Stress Leave and Workers’ Compensation in NSW

Two weeks of paid leave may not provide enough time to some employees to return to work in a psychologically improved or capable state. Although Australian employers do not offer paid leave for recovery from stress, you may be able to claim for any additional time you spend managing your mental health when the symptoms you experience are serious or enduring and caused directly by your work.

What is stress leave in NSW? 

What is called ‘stress leave’ in Australia is really the name for personal leave: two weeks of paid leave available to all full-time employees to recover from any illness or injury they experience throughout the year.

In Australia, no separate category of leave exists to cover any additional time employees wish to take off of work due to stress or other psychological injuries. The only way that employees may receive payment or compensation for additional time off of work to manage stress-related symptoms is through workers compensation and/or via a common law claim.

Employment entitlements every employee has  

Australian legislation lists 11 entitlements that all employers must provide their employees. These are called the National Employment Standards (‘NES’) and are listed in Part 2-2 of the Fair Work Act 2009 (Cth).

Specifically, the NES requires employers to provide employees with 10 days of paid sick leave, commonly called ‘personal leave’, a year. The purpose of this leave is to allow you to recover from illnesses or injuries that affect your capacity to work.

If your workplace does not specify that it provides additional days for stress leave, then any time you take off of work to recover from stress or anxiety will be deducted from your yearly sick leave entitlements. ‘Stress leave’ is included as a part of personal leave and not a separate category of leave.

If you work part-time, you are also entitled to sick leave on a 1 hour : 26 hours (leave time: hours worked) basis. Please note that sick leave is different and additional to annual leave – 4 weeks of paid time off of work which the employer must also provide the employee under the NES.

Is work-related stress covered by workers compensation? 

If you experience low-level and manageable stress as a part of your work, you will not be able to claim workers compensation. However, workers compensation is available to workers who experience a psychological injury in the course of their work.

More specifically, you are eligible for workers compensation when your work-related stress can be diagnosed as a mental illness or injury that arises as a result of an event or the reoccurrence of events or conditions at your workplace. You may be eligible for workers compensation, for example, if you develop depression, anxiety, or post-traumatic stress disorder as a result of continual exposure to a hazardous and stressful work environment.

What are some examples of work conditions that can lead to stress or a psychological injury?

Below are some work circumstances and events that commonly lead to work-related stress and psychological injury:

Stress Triggers Examples
Professional pressureHigh or low workloads
Performance issues
Unrealistic deadlines
Lack of clarity about the role
Being under-resourced, a lack of support for the role
Working long or dangerous hours
Fear of job loss Poor working conditions
Interpersonal work pressureRestructures and changes of management
Being ostracised or targeted
Traumatic EventsSuffering, witnessing, or being exposed to distressing events, such as a fatal accident or serious physical injury Suffering, witness, or being exposed to violent events, such as a robbery
Bullying and harassmentBeing subjected to assault, hazing, intimidation

A psychological injury can be the result of a diverse set of circumstances, and can arise from a single event or the impact of circumstances sustained over a period of time. Work events and conditions can also cause pre-existing psychological conditions you have to worsen, leading you to suffer more severely from those conditions. All of these outcomes, if they are a direct result of your work, can entitle you to workers’ compensation.

How do I claim compensation for work-related stress in NSW?

In NSW there are two main processes for claiming compensation for work-related stress. If you experience a workplace injury or illness you should always consider submitting a Workers Compensation Claim. Whether or not you submit a common law claim in addition will depend on a number of factors, including whether you think your employer was at fault for your injury and what kind of compensation you are seeking.

Claiming through Workers Compensation

You can make a Workers Compensation claim for psychological injuries as a result of work-related stress in NSW by notifying your employer and insurer of your injury as soon as you become aware of it.

The Workers Compensation Scheme in NSW does not hold any person at fault for the injury. The main steps of the claim therefore involve notifying relevant parties and obtaining medical proof of your injury.

In brief, submitting a claim for compensation for stress in NSW involves:

  1. Gathering evidence about your injury
  2. Immediately notifying your employer about your injury
  3. Notifying your insurer about your injury
  4. Retrieving your Workers Compensation Claim Number
  5. Seek treatment for your injury and obtain a ‘Certificate of Capacity’

You can read more about this process in our Complete Guide to Workers Compensation NSW 

Making a Common Law Claim for Stress Leave in NSW 

Another avenue for claiming compensation for work-related stress involves filing a common law claim. If you have suffered from psychological injuries as a result of stress from work, and your injury is assessed to have a whole person impairment of greater than 15% then a common law claim is definitely an option to consider.

Successful common law claimants receive a different set of compensation or ‘damages’ to those available under the Workers Compensation Scheme. This is because a common law claim also allows you to apply for compensation for the negligence of your employer; it is an avenue of redress for failure of your employer to take the reasonable or standard steps to protect you from stress or your mental health condition. 

In brief, filling a common law claim involves:

  1. Gathering evidence about your injury and the negligence of your employer (see below for more information);
  2. Lodging a claim with the Workers Compensation Commission; and
  3. Negotiating a settlement with your employer.

For more detailed information on how to lodge a common law claim for work-related stress or psychological injury, read our guide on How to Claim Workers’ Compensation for Psychological Injury.

How do I prove work related stress for workers compensation or a common law claim? 

Compensation claims for stress are usually much harder to prove than for other injuries. Amongst the various factors affecting the psychological injury compensation rate is the rise of workplace compensation claims related to stress and mental health in NSW (11% of all compensation claims compared to 6% a decade ago) and the costliness of mental health conditions compared to other workplace injuries (around 30.7 weeks off of work compared to 6.2 weeks for other injuries). 

In proving work-related stress for a compensation or common law claim, applicants therefore need to be very clear about the causal link between their psychological injury and work events, in addition to providing strong supporting evidence of their claims. 

One of the strongest pieces of evidence and explanatory material you can present to support your stress leave or psychological injury claim is medical evidence of your psychological injury, including a psychiatric assessment. Such assessments by mental health professionals can confirm the seriousness of your condition as well as the causal link between work events and your stress. 

While it is not necessary to seek advice or assistance with your claim, legal representation can greatly improve your chances of articulating your claim clearly and persuasively. Our skilled Workers Compensation Lawyers can not only help you present a strong case for compensation but also assist you with collecting and organising appropriate supporting evidence. 

What compensation am I entitled to for a work-related stress claim?

Succeeding in your claim for compensation or damages can entitle you to multiple forms of payments. If you successfully claim workers compensation for work-related stress, you could receive one or a combination of the following benefits:

  • Weekly wages for loss of income; 
  • Payments for medical expenses;  
  • Lump sum compensation for permanent effects of your injury; and  
  • Payments for the cost of rehabilitation and retraining. 

If you succeed in bringing a common law claim, you will receive a work injury damages payout. This is a lump sum compensation which covers any future loss of earnings you suffer as a result of the permanent effects of your psychological injury, as well as medical costs and travel expenses. 

The amount you receive in damages from a common law claim usually emerges from settlement discussions with your employer in the final step of the claim process. It is therefore crucial to receive legal assistance with negotiating common law payouts to ensure you receive the full amount to which you are entitled.  

Please note that receiving the common law work injury damages payout will end your entitlement to workers’ compensation benefits. In some instances, you may even be required to pay back some of the value of your entitlements from out of your common law damages payout. 

How much compensation can I get from a workers compensation stress claim? 

Workers compensation stress claims entitle you to the following weekly payment amounts: 

Time off workEntitlements 
0-13 weeks95% of worker’s pre-injury earnings
14 – 130 weeks80% of worker’s pre-injury earnings
130 – 260 weeksA work capacity assessment is required to understand if the worker can return back to work:
– Unable to work (no work capacity): 80% of worker’s pre-injury earnings
– Able to work (some work capacity): weekly benefits stop
260 weeks (5 years) 80% of worker’s pre-injury earnings, only applicable for workers with a whole person impairment (WPI) of more than 20%

If your injury has resulted in permanent impairment, your claim will enable you to receive an amount between $27,790 (for an 11% degree of permanent impairment) to $713,660 (for a 75% to 100% degree of permanent impairment). 

All Workers compensation payments measured against earning potential change twice a year according to indexation. If you would like to know more about how compensation for your work-related stress will be calculated please read our Workers Compensation Payout Guide for NSW

Can I sue my employer for stress and anxiety in Australia? 

If you submit a common law claim for damages, you are suing your employer for their failure to protect you from your injury using reasonable industry practices. 

As mentioned above, this avenue of seeking compensation differs from filing a Workers Compensation claim in that you must prove your employer was negligent, you have at least 15% permanent impairment, and you’ve received all the lump sum entitlements for permanent impairment that you are entitled to.

Once you have met the criteria set, you can start a common law claim/work injury damages claim to sue your employer. 

The importance of seeking legal advice 

Workers Compensation and common law claims for psychological injury from work-related stress will both require you to articulate the circumstances and causes of your stress. In the case of common law claims, you will even be required to justify the amount you request in damages against the professional and financial interests of your employer. 

Legal advice is often crucial in these circumstances in helping you to understand the claims process, articulate your claim in an effective and compelling manner, and advocate for the greatest amount of compensation from which you can benefit. 

Alliance Compensation & Litigation Lawyers are sensitive to the emotional difficulties of submitting a compensation claim for stress leave and are focused on helping clients obtain their entitlements.

If you wish to claim compensation for psychological injuries from work-related stress, or would like to know more about the claims process, book in your free no-obligation consultation by calling us on 02 8764 1776 or emailing us at refer@alliancecomplawyers.com.au

Get in touch to find out more HERE … or call 02 8764 1776
We can help.
No win, no fee.
We can help.
No win, no fee.

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