Change is coming to New South Wales with plans to amend the Workers Compensation and anti-bullying schemes

On 18 March 2025, the New South Wales Government announced plans to amend the Workers Compensation and anti-bullying schemes. Although no Bill has been presented yet, NSW Treasurer Daniel Mookhey stated that the aim of these reforms is to significantly reduce workers compensation claims and their impact on premiums. The proposed changes include:

• Bullying Jurisdiction—Establishing a bullying and harassment jurisdiction within the NSW Industrial Relations Commission, requiring that such claims be resolved there before any workers' compensation claim can be filed.
• Definitions—Introducing an “inclusive” definition of “psychological injury” and clarifying what constitutes “reasonable management action” that would not be classified as bullying.
• Reforms from other states—Incorporating elements from other states, particularly changes to the whole-person impairment threshold, which can give rise to additional claims for compensation.

The most significant reform is that a successful bullying claim must be established before a workers' compensation claim can be made. This requirement could discourage unmeritorious claims and provide businesses with improved options to contest allegations of bullying. Employers have generally supported the Fair Work Commission’s approach to distinguishing between reasonable management and bullying behaviour.

The effectiveness of these reforms will greatly depend on how “psychological injury” and “reasonable management action” are defined, emphasising the need for a robust consultation process. The Government plans to consult with Business NSW and Unions NSW to ensure these reforms effectively reduce the incidence of injuries, claims, and premiums.