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May 2017 – The growing cost of managing psychological injury claims

While claims for psychological injury account for just a small number of all claims received by Coal Mines Insurance (CMI), industry data shows that the average cost of workers compensation claims for mental illness are more than twice that for other injury claims. This trend is a reflection of that seen more generally in Australian workers compensation schemes, as reported in a recent article in the Sydney Morning Herald.

What is a psychological injury?

Psychological injury claims usually relate to where a worker during the course of their employment has experienced:

  • a traumatic event
  • ongoing, interpersonal conflict
  • bullying and/or harassment
  • other workplace stressors (e.g. heavy workloads,
    unrealistic deadlines, poor communication, job security and other uncertainty).

Latest data from CMI shows that work pressure and other mental stress factors account for around 28 per cent of psychological injury claims, second only to work-related harassment and/or workplace bullying, which accounts for 48 per cent.

In legal terms psychological injury is defined as a personal psychological or psychiatric disorder arising out of, or in the course of, employment that is:

  • a diagnosable condition
  • not a mere emotional response
  • not frustration or emotional upset
  • where their nervous system was so
    affected that a physiological effect was induced
  • any aggravation, acceleration, exacerbation or deterioration of a
    pre-existing psychiatric condition.

Under the law, no compensation is payable unless the employment was a substantial cause of the injury; AND the psychological injury must not be wholly or predominantly caused by reasonable action taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment, dismissal or the provision of employment benefits.

What can we do to protect against psychological injury?

Everyone has a legal right to a safe, healthy workplace – and that includes mental health.

‘There are many things that employers can do to manage risks to help prevent psychological injuries and to assist workers where they occur’ explained Coal Services Managing Director/CEO Lucy Flemming.

‘For example, raising awareness of mental health; developing clear policies and procedures about expected behaviours and taking prompt, appropriate action when issues are raised. A supportive culture and strong leadership are essential elements underpinning these.’

For information or support, please contact:

  • Beyond Blue has resources to assist employers in managing mental health in the workplace.
  • Mates in Mining runs programs for workers to raise awareness of mental health issues.