Calls for reform as remote work exposes compensation gaps

Workers, doctors and lawyers unite in calls for urgent reform to fix a system described as adversarial, outdated and unfair, writes Andrew Klein.

The new workplace reality exposes systemic flaws

The dramatic shift toward remote work in Australia has created a critical stress test for the nation's workers' compensation systems, revealing fundamental flaws in how workplace injuries are recognised, assessed and compensated.

When 188 Australian workers lost their lives to traumatic injuries in 2024 and 146,700 serious workers' compensation claims were lodged, the system already struggled to manage conventional workplace injuries. Now, with the boundaries between home and workplace blurred, these systems face unprecedented challenges in addressing injuries occurring in home offices, mental health conditions developing in isolation and the adequacy of telehealth assessments.

This article examines how Australia's compensation framework is failing to adapt to the new world of work, creating absurd contradictions and leaving vulnerable workers without adequate protection or support.

The statistical foundation: Australia's workplace injury landscape

Understanding the current crisis requires examining the foundational data on workplace injuries in Australia.

According to Safe Work Australia's 2025 Key Work Health and Safety Statistics, the situation presents both progress and persistent problems:

• Traumatic injury fatalities: Australia recorded 188 worker fatalities in 2024, representing a rate of 1.3 deaths per 100,000 workers. While this reflects a 24% decrease since 2014, the rate has remained relatively steady in recent years.
• High-risk industries: The statistics reveal alarming concentrations of harm, with 80% of work-related traumatic injury fatalities occurring in just six industries: agriculture, forestry and fishing; public administration and safety; transport, postal and warehousing; manufacturing; health care and social assistance; and construction.
• Mental health claims: Perhaps most significantly for remote workers, mental health conditions now account for 12% of all serious claims, representing a 14.7% increase on 2022–23 and a startling 161% increase compared to ten years ago. The median time lost from work for these claims is almost five times longer than for other injuries and diseases.

These statistics provide crucial context for understanding the system, which was already straining under conventional workplace injuries before the massive shift to remote work added new layers of complexity.

Homework injuries: Legal precedents and regulatory recognition

The recognition of injuries sustained while working from home has created novel legal challenges and begun establishing new precedents in compensation law.

The Vercoe case: Establishing compensability for home injuries

A landmark 2024 decision from the South Australian Employment Tribunal, Lauren Vercoe v Local Government Association Workers Compensation Scheme, established that injuries sustained while working from home can be compensable. The case involved Ms Vercoe tripping over a pet fence during an authorised coffee break in her home office.

The Tribunal determined her injuries arose out of her employment, reinforcing that a workplace includes a worker's remote working environment. This decision underscores the critical importance of employers implementing robust safety measures and comprehensive policies that address risks in home workplaces.

Practical complexities in home injury claims

Despite legal recognition, practical difficulties persist in home injury claims:

• Evidentiary challenges: Proving an injury occurred during work duties presents significant hurdles without witnesses or clear work boundaries.
• Diverse work arrangements: The highly variable nature of home workplaces complicates standardised safety approaches.
• Employer responsibility: Employers maintain obligations to provide safe working conditions even in home environments, which may include providing ergonomic equipment or conducting home office assessments.

Legal experts note:

‘Working from home doesn't automatically mean you're unable to claim workers' compensation, but the circumstances of your injury and employment arrangement will need careful legal assessment.’

The mental health crisis: Systemic neglect of psychological injuries

The compensation system's approach to mental health represents one of its most significant failures, particularly problematic for remote workers who face isolation and blurred work-life boundaries.

The regulatory framework for psychosocial hazards

Under model Work Health and Safety (WHS) laws, persons conducting a business or undertaking (PCBU) must manage the risk of psychosocial hazards in the workplace.

These hazards include:

• Job demands: Excessive workload, tight deadlines and traumatic content exposure.
• Low job control: Lack of autonomy over work arrangements.
• Poor support: Isolation from colleagues and inadequate supervision.
• Role ambiguity: Unclear responsibilities and expectations.

The regulatory recognition is clear:

‘Psychosocial hazards can create stress. This can cause psychological or physical harm. Stress itself is not an injury. But if workers are stressed often, over a long time, or the level of stress is high, it can cause harm.’

The treatment gap in mental health services

Research reveals significant disparities in mental health service provision for physically injured workers:

• A study on low back pain (LBP) claims found only 9.7% of workers accessed mental health services through their compensation claim, despite the established connection between chronic pain and mental health issues.
• Prevalence of mental health service access increased with time off work, with the highest odds of accessing services among females and in Queensland, while regional areas and workers over 56 showed lower access rates.
• The study concluded there are ‘opportunities for workers' compensation regulators and insurers to provide greater access to appropriate mental health services alongside physical treatment as standard practice’.

Proposed legislative restrictions

Alarmingly, instead of expanding access, proposed reforms would restrict mental health support.

The Workers Compensation Legislation Amendment Bill 2025 suggests:

• Tightening access: Lifting permanent impairment thresholds from 21% to 31% for ongoing payments and medical support.
• Eliminating lump sums: Workers between 15% and 30% impairment would lose access to lump sum compensation and common law damages.
• Restrictive “relevant events” test: Psychological injuries would only be compensable if caused by a narrow list of events, excluding single bullying incidents, unreasonable management action and most workplace pressures.

These changes would affect even victims of workplace sexual assault, bullying, racism and harassment, who would ‘no longer have recourse unless they reach the near unattainable 31 per cent threshold’.

Telehealth limitations: The inadequacy of remote assessments

The heavy reliance on telehealth services during the pandemic created new challenges for injury assessment and treatment, particularly problematic for workers' compensation cases.

Clinical limitations of telehealth

The Australian medical community recognises significant constraints in telehealth:

• Physical assessment restrictions: ‘Your ability to conduct a thorough physical assessment during a telehealth consultation is limited, which poses significant risk.’
• Mitigation strategies: Clinicians may use workarounds like patient-owned equipment (blood pressure monitors, glucometers), functional assessments conducted by patients, or relying on examinations by other healthcare professionals physically present with the patient.
• Knowing limitations: Medical guidelines stress ‘there may be times when you can't sufficiently mitigate this risk’ and emphasise recognising when in-person consultation is necessary.

Relationship and continuity of care concerns

• Pre-existing clinical relationships: The absence of established doctor-patient relationships compromises care quality through limited access to clinical records, increased inappropriate prescribing risks and reduced ability to detect prescription shopping.
• Follow-up challenges: Inadequate follow-up poses risks, including care continuity gaps, missed monitoring of conditions and medication or treatment mismanagement.

Regulatory and reimbursement complexities

• Professional standards: The Medical Board of Australia expects clinicians to ‘comply with good medical practice every time you consult a patient’ and provide care that meets ‘the same standards of care provided in an in-person consultation’.
• Privacy and technology: Practitioners must use platforms with ‘adequate measures to protect the privacy and security of your patient's health information’ and ‘secure, reliable technology that is fit for clinical purpose’.
• Cross-border practice issues: When patients are in different jurisdictions from providers, clinicians must adhere to regulations governing both their own location and the patient's location, particularly challenging with high-risk medications.

Systemic failures: A system in critical condition

Beyond specific issues with home injuries and mental health, the workers' compensation system suffers from foundational problems that affect all claimants.

Frontline professional perspectives

General practitioners report profound frustrations with the system:

• Administrative burden: The Royal Australian College of General Practitioners identified compensation paperwork as a key issue leading GPs to consider early retirement.
• Patient harm: ‘In some cases, these administrative burdens create more harm than the original injury.’
• Psychological fallout: ‘Patients arrive disheartened, their physical recovery overshadowed by stress and frustration. Each delay can erode their motivation to return to work and sap their confidence in the system designed to protect them.’

Insurance practice criticisms

The proposed 2025 legislation highlights severe systemic issues:

• Treatment delays: ‘Psychological injury claims where treatment occurs within two weeks cost 20 times less, yet insurers often take months to act.’
• Adversarial approach: The system is characterised by ‘delays in treatment approvals [and] adversarial claim handling’.
• Poor outcomes: There are ‘poor return-to-work outcomes [and] excessive legal and investigation spending’ throughout the system.

Inadequate consultation funding

GPs face structural disincentives for proper care:

‘These are not quick consultations. They often require detailed discussions about workplace duties, functional capacity, mental health and complex social factors. Yet, like other longer, complex consults, these visits are often inadequately funded, leaving patients facing out-of-pocket costs or GPs absorbing the financial hit to ensure proper care.’

Structural criticism: The fundamental absurdities exposed

The combination of these factors creates what can only be described as a systematically absurd situation that fails workers, employers, and healthcare providers alike.

The remote supervision paradox

The original concern about supervisors' inability to assess worker wellbeing remotely reflects a genuine dilemma. Without visual cues and casual interaction that might reveal distress in physical workplaces, supervisors lack basic tools to identify struggling employees. This creates a perfect storm: employees invisibly deteriorating without organisational support, then facing inadequate assessment and treatment systems when issues surface.

The telehealth double bind

The heavy reliance on telehealth creates a contradiction: the same remote assessment limitations that possibly contributed to undetected mental health deterioration become the primary assessment method once injuries are identified. This circular failure means the system's response replicates the conditions that potentially enabled the problem.

The evidence conundrum

Remote workers face particular difficulties providing evidence for mental health claims. Without workplace witnesses to hostile interactions or excessive demands, claimants must rely on digital paper trails and their own testimony against potentially well-resourced employers. This power imbalance is exacerbated by a system described as “adversarial” and prone to “excessive legal and investigation spending”.

Conclusion: Reform imperatives for a system in crisis

Australia stands at a crossroads in workers' compensation. The evidence clearly demonstrates the system's failure to adapt to modern work realities, particularly regarding remote work and mental health. The statistical evidence, legal precedents, clinical limitations and frontline professional testimony all point toward a system requiring fundamental reform, not restrictive band-aid solutions.

The path forward

Meaningful reform should prioritise:

• Adapting to modern work realities: Explicitly recognising the home as a legitimate workplace with appropriate safety standards and assessment frameworks.
• Mental health integration: Embedding mental health support as standard practice in physical injury claims, particularly for conditions like chronic pain with established psychological connections.
• Proactive early intervention: Implementing early identification systems for both physical and psychological injuries, recognising that early treatment dramatically improves outcomes and reduces costs.
• Systemic simplification: Reducing administrative burdens that frustrate claimants and clinicians while driving up costs without improving outcomes.
• Telehealth refinement: Developing specific protocols for telehealth in compensation cases, recognising both its potential and limitations while ensuring adequate reimbursement for comprehensive assessments.

The proposed legislative response to restrict entitlements rather than improve system management represents a failure of imagination. As the research shows, the solution lies not in making compensation harder to obtain, but in creating a system that supports recovery through early intervention, coordinated care, and recognition of the complex interplay between physical and psychological health in the modern workplace.

Without such fundamental reimagining, Australia's workers' compensation system will continue to fail those it was designed to protect, particularly the growing legion of remote workers navigating the dangerous limbo between home and workplace.