An increasing number of workers compensation 'stress' claims means employers need to know how to reduce the likelihood of these claims and how to manage a claim once it is made. While the total number of cases in NSW is only about 2 percent of all workers compensation claims, stress claimants are on average away from work almost twice as long as other workers compensation claimants. Stress claims cost almost twice as much as an average workers compensation claim.
What is workplace stress?Workplace stress has been defined as the harmful physical and emotional responses that occur when the requirements of the job don't match the capabilities, resources or needs of the worker.
The term 'psychological injury' is often used to emphasise the physical and/or mental condition that results from the existence of prolonged and repeated exposure to stress at work.
Indicators of workplace stress problemsThese can include absenteeism, high or increased accident rates, poor or reduced work output and poor interpersonal relations in the workplace.
Main work-related stressors Those identified in the workplace include:
| Organisation Culture | * excessive hours * regularly taking work home * 'blamestorming' * bullying * failure to consult and communicate |
| Bad Management Practices | * micromanagement * 'control mentality' * incompetence * unethical behaviour * forcing subordinates to 'cover' * lack of consultation and communication * lack of feedback * favouritism or victimisation * bullying * lack of accessibility * taking undue credit * undermining * pushing own agenda or projects * withholding * inability to make decisions * unrealistic goals and targets * constant pressure |
| Job Content and Demands | * work overload * underload * deadlines * inadequate training * withholding work * boring or repetitive work * lack of control * conflicting demands * lack of feedback |
| Physical Working Environment | * unsafe conditions * technology * excessive noise, heat or cold * excessive physical exertion * inadequate lighting or ventilation * lack of maintenance * lack of space |
| Relationships at Work | * personality clashes * rivalry * harassment * victimisation * bullying * 'customer rage' |
| Change Management | * rate and speed * uncertainty * re-applying for own job * downsizing - survivor guilt |
| Lack of Support | * internal or external (e.g. ability to balance work/family or work/study) |
| Role Conflict | * unclear about role of own/others' jobs * unlawful or unethical practices |
| Trauma | * armed hold-up * terrorist attack * major workplace accident |
Minimising exposure to stress claimsUnder NSW occupational health and safety legislation employers have a duty of care to ensure the health and safety of their employees and to undertake risk assessments of hazards in their workplaces, including psychological risk. Note that employees are obliged to co-operate with employer efforts on health and safety.
Employers should assess the work environment and workers' needs to identify problem areas and risks. Work surveys and a review of work practices can be useful in identifying possible causes of stress.
Employee Assistance Programs, set up for employee use to cope with personal and emotional problems, can help employees manage stress at work and home.
When is compensation payable?Provisions in the Workers' Compensation Act 1987 determine when a stress claim is payable by an employer. No compensation is payable in respect of:
- an injury unless the employment concerned was a substantial contributing factor to the injury (section 9A). In practice however, it is difficult to isolate employment from other possible causes.
- a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of, the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers (section 11A).
Check your local state regulatory and statutory requirements.Practical tipsIt is not always possible for an employer to eliminate the possibility of stress claims. Where a stress claim is made by an employee or employer it is essential the claim is managed effectively from the outset.
Employers should attempt to identify those claims where the psychological 'injury' is wholly or predominantly the result of reasonable action (including transfer, demotion, promotion, performance appraisal, discipline or dismissal) taken or proposed by, or on behalf of an employer. Where a claim is lodged in these circumstances, in addition to the general obligations of stakeholders under the legislation, one or more of the following courses of action could also be taken to ensure the claim is being managed effectively:
- Keep in close contact with the insurance/claim officer
Don't just report the injury and rely on your insurer to identify whether the claim falls under Section 11A. Whilst the decision is ultimately up to your insurer, the claims officers that you liaise with will have hundreds of claims to manage at any one time. It is important that your business advises the insurer that there are aspects of the claim that may fall outside the provisions of the Workers' Compensation Act when you lodge the claim. Licensed insurers have an obligation to accept claims on a provisional basis unless they have good reason not to do so. Simply asserting that you may think the claim is ineligible for workers compensation is insufficient. It is important to identify the specific reasons.
- Maintain a good relationship with claims officer/insurance contact
Employers who maintain contact with their licensed insurer tend to have lower claims costs than those who just leave it up to the insurer. Develop and maintain a healthy rapport with the claims officer or insurance contact to enhance the exchange of information.
- Liaise with the treating doctor
Where an employee continues to provide doctor's certificates in relation to the injury/disease, it might be a good idea to make an appointment with the doctor in order to discuss the injury and what steps may be taken to assist the employee to return to work. It may be possible for an employer to provide a broader overview about what is occurring at the workplace and what arrangements can be made to facilitate a return to work for the employee.
Treating doctors are, in the first instance, only getting the employee's side of the story and that may not be the whole story.
However, it is not always possible for you to engage directly with the treating doctor. Where this is not possible it is worthwhile to talk to your insurer and or rehabilitation provider who may be in a better position to do so.
- Focus on a return to work (where possible)
Where a claim is accepted it is important to continue to liaise with the employee, relevant doctor and insurer in order to assist the employee to return to work as soon as possible. Generally it is the time people are off work that has the greatest impact on the cost of workers compensation claims. The sooner an injured worker is back at work, the greater the chances the cost of the claim to the business, and to the injured worker, will be reduced.