Psychological injuries can be just as debilitating, or even more so, than physical injuries. In this article Amber Wang discusses the definitions of workplace injuries in a compensation setting, and when compensation might be recoverable.

Psychological injuries

Knowledge and acceptance surrounding psychological injuries has improved significantly in the last few decades.
Beyond Blue estimates that 3 million Australians are living with anxiety or depression, and that 45% of people experience a mental health condition in their lifetime. As a personal injuries lawyer, I’m constantly assisting people who develop a psychological injury that resulted from a traumatic event, or a secondary psychological injury that develops due to chronic pain and the impact of their physical injuries.
Unfortunately, psychological injuries can be overlooked or misunderstood by the person themselves, their friends, family and/or employer. The impacts of psychological injuries can have ongoing and devastating impacts on the injured person and their family, lifestyle and career. Therefore, it’s appropriate that financial compensation is provided to people in these situations, where allowed by the legislation.


Healthcare professionals in Australia and much of the world use the Diagnostic and Statistical Manual of Mental Disorders (DSM-5) as the authoritative guide for diagnosing psychological injuries. However, the definition of a psychological injury in a compensation setting varies according to the legislation in each Australian state and territory. This is particularly so in the area of workplace injuries.

Workplace psychological injuries

In Canberra, the definitions of a ‘psychological injury’ for which compensation can be received varies between both the workers compensation and the Comcare schemes. Both schemes have the potential to prevent access to compensation for psychological injuries in various circumstances.
The Workers Compensation Act 1951 excludes the provision of compensation for mental injuries that are completely or mostly caused by reasonable action taken or proposed to be taken by or on behalf of an employer in relation to a:

  • transfer
  • demotion
  • promotion
  • performance appraisal
  • disciplinary action
  • retrenchment
  • dismissal
  • worker receiving an employment benefit.

Under the Safety Rehabilitation and Compensation Act 1988, there are similar exclusions in place for psychological injuries developing as a result of reasonable administrative action taken by the employer. These include reasonable:

  • appraisal of the employee’s performance
  • counselling action taken
  • suspension action taken
  • disciplinary action (formal or informal)
  • actions done in connection with an action above
  • actions in connection with the employee’s failure to obtain a promotion, reclassification, transfer or benefit or to retain a benefit in connection with their employment.

However, under the Safety Rehabilitation and Compensation Act 1988, the reasonable administrative action must be taken in a reasonable manner for the exclusion to be justified. Case law has developed in this area over the years and will be addressed in a separate article.

Non-workplace psychological injuries

Psychological injuries resulting from motor vehicle accidents and other types of non-employment claims are understandably not subject (currently) to the exclusions outlined above. However, in all situations medical evidence needs to be obtained about the injury to justify any compensation sought.
As such, it’s important that people suffering from psychological injuries consult with their treatment providers about their symptoms frankly and promptly.


Depending on the circumstances from which the psychological injury has arisen, people may also wish to consult a solicitor about whether they have any entitlements to claim compensation. Generally, such advice would be sought in a situation where their psychological injury has arisen as a result of the negligent action or inaction of another individual. Situations could include psychological injuries resulting from a car crash, or witnessing or being involved in a traumatic event.
The payment of compensation at common law is designed to put the person in the financial position they would have been, but for sustaining the injury. As such, the amount of compensation that is ultimately received will depend on the:

  • type of claim being pursued
  • severity of the injury
  • treatment and care required
  • impact upon the person’s ability to earn income.

How can we help?

If you’ve suffered from a psychological injury as a result of the actions or inactions of others, in the setting of your workplace, a motor vehicle accident, or another traumatic event, you may wish to seek advice about your legal options. You can contact our Personal Injury team on 02 6285 8000 or by email.

Amber Wang holds a law degree and a Masters Degree in psychology, and has over 12 years’ experience in personal injuries claims involving psychological injuries.