Publish date: 18 October 2024

With the recent recognition of Mental Health Week in Queensland, now is an opportune time to shine a light on a crucial yet often overlooked aspect of workplace safety: the psychological impact of various stressors that employees face in the course of their employment.

While physical injuries are often immediately visible and therefore easier to address, psychological injuries can be more insidious, yet equally damaging.

It could be said that historically, a lack of understanding, cultural attitudes stigmatising mental health issues, and insufficient resources to support mental health conditions have shifted the focus away from psychological well-being. However, statistics reveal a significant rise in both primary and secondary mental health injury claims arising from workplace incidents. Since 2017, WorkCover Queensland has seen an increase in psychological injury claims by 27%.[1]

As a personal injury lawyer, we frequently speak with clients seeking advice about their entitlement to compensation for psychological injuries stemming from their employment, including psychological injuries suffered as a result of actions taken by management, bullying, workplace fatalities, and/or excessive workloads.

I recently participated in the Lift the Lid Walk to help raise awareness and funds for mental health research.

Meaning of injury under the Workers’ Compensation and Rehabilitation Act 2003

Ordinarily, when a worker suffers an injury which has occurred out of or in the course of their employment, they are entitled to lodge an application for workers compensation benefits. This is referred to as a “statutory workers compensation claim”. A worker can have a statutory workers compensation claim for a physical injury, a psychological injury, or a combination of both.

However, the Workers’ Compensation and Rehabilitation Act 2003 (Qld) excludes entitlement to compensation for psychological injuries involving reasonable management action taken in a reasonable way.

Once a statutory workers compensation claim is accepted, a worker has the right to pursue a common law damages claim (a “negligence” claim). However, employers’ liability for pure psychological injuries depends on the specific circumstances of each case. To successfully claim damages against an employer, the risk of a worker suffering a psychological injury must have been foreseeable.

The following case examples illustrate the complexities around determining employers’ liability for pure psychological injuries.

*Content warning for some graphic circumstance described below*

Case studies

Hodson v Hurex and Lederer Pty Ltd

In Hodson v Hurex and Lederer Pty Ltd, Mr Hodson successfully claimed damages against both his employer (a labour hire company, “Hurex”), and host employer (“Lederer”) for a psychological injury he suffered as a result of witnessing a fatality in the course of his employment as a cleaner.

In October 2020, Necovski, a representative of Lederer, called Mr Hodson and requested him to come into work due to a fatality where an elderly gentleman had been killed by a semi-trailer. Mr Hodson sustained a psychological injury as a result of what he was told, saw, and what he smelled at the accident scene. 

As to Hurex’s liability – the Court found that it was reasonably foreseeable that a person employed to perform cleaning and other duties at a shopping centre, such as Mr Hodson, could be confronted with a significant incident, including patrons of the shopping centre suffering life-threatening medical condition/injury.  Further, it was found reasonably foreseeable that Mr Hudson, by being exposed to such an incident, could suffer psychiatric injury. As a result, the Court found that Mr Hodson’s employer should have directed him not to attend such an incident and the failure to do so was found to be a cause of Mr Hodson’s injury.

As to Lederer’s liability – at the time of the incident, Lederer was aware that Mr Hodson was someone who was subject to emotional fragility. This was because prior to the incident, Mr Hodson had shared with other employees from timetotime personal issues including difficulties with his stepson and marital problems. On occasions, he had proffered his personal problems as an excuse for his failure to open the shopping centre on time. In the circumstances, it was found that it was reasonably foreseeable that Mr Hodson might suffer a recognised psychiatric illness if confronted with a fatal accident scene. Lederer was found to have breached its duty of care by not preventing Mr Hodson being exposed to the aftermath of the accident.

Karzi v Toll Pty Ltd

In the case of Karzi v Toll Pty Ltd, Mr Karzi was subjected to offensive and racist remarks by his co-worker between September 2014 and January 2015 and as a result, sustained a psychological injury. As there was nothing in the nature and extent of Mr Karzi’s work itself which gave rise to a risk of psychiatric harm, the Court was required to determine whether Mr Karzi’s employer ought to have foreseen that he would suffer psychiatric harm in the circumstances.

While in early November 2014 and on 7 January 2015, Mr Karzi complained to his employer about the conduct of his co-worker, he did not complain or exhibit any signs of psychological harm. As a result of the complaints, his co-worker was dismissed on 9 February 2015. Further, Mr Karzi was transferred to a different depot. The majority found that because Mr Karzi did not complain or exhibit any signs of psychological harm, it was not reasonably foreseeable to his employer that there was a risk of psychological harm in the circumstances and that in any event, his employer acted reasonably.  As a result, it was found that Mr Karzi’s employer did not breach its duty of care owed to him and therefore, Mr Karzi was unsuccessful.

Duggan v Workers’ Compensation Regulator

In Duggan v Workers’ Compensation Regulator, Mr Duggan worked as a groundsman at a primary school. In or about October 2018, a teacher made a complaint to the principal regarding comments Mr Duggan had made to her, which she considered inappropriate. Mr Duggan became aware of this complaint when the principal directed him not to approach or speak with the teacher except in an emergency. Mr Duggan heard nothing further about any complaints until 27 June 2019, when the principal alerted him to a second complaint being received. From 27 June 2019, there were various communications between Mr Duggan and the principal regarding the complaints. As a result, Mr Duggan sustained a psychological injury. His application for workers’ compensation was rejected on the basis that his psychological injury arose out of, or in the course of, reasonable management action taken in a reasonable way. The Court found that the principal was required to alert Mr Duggan of the complaints and he did so promptly and in a place and atmosphere where they could speak confidentially and privately. It was found that the management action taken by the principal was reasonable and undertaken in a reasonable way and as a result, Mr Duggan was unsuccessful.

Gairns v Pro Music Pty Ltd

By way of contrast, in the case of Gairns v Pro Music Pty Ltd, Mr Gairns successfully claimed damages against his employer for a psychological injury he sustained as a consequence of attending a meeting with his employer’s managing director during which he was told that his supervisory role was to be relinquished, and his salary would be reduced. Mr Gairns was not provided with prior written notice of his employer’s concerns about his performance. Further, the meeting was conducted in an open office and Mr Gairns was not provided with an opportunity to bring a support person.

In the weeks prior to the meeting, Mr Gairns had presented to work in such a state that his employer had observed him to be sobbing and hyperventilating. This level of distress was such that it seemed to have been an abnormal reaction to Mr Gairns having learnt that his son had been caught speeding. The Court found that these signs ought to have alerted the employer to Mr Gairns psychological vulnerability. The demotion of a long-term employee was considered to be a serious matter which would inevitably cause any employee disappointment, unhappiness and distress, but against the employer’s awareness of Mr Gairns psychiatric vulnerability, a reasonable person in the position of the employer was on notice that a failure to address perceived performance deficiencies prior to the meeting would risk psychiatric injury. The Court otherwise considered that even in the absence of Mr Gairns pre-existing vulnerability, the circumstances in which the meeting occurred was sufficiently unreasonable as to give rise to the risk of psychiatric injury, which would have been very distressing for any employee.

These case examples highlight some of the complexities surrounding claims for pure psychological injuries arising from employment, which, as can be seen, require careful consideration of the circumstances of each individual case. To succeed in such a claim, a worker must prove that the risk of psychological injury was foreseeable to the employer in those circumstances and that the injury did not arise from reasonable management action taken in a reasonable manner. Given the intricate nature of these claims, it is important to seek legal advice and discuss the circumstances of your injury with a lawyer as soon as possible to ensure you are appropriately compensated for your loss.

Mental Health Week serves as a reminder of the importance of mental well-being in the workplace year round. Employees subjected to various stressors can experience profound and lasting psychological injuries. By highlighting these often-hidden issues, we can foster a more supportive and understanding workplace environment.

If you’re in need of mental health support you can reach out to the following organisations:

LifeLine: www.lifeline.org.au

Beyond Blue: www.beyondblue.org.au/get-support


[1] https://www.worksafe.qld.gov.au/resources/statistics/reports/workers-compensation-regulator-statistics-reports


Emmi Airaksinen
Emmi Airaksinen
Lawyer
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