By Gaby Grammeno Contributor

The worker was employed as a correctional officer with Tasmania’s State Litigation Office. 

In August 2021 he injured his right knee while twisting to put a box down. He got a medical certificate saying he was unable to work for five days, and put in a claim for workers compensation.

Though he returned to work, the physical injury claim was left open so that the worker could continue with physiotherapy, and he continued to be provided with medical certificates. 

In June 2022 his knee injury was exacerbated by further incidents, and he was certified as incapacitated for any work from 21 June 2022 to 5 July 2022. He had an ongoing incapacity for work but attended work on a return to work plan.

A psychiatrist commissioned by the employer diagnosed an adjustment disorder with depression and anxiety and said he thought the substantive cause of the psychiatric disorder was the right knee injury and ‘the relevant context and consequences’.

The employer also commissioned a consultant orthopaedic surgeon to assess the worker’s knee injury. The consultant expressed the opinion that ongoing symptoms affecting the right knee were due to pre-existing degenerative disease and were not a compensable injury.

When the injury management co-ordinator told the worker the employer would not be paying for knee surgery, the worker responded that the workers compensation process had caused a decline in his mental health and as such he was considering lodging a new compensation claim.

In April 2023, he duly provided the employer with a further workers compensation claim form and accompanying medical certificate stating that from November 2022, the worker suffered severe anxiety and depression resulting from his ongoing workers compensation injury and ‘lack of meaningful work’ on his return to work plan, and that he was incapacitated for ‘any work’ from 9 May 2023 to 20 June 2023.

The employer disputed liability and referred the claim to the Tasmanian Civil and Administrative Tribunal, arguing that under s 81A of the Workers Rehabilitation and Compensation Act 1988, compensation was not payable because it was a separate claim for an illness or disorder of the mind, which had arisen substantially from reasonable action taken by the employer in a reasonable manner.

After considering the evidence, the Tribunal’s Deputy President found that by virtue of s 80A of the WRC Act, the Tribunal did not have jurisdiction to determine the referral, because the claim was ‘in respect of’ an injury for which the worker had previously made a claim for compensation. 

The Deputy President concluded that the cause of the psychological injury was the ongoing effects of the physical injury, and that the employer could therefore not establish that the psychological injury had arisen from reasonable management or administrative action. 

The Tribunal’s Deputy President noted, however, that this conclusion was hypothetical ‘because the ultimate disposition of the referral depended on the finding that the Tribunal did not have jurisdiction to determine it’.

The employer’s appeal from the Tribunal was heard in the Supreme Court of Tasmania.

In court

The employer’s case was that the Tribunal had got it wrong – that the psych injury claim arose from the manner in which they had dealt with the claim, rather than arising as a direct consequence of the knee injury. 

They maintained that the action they took in relation to the knee injury was reasonable, enabling them to dispute liability under s 81A.

The Court’s job was to determine whether the physical injury had caused the worker’s psychological injury, and whether the Tribunal had correctly concluded worker's claim for incapacity from psychological symptoms was ‘in respect of’ physical injury.

Judge Michael Brett said that in his view, the employer’s argument was flawed in two fundamental respects. 

‘Firstly, it focusses on conclusions available from the objective evidence about the relevant causal connection, and does not address the correct question requiring determination under s 80A. Secondly, it misapplies the required connection between the claim and the injury, in particular the meaning and application of the requirement that the claim must be "in respect of an injury"’, he said.

‘As a matter of common sense, it can often be expected that a psychological condition will occur as a consequence of the ongoing effects of a physical injury on the worker's life. This must include the impact arising from the ongoing action taken by the employer in respect of the worker's employment. In my view, the causal link clearly falls within the ambit of that contemplated by the term "in respect of" as it appears in s 80A.’

Even if the psychological symptoms arose partly because of the employer’s management of the claim, the consequences would not have ensued were it not for the original physical injury.

Judge Brett was satisfied that the Tribunal's conclusion was correct in its finding that the worker's claim for incapacity arising from psychological symptoms was in respect of the physical injury, ‘and indeed the only conclusion open on the undisputed evidence’. Consequently, s 81A had no application to this claim.

The Court therefore dismissed the appeal.

What it means for employers

Before deciding to take the position that a claim for psychological injury is attributable to reasonable management action, employers would do well to consider all the factors which could have contributed to a worker’s psychological condition, including an earlier physical injury.

Read the judgment

State of Tasmania v Cane [2024] TASSC 56 (5 November 2024)