Psychological Injury Risk: A Powerful Reminder of the Cost of Poor Consultation

A recent case reported by HRDaily offers a compelling reminder for employers across all sectors: effective consultation isn’t just best practice — it is a legal and psychological safety imperative.

In this case, NSW Personal Injury Commission Member John Turner found an employer liable for a psychological injury suffered by a worker recovering from a physical injury. Turner was direct in his assessment, noting that the employer “simply did not consult” the employee regarding possible modified or alternate duties she may have been able to undertake while recovering. This lack of engagement critically undermined the employer’s ability to rely on a “reasonable action” defence in response to her claim.

The worker had been recovering from a physical injury and sought modified duties — a common, practical, and often beneficial pathway supporting return to work. But the employer did not open dialogue about what options existed, nor did it explore her capabilities or willingness to participate in adjusted tasks. As Turner highlighted, this absence of consultation was central to the psychological injury that developed, and it was equally central to the employer’s liability.

What this means for employers:

• Consultation is a non‑negotiable duty. Employers cannot assume the limits of an injured worker’s capacity without asking, listening, and exploring suitable pathways. By failing to consult even at a basic level, organisations expose themselves to significant legal risk.
• Psychological injuries frequently arise from process failures — not just heavy workloads or interpersonal conflict. The HRDaily report underscores that when employees feel excluded, ignored, or unsupported during recovery, the impact can be psychological as well as operational.
• Reasonable management action must be both “reasonable” and “action.” Silence or inaction cannot satisfy this standard. The Commission in this case was clear: reasonable action requires genuine engagement and evidence of thoughtfulness and procedural fairness.

The broader lesson:

As psychological injury claims continue to grow in Australia — a trend reflected in numerous decisions across commissions and courts — the consistency of employer processes is under increasing scrutiny. The HRDaily article aligns with broader commentary on psychosocial risk management and reinforces that procedural rigour, transparency, and empathy are not optional extras — they are legally relevant behaviours.

For HR leaders, managers, and executives alike, this case highlights an important opportunity:

• Embed structured consultation into injury management and return‑to‑work processes;
• Train leaders to maintain active, supportive communication during employee recovery;
• Ensure decisions about modified duties are collaborative, not unilateral.

Acknowledgment:

This important case insight comes from HRDaily’s reporting and the findings of NSW Personal Injury Commission Member John Turner, whose detailed observations highlight the very real consequences of procedural gaps in workplace injury management.