Two systems, one regulator. Why some WorkCover mental injury claims are rejected in Victoria.

Sep 7

14 min read

In brief: In Victoria, a WorkCover mental injury claim can be rejected even when the scheme’s own Independent Medical Examiner has found that the injury was predominantly caused by work. WorkSafe’s Claims Manual authorises rejection where the worker’s account of events has not been corroborated. Since 31 March 2024, mental injuries must be the predominant result of employment, injuries from usual workplace stress are excluded, and injuries from reasonable management action have long been excluded. Together these rules mean that harm caused by a colleague or manager is harder to have recognised than harm caused by a member of the public. At the same time, Victoria’s Psychological Health Regulations, in force since 1 December 2025, require employers to prevent exactly that kind of harm. This article explains how the two frameworks fit together and what injured workers and their treating practitioners can do.

A Victorian psychologist explains why mental injury claims caused by colleagues or managers are rejected more often, what WorkSafe’s own rules say, and what helps.

I am feeling angry these days because I am part of a system that creates outcomes for people that do not align with my values. Client-centredness is my clinical philopshy and I believe strongly in the Latin maxim primum non nocere, which means "first, do no harm". That statement serves as a foundational principle of clinical ethics emphasising non-maleficence. This blog is about sharing my lived experience only, and perhaps helping individuals in this system learn a bit more about it.

Who this is written for

Most people who lodge a WorkCover claim for a mental injury have never had to prove to a stranger that something happened to them. They have usually already spent months trying to cope, then trying to be believed by their own workplace, and by the time they reach a psychologist they are often exhausted in a way that sleep does not fix. The claim form is one more task in a long line of tasks that the injury itself makes harder to complete. This article is written for those people, and for the general practitioners, lawyers and other referrers who support them.

I treat people at every stage of the process. Some arrive on provisional payments, where WorkSafe funds treatment while the claim is decided. Some arrive with accepted claims. Some arrive after a rejection. Over time I have noticed a pattern in who ends up in which group, and I want to set it out carefully, because it is an observation from my own practice rather than a finding from data, and because the reasons for it turn out to be written into the scheme’s own documents.

What the process looks like from the treatment room

What follows is a composite. It draws on the experiences of several people I have treated under WorkCover over the past year, with details altered and combined so that no individual, workplace or incident can be identified. No client is described here, and none of the events belong to a single person.

Two things are consistent across almost everyone I see under WorkCover.

The first is that the system they enter is not built around trauma-informed principles. Trauma-informed practice is a set of commitments that health services use when working with people who have been harmed. The principles are usually described as safety, choice, collaboration, trustworthiness and empowerment. In practice they mean that a person is not asked to retell distressing events more often than necessary, that they know what will happen next and why, that decisions about them are explained, and that they are treated as a credible reporter of their own experience.

The composite picture runs the other way. A person gives their account to a claims manager, then to an investigator, then to one or more independent examiners, and often again to a rehabilitation provider, with each retelling producing the same physiological response as the original event. Examinations can be brief, and the reports that follow sometimes reach conclusions about capacity or diagnosis that differ markedly from the treating GP, the treating psychologist and the standardised measures administered over months of treatment. A return to work recommendation is delivered over the phone in a tone that treats it as good news, while the person on the other end is shaking and unable to speak. Undertakings are given and not kept, for example a promised letter to the workplace to stop colleagues making contact, or a promised summary of a report, or a choice of rehabilitation provider that is later withdrawn. Approval of a claim is sent to a work email address the person no longer opens because it was a source of distress, so they carry two further weeks of uncertainty about a decision already made in their favour. Certificates of Capacity and receipts accumulate, payments are missed when paperwork arrives late, and the administrative load lands on someone whose concentration and decision making are impaired by the injury itself.

Several people have described the experience as being treated as if they might be making it up. In more than one case a claims manager has eventually said, in so many words, that they know the person is not trying to exploit the scheme. That the reassurance was needed at all tells its own story. For people whose earlier lives included not being believed when they disclosed harm, and this is common in the group I see, the compensation process reproduces the original wound with some precision. I have watched standardised measures of posttraumatic stress and insomnia move upward in the weeks following an examination, after months of steady improvement, and I have documented the compensation process itself as a clinical stressor in scheme reporting where that was the accurate clinical picture.

This is my clinical observation, not a measured finding. I am not aware of published data that tests it directly. It is consistent enough across claims managers, examinations and return to work contacts that I no longer think of it as individual variation.

The second consistent feature is the difference in outcome depending on who caused the harm. In the composite, the person assaulted by someone they were there to serve, a member of the public or a person in their care, had their claim accepted. The process was hard, but whether the event happened was never in dispute. The people harmed by a colleague or a manager met a different process. One had a workplace investigation find that a colleague’s conduct could not be corroborated even though it had been witnessed by a manager and a human resources representative. One had a complaint of unwanted physical contact found unsubstantiated after the other party admitted part of the conduct, and was made redundant within weeks of the finding. One had an examiner attribute a severe posttraumatic presentation to interpersonal difficulties and stress, and the claim was rejected on that basis. One had a claim rejected because the account had not been sufficiently corroborated, in a decision issued after an independent examiner had concluded that the injury was predominantly caused by employment.

The diagnoses across these people were broadly the same. Posttraumatic stress disorder, major depression and generalised anxiety, at severities that left them unable to work, care for themselves reliably, or leave the house without significant effort. The functional impact was broadly the same. The difference in how the scheme responded tracked the identity of the person who caused the harm.

I want to be precise about the status of that statement. It is what I have seen in my own caseload, described as a composite. It is not a statistical finding. What I can do is show why the framework makes this pattern likely.

Why does the WorkCover framework produce this pattern?

On 31 March 2024, changes to the Workplace Injury Rehabilitation and Compensation Act 2013 (the WIRC Act) came into effect. WorkSafe Victoria describes them as scheme modernisation. For mental injury claims, three changes matter here.

The first is the causation test. Employment must now be the predominant cause of the mental injury, meaning the strongest or largest contributing factor relative to all others (WorkSafe Victoria, Practice Directive, Mental injury eligibility). Before that date, the test was whether employment was a significant contributing factor. The bar moved up.

The second is a new exclusion for stress and burnout arising from events that are usual or typical and reasonably expected to occur in the course of a person’s duties. The Practice Directive states that workload pressure and work related interpersonal interactions fall within what is reasonably expected. It also states that unreasonable behaviour, including bullying, harassment and discrimination, is not considered reasonably expected and may be considered traumatic, and that where it is not clear whether bullying has occurred, the decision maker may request further information to substantiate allegations or confirm that events occurred.

The third is a longstanding exclusion that predates 2024. There is no entitlement where a mental injury is wholly or predominantly caused by management action taken on reasonable grounds and in a reasonable manner. The WorkSafe Claims Manual (section 2.1.2.4) lists what counts as management action. It includes appraisal of performance, counselling, disciplinary action, transfer, demotion, investigation of alleged misconduct, and communication in connection with any of these.

Read together, these provisions explain the pattern I see. A person injured by a stranger has nothing to substantiate beyond the event itself. A person injured by a colleague or manager must establish that the conduct was unreasonable rather than expected workplace interaction, and must establish that it was not reasonable management action. The information used to test those questions comes largely from the employer, who is also the party whose conduct is in question. The claim is not decided by the employer. It is decided by a WorkSafe authorised agent. But the agent is weighing the worker’s account against an account supplied by the workplace, and the framework asks the worker to carry the burden of corroboration.

Can a claim be rejected when the IME says work caused the injury?

Yes, and this is the part I find hardest to reconcile with how the rest of health care works.

The WorkSafe Claims Manual (section 2.1.2.1) states that the causation ground can be relied on to reject a mental injury claim where the worker’s version of events has not been corroborated, even when the Independent Medical Examiner has stated that the injury has been predominantly caused by employment. The manual’s reasoning is that the IME’s opinion rests on events described by the worker, and there may be evidence on which the agent can refute the claimed events.

In plain terms, a medical specialist engaged by the scheme can examine a person, conclude that their work caused their injury, and the claim can still be rejected because the account of what happened at work has not been confirmed by someone else. The clinical judgment about causation is set aside in favour of a judgment about credibility, made by a claims officer rather than a clinician.

There is a second structural feature that is less well known. The Practice Directive states that only a general practitioner or psychiatrist can provide a diagnosis of a mental injury for the purposes of the WIRC Act, and that psychologists cannot. This is a legislative definition rather than a comment on competence, and it is worth understanding for anyone lodging a claim. A treating psychologist’s diagnostic formulation does not, on its own, satisfy the scheme. The Certificate of Capacity must come from a medical practitioner.

I am not arguing that credibility should never be examined. Any compensation scheme has to make findings of fact. My concern is narrower. When a scheme’s own examiner reaches a causal opinion and the scheme’s own manual authorises a decision maker to override it on the basis of uncorroborated events, the people trained to recognise psychological harm are not the people deciding whether it happened. For the injuries most likely to lack independent witnesses, which are exactly the interpersonal injuries caused by colleagues and managers, this is a significant barrier.

What if the employer’s investigation was not done properly?

Many of the people I see were harmed by a colleague or manager and then harmed again by the way their complaint was handled. The investigation was slow, or was run by someone close to the person complained about, or reached its conclusion without speaking to the people who were present, or found the conduct could not be corroborated when it had been witnessed. Sometimes it is reasonable to infer that an organisation preferred not to find what it would then have to act on. That inference cannot be proved from the treatment room, so I state it as an inference.

The framework does anticipate this, up to a point. The management action exclusion applies only where the action was taken on reasonable grounds and in a reasonable manner. The Claims Manual states that the action must be lawful, must not be irrational, absurd or ridiculous, and must be assessed with regard to the applicable award or enterprise agreement. An investigation that was predetermined, that ignored available witnesses, that departed from the employer’s own complaints procedure, or that was conducted by a person with a conflict of interest is open to challenge as not having been conducted in a reasonable manner. If the exclusion falls away, the ordinary causation test applies.

The Practice Directive also does not say that corroboration must come from the employer. It refers to the agent’s own circumstance investigation, to information from the worker, and to medical records. Messages sent at the time, a colleague willing to give a statement to the agent’s investigator, notes kept by a union representative, and clinical records showing what was reported and when, all sit outside the employer’s finding. Where an internal investigation has reached a conclusion the worker knows to be wrong, the useful step is to identify every source of evidence that does not depend on the employer and to make sure the agent has it.

Two further points. A deficient investigation is itself a psychosocial hazard. Poor organisational justice and poor support are named in WorkSafe’s guidance under the Psychological Health Regulations, so an employer that looks away from misconduct may be in breach of its prevention duty at the same moment its account is being relied on to defeat a compensation claim. And the WorkCover file is not the only avenue. A rejected claim can be taken to conciliation at the Workplace Injury Commission. Harassment and discrimination can be raised with the Victorian Equal Opportunity and Human Rights Commission or the Australian Human Rights Commission. Bullying can be raised with the Fair Work Commission. A psychosocial hazard can be reported to WorkSafe as a health and safety matter, separate from any claim. Those bodies can require information that an individual worker cannot. Which body bears the burden of proving that management action was reasonable in a Victorian claim is a legal question I am not able to answer here, and it is one to put to a workers compensation lawyer early.

What do the 2025 Psychological Health Regulations change?

On 1 December 2025, the Occupational Health and Safety (Psychological Health) Regulations 2025 commenced in Victoria. They require employers to identify psychosocial hazards and to eliminate or reduce the associated risks so far as is reasonably practicable. The definition of a psychosocial hazard expressly includes factors in the management of work and in personal or work related interactions. Bullying, poor support, poor organisational justice and poor workplace relationships are named hazards in WorkSafe’s guidance. Information and training cannot be the predominant control where changing the work itself is reasonably practicable.

I welcomed these regulations. They recognise, in law, that harm from managers and colleagues is foreseeable and preventable, and that the responsibility to prevent it sits with the employer.

This is where the two systems separate. Prevention law now treats a manager’s conduct toward an employee as a hazard that the employer must control. Compensation law, amended twenty months earlier, treats the same conduct as something a worker must corroborate before their injury from it is recognised, and excludes it entirely where it can be characterised as reasonable management action. The same regulator administers both. An employer can be in breach of the Regulations for failing to control a psychosocial hazard while the worker harmed by that hazard has their compensation claim rejected because their account was not confirmed. I do not think these two positions were designed to conflict, but in practice they do, and the injured person sits in the gap between them.

What helps when making a mental injury claim

I set this out because knowing how a system works changes how a person can move through it, and because the burden of corroboration is easier to meet when it is anticipated.

Contemporaneous records matter more than most people expect. Emails, messages, diary notes and dated records of conversations, kept at the time, are the kind of evidence the framework asks for. Early medical contact matters, because the Claims Manual uses first treatment and first certification as anchors for the date of injury, and treats clinical records as the most reliable evidence. A GP or psychiatrist must make and certify the diagnosis. Where a treating psychologist is involved, their reports still carry weight in describing functional impact and treatment, and a GP can draw on them. Provisional payments for a mental injury claim continue for up to 13 weeks after a rejection, so treatment does not need to stop while a decision is reviewed. People also have the right to seek review of a rejected claim, and legal advice from a workers compensation lawyer is appropriate at that point.

For GPs and referrers, the practical implication is that a Certificate of Capacity for a mental injury should name the DSM diagnosis and describe the significant behavioural, cognitive or psychological dysfunction, because both are now required by the definition. Where the causal events involve a colleague or manager, the certificate and any supporting report are strengthened by clear, dated documentation of what the worker reported and when.

None of this is legal advice. The WIRC Act, the Practice Directive and the Claims Manual are the primary sources, and they are linked below. Where a person’s circumstances depend on how those provisions are applied, a lawyer or WorkSafe Advisory is the right contact.

A closing observation

The people I see under WorkCover are not, in the main, seeking anything other than treatment and a return to work that does not re-injure them. What they describe as most difficult is often not the original event but the process of being asked to prove it to people who appear to doubt them. A scheme that requires corroboration of harm caused by colleagues and managers, while the regulator’s own prevention law names that same harm as a foreseeable hazard, is asking the most of the injuries that are hardest to evidence. I do not have a complete solution to offer. I do think the two halves of the regulator’s framework should be read together, and I think clinicians, referrers and injured workers are entitled to understand how they currently fit.

Frequently asked questions

Can WorkCover reject a mental injury claim in Victoria if the IME says work caused it?

Yes. The WorkSafe Claims Manual (section 2.1.2.1) states that a mental injury claim can be rejected on the ground that it did not predominantly arise from employment where the worker’s version of events has not been corroborated, even when the Independent Medical Examiner has concluded that employment was the predominant cause.

What does predominantly arose out of employment mean?

For mental injuries sustained on or after 31 March 2024, employment must be the strongest or largest contributing cause of the injury relative to all other causes combined. Before that date the test was whether employment was a significant contributing factor.

Can a psychologist diagnose a mental injury for a WorkCover claim?

No. Under the WIRC Act a mental injury must be diagnosed by a medical practitioner, meaning a general practitioner or psychiatrist, using the current DSM. A psychologist’s assessment can support the claim but the Certificate of Capacity and diagnosis must come from a medical practitioner.

Are injuries caused by a manager covered by WorkCover?

Sometimes. There is no entitlement where the mental injury was wholly or predominantly caused by management action taken on reasonable grounds and in a reasonable manner. Injuries predominantly caused by bullying, harassment or discrimination remain compensable, but the decision maker may seek further information to substantiate those allegations.

What are provisional payments?

Provisional payments allow a WorkSafe agent to fund reasonable treatment for a claimed mental injury while the claim is being decided. If the claim is rejected, treatment costs continue to be covered for up to 13 weeks.

What if my employer’s investigation was unfair or incomplete?

The management action exclusion only applies where the action was taken on reasonable grounds and in a reasonable manner. An investigation that was predetermined, ignored witnesses or departed from the employer’s own procedure can be challenged on that basis. Corroboration does not have to come from the employer, and a rejected claim can be taken to conciliation at the Workplace Injury Commission. Legal advice is recommended.

What do the Psychological Health Regulations 2025 require?

From 1 December 2025, Victorian employers must identify psychosocial hazards, including factors in the management of work and workplace interactions, and eliminate or reduce the associated risks so far as is reasonably practicable. Information and training alone cannot be the predominant control where altering the work is reasonably practicable.

Sources

WorkSafe Victoria. Claims Manual, section 2.1.2, Mental injuries, entitlements and exceptions. https://www1.worksafe.vic.gov.au/vwa/claimsmanual/Claims%20Manual/2-claims-management/2-1-workers-and-injuries/2-1-2-mental-injuries-entitlements%20and%20exceptions.htm (accessed 7 September 2026)
WorkSafe Victoria. Practice directive, Mental injury eligibility. Reviewed 7 October 2024. https://www.worksafe.vic.gov.au/practice-directive-mental-injury-eligibility (accessed 7 September 2026)
WorkSafe Victoria. Scheme modernisation. https://www.worksafe.vic.gov.au/scheme-modernisation (accessed 7 September 2026)
WorkSafe Victoria. Information for IMEs, Mental injury eligibility, determining if employment is the predominant cause. https://www.worksafe.vic.gov.au/information-imes-mental-injury-eligibility-determining-if-employment-predominant-cause (accessed 7 September 2026)
Workplace Injury Rehabilitation and Compensation Act 2013 (Vic), sections 3, 39 and 40, as amended by the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Act 2023 (Vic), in effect 31 March 2024.
Occupational Health and Safety (Psychological Health) Regulations 2025 (Vic), Statutory Rule 103/2025, commenced 1 December 2025. WorkSafe Victoria, Compliance Code, Psychological health, Edition 1, September 2025.

Dr Sarah Fischer is Principal Psychologist at Behavioural Edge Psychology and a registered WorkSafe Victoria provider. This article is general information drawn from publicly available scheme documents and the author’s clinical experience. It is not legal advice. Clinical observations are presented as a composite drawn from several people, with details altered and combined so that no individual, employer or incident can be identified. No person described here is a single real client.