Psychological injuries are among the more complex WorkCover claims in Queensland, and among the most misunderstood. The rules that decide them sit mostly in a single section of a single Act, and they work differently from the rules for a broken wrist or a bad back.
Two questions decide most of these claims. First, does the worker have a psychiatric or psychological disorder that work significantly contributed to? Second, did that disorder arise out of reasonable management action taken in a reasonable way? The first question brings a claim within the scheme. The second can take it back out, even when work plainly caused the harm.
This guide explains how Queensland law answers both questions, using the current wording of the Act, and how the answer tends to differ across three common situations: workplace bullying, performance management, and exposure to traumatic material at work. It is general information, not advice about any particular claim.
What the scheme means by a psychological injury
The Queensland workers’ compensation scheme is set up by the Workers’ Compensation and Rehabilitation Act 2003 (Qld). Section 32 defines what an injury is, and a psychological injury only counts if it is a “psychiatric or psychological disorder”. The Act uses that phrase deliberately. There must be a recognised, diagnosed condition, not simply unhappiness, frustration or ordinary work stress. A difficult week at work, without more, is not an injury.
The disorder must also arise “out of, or in the course of” employment. Being “in the course of” employment means it happened while the worker was doing the job or something connected with it. “Arising out of” employment looks at whether the work itself was a source of the harm. For psychological injuries, the cause is usually a pattern of events over time rather than a single incident, which is one reason these claims take careful investigation. You can read the section itself on the Queensland legislation website, and our complete guide to WorkCover claims in Queensland sets out the wider process.
The causation test: a significant contributing factor
Once there is a diagnosed disorder, section 32(1) asks whether employment was “a significant contributing factor” to it. In practice, “significant” is understood to mean a contribution that is real and of substance, more than something trivial or minimal. Importantly, work does not have to be the only cause, or even the main cause. A worker whose disorder also has roots in personal life or earlier history can still have a valid claim, so long as work made a significant contribution.
This is a point where older online guides are often wrong. Until 2019, the Act set a higher bar for psychological injuries: employment had to be “the major significant contributing factor”. In 2019 the Act was amended, and the test today (section 32(1)) is the same “a significant contributing factor” standard that applies to physical injuries. If you read that psychological claims need work to be the dominant cause, that description is out of date.
The reasonable management action exclusion
Even where work is a significant contributing factor, a psychological disorder is not treated as an injury if it arose out of certain workplace decisions. Section 32(5) says a psychiatric or psychological disorder does not count as an injury if it arises out of, or in the course of, any of the following: reasonable management action taken in a reasonable way by the employer; the worker’s expectation or perception that reasonable management action is being taken; or action by the Regulator or an insurer in connection with the worker’s claim.
The Act gives examples of what management action can look like. They include transferring, demoting, disciplining, redeploying, retrenching or dismissing a worker, and decisions not to promote, reclassify or transfer a worker, or to grant leave or a benefit. These are ordinary features of running a workplace, and the law does not treat them as compensable simply because a worker found them upsetting.
The exclusion has two limbs, and both must be met before an employer or insurer can rely on it. The action must be reasonable, and it must be taken in a reasonable way. Action that is reasonable in substance can still fall outside the exclusion if it was carried out harshly or unfairly. And whether action was reasonable is judged objectively, on the facts, not by how strongly the worker felt about it.
Bullying, performance management and vicarious trauma
The exclusion is where many psychological claims are won or lost, and it tends to play out differently depending on what actually happened. The table below sets out how three common situations are usually approached. It is a starting point, not an answer, because every claim turns on its own evidence.
| Situation | Usual position under s 32(5) | Why |
|---|---|---|
| Workplace bullying or harassment | Usually not caught by the exclusion | Bullying is not “management action”. If work is a significant contributing factor to a diagnosed disorder, it can be a compensable injury. |
| Fair performance management | Often caught by the exclusion | Managing performance is management action. If it was reasonable and done in a reasonable way, a disorder arising out of it is not an injury. |
| Performance management done badly | May not be caught | If the process was unfair, disproportionate or handled in a humiliating way, the “reasonable way” limb may not be met. |
| Exposure to traumatic events or material | Usually not caught | Being exposed to distressing incidents or content is part of the work itself, not management action taken against the worker. |
These labels describe tendencies, not rules. A single claim can involve several of these threads at once, and the decision-maker has to work out what actually caused the disorder and whether that cause sits inside or outside the exclusion.
When management action is not reasonable, or not taken in a reasonable way
The second limb of the exclusion does real work. An employer is generally within its rights to raise genuine concerns about performance, conduct or attendance. That is reasonable management action. But the way it is done matters. Raising concerns by shouting at a worker in front of colleagues, withholding information the worker needs, moving goalposts, or running a process that is plainly unfair can mean the action was not “taken in a reasonable way”, even if there was a legitimate issue to address.
A worker’s own perception is not the test. Believing that a fair process was unfair does not make it so, and the expectation or perception of reasonable management action is expressly excluded by section 32(5). Equally, genuinely unreasonable conduct is not rescued by labelling it “management”. The line between the two is a question of fact, decided on documents, timing and what people actually did.
Time limits: the six month rule
Timing matters. Section 131 says an application for compensation should be lodged within 6 months after the right to compensation arises. For a psychological injury, that point is often when the worker first receives a diagnosis and a workers’ compensation medical certificate, although the timing can be less obvious than it is for a physical injury with a clear date.
The six month limit is not always fatal. An insurer can waive it in defined situations, for example where the delay was due to a reasonable cause, a mistake, or the worker’s absence from the State, and there is a mandatory waiver where special circumstances of a medical nature apply (section 131). Even so, lodging late can limit how far back weekly payments run, so it is better not to rely on a waiver. The section is on the Queensland legislation website.
How a psychological injury claim is assessed
A worker lodges an application with WorkCover Queensland, or with a self-insurer, supported by a medical certificate. The insurer then gathers medical and workplace information, and usually asks the employer to explain the events the worker has raised. Because section 32(5) turns on the reasonableness of management action, these claims often involve close scrutiny of what the employer did and why, which is why documents and witness accounts carry so much weight.
If work is a significant contributing factor and the exclusion does not apply, the scheme provides support: reasonable medical and treatment costs, weekly payments while the worker is unable to work, and, once the condition stabilises, a lump sum if the injury has left a permanent impairment. If a claim is rejected, there is a statutory pathway to have the decision reviewed by the Workers’ Compensation Regulator and, if necessary, appealed to the Queensland Industrial Relations Commission. Our WorkCover claims page explains where these claims fit in the wider scheme.
Queensland has also moved to strengthen this area. In 2024 the Act was amended to add a dedicated Part supporting workers with psychiatric or psychological injuries (Chapter 4, Part 5A) and a Part directed at minimising the risk of psychological harm at work (Part 5B). These reflect a growing focus on early support and prevention alongside the older question of whether a claim is accepted.
Published 13 July 2026.
Where this leaves you
Most psychological WorkCover claims come down to the same two questions: is there a diagnosed disorder that work significantly contributed to, and did it arise out of reasonable management action taken in a reasonable way? The first question decides whether a claim is within the scheme at all. The second decides many claims that clear the first, and it turns on detailed, often contested facts about what happened at work and how it was handled.
Knowing which side of that line a situation is likely to fall on, early, helps a worker make informed decisions about lodging, about evidence, and about time limits before options start to close.
Related reading
- WorkCover claims in Queensland: the complete guide
- How Fraser Lawyers helps with WorkCover claims
- Contact Fraser Lawyers
Need advice? Psychological injury claims turn on detailed facts and strict time limits that are easy to miss. If this is your situation, contact Fraser Lawyers to understand your rights and where you stand, with no obligation. |
This article is general information only and is not legal advice. Queensland law and the figures referred to can change, and every situation turns on its own facts. Contact Fraser Lawyers for advice specific to your circumstances.
If you would like to discuss your matter, you can book a consultation or call (07) 5554 6116.
