Sparke Compensation Quarterly - Issue 3

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

In this edition, at the Commonwealth level, we look at a recent decision of the Administrative Review Tribunal (ART) to dismiss a matter based on the Applicant’s attempts to relitigate a previously determined matter.

Across the states and territories we cover:

• For New South Wales, we look at the Public Accountability and Works Committee report on the legislature changes to workers’ compensation legislation that has recently passed.
• For ACT, we report on the passage of the Workplace Legislation Amendment Bill 2025, which will better support the families of ACT workers who tragically die because of their work.
• For Victoria, we look at the recent case of a former WorkSafe Victoria safety inspector, whose weekly compensation benefits for an injury triggered by exposure to traumatic events were reduced unlawfully.
• For South Australia, we look at the recently revised Practice Directions published by the SAET.
• For Northern Territory, we provide a brief refresher on NT WorkSafe mediations and cost consequences, and best practice guidelines in relation to attendances and mediations.
• For Western Australia, we review a decision to uphold a stress claim despite the worker’s subjective and potentially irrational perception of events.
• For Queensland, we summarise a recent matter where the employer’s failure to prevent a fabricated email being broadcast to the public resulted in a $2.35 million payment to a former employee.

Commonwealth

Dismissal of recent matter due to re-litigation of previous claim

A recent decision of the ART has seen a matter dismissed based on the Applicant’s attempts to relitigate a previously determined matter. Comcare made an application for the matter to be dismissed in accordance with 101 of the Administrative Review Tribunal Act 2024 on the basis that the application was frivolous, vexatious, misconceived or lacking in substance or was otherwise an abuse of the process of the Tribunal.

In the matter of Jablonka and Comcare (Compensation) [2025] ARTA 2176 the Applicant submitted that her condition was a new and distinct diagnosis. The Tribunal was satisfied on the evidence that the alleged worsening symptoms represented the existing disease becoming worse and not being made worse by relevant employment contribution.

The Tribunal referenced a number of authorities in reaching the final decision, including the decision of Novosel v Comcare [2017] FCA 722, in which it was noted that … abuse of process is not merely concerned with prejudice to a respondent but also with matters of broader public policy … it may be an abuse of process not only to re-litigate the same issue twice, but also to seek to litigate an issue that properly belonged to the earlier litigation.

The Tribunal was satisfied that the use of the word 'vexatious' was apt to describe not only proceedings that were commenced to harass the other party but where issues of re-litigation arose such that the opposing party is vexed a second time about the same cause previously dealt with conclusively. This recent decision provides further certainty for Respondents in dealing with Applicants who may be attempting to re-litigate simply because they disagree with the decision.

New South Wales

NSW workers compensation reforms passed

The NSW Government passed the Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025 on 18 November, introducing significant changes to the state’s workers’ compensation scheme, particularly around psychological injury claims.

The Public Accountability and Works Committee (PAWC) has released its report on the reforms. The PAWC is not supportive of the legislative changes overall, warning that they may harm injured workers and fail to address systemic issues. It recommended alternative measures to improve return-to-work rates and claims management rather than restricting access to benefits.

However, it was noted that one proposal raised by the Government—to strengthen s 11A defences for psychological injuries (injuries caused by reasonable actions of the employer)—was supported. The review considered that the proposal to deny liability for injuries where a significant causative factor was the reasonable actions of the employer had merit (e.g., performance reviews, disciplinary processes), meaning that less claims would pass the threshold to obtain compensation for psychological injury.

The Bill, which is currently awaiting assent, makes widespread changes to the Workers Compensation Acts. These include broadening the defences available to an employer with respect to a psychological claim,  increasing the threshold for weekly payments after 130 weeks to 21% WPI for primary psychological injuries, and reducing the time period for which an employer is liable for medical expenses arising from a psychological injury. Changes have also been made to death benefits, allowing compromised resolution of such claims (subject to approval) and in respect of the assessment of permanent impairment, with parties required to agree to a Principal Assessor or seek appointment of one by SIRA.

The full report can be read on the NSW Parliament website.   View the Workers Compensation Legislation Amendment Bill 2025, passed by both Houses, here.  

ACT

New payments to families of deceased workers in the ACT

The families of ACT workers who tragically die because of their work will now be better supported following the passage of the Workplace Legislation Amendment Bill 2025 (No 3) on 28 October 2025.

Where a worker’s death arises out of or in the course of the worker’s employment, the worker’s domestic partner and/or any other family member may apply to the employer for a lump sum payment within three months of the death. On receipt of an application, the employer must relevantly pay the family member within seven days—unless the employer has already paid $50,000 to other family members. Under the scheme, a domestic partner of a deceased worker will receive $10,000, and a family member who lived with the deceased worker will receive $5,000.

Payments are not an admission of liability, are not recoverable and do not affect any claim for compensation for death under the Workers Compensation Act 1951 (ACT).

Victoria

The bumpy road to reducing entitlements

The Magistrates’ Court of Victoria has ruled a former WorkSafe Victoria safety inspector’s entitlement to compensation for a psychological injury sustained in the course of employment, was wrongly reduced to zero because of claims he ceased work for reasons unrelated to his incapacity.

On 4 July 2017, Mr Adam Stewart (the worker) commenced employment as a Workplace Field Inspector with WorkSafe Victoria (VWA). In February 2020, he lodged a claim for compensation with respect to a mental injury sustained in the course of employment with VWA citing issues of; trauma from attending sites where fatalities occurred, witnessing graphic injuries, witnessing deceased workers, and viewing CCTV footage of safety incidents. The worker remained off work until May 2021 then returned to work on modified administrative duties two days a week.

The worker was involved in a single-vehicle crash while off duty from work, resulting in his work vehicle being written off. Found away from the scene, the worker told police he had no memory of the incident and suggested someone else had stolen and crashed the vehicle. On investigation, VWA discovered the worker had crashed the work vehicle under the influence of alcohol and drugs, misleading his managers and the police investigation. The worker said he had no memory of the incident due to experiencing a dissociative episode from an anti-depressant medicinal dosage change.

VWA disagreed with the worker’s submissions, terminating him for serious misconduct and reducing his weekly compensation to nil dollars pursuant to s 185 of the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) (the Act), finding that his working hours had been reduced to zero for reasons unrelated to his compensable incapacity. The worker disputed the determination to reduce his weekly compensation entitlement to nil.

VWA challenged the diagnosis of post-traumatic stress disorder (PTSD) made by psychiatrists on the basis of the worker’s extensive mental health history that predated his commencement with VWA. It was also argued by VWA that the worker did not meet the criteria for PTSD under the applicable diagnostic manual as he neither directly witnessed or experienced and was not repeatedly exposed to the traumatic events. The worker’s credibility was questioned by VWA, alleging he exaggerated and embellished events.

The matter proceeded to the Magistrates Court of Victoria.

Within Stewart v Victorian WorkCover Authority [2025] VMC 14, the decision dated 26 August 2025, Magistrate Hoare concluded that some claims were over-stated or unfounded but concluded the medical evidence confirmed the work events could trigger PTSD, and the worker had experienced dissociative episodes at the time of the crash.

Magistrate Hoare rejected VWA’s argument that the ongoing psychological condition suffered by the worker was non-compensable because it was mainly caused by the reasonable management actions taken in relation to the crash. While she found VWA acted reasonably in investigating the incident, she found it failed to discharge its ‘burden of proof to establish that it acted on reasonable grounds in proceeding to termination of employment for serious misconduct’. It was found VWA breached its relevant enterprise agreement obligations by not considering key mitigating factors including that the worker was being treated for a psychiatric condition for which VWA had accepted liability, the medical reports detailing his dissociative episodes, and the worker’s written response to the accusations that demonstrated he was a ‘markedly unwell person’. Magistrate Hoare found that even if the management action had been reasonable, it was irrelevant as it didn’t contribute to the injury, which predated the management action.

Magistrate Hoare set aside the decision to reduce the worker’s payments, confirming he ‘requires a continuation of appropriate and adequate medical and like treatment in accordance with the Act’.

The decision is a timely reminder for employers to ensure they are adhering to their relevant agreement obligations and acting on reasonable grounds when terminating an employee for serious misconduct.

South Australia

SAET publishes revised Practice Directions to streamline its processes

On 26 September 2025, the South Australian Employment Tribunal (SAET) published revised Practice Directions. In part, these amendments seek to streamline the SAET’s processes in the wake of a series of amendments to the Return to Work Act 2014 (SA) and other enactments falling under the SAET’s purview. An Amendments Guide is available for ease of reference: Practice Directions 2025 - SAET.

We highlight the following important developments:

• The SAET has reinforced its informal expectations in relation to the need for parties to genuinely engage in both conciliation and settlement conference by exchanges realistic offers of settlement. We expect that these changes may have consequences for parties who request or attend Settlement Conferences but adopt ‘best case’ positions, including in relation to costs which has in practice been a developing consideration for both plaintiff and respondent representatives over the last few years.
• The Inactive Matters List will be re-introduced (heaving previously been used during the ‘test case’ phase of the RTW Act’s lifecycle) whereby matters that cannot be prosecuted can be placed, in a period of protracted inactivity. This list is useful in cases where, for instance, a litigant or witness might be affected by an unforeseen personal circumstance (e.g., serious illness) or is exercising their right against self-incrimination in relation to a related but separate potential criminal charge of prosecution.
• Clearer expectations relating to unilateral communications with Presidential members and their chambers and otherwise in relation to the behaviour of advocates and parties at the Tribunal have been provided.
• Further amendments to the SAET Style Guide related to the drafting of Orders have been made, with a focus on a more uniform approach to Notations being used in Consent Orders.

Northern Territory

NT WorkSafe

Grant Hastie was appointed Executive Director for NT WorkSafe (the NT’s workers compensation and health and safety regulator) commencing 25 August 2025. Mr Hastie, previously at Workplace Health and Safety Qld, now holds the NT statutory positions of Work Health Authority, Electrical Safety Regulator and Chief Inspector Radioactive Ores and Concentrates.

Mediations

The primary dispute resolution mechanism in the NT is the Work Health Court (WHC) and is comprised of a Judge of the Local Court of the Northern Territory. Appeals (on questions of law only) are made to the Supreme Court of the Northern Territory.

In the event of a dispute, claimants may use an insurer’s internal dispute resolution process and or apply to NT WorkSafe for mediation. A mediation is a pre-condition to filing an application to the WHC. The legislation requires mediations to be arranged and completed within 28 days of application. At the conclusion of mediation, the Mediator issues a certificate certifying the mediation provisions were invoked, recording whether the matter resolved.

Mediators have certain powers over the conduct of mediations (such as requiring the production of specified documents), but no fact finding or determinative powers—those are for the Court. However, the parties pre-Court conduct, including conduct at mediations, can be, and are, taken into account by the WHC in awarding costs.

Also, the WHC rules give the Court power to make an order for costs where the information provided to the Court differs from that provided at mediation or a party failed to provide the mediator with relevant information existing at the time of mediation.

The NT Workers Compensation Best Practice Guidelines require claims officers attend mediation conferences in person and have full authority to make decisions concerning the claim. The guidelines require meaningful participation and for the insurer to fully explain to a worker the reasons for a decision.

Psychosocial hazards

The Northern Territory (via the NT Work Health and Safety legislation) requires employers to manage psychosocial risks (a risk to the health and safety of persons arising out of a psychosocial hazard (something relating to, including, the management of work and workplace interactions or behaviours which may cause psychological harm)).

The risks are managed by implementing control measures to eliminate or minimise the risk, as far as is reasonably practicable. The type of control measures will depend on certain things including the design of work, job demands and tasks and how work is managed.

Western Australia

WA decision confirms objective facts, not rationality, drive stress claim

In the case of Morgan v Roman Catholic Archbishop of Perth [2025] WADC 38, the worker’s ‘stress-related psychiatric disease’ resulted from managerial process in the restructuring of the employer’s leadership team. On appeal it was alleged that the arbitrator erred by considering whether the worker’s perception of specific events was objectively correct, and that the arbitrator should have considered whether the worker’s stress was ‘caused by their subjective (and potentially irrational) perception of certain events’. However, in this case, this did not matter as the outcome would have been the same either way as the predominant reason for the worker’s stress was based upon an objective fact.

However, the judge went further to say that, even if the arbitrator found that the worker’s stress was caused by their subjective perception of events, that there was no requirement at law that a worker’s perception of events must have been one that passed some quality of test based on an ‘objective measure of reasonableness’. The judge also made reference to the following cases:

1. Department of Education v Azmitia [2014] WADC 85 - the judge held that a stress claim is compensable if it is caused by a worker’s subjective reaction to objectively proven facts. Further, it is not necessary for the worker to prove that his or her subjective perception of proven facts.
2. Pilbara Iron Company (Services) Pty Ltd v Suleski [2017] WADC 114 - the judge observed that a worker’s perception of unfair treatment which causes a stress-related disease is not compensable if the perceived unfair treatment was part of an action taken by the employer which was an excluded matter within s 5(4) of the Act (Workers’ Compensation and Injury Management Act 1981 (WA)), such as the worker’s dismissal, demotion, and discipline.

In this matter, whether the arbitrator erred did not matter as if he had of considered the subjective reaction of the worker the outcome would have been the same. But the judge stated that, irrespective of this, there is still not requirement at law that worker’s perception of events must be rational, as long as the reaction was based upon objectively proven facts.

Queensland

Employer’s failure to exercise duty of care with fabricated email causes psychiatric injury

The judgement in the matter of Habermann v Cook Shire Council [2025] QSC 214, which was heard in the Supreme Court of Queensland in Cairns in July 2025, was handed down on 29 August 2025.

In the judgement it is stated that Mrs Habermann’s health and career was a casualty of the malevolent conduct of persons who fabricated an email in her name during a dispute with the Council at which she was employed. The subject email purported to be an email authored by Mrs Habermann to the Cook Shire Council’s Chief Executive Officer. It falsely portrayed her as racist and engaged in a deceitful misuse of her position to prevent the Gungarde Community Centre Aboriginal Corporation from assuming control of the lease of a failed waterfront cruise business which owed rent and rates to Council.

In the judgment it states the subject email was deployed by the director of the cruise business, Pamela Roberson, to encourage Council to settle a debt proceeding instituted by Council against her business. Unfortunately, Council mishandled the task of demonstrating the email was a fabrication.

This failure heightened the risk of the fabricated email being broadcast to the public, thus perpetuating the allegation, implicit in its content, that Mrs Habermann was the author of it. That risk eventually manifested when a Member of Parliament, Mr Rob Pyne, tabled it in Parliament. The result of that public demolition of Mrs Habermann’s character was a lasting psychiatric injury and consequent inability to continue working.

As regards the duty of care His Honour Henry J states:

'…the scope of the duty of care in each case is not identifiable in the abstract and will depend upon the circumstances of the case. There is no logical justification for limiting the scope of the employer’s duty of care by reference to systemic workplace considerations.

Some cases may involve situation specific circumstances, the novelty of which carries them beyond the circumstances typically contemplated by a so-called system of work. Of course, their novelty may inform assessment of foreseeability. But once an employer is aware of those circumstances, and that they pose a foreseeable risk of injury to an employee in their capacity as an employee, that knowledge informs the scope of the duty owed in those circumstances. It does here.'

In this instance His Honour Henry J found:

1. that the scope of Council’s duty, required it to take reasonable steps to avoid the perpetuation of the content of the fabricated email in the public domain and that such steps included revealing the facts demonstrating the falsity of the fabricated email in a timely way
2. the Council breached this duty when it failed to demonstrate the falsity of the fabricated email in a timely way, and
3. it was appropriate that the scope of Council’s liability should extend to causation of a foreseeable injury which would not have occurred if Council had met the undemanding duty of care which the circumstances of this case placed upon it.

Judgement for Mrs Habermann in the amount of $2,359,037.64.

The full judgement in this matter can be found at Habermann v Cook Shire Council [2025] QSC 214 - Caselaw.