Opinion

Queensland reforms affecting workers’ comp claims for psychological injuries

5th Mar 2020

Employers must ensure, so far as is reasonably practicable, the health and safety of their workers. Queensland workers’ compensation law can be complicated, especially when it comes to psychological injuries. Unfortunately, a high number of compensation claims for psychological injuries are rejected in the first instance: see Queensland workers’ compensation scheme statistics 2018–19, Figure 8, p18 (statistical report).

It is not enough to prove that a psychological injury occurred at work; presently, an injured worker must also establish that the work-related incident (or incidents) was ‘a significant contributing factor’ to the psychological injury.

Often, determination of whether a work incident was ‘a significant contributing factor’ is based on the opinion of a treating practitioner (for example, the treating psychiatrist).

A significant change to the definition of psychological injury came into effect 30 October 2019

Prior to October 2019, the definition of psychological injury required employment to be ‘the major significant contributing factor’.

On 30 October 2019, the Queensland Parliament enacted the Workers’ Compensation and Rehabilitation and Other Legislation Amendment Act 2019 (the amending Act).

The amending Act changed the definition of psychological injuries in s32 of the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (the Act) by removing ‘major’. Therefore, the definition has been amended to require employment to be ‘a significant contributing factor’ to the development of the psychological injury. This significantly decreases the standard a worker must meet to claim compensation and brings Queensland into line with other jurisdictions, as recommended by the 2018 five-year review of the scheme.

This amendment only applies to psychological injuries sustained on or after 30 October 2019. Psychological injuries sustained before that date must meet ‘the major significant contributing factor’ definition.

Even if a treating practitioner states that the work incident was ‘the major significant contributing factor’ or ‘a significant contributing factor’ to the injury, the claim may still be rejected if the incident constitutes ‘reasonable management action taken in a reasonable way’.

What is ‘reasonable management action taken in a reasonable way’?

‘Reasonable management action taken in a reasonable way’ is an exclusion often relied on by insurers to reject claims for psychological injury. This exclusion only applies to work-related psychological injuries and can be applied when:

  • the incident(s) constituted ‘management action’;
  • this ‘management action’ was reasonable; and
  • this ‘reasonable management action’ was carried out in a ‘reasonable way’.

The test for whether an incident involves ‘reasonable management action taken in a reasonable way’ is an objective one. That is, would a reasonable person (that is, not the employer or injured worker), after considering all the relevant facts, consider the management action reasonable? 

The legislation (s32(5)) provides examples of actions that may constitute a reasonable management action taken in a reasonable way, for example:

  • an action taken to transfer, demote, discipline, redeploy, retrench or dismiss the worker; or
  • a decision not to award or provide promotion, reclassification or transfer of, or leave of absence or benefit in connection with, the worker’s employment.

Cases have clearly determined that the ‘management action’ does not have to be perfect, only reasonable: see for example, Qantas Airways Ltd v Q-Comp [2006] QIRC 27 and Roberts v Workers’ Compensation Regulator [2016] QIRC 30. Unfortunately, this means that the exclusion is broad and can be applied unfavourably for many injured workers. In 2018–19, according to the Queensland Office of Industrial Relations, 91.8% of the rejected psychological and psychiatric claims were rejected on this basis (see statistical report).

What to do if a workers’ compensation claim is rejected

If a claim is rejected, a claimant can lodge a review with the Queensland Workers’ Compensation Regulator. This review must be lodged within three months of the date the claimant received the decision to reject the claim.

The arguments raised on a review will depend on the facts of each case, but can include: 

  • the incident(s) did not arise as a result of a management action;
  • the ‘management action’ was unreasonable; or
  • the ‘reasonable management action’ was not carried out in a ‘reasonable way’.

In cases where the injury was caused by multiple factors, the matter can be complicated. Courts take a ‘global approach’ by weighing up all events linked to the cause of injury before determining whether, on balance, those factors constitute ‘reasonable management action taken in a reasonable way’.

Other key amendments to the Act

Insurers to provide treatment for psychological injuries prior to determination

Historically, insurers were only required to fund treatment for psychological injuries after a claim was accepted. This often meant that a worker’s treatment was delayed significantly. 

The Amending Act inserted a new ch4, pt5A (ss232A232AB) into the Act. Under these amendments, insurers are required to take all reasonable steps to provide reasonable support services to workers with psychological injuries prior to the determination of their claim. As it generally takes time for insurers to investigate and determine psychological injury claims, this allows workers to access early intervention treatment with a view to improving recovery prospects. 

Waiver of six-month time limit

Previously, an injured worker was required to lodge a workers’ compensation claim within six months of the date that their entitlement to compensation arose, which is generally the date that they were first assessed by a doctor. Naturally, this presented problems for workers who had initially attempted to manage their injuries and continue working after seeking medical treatment for a work injury. 

The Act has been amended (new sub-s131(5)) to enable an insurer to waive the 6-month time limit and accept an application if the worker is certified as incapacitated and lodges a claim within 20 business days of being assessed with an incapacity for work by a doctor.  This will enable further access to compensation for workers who may otherwise have been precluded by virtue of the strict time limitations. Whether insurers elect to exercise this discretion in favour of injured workers remains to be seen.

Expressions of regret

Employers had previously been hesitant to provide workers with a sincere apology following a work-related injury, fearing it would be interpreted as an admission of liability. The Amending Act introduced a new ch5, pt14 (ss320A320H) into the Act. These provisions allow apologies to be made on a ‘without prejudice’ basis, which means they cannot be considered in any assessment of whether an employer has been negligent. This is a positive change for workers as it will encourage employers to give apologies and hopefully help to improve the level of distress to injured workers seeking compensation. 

Conclusion

The removal of ‘major’ from the required standard for psychological injuries represents a positive step for employees, particularly those with pre-existing psychological conditions. However, given the number of compensation applications rejected on the basis that they arose out of ‘reasonable management action’, this alteration to the standard is unlikely to result in a significant increase to the claim acceptance rate. 

An earlier version of this article was published on Hall Payne Lawyers website here.

Jessica Hodge is a lawyer in the personal injuries compensation team at Hall Payne Lawyers. She assists clients with workers’ compensation claims (across the Queensland, Northern Territory and Comcare schemes), motor vehicle accident claims, and public and product liability claims. Jessica strives to always provide clients with practical and commercial advice. She is passionate about doing her best for her clients and prides herself on being down-to-earth and approachable.
 

The views and opinions expressed in these articles are the authors' and do not necessarily represent the views and opinions of the Australian Lawyers Alliance (ALA).

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Tags: Queensland Workers compensation Psychiatric Injury Jessica Hodge