Workplaces must take greater responsibility for psychosocial injury

Aon workplace risk director Gary McMullen (pictured) has provided recommendations on how workplaces can approach psychological injury claims while under poorly performing workers’ compensation schemes.

Increased incidence or increased awareness?

“Fifteen or 20 years ago, people were told just to turn up and get on with it. That’s no longer acceptable in the modern world,” McMullen said.

According to data from Safe Work Australia’s report, Key Work Health and Safety Statistics Australia 2025, serious mental health claims have jumped by 161.1 per cent from 6,700 claims a decade ago, to 17,600 claims for 2023–24 – this was the largest increase in this period of any “nature of injury” major group.

“There is an argument to be made that there’s now more awareness around psychosocial risks in the past few years [and] therefore people are more aware of their rights and responsibilities and maybe putting in claims,” he said.

Despite estimating that 90 per cent of workplaces were aware of risks and costs of psychosocial injury, McMullen called the 17,600 claims “extraordinary”.

He added: “That’s why the New South Wales and previously the Victorian scheme was struggling in terms of the cost of these claims and charging the right premium to ensure the schemes are refunded.”

The Victorian system

The issue with modernising and changing eligibility in whole person injury was that it moved it out of the workers’ compensation scheme for a “healthier balance sheet”, McMullen said.

He noted that approximately 40 per cent of Victorian claims in 2024, following the state’s workers’ compensation reforms, were no longer classified as workers’ compensation claims.

“I think society needs to also look at addressing the problem, and as opposed to just saying it’s no longer work-related,” he said.

Pivoting to leadership and culture

McMullen said that over the years, workplace injury claims used to be the responsibility of safety professionals; however, more recently, it has fallen into the lap of the HR professional.

For him, psychosocial injuries are “leadership and culture responsibilities”, and thus, workplaces must recognise burnout and workload issues, and gather insight into the culture of the organisation through annual pulse surveys, exit interviews, or general consultation with their colleagues.

“The proactivity of an organisation into looking at those hazards will determine whether they’re able to manage those risks and hazards,” McMullen said.

Regaining a ‘more profitable position’

“Leaders need … [to] take a lot more proactive steps to ensure things like bullying, harassment, workloads, job demands are part of the annual agenda,” McMullen said.

He emphasised that “legislating out” particular types of claims cannot fix the financial performance of the scheme; instead, workplaces must reduce the number of claims and subsequently, the costs associated with these claims, to turn the scheme back into a more profitable position.

If each workplace provides leadership and culture training to their people leaders in areas such as workload, job demand, and job design, this could collectively reduce the number of claims, he said.

A ‘holistic human capital solution’

McMullen recommended that workplaces create a safe working environment by addressing hazards that may pose a psychosocial safety risk and reporting injury claims within 48 hours.

“We’re now looking at a holistic human capital solution where we help the organisations protect and engage their workforce, because it’s all [about] leadership and behaviour,” he said.

“[Employers must] take the [most] responsibility to ensure, firstly, they prevent as many injuries as possible, and secondly, in the unfortunate event of an injury, they try and rehabilitate them back to work as quickly as possible.”