For small business owners, workers’ compensation claims may be few and far between. However, if and when they do arise, they can be destabilising for businesses that have limited resources and cash flow.
This is no more true than in cases of psychological claims. According to Safe Work Australia claims involving mental disorders often mean higher than average time off and claim costs.
Unfortunately, the claims process often leaves both parties feeling frustrated, with outcomes sometimes taking longer than anticipated. And, with more than 90% of claims involving a mental disorder linked to work-related stress, the increasing pressure can create unwanted friction.
“Some insurers, when they’re presented with a psychological claim, will push that claim away using what’s called a reasonable excuse,” said Spencer McCabe, Manager Claims Supervision at regulatory authority SIRA at a recent workers’ compensation event hosted by SmartCompany and the Australian Chamber of Commerce and Industry.
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“So the injury that’s described to the insurer will list stress, depression, anxiety. The insurer will respond, ‘Well, that’s not a diagnosable condition, so we therefore don’t have to make payments on it.’”
According to McCabe, insurers will then make investigations in the background to reach a liability determination, after which they may get in touch with the worker. In the meantime both employer and employee have been lost in a limbo state waiting for an outcome, which can lead to negative consequences.
Keeping the lines of communication open
According to McCabe there’s often a ‘culture of blame’ when it comes to psychological claims.
“So the worker’s blaming the employer, the employer wants to blame the worker, and it tends to be more frictional.”
This of course, makes communication absolutely critical to arrive at an amicable outcome.
“The biggest single determinant of whether a worker is likely to return to work or not is their relationship with their employer,” says McCabe.
Liz Greenwood, Policy Manager, Workers’ Compensation, WHS and Regulation at NSW Business Chamber agrees, stating that more often than not employers have the best intentions.
“Employers tend to – in my experience anyway – have the reaction, ‘Well of course, do what you have to do and get better.’”
Greenwood adds that if a stress-related injury has something to do with work, employers often choose not to constantly stay in contact with their employee as they don’t want to be the trigger for further stress.
“Psychological injury should not be treated the same as a broken toe,” says Greenwood.
McCabe, however, says the deliberation process that often comes with insurance claims may mean that both parties – but particularly the employee – feel that communication has broken down, which can lead to more unnecessary stress and anxiety.
What can be done?
Peter Meighan, Manager, Policy Services at icare NSW emphasises the need for more communication, particularly between the insurer and the employer.
“That contact with the employer to help the return to work process from day one is absolutely key [to a good outcome],” says Meighan.
Regardless of the claim status, it is important for businesses to work closely with their insurer to ensure that the lines of communications are open between all parties. McCabe suggests that employers can be asking their insurer, “What can you do for me?” in order to get the best out of what can be a difficult situation.
The Australian Chamber is Australia’s largest and most representative business association, comprising of state and territory chambers of commerce and National Industry Associations. Biz Better Together is an Australian Chamber initiative, established with assistance from the Department of Employment under the Productivity Education Training Fund, to engage with business on productivity enhancing tips and tricks.