What Is Stress Leave? Everything You Need To Know

If you’re a full-time or part-time employee, you’re entitled to a certain amount of paid personal leave when you can’t work. Illness due to stress is a legitimate reason for taking leave according the Australian Fair Work Ombudsman.

Rachel Clements, Director of Psychological Services at the Centre for Corporate Health in Sydney, said it’s in the best interests of both employees and employers for people to feel comfortable taking time off to address their mental health.

“Because so much of the time, what starts off as a little issue can become a big one later on. So, I think by promoting the various leave entitlement that people may have, from an early intervention perspective, that’s what it’s designed for,” Clements said.

She said the best-case scenario was one where leaders were proactive about recognising stress and creating a culture of psychological safety. Recent changes to workplace health and safety laws have also put more onus on employers to mitigate psychosocial hazards.

“I think leaders now are much more educated about the need for flexibility for mental health issues and that it’s much better for someone to take a Friday off and recoup and recharge rather than have them kind of continually be depleted for weeks or months,” Clements said.

Is Stress Covered by Workers’ Compensation?

Taking the occasional mental health day is a valuable short-term option for managing stress. But what if your stress turns into a psychological injury? If you develop a diagnosed mental health condition, you may be able to access payments that help replace your wages and fund treatment through workers’ compensation or insurance.

Rachel Clements said that when preventative measures do not work and a psychological injury occurs, compensation claims are an important aspect of people’s ability to recover from mental health issues.

“Usually what we hear is, ‘you know what I felt like I was banging my head against a brick wall. I felt like, I’d been raising issues. I’ve been talking about things, nothing was being done. So I felt like this was now my only other option because I’d become so unwell’.”

Work-Related Stress Is Not an Isolated Problem

Clements said there were high levels of burnout among workers since the Covid pandemic started, influenced by constant adaptation to new ways of working, being overloaded or under-stimulated, and more recently—the uncertainty associated with organisational change, downsizing and redundancies.

“People are tired, they’re not at their best in their prefrontal cortex. They’re depleted,” she said.

“And what I’ve seen with employees over the last couple of years is that many people are managing a lot more complexity in their personal lives as well.

“This is doubly why people are not travelling well. Stress is through the roof and psychological injury claims have increased.”

Australian employers are obligated to provide paid personal leave but the amount depends on how many hours you work—the minimum entitlement is 10 days a year for a full-time employee, but most employers offer around four weeks’ leave.

Australian employers are also required to hold workers’ compensation insurance for their employees. Successful workers’ comp claims will usually provide weekly payments for the period you’re unable to work, but there’s upper limits.

As long as you have leave available, you can take it. You may also be able to take extra unpaid leave—depending on the policies and willingness of your employer. If you’re unwell for less than three months and can provide evidence of your illness, you should be protected from being fired under Australian law.

Self-employed people, such as sole traders, freelancers and independent contractors don’t benefit from employee leave entitlements—it’s up to these individuals to determine when they work or take breaks, and the costs associated with that. Generally, self-employed workers are also not eligible to claim workers’ compensation.

Do You Get Paid for Taking Stress Leave?

If you’re entitled to paid leave, then you’ll be paid for any leave balances you use due to feeling stressed or mentally unwell. You may also be able to make a claim through workers’ compensation and insurance policies, such as those you pay for through your superannuation, as well as separate life insurance or income protection insurance you hold.

If you’re eligible for workers’ compensation, you don’t get full pay while you’re on leave. The amount paid will be a percentage of your usual salary (up to 95% initially) and will also depend on the severity of your psychological injury, your medical expenses and how much work you’ll miss.

To get paid via your insurance or a worker’s compensation scheme, you’ll need to seek out a formal clinical diagnosis of mental illness. LawPartners firm advises: “Your claim will be declined if the doctor refers to your injury as “stress”.”

Mental health conditions are a common reason for claims to be paid out by insurers. Claims are typically made via life insurance, total and permanent disability (TPD) insurance, or income protection insurance.

The specific details of your policy will determine how much money you can claim, waiting periods, and how payments will be delivered. Life and TPD insurance will usually pay a lump sum. Income protection policies may offer a lump sum or periodic payments, and typically cover up to 75% of your regular income.

It’s worth noting that denied coverage and policy exclusions related to mental health are key criticisms of the insurance industry. People with a history of mental health conditions may find it harder to get a policy or the insurer may exclude coverage for mental health conditions. Insurers have also been known to use an undisclosed medical history of stress to avoid paying claims, even for unrelated matters.

Maurice Blackburn Lawyers’ Josh Mennen said accurate disclosure of even minor issues or treatment related to stress and mental health was critical when applying for insurance, even if it happened a long time ago. As Mennen suggests, “You may need to shop around to find an insurer who will cover you, and this may incorporate a higher premium.”

When you’ve made the decision to take leave to focus on your mental health, don’t feel guilty about doing what’s needed to rest, relax and recharge. You can completely switch off from work and leave the house. Take the advice of your GP if you need to see one.

If you’re concerned that your stress isn’t temporary, consider your long-term health needs and whether you’d benefit from ongoing professional help. Untreated stress can cause psychical problems and lead to more serious mental illness.

How to Deal With Your Employer

Your personal leave is there for you to use as needed. But you’ve also made a commitment to your employer, so it’s important to follow the right processes.

1. First and foremost, you need to notify your employer that you’re taking leave, even if you can’t provide advance notice. You can simply say you’re unwell and won’t be at work.
2. Make sure you understand leave policies and follow your job’s leave request steps. For personal (sick) leave, your employer might ask that you provide a medical certificate—and they’re entitled to request this kind of evidence. As long as you’re not putting yourself or others in danger, you’re not required to disclose your reason for leave or any details about your treatment. You can ask your doctor to be vague about the reason they write on your medical certificate.
3. Consider any specific mental health hazards that need to be fixed. Your employer has a legal obligation to control work-related risks to mental health. If you’re willing to raise problems about your workplace, and your employer takes action, it could help you avoid stress in future.
4. Be aware that if you have developed a psychological injury and want to claim workers’ compensation, you’ll need to gather medical evidence and submit a claim via your employer and your state’s workers’ compensation body within certain time limits.

Should You Tell Your Boss You’re Stressed?

Not everyone wants to admit they’re struggling or face possible stigma. Mental health service headspace has a list of pros and cons to help people weigh up whether to tell people at work about your mental health difficulties.

Rachel Clements argues that not raising concerns about how work is contributing to stress could result in leave being a temporary solution only. Here is her advice:

• Find a trusted person to talk to about the issue: “Hopefully that might be your manager. Maybe it’s someone in HR, maybe it could even be a colleague.”
• Be honest and open to finding solutions: Clements suggests explaining that you’re trying to be proactive in addressing challenges that are taking a toll on your wellbeing, and that you want to help find a workable solution.

Clements said a lack of openness limited the ability for employers to nip issues in the bud.

“We run the risk of it kind of going underground. And then people take more of that leave and suddenly it’s you know, a month gone and somebody’s still on sick leave, or mental health leave.”

Clements suggests talking to your manager about crafting your role in the first few weeks to include less taxing tasks that will also make you feel good about your achievements or impart a sense of purpose.

“People get better faster if they are engaged in good elements of work. If I’m engaged in bad work, and I’m on the recovery journey, that might be a setback for me.”

She said not to forget the strategies that helped you while on leave like exercise or catching up with people for coffee: “Are there some good wellbeing habits I’ve gotten into while I’ve been recovering that I can continue on in the workplace?”

Do you need support? Access 24/7 crisis support from Lifeline on 13 11 14. Reach out to a Beyond Blue counsellor on 1300 22 4636. If it’s an emergency phone 000.