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Workplace Bullying and Psychological Injury Claims in NSW

Psychological injuries caused by workplace bullying are one of the most common categories of workers compensation claims in NSW. They are also among the most frequently disputed. This guide explains what workplace bullying is in the legal sense, when it can give rise to a compensable psychological injury under NSW workers compensation law, the section 11A exclusion you will hear about from insurers, and how to access psychological treatment under an approved claim.

What Is Workplace Bullying?

In the NSW context, workplace bullying typically refers to repeated, unreasonable behaviour directed at a worker or group of workers that creates a risk to health and safety. The key elements are:

• Repeated: A single incident of unreasonable conduct may not constitute bullying in the legal sense (though a single serious incident may give rise to a separate psychological injury claim).
• Unreasonable: Behaviour that a reasonable person, having regard to all the circumstances, would consider unreasonable — including verbal abuse, humiliation, belittling, intimidation, isolation, and unfair work allocation.
• Creates a risk to health and safety: The conduct causes or has the potential to cause harm.

What bullying is not (in the legal sense)

Reasonable management action does not constitute bullying. Under NSW workers compensation law and the Fair Work Act, the following are generally not considered bullying if carried out reasonably:

• Performance reviews and feedback
• Managing underperformance or misconduct
• Directing or supervising work
• Rostering decisions
• Reasonable disciplinary processes

The difficulty is that the line between "reasonable management action carried out in a reasonable manner" and "bullying" is often disputed. Conduct that is technically framed as performance management but is delivered in an abusive, disproportionate, or demeaning way may not qualify as reasonable management action under section 11A.

When Workplace Bullying Can Give Rise to a Workers Comp Claim

Under the Workers Compensation Act 1987 (NSW), a psychological injury is compensable when:

1. You have a psychological injury (diagnosed by a medical professional)
2. Work — including the nature or conditions of your employment — was a significant contributing factor to the injury
3. The section 11A exclusion does not apply

The section 11A exclusion in detail

Section 11A excludes compensation for psychological injuries where the injury results solely from "reasonable management action carried out in a reasonable manner". This is the most common basis on which insurers dispute psychological injury claims in NSW.

The critical word is solely. If your injury was partly caused by conduct that was not reasonable management action (for example, abusive conduct, bullying, or harassment), the section 11A exclusion should not apply.

Courts and the NSW Personal Injury Commission (PIC) have consistently held that:

• Conduct that involves verbal abuse, threats, or humiliation does not constitute "reasonable management action carried out in a reasonable manner"
• Performance management that is disproportionate, persecutory, or used as a vehicle for bullying is not "reasonable"
• The manner in which management action is carried out is as important as the nature of the action itself

Whether section 11A applies is often contested and may ultimately need to be determined by the Personal Injury Commission. If your insurer disputes your claim on section 11A grounds, legal advice from a workers compensation solicitor is strongly recommended.

What to Do If You Have a Psychological Injury from Workplace Bullying

Step 1: See your GP

Your GP is the first port of call. They will assess your psychological health, document the work-related nature of your injury, and issue a Certificate of Capacity. Ask your GP specifically for a referral to a SIRA-approved psychologist for workers compensation — this is different from a Medicare Mental Health Treatment Plan and uses different referral paperwork.

Step 2: Report the injury to your employer

Reporting your injury to your employer is a formal step that starts the workers compensation process. You can report verbally and then follow up in writing. Note the date and how you reported it. Your employer is required to notify their insurer within 48 hours.

Step 3: Document the conduct

Document incidents as thoroughly as you can: dates, times, who was present, what was said or done, and any witnesses. Preserve any emails, messages, or other communications that are relevant. This documentation supports your claim and is important if the claim is disputed.

Step 4: Contact a SIRA-approved psychologist

In many cases, you can begin seeing a psychologist before formal insurer approval — the psychologist submits a treatment request (AHTR) to your insurer after the initial assessment. Confirm the billing arrangements with your chosen psychologist before the first session. For insurer-approved sessions, there is typically no out-of-pocket cost to you.

Step 5: Consider legal advice

Psychological injury claims involving workplace bullying are frequently disputed. A workers compensation solicitor (many offer free initial consultations and work on a no-win no-fee basis) can assess whether section 11A applies to your situation and advise on your options if the claim is declined.

Psychological Treatment Under Workers Comp

Under an approved NSW workers compensation claim, psychology sessions are funded by your insurer at SIRA gazetted rates. There is typically no out-of-pocket cost to the worker for insurer-approved sessions. Your psychologist submits treatment requests (AHTRs) to the insurer to obtain funding for ongoing sessions.

Common presenting issues treated include:

• Adjustment disorder with anxiety and/or depressed mood
• Post-traumatic stress disorder (PTSD) — particularly following incidents involving threats, assaults, or prolonged traumatic stress
• Major depressive episode
• Anxiety disorders
• Burnout and occupational stress

A SIRA-approved psychologist will prepare and implement a Recovery Plan focused on functional recovery — returning to work where this is safe, appropriate, and consistent with your clinical progress. They can also prepare Independent Medical Examinations (IME reports) if required by the insurer, and liaise with workplace rehabilitation consultants where applicable.

What to Look for in a Psychologist for a Bullying-Related Claim

• SIRA provider number: Not all psychologists are SIRA-approved. The psychologist must hold a SIRA provider number to bill your insurer directly under workers compensation. You can verify SIRA approval at the SIRA website.
• Experience with work-related psychological injury: Familiarity with the workers compensation system, AHTR processes, and Recovery Plans is important — not all psychologists work in this context.
• Trauma experience: Workplace bullying can cause PTSD or trauma-related presentations. Ask whether the psychologist has experience with trauma-focused therapy if this applies to your situation.
• Telehealth availability: Telehealth sessions are available under NSW workers compensation at the same gazetted rates as in-person. If travel is difficult due to your injury (or anxiety about returning to situations near your workplace), telehealth is a practical option.

Common Questions

This guide provides general educational information and is not legal or clinical advice. Workers compensation claims are subject to change; verify current requirements with a workers compensation solicitor or insurer. For mental health crisis support: Lifeline 13 11 14, Beyond Blue 1300 22 4636, 13YARN 13 92 76.

Last reviewed June 2026. Sources: Workers Compensation Act 1987 (NSW) s.11A; NSW Personal Injury Commission determinations (publicly available); Safe Work Australia bullying definitions; ABS Work-Related Injuries Survey 2021-22.