Developments in workplace safety: Psychosocial risk reforms in Australia

There is a growing body of research that indicates that workplace stress, bullying, harassment (including sexual harassment), and lack of support can significantly affect performance and lead to psychological distress, high turnover rates, absenteeism, and burnout¹.

This is one of the reasons a (mentally and physically) healthy workforce is integral to a business’ success.

It is also a matter that has received increased legislative and regulatory attention. In October 2023, Court Services Victoria was prosecuted, pleaded guilty and fined $379,157 for breaching the Occupational Health and Safety Act 2004 (Vic) between 2015 and 2018 by failing to properly identify and assess risks in relation to the psychological wellbeing of its employees, particularly due to what was described a toxic culture within the Coroners Court².

Changes have now been made to the model Work Health and Safety Regulations (WHS Regs) that require employers to take a proactive approach in managing psychosocial risk in the workplace. Employers must actively identify psychosocial hazards, and implement, maintain and review control measures to address the risks these hazards pose. This article will set out the key obligations for managing psychosocial risks and suggest steps duty holders can take to help ensure compliance.

Background

The general duty imposed on persons conducting a business or undertaking (PCBU) to ensure, so far as is reasonably practicable, the psychological (as well as physical) health and safety of workers is not new. However, until the introduction of psychosocial risk reforms, work health and safety laws did not provide detailed guidance for duty holders on how to ensure a psychologically healthy workplace.

In 2019, the Boland independent review of model work health and safety laws highlighted, among other things, the need for stronger regulation to address psychological hazards in the workplace. This led to amendments to the model WHS Regs. SafeWork Australia also introduced a Model Code of Practice on Psychosocial Hazards at Work (Model Code). These reforms included the identification and management of ‘psychosocial’ hazards in the workplace, as is set out further below. Almost every Australian State and Territory has adopted in some fashion the changes to the model WHS Regs and adopted the Model Code (with some variations).

What are psychosocial hazards and psychosocial risks?

A psychosocial hazard is a hazard which arises from or relates to the design or management of work or the work environment, plant at the workplace or workplace interactions or behaviours and which may cause psychological harm (whether or not it may also cause physical harm). Psychosocial hazards can take many forms, including³:

• Workload and Job Demands – unrealistic deadlines, excessive workloads, or constant pressure to perform.
• Lack of control – limited autonomy in decision-making, inflexible work arrangements, or micromanagement.
• Poor workplace relationships – bullying, harassment (including sexual harassment), conflicts, or poor communication between colleagues or management.
• Job insecurity – uncertainty about job stability, contract work without security (gig economy workers), or frequent restructuring.
• Poor organisational support – lack of recognition, inadequate leadership, or insufficient resources to perform tasks effectively.
• Exposure to traumatic events – first responders, healthcare workers, or employees dealing with distressing situations.

A psychosocial risk refers to any risk to a worker’s health or safety that stems from a psychosocial hazard. Unlike physical hazards, which are often tangible and more easily identifiable, psychological hazards arise from the design, management, or the environment of work, as well as workplace interactions and behaviours.

Unchecked psychosocial hazards can lead to stress, anxiety, depression, burnout, and decreased job satisfaction, and in some cases could contribute to physical health issues. From a business perspective, unmanaged psychosocial risks result in higher absenteeism, reduced productivity, increased regulatory scrutiny (e.g. investigations and prosecutions) and higher numbers of workers’ compensation claims.

Steps to comply with psychosocial risk laws

The Code sets out a four-step overview to manage psychosocial risks including⁴:

1. Identify hazards
   Take a proactive approach in identifying any reasonably foreseeable psychosocial hazards which could arise within the workplace.
   
   For example, use employee surveys, and incident reviews to identify factors such as high workloads, poor job control, workplace bullying, and exposure to traumatic events.
2. Assess risks
   Conduct a risk assessment and identify whether the hazards alone, or combined, could pose a psychosocial risk to individuals, groups or the workplace.
   
   Evaluate the likelihood and severity of harm these hazards pose to employees. Assess work practices including working hours, surveys, review grievance data and consider the potential psychological and physical impact on workers and whether existing measures adequately address the risks.
3. Control risks
   Implement the most effective control measures that are reasonably practicable in the circumstances and ensure they remain effective over time. The control measures which are implemented must remain fit for purpose, suitable for the work and be installed, set up and used correctly.
4. Review control measures
   Implement a review process for the control measures which have been implemented in line with the requirements set out in the WHS Regs. Revise the control measures as necessary and record these processes as they occur.
   
   Compliance isn’t a one-time task. PCBUs should regularly assess the effectiveness of implemented control measures, seek worker feedback (e.g. through exit interviews, surveys, or health and safety committees), and refine policies based on emerging risks or legislative updates.
   
   Separately, the model WHS laws impose a duty to consult workers. A PCBU must consult, so far as reasonably practicable, with workers who carry out work for the business or undertaking who are, or are likely to be, directly affected by a matter relating to work health or safety. Consultation should take place throughout each stage of the risk management process.

Key takeaways

As workplace lawyers we see businesses often not prioritising psychosocial risk and we see this commonly play out in the form of extended absences, performance management, conduct concerns or workers’ compensation claims. With psychosocial risks now recognised as a serious workplace safety issue, businesses should integrate psychological health and safety into their WHS frameworks, ensuring a safe, productive, and legally compliant workplace. Ultimately, businesses that fail to adapt, risk not only legal repercussions but also long-term damage to employee satisfaction, productivity and reputation.

Footnotes

1. SafeWork NSW – Psychological Health and Safety Strategy 2024–2026; Malola, P., Desrumaux, P., Dose, E., & Jeoffrion, C. (2024). The Impact of Workplace Bullying on Turnover Intention and Psychological Distress: The Indirect Role of Support from Supervisors. International Journal of Environmental Research and Public Health, 21(6), 751.
2. https://www.mdpi.com/1660-4601/21/6/751.
3. Marcel.ianno (2023) Response to the worksafe sentence, Court Services Victoria. Available at: https://courts.vic.gov.au/news/response-worksafe-sentence.
4. See Safe Work Australia – Managing psychosocial hazards at work: Code of Practice 2022, 1.1.
5. See Safe Work Australia – Managing psychosocial hazards at work: Code of Practice 2022, 2.