Burnout, Claims and Blind Spots
Psychological injury claims are climbing fast — and insurers, courts and staff are watching closely
Why Psychological Injury Claims Are Coming for Your Boardroom
Mental health isn’t a “nice-to-have” workplace benefit anymore. It’s fast becoming one of the most common—and costly—sources of board-level risk.
In 2025, claims for psychological harm are rising sharply. Courts are siding with employees. Insurers are narrowing their cover. And boards that think “we’ve got an EAP” will be caught flat-footed.
Here’s what directors need to know, and what they can do about it now.
🚨 The Numbers Are Up — And So Is the Scrutiny
Stress, burnout, and mental health complaints have become a regular part of workers’ comp claims in Australia. The NSW government has already changed the way psychological injuries are assessed and paid out, and more states may follow.
And this isn’t just playing out in emergency services or construction. White-collar workplaces are in the mix too, from public broadcasters to tech firms to logistics companies.
👀 Real Cases, Real Consequences
🟡 Elisha v Vision Australia (2024):
In a case that’s now being cited across the board, the High Court awarded $1.44 million to an employee who developed a psychiatric injury. The reason? Managers failed to follow basic disciplinary procedures. Not maliciously, just sloppily. Policies were on paper, but in practice, they were applied late or inconsistently. The court agreed this lack of care did real harm.
It’s a sharp reminder: it’s not enough to have a policy. You have to know it’s being followed, and followed well.
🟡 Rodney Johnston vs WorkCover QLD (2025):
Rodney Johnston, a small business owner, fought a psychological injury claim that he says never should have passed the first hurdle. His former employee claimed workplace mistreatment. Johnston uncovered search history suggesting she may have staged the incident. Still, WorkCover paid out. He’s out nearly $400,000 in legal fees, and no fraud investigation has been launched.
Even if you’re in the right, these claims can be costly, messy, and frustrating. If you’re not on top of your internal reporting and recordkeeping, it’s even worse.
🟡 Antoinette Lattouf vs ABC (2025):
Journalist Antoinette Lattouf filed a claim against the ABC after being dismissed from her role. She said it caused severe stress, paranoia, and sleep problems. The ABC didn’t deny it had affected her, but still suggested only a “modest” payout if they lost. The case hasn’t been resolved yet, but the headlines are already out there .
It shows how quickly these disputes move from HR problem to national talking point — and how brand damage often lands long before the legal costs do.
This Isn’t Just Legal Risk, It’s Fourfold
Boards that ignore mental health aren’t just risking lawsuits. You’re also opening the door to:
Brand damage (public disputes, media stories, employee activism)
Operational risk (absenteeism, poor engagement, manager burnout)
Investor risk (especially for ESG-sensitive funds)
Insurance gaps (D&O exclusions for unaddressed governance failures)
Even APRA expects boards to be across material people risks. That includes psychological safety.
So What Should a Director Do?
🟢 Ask: Do we know how many complaints have been made this year?
🟢 Ask: Is mental health showing up in our board papers at all?
🟢 Ask: What does our insurer think of our current position?
If those questions land awkwardly, here’s a five-step fix:
Five Quick Wins for Boards
✅ Get a Clearer View of the Risk
Ask for a briefing at the board level. Not a generic one-pager — a proper walk-through of where your psychological injury risks might sit. That includes claims data, incident trends, workload hotspots, and how complaints are handled.
Pull in HR, Legal and frontline leaders. Make sure what you’re hearing lines up. If the board’s being told things are fine, but team leaders are drowning in burnout and unresolved issues, you’ve got a gap to fix.
✅ Put It on the Agenda Regularly
Make mental health a standing item. If it’s only showing up when something’s gone wrong, you’re already behind.
Ask for trend reporting. Not just usage stats from your EAP, but data on absenteeism, stress leave, complaints, manager escalations, and referrals. Look at patterns — are certain roles or departments under pressure? Is support reaching the people who need it?
✅ Pressure Test the Systems You Already Have
Check if your EAP is actually being used. If uptake is low or trust is low, figure out why. Ask staff directly, if needed.
Review your complaint handling. How long do matters sit unresolved? Are people dropping complaints mid-way? How do you track follow-up?
Audit your internal policies. When was the last time your discipline or grievance procedures were reviewed? Are they being followed, or just filed away?
✅ Decide Who Owns This
Make someone responsible at board level. Whether it’s the Risk Committee, the People Committee, or a single director — someone needs to be tracking this regularly and reporting back.
Check who owns it at exec level too. Is it a shared priority, or does it only live in HR? The best organisations bring People, Legal, and Operations into the conversation together.
✅ Get Ahead on Insurance
Review your D&O policy. Are psychological injury claims covered? Are there exclusions for organisational failure to act?
Speak to your broker early. Show them what you’re doing — boards that can demonstrate active oversight usually end up with better terms.
Boards That Get This Right…
…don’t wait for a claim to learn how their grievance system works.
…treat mental health reporting the way they treat finance and safety.
…don’t get blindsided by lawsuits, payouts, or bad press.
You don’t need to solve every problem. But you do need to show up.
🔁 Share this with a board member who’s still relying on an old EAP brochure.
💬 I’d love to hear how your board is handling this. Leave a comment or reply.