An Arbitrator in the Personal Injury Commission has found that a worker, who sustained psychiatric injury when her employer stood her down during the early stages of the COVID-19 pandemic, was not entitled to compensation. The Personal Injury Commission upheld the employer's defence - that its reasonable conduct when faced with the pandemic meant that it was protected from liability to the worker.

The employer, which like numerous other employers, was forced to consider workforce changes as a result of the first COVID-19 lockdown in 2020.  As part of the strategy to avoid widespread retrenchment, and with the benefit of the Jobkeeper payments, it stood down part of its workforce.  

One employee submitted a workers compensation claim alleging bullying and intimidation.  The Arbitrator rejected this allegation finding that her psychological injury was wholly and predominantly caused by the retrenchment and standing down of the employee.  

The Claimant argued that she was never actually retrenched, and therefore the defence in section 11A of the Workers Compensation Act 1987 could not be relied upon by the employer on the basis its conduct was not reasonable.  The Claimant also argued that standing down was not a provision of employment benefits, but rather a detriment (the opposite of a benefit) so the terms of the defence were not available.

The employer argued, and the Commission accepted, that it is not necessary for there to be an actual retrenchment in order for the conduct to be "with respect to" a retrenchment and also concluded that:

"...because of the unprecedented situation caused by the Coronavirus, the provision of the Jobkeeper benefits should be viewed as the provision of employment benefits since the funds made available were distributed by and through the employer.  Without such benefits, the applicant may well have received no income or limited income depending on her personal circumstances".

We believe that this decision is the first determination in this jurisdiction in the context of stress claims which have flowed from the impact of the COVID-19 pandemic in which employees have been stood down - and that it offers rare insight into what constitutes an "employment benefit" within the meaning of section 11A of the Workers Compensation Act 1987. 

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