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Proving causal nexus in psychological injury claims

If a co-worker sets up a colleague for a criminal offence, and the colleague suffers a psychological injury – does the psychological injury occur in the course of, or arise out of, employment?

In the matter of Nizamdeen v University of New South Wales [2022] NSWPIC 17 (12 January 2022) the Commission decided the psychological injury did not occur in the course of, or arise out of, employment.

The facts

The worker alleged a psychological injury as a result of an incident on 30 August 2018, when he was arrested at work by the Australian Federal Police. The worker was accused of detailing plans for a terrorist attack in a notebook. He was detained at Goulburn Correctional Centre for a month in solitary confinement and was subjected to long hours of interrogation. He was released on conditional bail on 28 September 2018. Later, all of the charges were dropped.

After his release from prison the worker made a claim for weekly compensation and lump sum compensation. The worker alleged the notebook entries depicting a terrorist attack were created by a co-worker in order to frame him. Thus, the worker argued his employment was a substantial contributing factor to the injury because:

  • it was a co-worker who allegedly framed him

  • his arrest occurred during work hours

  • he suffered humiliation and disgrace at his workplace.

The insurer argued the worker’s condition developed while he was in custody as a result of the interrogation and media scrutiny. Further, the insurer said the psychological injury was a disease and his employment was not the main contributing factor to this disease as required by section 4(b) of the Workers Compensation Act 1987.

The matter proceeded to determination before a Member of the Commission.  


The Commission was satisfied the evidence supported a finding the worker sustained a disease injury which developed over the month after his arrest. The Commission determined the medical evidence supported a causal nexus between the psychological condition and the month long imprisonment in a maximum security prison, lengthy interrogations while in prison, the attitude of the police in response to the worker’s protests of innocence, attacks by the media, and the worker’s feelings of racial profiling.

Whilst the Commission accepted the arrest at work, which occurred in the course of his employment, was a factor in the development of the psychological injury, the evidence did not establish the arrest at work as the main contributing factor as required by section 4(b) of the 1987 Act.

In relation to the worker being framed by a co-worker, the Commission was not satisfied the evidence provided by the worker established the notebook, or the alleged actions by the co-worker, were causally related to the worker’s employment. The notebook was not used for work, and there was no evidence of any work related issues causing the co-worker to frame the worker. Thus, the Commission determined there was no causal nexus between employment and the co-worker’s alleged actions in framing the worker. On this basis, employment was not the main contributing factor to the injury.

These findings on the relationship between the injury – and the notebook and the co-worker’s alleged actions, also led the Commission to find the injury did not arise out of or in the course of his employment pursuant to section 4(a) of the 1987 Act. Based on the authority in Mercer v ANZ Banking Group Limited [2000] NSWCA 138 the worker needed to establish the cause of his injury was something he was doing for his employment. This causal test was not satisfied as the notebook and his interactions with the co-worker were not sufficiently related to his employment.

Whilst the events which unfolded around the worker in 2018 were ‘terrible and shocking’, the Commission was not satisfied the employer was liable for the psychological injury.


This case highlights the importance of drilling into the causative events when considering injury. The extent to which a causative event arises out of, or has a causal relationship to work, is determined on the evidence which shows a causal connection – and this evidence must be closely scrutinised.  

In this matter the Commission also reinforced the worker has the onus to satisfy the causal test for injury. The worker must provide evidence to prove employment caused the injury to the requisite threshold ie it was the main contributing factor; it arose out of employment and it was a substantial contributing factor.

Further, the Commission observed the causation tests are not reliant only on medical evidence and require consideration of all of the evidence. This includes the time and place of the injury, nature of the work performed, the particular tasks of the employment being undertaken, and the duration of the employment amongst other things.

This case serves a timely reminder for the insurer to carefully consider causation of any injury in the context of both medical and factual evidence.

Author: Kate Ralph

Supporting partner: Robbie Elder

See also: Causation: ‘common sense’ or ‘but for’ test?