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Employers are not liable for workers compensation claims relating to psychiatric injuries where the injury occurred as a result of “reasonable administrative action taken in a reasonable manner by an employer in connection with a worker’s employment” as per the Workers Rehabilitation and Compensation Act 1988 (TAS) S 25(1A)(c).

When an employer declines a claim on this basis by way of a section 81A notice and the matter is reviewed by the Tasmanian Civil and Administrative Tribunal (TASCAT), it is important to understand the role of TASCAT and that their decision is not final.

In this case of Morrison, despite TASCAT upholding the employer’s decision to decline the claim, the worker was successful on appeal to the Supreme Court of Tasmania and orders were made for compensation to be paid.

Background

The worker was a high school teacher in a program for students who required learning support. In April 2024, two female students under the care of the worker had a ‘brutal’ fight and despite the worker’s concerns, the school administration refused to remove the students from the program. The lack of collaboration in the decision to permit the violent students back into the program caused distress to the worker. The worker went home early as a result.

The worker subsequently lodged a workers compensation claim for psychological injury and was diagnosed with adjustment disorder with mixed anxiety and depressive mood.

‘Reasonably Arguable Case’

The employer declined the worker’s claim on the basis that his psychiatric injury was caused by “reasonable administrative action taken in a reasonable manner by an employer in connection with a worker’s employment” (emphasis added).

The denial was referred to TASCAT for review. The role of TASCAT in cases such as this, is to ascertain whether there is a reasonably arguable case regarding the liability of the employer to pay compensation. While this allows TASCAT to conduct an arbitration in a timely manner without reviewing the claim in detail, it can result in valid claims being declined in the first instance.

In this case, it was not disputed that the cause of the worker’s psychological injury was the administrative action of the school. As a result, the employer was found to have a reasonably arguable case and its denial was maintained at arbitration.

The worker appealed the preliminary decision of the Tribunal and a full hearing was conducted at TASCAT. The decision to decline the claim was maintained at the full hearing on the basis that the worker’s psychological injury arose ‘substantially from reasonable administrative action taken by the respondent in a reasonable manner in connection with the appellant’s employment’. Notably, the Tribunal failed to conduct any detailed review of whether the administrative action was in fact reasonable, instead focusing on the cause of the workers psychological injuries.

Appeal to the Supreme Court

The worker appealed this decision to the Supreme Court of Tasmania on the basis that despite his injury being caused by the administrative action, the administrative action was not itself reasonable.

On review of the reasonableness of the administrative action (being to re-admit/fail to exclude the violent students), the Court held that the way in which the administrative action was taken was in fact unreasonable. This was due to the lack of consultation with the worker in making the decision, as well as the failure to advise the worker of the policies and procedures in place to ensure the students continued enrolment in the program was safe.

As a result of the Courts decision, the employer was unable to rely on ‘reasonable management action’ to decline the claim and the worker’s claim was accepted. The employer was ordered to pay weekly compensation from the date that the claim was lodged.

Conclusion

This case demonstrates the importance of obtaining legal advice when a workers compensation claim for a psychiatric injury is declined. The test for whether a psychological injury should be declined is not as simple as determining that the injury was caused by administrative action but also considering whether the administrative action was reasonable in the circumstances.

If your claim has been declined, you can contact our Tasmanian Partner Lucinda Gunning at lgunning@codea.com.au or 03 6285 8674 for advice regarding your prospects of success and whether a decision by TASCAT should be appealed.

This article was published on 15 June 2026 by Carroll & O’Dea Lawyers and is based on the relevant state of the law (legislation, regulations and case law) at that date for the jurisdiction in which it is published. Please note this article does not constitute legal advice. If you ever need legal advice or want to discuss a legal problem, please contact us to see if we can help. You can reach us on 1800 059 278 or via the Contact us page on our website. (www.codea.com.au). If you or a loved one has been injured, use our Personal injury Claim Check now.