Psychological injury caused by misperception – another dirty defense tactic


This interesting legal case (NSW 2010) shows how employers and- of course- workcover insurers will go to great length to try  to dispute claims for psychological injury based upon a broad interpretation of the ‘misperception‘ argument, especially in circumstances where the worker’s injury was caused by a reaction to seemingly harmless events at work or an arguably ‘irrational‘ interpretation of exchanges with other employees or managers. However, as you’ll see from this case, an injured worker’s entitlement to compensation is not dependent upon the [injured] worker establishing or proving that his or her perception of events was a rational one!

Psychological injury caused by work or misperception?

The case

The [injured] worker started proceedings Workers compensation Commission of NSW (WCC) alleging that she had suffered a psychological injury as a result of an excessive workload, chronic pain associated with a work related foot injury as well as harassment in her workplace.

The insurer – of course- disputed liability, and defended the claim on the basis that the injured worker’s injury was caused as a consequence of her ‘misperception of events’. They contented that as such the injury did not arise out of or in the course of employment and was not ‘substantially work related.’

The first Hearing

However,at first WCC Hearing, Arbitrator John McGruther did find that the injured worker had sustained a psychological injury arising out of her employment to which employment had been a substantial contributing factor.

The employer – alas the workcover insurer- of course- appealed Arbitrator’s McGruther’s decision.

The Appeal

The employer (read the workcover insurer)argued that the ‘harassment, victimisation and excessive workload’ alleged to have caused the [injured] worker’s injury basically amounted to ‘a misperception’ of actual events. The employer/insurer also referred to another legal case [Yeo v Western Sydney Area Health Service (1999) 17 NSWCCR 753] in which the Judge had stated that

“A misperception by a worker of an otherwise innocuous matter, which misperception leads a worker to develop a psychiatric condition, does not constitute an injury arising out of or in the course of employment”.

At the appeal, the Acting President Bill Roche of the Workers compensation Commission of NSW concluded that the critical question was whether the events complained of occurred in the workplace or not. Roche highlighted that a worker’s reaction to events will always be subjective and will depend upon his/ her personality and circumstances.

Roche then set out a number of conclusions which he had drawn from authorities on this issue:

  • Employers take their employees as they find them (the ‘egg shell psyche’ principle)
  • A perception of real events, which are not external events, can satisfy the test of injury arising out of or in the course of employment
  • If events which actually occurred in the workplace were perceived as creating an offensive or hostile working environment, and a psychological injury followed, it is open to the Commission to conclude that causation is established
  • So long as the events in the workplace were real, rather than imaginary, it does not matter that they affected the worker’s psyche because of a flawed perception of events because of a disordered mind
  • There is no requirement at law that the worker’s perception of the events must have been one that passed some qualitative test based on an ‘objective measure of reasonableness
  • It is not necessary that the worker’s reaction to the events must have been ‘rational, reasonable or proportionate‘ before compensation may be recovered.

In this case, while the injured worker’s reference to ‘bullying and harassment’ may have been, on one hand, an overstatement, the injured worker’s perception was that she had been unfairly treated at work over work-related matters.

That the manager against whom the injured worker’s allegations of victimisation were directed had a different perception of a particular conversation did not defeat the injured worker’s claim. Even if the injured worker’s perception had been an irrational one (which Roche thankfully did not believe it was), it was based on real events concerning important work-related issues.

Roche accepted that the injured worker was distressed by her manager’s conduct and that it played a significant part in the development of her psychological condition. The injured worker had based her perception upon real events that happened at work. As such, Arbitrator Roche did not have to consider whether the injured worker’s perception was incorrect or even irrational. He only had to determine if the events complained of actually occurred and, if they did, whether the injured worker’s injury resulted from those events.

Attorney General’s Department v K [2010] NSWWCCPD 76 (21 July 2010)


The Acting President Bill Rocher has clearly  emphasised that the statutory workers compensation scheme operates within a ‘no fault’ framework. An injured worker’s entitlement to compensation is not dependent upon the [injured] worker establishing or proving that his or her perception of events was a rational one. The [injured] worker need only establish that the events in question occurred and that the injury flowed from a genuine reaction to those events in order to succeed a claim.


[post dictated by workcovervictim and manually inserted on behalf of workcovervictim]


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