Sparke Compensation Quarterly - Issue 1

Welcome to the first edition of our new publication, Sparke Compensation Quarterly, aimed at keeping you informed about the latest Commonwealth, state and territory legislation that could impact you as an employer or insurer.

In this edition, at the Commonwealth level, we provide an update on the transition of the AAT to the ART while across the states and territories we cover:

• For South Australia, we highlight that the safety net afforded to workers with latent and progressive injuries has been expanded.
• For New South Wales, we provide an update on the workers compensation reform needed to address psychological safety and discuss SIRA's vision for the next three years.
• For Victoria, we explore in the increased support planned for injured workers and their families.
• For the Northern Territory, we report on the case of Northern Territory of Australia v Yao, which concerned a Work Health Court claim for a mental injury arising out of or in the course of the respondent's employment with the appellant.
• For Western Australia, we report on an appeal from WorkCover to the District Court of Western Australia and consider whether injuries occurring during work-related journeys can be considered as arising in the course of employment.

Commonwealth Compensation

Young at ART: the new Administrative Review Tribunal

In the transition of the AAT to the ART, we have seen clear changes in processes and a strong drive to resolve protracted applications. Matters are progressing to final hearings at a quicker pace, and through ADR with fewer conferences and more defined timetables. A national approach also means that consistency is a key focus. The Guidance and Appeals Panel (GAP) have begun exercising their review functions.

User experience has not been without teething issues. Delays in receiving Tribunal documents and responses to party requests, and difficulties with the ART’s case management system may increase party costs and cause undue delay. The ART is attune to these issues and stakeholder feedback will hopefully assist in the refinement of processes.

The ART’s policy on publishing decisions has also raised some concern. Unlike the AAT, only select decisions are published publicly (apart from GAP decisions and decisions on remittal). It may be that the selection process will delay the publication of decisions and appear inconsistent with the need for transparency and consistency. For decision makers, it may also mean that decisions that would otherwise provide guidance on the law and how claims should be managed are not available.

It will be interesting to see the ART come into its rhythm in the next six months. We look forward to sharing the journey.

South Australia

Preparing for change

Following recent legislative changes to the Return to Work Act 2014 (SA) the safety net afforded to workers with latent and progressive injuries has been expanded. The ability for injured workers to seek suitable employment from their pre-injury employer has also been expanded and extended to enable, in some cases, workers to seek employment arrangements with their host employer or other entities grouped with or related to their pre-injury employer. These changes are expected to lead to a period of adjustment and increased risk of claims and litigation for employers and insurers.

Preparing for change - Update on amendments to the Return to Work Act Scheme: Sparke Helmore

New South Wales

Workers compensation reform to address psychological safety

On 18 March 2025, NSW Treasurer Daniel Mookhey warned the NSW Parliament that the State’s workers compensation system is unsustainable without reform as to how it deals with workplace psychological injury.

The Treasurer advised that:

• For every $1 needed to care for injured workers, the State’s main workers compensation scheme holds only 85 cents in assets.
• If claims continue growing at recent rates, the State insurer icare expects an additional 80,000 people will make psychological injury claims over the next five years.
• Without reform, premiums for businesses facing no claims against them are forecast to rise by 36% over the next three years.

Mr Mookhey has proposed reforms that will see NSW:

• give the NSW Industrial Relation Commission a bullying and harassment jurisdiction ahead of requiring those claims to be heard there first before a claim can be pursued for compensation
• define psychological injury, as well as ‘reasonable management action’, to provide workers and businesses with certainty—rather than let the definitions remain the subject of litigation
• align whole-person-impairment thresholds to standards established in South Australia and Queensland, and
• adopt some of the anti-fraud measures recently enacted by the Commonwealth to protect the National Disability Insurance Scheme.

At this stage the specific details of the proposed amendments are unknown and the NSW Government has yet to release a proposed bill in support of the amendments.

To learn more: Workplace Psychological Injuries

On 24 February 2025, NSW Premier Chris Minns told a Sutherland Shire Business Chamber function that young people were particularly responsible for a 10% increase each year for the last five years in the number of claims for stress, burnout, bullying and harassment. Mr Minns said workers compensation premiums paid by employers had risen 80% in four years and that the situation was not sustainable. He said that proposed modernisations to the scheme are intended “to rebalance the system so resources go to the prevention side of the spectrum more than the compensation side.”

In December 2024 the Council of Australian Life (CALI) and KPMG, with contributions from more than 15 insurance firms, published a report that showed the frequency and severity of mental health issues in Australia is rising exponentially, particularly for workers aged 30 to 40.

In a 2023 analysis of work-related injuries, Safe Work Australia found that the average time off work due to work-related mental health issues was four times longer than for physical conditions, and the average payout now costs nearly $60,000—about four times physical injury compensation.

Disputes over mental health claims often revolve around the nature of the injury, the employer’s contribution, and whether the employer’s actions were reasonable. These disputes typically rely on supporting evidence such as medical or legal documentation. Employers, with the support of their insurers, must demonstrate the reasonableness of actions like transfers or performance appraisals and establish a clear causal link to the injury as part of their defence.

Mental health issues and workers' comp impacts | Insurance Business Australia

SIRA’s vision for the next three years

In February 2025 SIRA published its new strategy SIRA 2028, outlining its vision for the next three years. The new strategy builds on SIRA’s recent work and outlines its goals and purpose as it continues to work to being a customer-centred, intelligence-led, risk-based regulator. The renewed strategy identifies five goals that support the needs of SIRA’s customers:

• Putting customers at the centre
• High performing people and operations
• Holding regulated entities to account
• Strengthening the regulatory environment
• Enhancing data and digital capability.

Read the SIRA 2028 Strategy booklet.

Victoria 

Increased support planned for injured workers and their families

The Victorian Government has introduced amending legislation to the Workplace Injury Rehabilitation and Compensation Act 2013. The amending legislation was the subject of a second reading in Parliament on 5 March 2025.

The intention of the Workplace Injury Rehabilitation and Compensation Amendment Bill 2025 is to:

• empower the Minister to publish a Code of Claimant’s Rights
• Return to work (RTW) coordinators to complete approved training and to be provided with resources to fulfil their role
• appoint members with lived experience to WorkSafe’s advisory committees
• introduce an independent review of the scheme at least once every five years starting in 2030, and
• improve support to family members following a work-related death.

To learn more: Delivering for Injured Workers and Their Families – Premier of Victoria

Northern Territory

Reasonable management action and the onus of proof

Northern Territory of Australia v Yao [2024] NTSCFC 1
This case was on appeal to the Full Court of the Supreme Court of the Northern Territory with regard to the specific issue (separate to other issues determined before the Supreme Court) of who bears the onus of proof when raising the defence of reasonable management action under the Return to Work Act 1986 (NT) (Act), heard by Grant CJ, Kelly, and Brownhill JJ.

This matter concerned a Work Health Court claim by Mr Yao (respondent), who sought compensation for a mental injury arising out of or in the course of his employment with the appellant.

The appeal concerned who bears the legal and evidential onus of proof for the reasonable management action defence under s 3A of the Act. The court conducted a construction of s 3A, via the case law, second reading speech and explanatory statement.

The Full Court found that the employer (appellate) bears the legal onus of proof, noting that this determination does not mean that the worker (respondent) did not carry an evidential burden.

The case reinforced that the court will examine factors, including (not limited) whether:

• the overall management processes were fair
• the employer followed relevant performance management procedures and policies, and
• objectively the employer’s actions were carried out in a manner proportionate to the circumstances.

The Northern Territory Full Court Decision can be read here: 2024 | Supreme Court NT

Western Australia

Guidance on how personal activities undertaken during work journeys are evaluated

Oz Shut Pty Ltd v Hilton [2025] WADC 10

This case was on appeal from WorkCover to the District Court of Western Australia and considers whether injuries occurring during work-related journeys can be considered as arising in the course of employment under the Workers Compensation and Injury Management Act 2023 (WA) which commenced on 1 July 2024. Section 9 of the Act provides that injuries sustained during a ‘work journey’ are compensable, except where the journey is substantially interrupted or deviated from for a purpose unconnected with employment.

Judge Staude found:

1. Whether the worker had suffered an injury in the course of her employment was a question of law—leave to appeal granted.
2. The act of going into the shopping centre to use the restroom and then going into Kmart to buy a dress whilst she was on the road and between appointments (and she was always on the road in the course of her employment) was compensable:
   1. She was undoubtedly in the course of employment—the grounds of appeal lacked cogency, were disorganised and difficult to understand but did not in fact challenge the arbitrator’s finding that the worker was on a work journey.  Accordingly, all of the grounds fell away and the only defence was whether there was a substantial deviation to her work journey. 
   2. The employer was trying to argue the worker was on a frolic of her own and not in the course of her employment, but the grounds of appeal did not actually address the finding that she was on a work journey—not just at work.
   3. Previously under the old Act, ‘substantial’ used to be defined as one hour or more. That definition of substantial has been removed in the 2023 Act—regardless, his Honour found there was no substantial interruption of or deviation from the work journey. The only authority cited by the employer, Humphrey Earl Ltd v Speechley (1951) 84 CLR 126, was rightly distinguished on its facts. The worker going to the toilet and then buying a dress in Kmart—all of which took 15 minutes—was short compared to her journey from Middle Swan to Halls Head. She was never going to be late for her appointment arranged by the employer, and there was no substantial interruption or deviation.
   4. In any event, the interruption or deviation was to purchase a dress and she was required to be professionally attired and accordingly, the deviation and interruption was connected to her employment.
   5. In any event, personal shopping was encouraged, authorised, or permitted by the employer during downtime provided the worker remained contactable and available to attend appointments. This is consistent with Hatzimanolis v ANI Corporation Ltd [1992] HCA 21 and Comcare v PVYW [2013] HCA 41—injury in interval of employment occurs in the course of employment in circumstances where the worker is expressly or implied induced or encouraged to spend the interval at a particular place or in a particular way.
3. The appeal was accordingly dismissed.