Productivity Commission Releases Mental Health Report

Psychological hazards in the workplace receive less attention than physical hazards, however, such hazards – including workplace bullying – are increasingly identified as significant contributors to psychological injuries, according to a recent Productivity Commission report.

For an employer, meeting their duty of care to ensure psychological health and safety in a workplace that is also the employee’s home — as was increasingly the case during the COVID-19 pandemic — may present particular difficulties and challenges, said the Productivity Commission’s report into its inquiry on mental health.

Workplace mental health and productivity would be improved by making psychological health and safety as important as physical health and safety in practice, and the report suggested the same risk management approach that applies to physical health and safety (an approach familiar to employers and employees) should be applied, as a priority, to psychological health and safety.

“This reform would not only improve the mental health of workplaces but is estimated to generate savings (as reduced presenteeism and absenteeism) in excess of the cost of implementing the reform,” said the report, which was recently released to the public.

The report, which makes recommendations to the Australian and State and Territory Governments, to improve mental health, observed that about 2.8 million working Australians have a mental illness, requiring time off work to maintain their wellbeing; a further 440 000 working Australians are carers of someone with mental illness.

Furthermore, people with mental ill‑health took an average of 10 to 12 days per year off work due to psychological distress, while estimates for the cost of workplace absenteeism due to mental ill-health were up to $10 billion per year.

More specifically, only about 6 per cent of all workers compensation claims in Australia are for work-related mental health conditions, the cost of these claims is typically about 2.5 times the cost of other workers compensation claims.

Furthermore, they involve 2.5 times more time off work (the median time off work for mental health-related workers compensation claims is 16 weeks, compared with 6 weeks for other claims), and are much less likely to be accepted.

In recent years, occupations with the most work‑related mental health claims have been police, firefighters and defence force members (9 per cent of all serious claims), school teachers (8 per cent), followed by health and welfare support workers (6 per cent) (figure 8).

“To get people back to healthy lives, including working productively, as quickly as possible, early identification and treatment of mental illness should be encouraged by amending, as a priority, workers compensation schemes to fund clinical treatment (including any required rehabilitation) for all mental health-related workers compensation claims,” the report said.

“This should be provided regardless of liability until the injured worker returns to work or up to a period of six months following lodgement of the claim. Similar provisions should be required of companies who are self-insurers. There would be no compensation under this provision for loss of income.”

The Productivity Commission estimated that this provision would cost in the order of 0.6 per cent of the total annual premium revenue received by insurers.

At the enterprise level (were insurers to pass on the cost of this), the report said the provision would translate to a very small annual additional cost per worker.

“Given the very small additional costs involved, coupled with the significant benefits achievable through early intervention and early return to work, funding treatment through workers compensation schemes would be an effective approach to improving outcomes for mental health-related workers compensation claims,” the report said.

“This reform would not only get people experiencing mental illness the help they need earlier, but it is estimated to increase the value of economic production for those businesses that offer such support to their employees.”

The report also suggested employee assistance program providers and their industry bodies, in conjunction with employers, and with employer and employee representatives, should develop minimum standards for employee assistance programs and for the evaluation of these programs.

Article originally published by the Australian Institute of Health and Safety.