Date: Mon, 7 Aug 2006 17:31:01 +1000

From: Neil Foster

Subject: Workers' comp for getting fired?

Dear Vaughan;

Interesting how what seems "over the top" in one jurisdiction has become normal in others. Without turning this forum into a worker's compensation one, I just thought I should mention that in NSW at least claims for statutory compensation for mental distress flowing from dismissal are not uncommon at all. Indeed, so much so that we now have a special exclusionary provision in s 11A of the Workers Compensation Act 1987:

(1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.

(if interested in seeing some of the cases, the AUSTLII "note-up" button provides a good link to relevant ones.)

Note of course that the section leaves open the possibility of "unreasonable" action in connection with employment (including dismissal) being a cause of compensable psychological injury.

For detailed discussion of other aspects of s 11A see Department Of Education & Training v Sinclair [2005] NSWCA 465.

Regards
Neil Foster

Neil Foster
Lecturer & LLB Program Convenor
School of Law
Faculty of Business & Law
University of Newcastle
Callaghan NSW 2308
AUSTRALIA
ph 02 4921 7430
fax 02 4921 6931

>>> Vaughan Black 4/08/06 11:16:32 >>>

The recent decision of the Nova Scotia Court of Appeal in Logan v. Workers' Compensation Board may not qualify as an obligations case, narrowly construed. Nevertheless, it's close in subject matter to some of our recent discussions (mental distress in a contractual setting) and also rather strange, so I'll pass on the citation.

Logan tried to claim workers' compensation benefits for the stress consequent on getting fired. The statute permitted recovery for stress arising from job-related traumatic events, but until Logan's claim no one had tried to argue that getting fired was such an event. The court was quite aware that the WC Act was never intended to provide compensation for getting fired, even where that resulted in mental distress, but it acknowledged that the words of the statute, on their plain meaning, seemed to permit such a claim. It denied the claim, noting that in the relevant statute the words "traumatic event" had to be given an objective meaning and that getting fired was not objectively traumatic.

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