What is the legal definition of a psychological injury?

HR managers should be wary of how the definition of ‘psychological injury’ varies according to jurisdiction.

It is a given that HR professionals must understand how seriously psychological injury can impact the productivity and happiness of employees. But how well understood is the legal definition of ‘psychological injury’? And how aware are HR managers of its common causes, and how employees might exploit or distort that definition?
Sally Cutts, psychologist with leadership and management consultants TMS Consulting, points out that the legal definition of psychological injury is dependent upon where a business is located.

“The legal definition of psychological injury in Australia actually changes depending on the jurisdiction,” she told HC Online. “In relation to work, ‘psychological injury’ refers to any work related stress and associated emotional condition resulting from real or perceived harm.

“But psychological injury is not just workplace stress, it is a stress response to the point of a psychological disorder. Examples of psychological injury are depression, post-traumatic stress disorder (PTSD), and anxiety disorders.”

Cutts believes that the lack of an Australia-wide definition of psychological injury is a limitation, with disadvantages for employer and employee alike.

Another limitation to defining psychological injury – perhaps a more unavoidable one – is that it is open to exploitation by employees. Employers should therefore be aware of this, but also understand that ‘reasonable’ management decisions that affect workers in a potentially negative way can generally not be subject to claims of psychological injury as a result of workplace factors.

“It is possible that individuals could attempt to exploit the term ‘psychological injury’ by making a false claim and pretending they have a psychological injury,” said Cutts. “Employees could also make a claim for psychological injury as a result of management decisions.

“However, at least in NSW, claims are not payable if the psychological injury was caused by the employer’s reasonable action regarding performance management decisions. For example, this means that if an employee is unhappy with a decision not to be promoted, they are not able to claim compensation from a psychological injury arising from this, as it was a reasonable management decision – obviously with appropriate paperwork to support the decision.”

Cutts says that workplace-related psychological injury can be caused by environmental, organisational and individual factors. Environmental causes include unsafe noise levels, unsafe machinery, workplace accidents and traffic accidents. Organisational factors include high job demand, low levels of support from managers and colleagues, poor workplace relationships and organisational change.

In describing individual factors, Cutts says, “We need to be mindful that everyone responds to stressors and hazards differently. Individual differences mean that some are more vulnerable to developing a psychological injury from exposure to hazards than others.”


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