A new anti-bullying jurisdiction? Proposed amendments to psychological injury claims under the NSW workers’ compensation scheme

Last week, the NSW Government announced its intention to reform the way psychological injury claims are managed under the NSW workers’ compensation scheme.

The reforms are intended to address the disproportionately rising number of psychological injury claims and the increasing cost of premiums.

In his statement, NSW Treasurer Daniel Mookhey stated that the current system is failing to return workers with psychological injuries to work effectively, noting that 40% of these workers remain away from work and on workers’ compensation after one year. By contrast, 88% of workers with physical injuries return to work within 13 weeks. Treasurer Mookhey further explained that if the scheme remains unchanged, premiums will increase significantly - even for businesses who have no claims against them.

The most substantial proposed amendment is the establishment of a bullying and harassment jurisdiction within the NSW Industrial Relations Commission (IRC), apparently modelled on the existing Fair Work Commission regime (FWC). This new jurisdiction is intended to be preventative in nature, giving workers a right to raise concerns about psychological hazards before an injury occurs.

Importantly, it is proposed that the IRC must hear any bullying and harassment claims before a worker can make a related psychological injury claim under the workers’ compensation scheme. This would represent a significant shift in the process.

To provide greater certainty for workers and businesses, the Government has proposed to define psychological injury and reasonable management action in legislation. It also proposed to adopt measures used in other states, including anti-fraud provisions and setting a whole-person impairment threshold for psychological injuries. 

These changes are not yet law, although they are clearly part of the NSW Government’s agenda, so we expect to see a Bill shortly. So far, there is little detail on what the NSW anti-bullying jurisdiction will look like, including whether it will focus on conciliation (like the FWC’s adverse action proceedings), or be a jurisdiction where stop-bullying orders would be made (similar to the FWC’s existing stop-bullying regime).