Understanding Section 11A: A Disentitling Provision for Psychological Injury Claims
Psychological injury claims pose specific legal challenges under the NSW workers’ compensation legislation. Section 11A of the Workers Compensation Act 1987 is a key provision that can disentitle a worker from receiving compensation, including weekly benefits, medical treatment and lump sum compensation. This applies if the injury was wholly or predominantly caused by the employer's reasonable actions concerning transfer, demotion, promotion, performance appraisal, discipline, retrenchment, or dismissal. 1
The Legal Framework
Section 11A(1) establishes three critical elements for the employer to prove:
- The psychological injury was wholly or predominantly caused by the employer’s action.
- Actions or proposed actions with respect to transfer, demotion, promotion,
performance appraisal, discipline, retrenchment, or dismissal. - The action taken by the employer was reasonable. 2
As a disentitling provision, the burden of proof rests on the employer. If the employer fails to establish all elements, the defence is unsuccessful. 3
What Does “Wholly or Predominantly” Mean?
The phrase “wholly or predominantly” has been judicially interpreted to mean mainly or principally caused. In Ponnan, the Commission clarified that even if multiple factors contributed to the injury, the employer’s actions must be the dominant cause for the defence to apply. 4
As Wood DP noted in Insurance Australia Group Services Pty Limited v Outram, the assessment requires weighing all employment-related contributions to the injury. Medical evidence often plays a crucial role in determining causation, and the decision-maker must feel actual persuasion that the employer’s actions were the predominant cause. 5
In Nguyen, McDougall SCJ emphasised that a tribunal’s belief must be “at least such as would be indicated by a probability in excess of 50%.” This principle requires more than a mathematical comparison of probabilities; there must be a genuine belief that the event was “more likely than not” to have occurred, particularly when drawing inferences from circumstantial evidence. The standard ensures that the
seriousness of the issue and the potential consequences of a finding are fully considered. 6
Employer’s actions or proposed actions with respect to performance appraisal and/or discipline
The second element in Section 11A includes a broad list of categories, such as transfer, demotion, promotion, performance appraisal, discipline, retrenchment, or dismissal. However, this article will only focus briefly on discipline and performance appraisal, as these were the categories relied upon by the Respondent in Emami v Transit Systems, the case subject of this article. 7
Specifically, discipline and/or performance appraisal were not in dispute in this case, as the employer's actions relied upon for the s11A(1) defence included a Show Cause Notice, disciplinary meetings, and a final written warning.
In Kushwaha v Queanbeyan City Council, "discipline" is broadly defined as learning or instruction imparted to the learner and the maintenance of that learning by training, by exercise or repetition, with punishment being a less important aspect. 8
In Heggie, the Court confirmed that action with respect to "discipline"; in s11A should be viewed broadly, encompassing the entire disciplinary process, including investigations. 9
In Dunn v Department of Education and Training, Gerahty J stated that a "performance appraisal"; should be a formal process, like an exam, not a continuous assessment. In that case, his Honour determined that a teacher's participation in an enhancement program for more than a year was did not qualify as a performance appraisal. 10
The Objective Test for Reasonableness
Even if the Respondent establishes that their actions or proposed actions were the whole or predominant cause of the psychological injury, they must also prove they were reasonable. This is an objective test, requiring consideration of all relevant facts, rather than subjective views of the employer or employee.
The objective nature of the test was confirmed in Ritchie v Department of Community Services. This case emphasised that reasonableness requires balancing the consequences of the employer’s conduct against the justifications provided for the action. 11
In Heggie, the Court stablished that the reasonableness of the employer’s actions is typically judged based on what they knew at the time, considering any relevant information they could have obtained through reasonable inquiries or care. Disciplinary actions, or any actions outlined in s11A(1), cannot be deemed unreasonable due to circumstances or events that were unknown at the time the employer took action. 12
In Buxton, Walker CCJ emphasised that the test must focus on the employer’s action in question, rather than the entire history of the employment relationship. His Honour highlighted that Section 11A is a privative provision, intended to limit workers’ rights rather than benefit them, and therefore, the legal test must be applied strictly. 13
Burke CCJ, in Melder v Ausbowl Pty Ltd, raised important questions about what "reasonableness"; actually refers to: Is it about the action itself or how it was carried out?. His Honour’s analysis laid the foundation for later decisions, which established that reasonableness must be assessed in the full context, considering both the action and the circumstances surrounding it. 14
Case Summary: Challenging a Section 11A Defence
In the recent case of Emami v Transit Systems [2025] NSWPIC 80, 15 we successfully defeated the respondent’s s11A defence in a psychological injury claim. Our client sustained a psychological injury following a motor vehicle accident at work, while performing his duties as a bus driver, and was subsequently subjected to disciplinary action by his employer.
The respondent argued that the injury was wholly or predominantly caused by reasonable disciplinary action taken in response to the accident. They asserted that the reviews and disciplinary measures, including a Show Cause Notice, disciplinary meetings, and a Final Written Warning, were necessary and justified, maintaining that their approach was measured and appropriate. 16
We submitted that the disciplinary process was not the whole or predominant cause of our client’s psychological injury, highlighting that the accident itself played a significant role, with clear psychological symptoms emerging after the accident, and as a result of the accident. 17
Furthermore, while the employer had the right to investigate the incident, we argued that the investigation needed to be fair and accurate, without misrepresenting objective facts. We contended that: (1) the investigation was superficial; (2) the alleged breaches of NSW Road Rules and company policies were neither identified nor supported by evidence; and (3) the disciplinary actions were based on a misinterpretation of the CCTV footage of the accident and lacked procedural
fairness. As a result, we submitted that both the disciplinary process and its outcome were objectively unreasonable. 18
The Personal Injury Commission found in our client’s favour, determining that the respondent failed to establish that their actions were the ‘whole or predominant’ cause of the injury and that they were ‘reasonable’ in the circumstances. 19
Member Whiffin carefully examined both medical and factual evidence before concluding that the respondent had not met the legal requirements of Section 11A. The medical evidence demonstrated that the injury arose from multiple factors, including a broader pattern of workplace stressors. Even if the employer’s actions had been the whole or predominant cause, the Member was not persuaded that they were objectively reasonable. The employer’s handling of performance management lacked fairness and reasonableness, leading to the rejection of the Section 11A defence. 20
Conclusion
Section 11A offers a defence for employers, but it is not easily established. To succeed, the Respondent must prove that their actions were the whole or predominant cause of the psychological injury, were reasonable in the circumstances, and fell within one of the specific categories listed in Section 11A.
Although the respondent carries the burden of proof, each case demands a meticulous, fact-specific analysis that carefully weighs medical and documentary evidence against stringent legal criteria.
We approach each case with the legal acumen and strategic insight necessary to safeguard our clients'; rights and achieve successful outcomes in complex matters.
If your claim, or that of someone you know, is challenged by the insurer under Section 11A, please do not hesitate to contact our firm for expert legal assistance or more information. For comprehensive support and details about our services, visit the Walker Law Group website.
1 Workers Compensation Act 1987 NSW, s 11A(1).
2 Workers Compensation Act 1987 NSW, s 11A(1).
3 Faramarz Emami v Transit Systems West Services Pty Ltd [2025] NSWPIC 80, [89] (‘Emami’); Pirie v Franklins Limited [2001] NSWCC 167; Department of Education and Training v Sinclair [2005] NSWCA 465.
4 Emami, [95]; Ponnan v George Weston Foods Limited [2007] NSWWCCPD 92.
5 Emami, [92]; Insurance Australia Group Services Pty Limited v Outram [2019] NSWWCCPD 44.
6 Emami, [110]; Nguyen v Cosmopolitan Homes [2008] NSWCA 246.
7 Emami.
8 Kushwaha v Queanbeyan City Council [2002] NSWCC 25, [152].
9 Northern NSW Local Health Network v Heggie [2013] NSWCA 255.
10 Dunn v Department of Education and Training [2000] NSWCC.
11 Emami, [118]; Ritchie v Department of Community Services (1998) 16 NSWCCR 727.
12 Emami, [72] and [121]; Northern NSW Local Health Network v Heggie [2013] NSWCA 255.
13 Emami, [115]; Buxton v Bi-Lo Pty Ltd [1998] NSWCC 13.
14 Emami, [114]; Melder v Ausbowl Pty Ltd (1997) 15 NSWCCR 454.
15 Emami.
16 Emami, [71].
17 Emami, [83].
18 Emami, [75 – 77] and [82].
19 Emami, [136];
20 Emami, [88-136].
