Worker’s comp claim could open the floodgates for remote staff to claim psychological injury


A remote management arrangement did not absolve a supervisor of his responsibilities to look after an employee’s mental health, significant AAT decision finds. How can you protect your people from psychological injury?

This article mentions suicide. If you, or someone you know, requires assistance you can call Lifeline for crisis support on 13 11 14.

A recent case heard by the Administrative Appeals Tribunal (AAT) should cause HR and employers to sit up and take action. It ruled in favour of an employee’s worker’s compensation claim surrounding a psychological injury sustained during a remote management arrangement.

While the AAT case isn’t related to overworking during COVID-19, it could set a precedent for employees who’ve felt stressed and overworked over the last 16 months.

“This case could potentially be one of the most profound changes in the IR landscape that we’ve seen,” says Aaron McEwan, vice president, research and advisory at Gartner. 

McEwan is keen to draw people’s attention to the decision because he doesn’t think we’re doing enough to prevent such psychological injuries. We’ve spent around 10-20 years working under what he calls a “hyper efficiency model” – the ‘do more with less‘ mentality and operating as close to the margin as possible to deliver outcomes but spreading people too thinly as a result.

In 2020, the Centre for Future Work found that full-time workers did an extra 6.21 hours of unpaid work per week which equates to seven weeks per year, per person. 

HRM draws on these statistics often, but they bear repeating as they highlight the significance that this AAT decision could have across the workforce. While we don’t know where the numbers sit today, it wouldn’t be surprising to see similar figures, if not worse ones. 

The gist of the AAT decision

Before offering some solutions to prevent psychological injuries, here’s an overview of the details of the case.

In 2016, an employee of a government agency, whose tenure spans over two decades, was temporarily promoted for a 12-month period. He spent the latter six months working under the supervision of a remote manager – the employee was in Sydney, the manager was in Melbourne. 

The manager would usually communicate with the Sydney team via phone calls and emails, and “occasionally video conference”.

In 2018, after returning to his former role as an analyst, an ear, nose and throat (ENT) specialist suspected the employee had a mood disorder. After investigating the ENT’s suspicions, a psychiatrist diagnosed the employee with “severe major depression, anxiety and panic attacks”. 

The psychiatrist was concerned the employee had suicidal ideation, so he prescribed medication to the employee which improved the severity of his depression.

Now this is where the matter gets a little complicated. The employee claims his psychological injury diagnosis pertained to the 2016-2017 period in which he was temporarily placed on higher duties while working under remote supervision. 

It’s only retrospectively that he realised he was suffering at that time, he says. And so, he put a worker’s compensation claim in against Comcare for the first six months of 2017. Comcare denied financial liability, claiming the psychological injury that was diagnosed in 2018 didn’t occur in 2017.

“If you work around aircraft, you paint lines on the ground and force people to walk in a particular way to avoid obstacles. So what’s the equivalent of that when it comes to mental health?” – Aaron McEwan, vice president of research and advisory, Gartner.

The AAT had to determine a few things: whether or not the psychological injury occurred due to personal or work-related matters, if the timing of the psychological injury occurred when the employee claimed it did, and if the employee had been given a reasonable workload and adequate support from his remote manager. 

In all instances, the AAT sided with the employee, although the deputy president presiding over the case was slightly hesitant, noting that the remote working nature of the relationship made things more complicated (i.e., the manager might not have been aware of the stress his tasking caused). However, in the end, that wasn’t enough to absolve him of responsibility to ensure the employee’s psychological safety.

“What this case shows is that the responsibility of every manager is to be aware of the impact of whatever workplace stressors occur, whether it’s excessive work, bullying, harassment, not enough resourcing, or expectations of a manager that can’t be met,” says McEwan. “Any of those things could [result in] psychological injuries. And what this judgement says is that there’s no excuse if you can’t see it.”

Evidence favours employee’s account

Although the employee wasn’t aware of his condition in 2017 (and there were some elements in his personal life that likely predisposed him to depression), the deputy president was satisfied that there was enough evidence to show the employee had been overworked, including:

  • His flex-time records increased from 25 hours 24 minutes (when he was working under a manager he felt was more supportive) to 72 hours 41 minutes during the six months he was managed by the remote supervisor. He claimed his two colleagues’ records also reflected an increase in unused flex-time. He says the remote manager didn’t encourage the team to take flex-time and he didn’t feel comfortable asking for it.

  • Records show that his performance suffered during the temporary promotion, and he claimed he wasn’t given adequate support from his supervisor. He also claims it was implied but never stated that his supervisor’s expectation was that he’d stay back late to finish work.
  • His partner, who he also works with, offered a detailed account of his mental state, saying he “would return home most days with dark circles under [his red eyes]” and that despite working and living together, he would usually leave for work before her and return home after she had.
  • The employee claims he became socially withdrawn and wasn’t sleeping well. His partner backed this up, saying he “lacked energy for leisure activities”, even on weekends, and became very quiet.
  • In 2017, he complained of dizziness and headaches, and collapsed at home and was taken to hospital. His psychiatrist was able to back up that the collapse was, “to some degree”, related to burnout and stress caused by the workplace. Other physical injuries, and a former episode of depression from 2010 related to the death of his mother, were also factored in.

After ruling in favour of the employee, the matter has now been remitted to Comcare for consequential orders.

The tweaked WHS backdrop

This AAT decision comes alongside a recent state and federal agreement to include psychosocial hazards as part of workplace health and safety (WHS) regulations.

WHS ministers agreed to regulate these hazards late last month, in a bid to prevent mental illness, sexual harassment and gendered violence in the workplace (read the official communique here).

“The power to regulate the elimination or reduction of psychosocial hazards in the workplace has been available to regulators under existing Australian OHS law,” says Sue Bottrell, a WHS expert and lawyer.

“However, there have not been specific regulations in respect to eliminating or reducing psychosocial hazards in the workplace. Regulations provide more detail on the duties owed under the Act and are focused on particular issues. 

“These are supported by Codes of Practice, such as the recently released [NSW] Code of Practice – Managing Psychosocial Hazards in the Workplace,(May, 2021) which provide practical advice on what employers are required to do to comply with the law and regulations.” It includes steps to proactively manage psychosocial hazards, she adds.

The code and recent regulations are “nothing new”, says Bottrell. Various WHS bodies across the globe have been talking about regulating these hazards since as early as the mid 80s.

These changes won’t make a difference to the obligations of employers, however “what compliance looks like will be much clearer, and prosecution of employers who fail to control psychological harm in the workplace will be more straightforward,” she says.

“It’s critical that a proactive approach to addressing the source of psychosocial harm is taken. This means not relying on reactive or palliative [initiatives] like wellness programs.” – Sue Bottrell, WHS expert and lawyer.

Bottrell says the consequences of a category one offence (where a worker is killed or suffers serious illness or injury) pertaining to a psychological injury could potentially result in significant fines or jail time for individuals and companies. 

However, “proving that the workplace was responsible for the serious injury or death may not be as straightforward as with a physical injury.” (See HRM’s 2019 report on the possibility of jailing employers for toxic work cultures for more on this).

“A finding of gross negligence requires that a person who owes a duty under health and safety legislation breached that duty, knew there was a risk of death or serious harm, and disregarded it. [The recent] MT Sheds case is an example of gross negligence.”

How can HR prevent psychological injury from occurring?

It’s important not to understate the difficulty of remote managers getting an accurate read on employees’ wellbeing – it’s very easy for remote staff to work under the cloak of night and hide their mental health struggles, but there are things you can actively do to prevent this.

“Not to put too fine a point on this, but there have been many employers who have told employees to be safe on a construction site and an employee has later died as a result of not adhering to safety regulations,” says McEwan. “In that case, telling them what to do is not enough. You have to create a safe work environment.

“You can put in place wellbeing measures, but if your culture encourages overworking, or your demands and goals are set at such a high level that the only way for employees to deliver is to work longer hours, then you’ve got a problem.”

McEwan can see the white-collar world undergoing a similar safety overhaul to what was seen in blue-collar industries decades ago.

“There was a really strong movement to become serious about workplace safety. So today, the increased recognition of the impact of work on people’s health could see something very similar happen with knowledge workers.”

What that looks like is yet to be determined, but McEwan poses a few suggestions.

  • There might be more ‘Right to Disconnect’ clauses included in EBAs, as was seen in the recent Victorian Police agreement.

  • Some of the things enshrined in blue-collar professions might be introduced into the corporate world, such as the concept of a ‘smoko’ – a defined and enforced short break in the middle of the morning.

  • End of work times could be legislated, he suggests, particularly if there’s a risk of people staying back consistently for prolonged periods of time.

  • Most employers are happy to give people things like stand-up desks, he says, but how many are actively encouraging people to use it? McEwan says he can see employers becoming much more assertive about how they encourage employees to get up and move around to avoid known health risks.

  • In the mining industry, all meetings start with a ‘safety moment’ – time to reflect on a specific safety risk identified or lessons to come out of a workplace accident. McEwan wouldn’t be surprised if similar measures are introduced to offices. Perhaps all meetings will start with a wellbeing moment, he says.

These strategies require a more considered approach, but there are steps organisations can take right now to make psychological wellbeing a priority. Resourcing teams effectively needs to be a key focus, says McEwan. In the AAT case, both the employee and his partner suggested overworking was the result of a lack of resources.

“This is an area where I think employers are going to get into a lot of trouble. Australia lost about 10 per cent of its workforce during the global financial crisis. Headcount has never been added back, despite 20 years of growth in Australia until 2020. 

“That means the same number of employees have been doing more and more and more work. This issue of resourcing is a really serious one for organisations to take note of. It’s  very common practice in some industries that when you lose people you don’t replace them, and you see how long you can go before the system crashes.

“The system crashes when your people have mental health problems.”

McEwan says we also need to stop thinking about wellbeing as an extension of benefits. It’s about fundamentally redesigning work.

“It’s not just about providing yoga classes and resilience training. You need to put your money where your mouth is and make sure you’re creating an environment which is safe.”

Bottrell agrees. “It’s critical that a proactive approach to addressing the source of psychosocial harm is taken. This means not relying on reactive or palliative initiatives like wellness programs (relaxation, yoga, healthy eating etc.) to manage psychosocial hazards, but actively understanding the conditions within the workplace that can cause mental harm, and work to eliminate or reduce them,” she says.

As for designing new ways of working, McEwan points to airports as an example.

“If you work around aircraft, you paint lines on the ground and force people to walk in a particular way to avoid obstacles. So what’s the equivalent of that when it comes to mental health? Do we metaphorically paint lines to show people how to get through a day in a psychologically safe way?

“Also, if you’re the one flying the plane, there are only so many hours you’re allowed to be in the air before you get grounded… that’s the biggest opportunity we have now – change the way work is done so it’s not psychologically or physically damaging.”

This is only one case, so whether it sparks more employees to come forward remains to be seen. Regardless of what happens next, this is a great opportunity for HR leaders to approach their executives and managers and take a comprehensive look at what they’re already doing well and where the gaps are. Addressing the gaps isn’t something that can wait.


Looking to prevent psychological injury in your workplace? AHRI’s short course, Mental Health at Work, will offer a helpful starting point. Book into the next session on 16 July, 2021.


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Worker’s comp claim could open the floodgates for remote staff to claim psychological injury


A remote management arrangement did not absolve a supervisor of his responsibilities to look after an employee’s mental health, significant AAT decision finds. How can you protect your people from psychological injury?

This article mentions suicide. If you, or someone you know, requires assistance you can call Lifeline for crisis support on 13 11 14.

A recent case heard by the Administrative Appeals Tribunal (AAT) should cause HR and employers to sit up and take action. It ruled in favour of an employee’s worker’s compensation claim surrounding a psychological injury sustained during a remote management arrangement.

While the AAT case isn’t related to overworking during COVID-19, it could set a precedent for employees who’ve felt stressed and overworked over the last 16 months.

“This case could potentially be one of the most profound changes in the IR landscape that we’ve seen,” says Aaron McEwan, vice president, research and advisory at Gartner. 

McEwan is keen to draw people’s attention to the decision because he doesn’t think we’re doing enough to prevent such psychological injuries. We’ve spent around 10-20 years working under what he calls a “hyper efficiency model” – the ‘do more with less‘ mentality and operating as close to the margin as possible to deliver outcomes but spreading people too thinly as a result.

In 2020, the Centre for Future Work found that full-time workers did an extra 6.21 hours of unpaid work per week which equates to seven weeks per year, per person. 

HRM draws on these statistics often, but they bear repeating as they highlight the significance that this AAT decision could have across the workforce. While we don’t know where the numbers sit today, it wouldn’t be surprising to see similar figures, if not worse ones. 

The gist of the AAT decision

Before offering some solutions to prevent psychological injuries, here’s an overview of the details of the case.

In 2016, an employee of a government agency, whose tenure spans over two decades, was temporarily promoted for a 12-month period. He spent the latter six months working under the supervision of a remote manager – the employee was in Sydney, the manager was in Melbourne. 

The manager would usually communicate with the Sydney team via phone calls and emails, and “occasionally video conference”.

In 2018, after returning to his former role as an analyst, an ear, nose and throat (ENT) specialist suspected the employee had a mood disorder. After investigating the ENT’s suspicions, a psychiatrist diagnosed the employee with “severe major depression, anxiety and panic attacks”. 

The psychiatrist was concerned the employee had suicidal ideation, so he prescribed medication to the employee which improved the severity of his depression.

Now this is where the matter gets a little complicated. The employee claims his psychological injury diagnosis pertained to the 2016-2017 period in which he was temporarily placed on higher duties while working under remote supervision. 

It’s only retrospectively that he realised he was suffering at that time, he says. And so, he put a worker’s compensation claim in against Comcare for the first six months of 2017. Comcare denied financial liability, claiming the psychological injury that was diagnosed in 2018 didn’t occur in 2017.

“If you work around aircraft, you paint lines on the ground and force people to walk in a particular way to avoid obstacles. So what’s the equivalent of that when it comes to mental health?” – Aaron McEwan, vice president of research and advisory, Gartner.

The AAT had to determine a few things: whether or not the psychological injury occurred due to personal or work-related matters, if the timing of the psychological injury occurred when the employee claimed it did, and if the employee had been given a reasonable workload and adequate support from his remote manager. 

In all instances, the AAT sided with the employee, although the deputy president presiding over the case was slightly hesitant, noting that the remote working nature of the relationship made things more complicated (i.e., the manager might not have been aware of the stress his tasking caused). However, in the end, that wasn’t enough to absolve him of responsibility to ensure the employee’s psychological safety.

“What this case shows is that the responsibility of every manager is to be aware of the impact of whatever workplace stressors occur, whether it’s excessive work, bullying, harassment, not enough resourcing, or expectations of a manager that can’t be met,” says McEwan. “Any of those things could [result in] psychological injuries. And what this judgement says is that there’s no excuse if you can’t see it.”

Evidence favours employee’s account

Although the employee wasn’t aware of his condition in 2017 (and there were some elements in his personal life that likely predisposed him to depression), the deputy president was satisfied that there was enough evidence to show the employee had been overworked, including:

  • His flex-time records increased from 25 hours 24 minutes (when he was working under a manager he felt was more supportive) to 72 hours 41 minutes during the six months he was managed by the remote supervisor. He claimed his two colleagues’ records also reflected an increase in unused flex-time. He says the remote manager didn’t encourage the team to take flex-time and he didn’t feel comfortable asking for it.

  • Records show that his performance suffered during the temporary promotion, and he claimed he wasn’t given adequate support from his supervisor. He also claims it was implied but never stated that his supervisor’s expectation was that he’d stay back late to finish work.
  • His partner, who he also works with, offered a detailed account of his mental state, saying he “would return home most days with dark circles under [his red eyes]” and that despite working and living together, he would usually leave for work before her and return home after she had.
  • The employee claims he became socially withdrawn and wasn’t sleeping well. His partner backed this up, saying he “lacked energy for leisure activities”, even on weekends, and became very quiet.
  • In 2017, he complained of dizziness and headaches, and collapsed at home and was taken to hospital. His psychiatrist was able to back up that the collapse was, “to some degree”, related to burnout and stress caused by the workplace. Other physical injuries, and a former episode of depression from 2010 related to the death of his mother, were also factored in.

After ruling in favour of the employee, the matter has now been remitted to Comcare for consequential orders.

The tweaked WHS backdrop

This AAT decision comes alongside a recent state and federal agreement to include psychosocial hazards as part of workplace health and safety (WHS) regulations.

WHS ministers agreed to regulate these hazards late last month, in a bid to prevent mental illness, sexual harassment and gendered violence in the workplace (read the official communique here).

“The power to regulate the elimination or reduction of psychosocial hazards in the workplace has been available to regulators under existing Australian OHS law,” says Sue Bottrell, a WHS expert and lawyer.

“However, there have not been specific regulations in respect to eliminating or reducing psychosocial hazards in the workplace. Regulations provide more detail on the duties owed under the Act and are focused on particular issues. 

“These are supported by Codes of Practice, such as the recently released [NSW] Code of Practice – Managing Psychosocial Hazards in the Workplace,(May, 2021) which provide practical advice on what employers are required to do to comply with the law and regulations.” It includes steps to proactively manage psychosocial hazards, she adds.

The code and recent regulations are “nothing new”, says Bottrell. Various WHS bodies across the globe have been talking about regulating these hazards since as early as the mid 80s.

These changes won’t make a difference to the obligations of employers, however “what compliance looks like will be much clearer, and prosecution of employers who fail to control psychological harm in the workplace will be more straightforward,” she says.

“It’s critical that a proactive approach to addressing the source of psychosocial harm is taken. This means not relying on reactive or palliative [initiatives] like wellness programs.” – Sue Bottrell, WHS expert and lawyer.

Bottrell says the consequences of a category one offence (where a worker is killed or suffers serious illness or injury) pertaining to a psychological injury could potentially result in significant fines or jail time for individuals and companies. 

However, “proving that the workplace was responsible for the serious injury or death may not be as straightforward as with a physical injury.” (See HRM’s 2019 report on the possibility of jailing employers for toxic work cultures for more on this).

“A finding of gross negligence requires that a person who owes a duty under health and safety legislation breached that duty, knew there was a risk of death or serious harm, and disregarded it. [The recent] MT Sheds case is an example of gross negligence.”

How can HR prevent psychological injury from occurring?

It’s important not to understate the difficulty of remote managers getting an accurate read on employees’ wellbeing – it’s very easy for remote staff to work under the cloak of night and hide their mental health struggles, but there are things you can actively do to prevent this.

“Not to put too fine a point on this, but there have been many employers who have told employees to be safe on a construction site and an employee has later died as a result of not adhering to safety regulations,” says McEwan. “In that case, telling them what to do is not enough. You have to create a safe work environment.

“You can put in place wellbeing measures, but if your culture encourages overworking, or your demands and goals are set at such a high level that the only way for employees to deliver is to work longer hours, then you’ve got a problem.”

McEwan can see the white-collar world undergoing a similar safety overhaul to what was seen in blue-collar industries decades ago.

“There was a really strong movement to become serious about workplace safety. So today, the increased recognition of the impact of work on people’s health could see something very similar happen with knowledge workers.”

What that looks like is yet to be determined, but McEwan poses a few suggestions.

  • There might be more ‘Right to Disconnect’ clauses included in EBAs, as was seen in the recent Victorian Police agreement.

  • Some of the things enshrined in blue-collar professions might be introduced into the corporate world, such as the concept of a ‘smoko’ – a defined and enforced short break in the middle of the morning.

  • End of work times could be legislated, he suggests, particularly if there’s a risk of people staying back consistently for prolonged periods of time.

  • Most employers are happy to give people things like stand-up desks, he says, but how many are actively encouraging people to use it? McEwan says he can see employers becoming much more assertive about how they encourage employees to get up and move around to avoid known health risks.

  • In the mining industry, all meetings start with a ‘safety moment’ – time to reflect on a specific safety risk identified or lessons to come out of a workplace accident. McEwan wouldn’t be surprised if similar measures are introduced to offices. Perhaps all meetings will start with a wellbeing moment, he says.

These strategies require a more considered approach, but there are steps organisations can take right now to make psychological wellbeing a priority. Resourcing teams effectively needs to be a key focus, says McEwan. In the AAT case, both the employee and his partner suggested overworking was the result of a lack of resources.

“This is an area where I think employers are going to get into a lot of trouble. Australia lost about 10 per cent of its workforce during the global financial crisis. Headcount has never been added back, despite 20 years of growth in Australia until 2020. 

“That means the same number of employees have been doing more and more and more work. This issue of resourcing is a really serious one for organisations to take note of. It’s  very common practice in some industries that when you lose people you don’t replace them, and you see how long you can go before the system crashes.

“The system crashes when your people have mental health problems.”

McEwan says we also need to stop thinking about wellbeing as an extension of benefits. It’s about fundamentally redesigning work.

“It’s not just about providing yoga classes and resilience training. You need to put your money where your mouth is and make sure you’re creating an environment which is safe.”

Bottrell agrees. “It’s critical that a proactive approach to addressing the source of psychosocial harm is taken. This means not relying on reactive or palliative initiatives like wellness programs (relaxation, yoga, healthy eating etc.) to manage psychosocial hazards, but actively understanding the conditions within the workplace that can cause mental harm, and work to eliminate or reduce them,” she says.

As for designing new ways of working, McEwan points to airports as an example.

“If you work around aircraft, you paint lines on the ground and force people to walk in a particular way to avoid obstacles. So what’s the equivalent of that when it comes to mental health? Do we metaphorically paint lines to show people how to get through a day in a psychologically safe way?

“Also, if you’re the one flying the plane, there are only so many hours you’re allowed to be in the air before you get grounded… that’s the biggest opportunity we have now – change the way work is done so it’s not psychologically or physically damaging.”

This is only one case, so whether it sparks more employees to come forward remains to be seen. Regardless of what happens next, this is a great opportunity for HR leaders to approach their executives and managers and take a comprehensive look at what they’re already doing well and where the gaps are. Addressing the gaps isn’t something that can wait.


Looking to prevent psychological injury in your workplace? AHRI’s short course, Mental Health at Work, will offer a helpful starting point. Book into the next session on 16 July, 2021.


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