||Issue No. 242||15 October 2004|
Interview: The Last Bastian
Unions: High and Dry
Security: Liquid Borders
Industrial: No Bully For You
History: Radical Brisbane
International: No Vacancies
Economics: Life After Capitalism
Technology: Cyber Winners
Poetry: Do It Yourself Poetry
Review: Hard Labo(u)r
The Locker Room
Invest in Dignity Part III
You Need Help
Whose Party Is It Anyway?
Letters to the Editor
Invest in Dignity Part III
I am seriously considering writing a book on the merits of investing in
companies that truely respect and invest in their people - I could call it
'101 Reasons Why You Should Invest In People Friendly Companies'.
So impressed was I that I purchased the rights to utilise the attached
report (THE HIGH PRICE OF PSYCHOLOGICAL INJURY. It cost me $95.00, but it
was well worth the investment.
I also suspect that the increases in psychological injuries may even
correlate to what you refered to in your original article..."it is all about
the management of personal relationships - whether it is the worker bullied
by unreasonable workloads or the apprentice bullied in the initiation
ceremony, bullying speaks to a breakdown of dignity at work"
WorkCover have already stated that "In 2001 the Qld Bullying Taskforce
estimated the annual cost of bullying to the Australian economy is between
$6 and $13 billion. Could it actually be that this breakdown of dignity at
work, will eventually catch up with us all, and who will have to foot the
CCH Australia - THE HIGH PRICE OF PSYCHOLOGICAL INJURIES
§ Workers compensation claims for psychological injury are increasing.
§ One recent case= $500,000 damages.
§ Employers required by law to provide safe workplaces, free from
prolonged work-related stress.
§ Failure to have safe system of work is enough for employer to be
Workers compensation claims for workplace-related psychological injury have
jumped in recent years and there is no sign they are on the decline.
Moreover, the cost of these claims is high when compared with other types of
injury, with one employee in a recent case awarded almost $500,000 in
damages from his employer.
In 2002-2003, while stress claims made to the workers compensation insurer
for the Commonwealth Government, Comcare, accounted for only 6% of total
workers compensation claims, they accounted for nearly 21% of total claims
payouts. And according to other Comcare figures, psychological injuries cost
four times as much and take longer to resolve than other workers
What is psychological injury?
Depression, anxiety and neuroses are among the most common psychological
workplace injuries. They may result from prolonged or excessive exposure to
demanding, stressful stimuli, such as work-related factors and/or critical
incidents. And most psychological injuries develop over a long period of
When initially faced with stressful stimuli, the body releases hormones that
increase the heart rate, blood pressure, breathing and muscle tension. These
create a state of mental and physical arousal in anticipation of a response
to the stimuli.
If stimuli are prolonged and excessive, the body attempts to adapt. If the
adaptation is over an extended period it can create exhaustion and provide
little opportunity for the body to recover from its stressed state. Over a
prolonged period, stress can make an individual susceptible to psychological
injury. Physical ailments can also occur, such as headaches, back and neck
strain, nausea and constipation.
Not all employees respond to stressful stimuli in the same way. Responses
vary depending on an individual's expectations and their capacity to deal
with demanding work-related factors. As a result, managers must avoid
relying on their own personal coping mechanisms as a guide to how much
stress employees can handle.
At the same time, not all stressful stimuli are negative. A certain level of
stimulus may motivate an employee to creatively and successfully complete
However, while individual employee expectations and capacity to cope may
determine the extent of a response, it is work-related factors that trigger
the response. A combination of high job demand and low job control is one of
the most common work-related factors put forward to explain the work-stress
response. In particular, low job control is seen as a major source of
Under Australian occupational health and safety (OHS) statutory law and
common law, employers must provide safe workplaces. This includes taking
practical steps to identify, assess and control reasonably foreseeable
Under OHS statutory law, a psychological injury does not have to occur for
an employer to be in breach of OHS law. Failure to have a safe system of
work is enough to be charged and prosecuted.
Under common law, an employee with a psychological injury may be able to sue
an employer for negligence and be awarded damages.
The State of NSW v Coffey  NSWCA 361, 7 November 2002 (Meagher, Heydon
and Ipp JJA), is an example of how an employer's common law duty may play
out in Court. The Court of Appeal found employers have a responsibility to
ensure the psychological health and safety of their workers. A NSW Housing
Commission caretaker received threats and abuse from tenants and had
witnessed murders and suicides, which he reported to his employer. He also
asked his employer to erect a security screen at his office counter, but the
The caretaker resigned from his job after eight years of service with
depression and post-traumatic stress disorder. The Court of Appeal held the
risk of psychological injury was reasonably foreseeable, but the employer
had failed to act. The employer could have considered rotating the employee
into other positions, monitoring the employee's coping ability and ensuring
he received ongoing counselling.
Although the employer offered a counselling service, it was up to the
employee to seek it out. According to the court, this was not sufficient to
„absolve" the employer from its duty of care to provide a safe system of
work. The employee was awarded $459,478 in damages.
Workers compensation laws
Under Australian workers compensation laws, psychological injury can be
compensated if work contributes to the injury or aggravates an existing
injury. The workplace does not have to be the dominant or the only cause,
but it must be a substantial cause of the injury.
Depending on the injury, compensation may include benefits such as weekly
payments, medical treatment, rehabilitation and lump sum payments for
permanent impairment (as opposed to common law damages).
Employees who are awarded common law damages will have their access to
workers compensation benefits ceased or restricted.
Injuries resulting from reasonable managerial direction, such as
retrenchment or addressing an employee's wilful misconduct are not covered
by workers compensation. However, if retrenchment and other managerial
directions are handled in an unreasonable manner then there could be grounds
for a stress claim.
In Jaksic v WorkCover/Allianz Australia Workers Compensation (SA) Ltd
(Konica Australia Pty Ltd)  SAWCT 17A, the SA Workers Compensation
Tribunal found the workplace contributed to an employee's anxiety and set
aside WorkCover SA's denial of the employee's claim.
WorkCover had argued it was a disciplinary interview that caused the
employee's anxiety; therefore the stress claim could be denied. However, the
judge found other action, not just the disciplinary action, contributed to
the employee's injury.
The employee's supervisor arrived at work one morning to find the warehouse
gate had been left open by the employee and decided to teach the employee a
lesson in securing the warehouse. The supervisor hid equipment from the
employee then asked the employee to find it. The employee could not. The
supervisor then revealed the equipment, indicating the workplace was not
secure. The employee became anxious and left work. The employee had a
history of not adhering to workplace policies and was in the process of
being counselled over this. The employee also had a history of anxiety. The
judge subsequently found that hiding the equipment had been unreasonable and
the employer should have foreseen it would cause the employee to become
Disability discrimination laws
Employers must also understand their obligations under disability
discrimination laws. An employer cannot use a psychological injury as the
reason for dismissing an employee if the employee still can carry out the
basic job requirements.
In Power v Aboriginal Hostels Limited  FCA 1475 the Federal Court set
aside an earlier Federal Magistrate's Court ruling, which found an
employer's decision to terminate an employee suffering from clinical
depression was reasonable. According to the Federal Court, the Federal
Magistrate failed to consider if the employee was unable to perform his
Employers should also have regard for privacy laws. Federal laws impose
certain obligations on the collection, use and storage of certain
information. Health information is considered sensitive under federal
privacy laws. Employers must ask permission before collecting such
information and do not have an unfettered right to use such information.
Preventing psychological injury
To ensure all workers are reasonably protected from psychological risks,
employers should address stressful work-related stimuli, not just employees'
Specific stressful stimuli may include, but not be limited to:
§ controlling management style;
§ poor consultation;
§ blaming culture;
§ unclear job description;
§ inadequate training;
§ poor recruitment techniques;
§ unexplained constant change;
§ intense, fast-paced work;
§ repetitive and boring work;
§ unsupportive work environment;
§ interpersonal conflict;
§ critical incidents;
§ poor ergonomics;
§ lack of flexibility, poor salaries and poor working conditions.
Employers should also be aware of the substantial indirect costs of
psychological injury. They can have a negative impact on a workforce's
productivity, morale, turnover, motivation, absenteeism and relationships.
Managers should take the lead and demonstrate the importance of preventing
workplace psychological injuries at both the organisational and the
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