Safe Work Australia released data in 2023 that psychological injury claims have increased by 67%. You can read more interesting statistics here (refer to this section for a table overview of claims by category and gender). With nearly 11,000 Australians being compensated each year for work related psychological injuries at four times the median claim cost and significantly more time off work, it’s a real issue. This article looks at one strategy to prevent this and spotlights the recent case of Super Retail Group.
What leads someone to make a claim?
Before exploring prevention strategies, let’s look at how someone gets to the point of making a claim. There’s usually two primary categories for this and one additional one worth considering:
- A build up of stress over time – ongoing workload, conflict, management and support issues that go unaddressed.
- A one-off serious incident – a single significant event such as sexual harassment.
- A frivolous claim – it’s possible someone might make a claim you’re unaware of to seek a settlement, especially if they have been let go.
The key to preventing claims is to resolve issues internally rather than having them go external. People tend to go external only when they have lost trust in the organisation being able to resolve their situation for them. In the final case of a frivolous claim, this can happen for a number of reasons out of your control and this is where documentation is key, and there are ways to deter this from happening.
An example to learn from
NOTE: As with all these cases, we are not suggesting the organisation is or isn't managing psychosocial risks effectively. We do not have access to their processes. We are sharing these to highlight that these risks are now being taken seriously by regulators to encourage organisations to take action.
There is a messy situation taking place at Super Retail Group. A claim has been made by multiple employees against the CEO and former CHRO which could total between $30-$50 million dollars. Reports of bullying, affairs and a toxic workplace culture reached boiling point before multiple staff went external to resolve the issues. Here are three important lines from reports on the case:
- Despite having an internal whistleblowing service, staff only felt “safe” to discuss this since Ms Kelly had left her role at Super Retail and “could no longer directly affect their careers”.
- The staff members who made the complaint allegedly said they felt that they could not report the affair to the board because Ms Pitkin had a close relationship with Mr Heraghty and Ms Kelly, and would “somehow sweep such matters under the carpet”.
- The board led by Ms Pitkin was made aware of these allegations via an open letter from Harmers Workplace Lawyers in December. The board conducted a review and investigation into the allegations, supported by independent external advisers.
The theme in this case is ‘trust’ and ‘accountability’. Despite having outlets to share concerns, staff lost trust in the ability for them to be resolved internally. Those that did report it internally were met with what they perceived to be bias responses. And, with all this happening there is now an extensive investigation process to filter through emails, scattered data and more to prepare for a battle in court.
A strategy to prevent this from happening
If there are trust and accountability issues, one potential strategy to this is implementing a neutral third party to manage worker consultation and anonymous incident reports. Many claims relate to issues between workers and leaders so a neutral third party between these two often makes sense. It doesn’t necessarily have to be an external third party, we’ve seen the successful implementation of internal wellbeing committees to handle such matters. Here is how it could work:
- Establish a neutral group – this might be a neutral internal group with staff representation or a trusted external third party group. This group has a clear procedure to follow for incidents and risk management, and all workers are aware this group exists.
- Periodically consult staff – this group can send out short anonymous checks annually or bi-annually to all staff. It is important that the checks allow for two-way conversations to take place rather than forms such as ‘Survey Monkey’ or ‘Google/Microsoft Forms’. If an issue is reported it can be responded to before it escalates into a claim.
- Establish an incident reporting process – develop a system where reports can be lodged e.g. via email or other communication channels and then the neutral third party follows a process to follow this up and document steps to resolving it. The third party is the link between senior leaders and workers which is where many of these claims and conflicts take place.
The advantages of doing this are:
- Cost & time savings – It saves leadership time, effort and complexity in consulting workers, managing complex issues and maintaining documentation.
- Mitigate risk early – It encourages more open and honest sharing of issues so they are resolved before they escalate. The neutrality promotes a more balanced and fair handling of issues that workers trust so an internal resolution is more likely.
- Deterrence of frivolous claims – Thorough documentation of incidents, worker consultation and risk assessments can deter workers from making claims. They feel they have less chance of it being successful.
Final thoughts
Silence is no longer a safe option for workplaces. They need workers to speak up early and get these issues resolved internally. When workers trust that their concerns will be heard and addressed fairly, they are far less likely to seek external resolutions that could escalate into costly claims. The challenge with this is that many of these issues that lead to a claim exist between workers and leaders. This creates friction in speaking up and reaching an internal resolution so workers go external. A neutral internal or external third party with the right tools and training to detect, resolve and document issues before they go external is a strategy that could prevent this. It doesn’t need to be costly either and it will be a strong investment in the security of your organisation long term.