Managing psychosocial risks in the workplace: the new paradigm

The increased attention from a work, health and safety regulatory perspective on psychosocial safety in the workplace in recent times has meant that this paradigm is being challenged. There is a growing appreciation by businesses generally that work, health, and safety regulatory compliance in respect of psychosocial safety should inform their broader resource management strategy. Not simply because of a recognition that such compliance drives better workplace culture and a productive workforce, but also, non-compliance could have serious consequences including substantial criminal penalties^[1] for employers, officers and workers where applicable standards have not been met. 

What is a psychosocial risk?

A psychosocial risk is a risk to health and safety of a worker (or other person) arising from a psychosocial hazard. Under harmonised work, health and safety legislation^[2], a psychosocial hazard is broadly defined to include hazards arising or relating to the design or management of work and work environment, which may cause psychological (and physical) harm.

Psychosocial hazards are varied, and may arise from various workplace scenarios such as, unachievable task deadlines, unreasonable management action, the demands on a person’s role, poor job support, an isolated working environment, workplace conflict, bullying and harassment (including sexual harassment).

In this modern era of working from home and hybrid work arrangements, it is important to keep in mind that psychosocial risks and hazards are not limited to situations or encounters at the employer’s premises – psychosocial hazards and risks that relate to the remote work must also be proactively managed by employers.

Increased regulatory focus on workplace psychosocial risk

Even prior to recent attention on psychosocial risks and hazards in the workplace, work, health and safety legislation provided protection of workers against psychosocial^[3] risks and hazards. The high-profile Brodie Panlock work, health and safety prosecution of an employer and workers arising from severe workplace bullying is a case in point.

However, over the last few years, it is fair to say that Australian work, health and safety regulation has bulked up its protections against psychosocial risks and hazards, starting with the introduction of a code of practice for the management of psychosocial risks in the workplace in a number of Australian harmonised work, health and safety jurisdictions. In New South Wales, for example, SafeWork NSW (the New South Wales safety regulator) introduced the Code of Practice: Managing Psychosocial Hazards at Work (Code) in 2021. Similar codes have since been introduced^[4] in Queensland, Western Australia, Tasmania, Northern Territory and at the Commonwealth level.

The Code provides practical guidance on how to meet standards required by NSW work, health and safety legislation including ways of identifying and managing psychosocial risks and hazards. Businesses need to either comply with the Code or manage applicable risks and hazards to an equivalent or higher standard.

In June 2022, the Model Work Health and Safety Regulations were amended to expressly require duty holders (e.g. businesses) to manage psychosocial risks. Consequently, all of the Australian harmonised work, health and safety jurisdictions have now amended their respective regulations (adopting the model regulations with some variation^[5]), to include express provision for the management of psychosocial risks in the workplace^[6]. Essentially, compliance involves:

1. identifying the psychosocial hazards;
2. assessing the psychosocial risks of harm arising. This includes considering the duration, frequency, and severity of the worker’s exposure to the psychosocial hazard;
3. implementing control measures aimed at eliminating the risks so far as is reasonably practicable, and if not, minimising the risks as is reasonably practicable; and
4. regularly monitoring and reviewing the effectiveness of the control measures.

These changes signify that businesses (and other duty holders) are expected to deal with such risks and hazards with the same diligence as those associated with physical health and safety

Additionally, various work health and safety regulators have identified psychological safety as a regulatory focus area for 2023.

Anticipated reforms

The incident notification framework in Australian harmonised work health and safety legislation requires the immediate notification of the applicable work safety regulator of a workplace incident involving the death of a person, a serious injury or illness or a dangerous incident. Incident notification is the primary means of alerting the work safety regulator to a serious workplace incident which may lead to an investigation by the regulator into possible breach of health and safety duties, and ultimately prosecution proceedings. In addition, information obtained via notification process informs the regulator’s broader compliance activities and strategies.

A review conducted on behalf of Safe Work Australia, the national work safety regulator, found that the current framework does not require an employer to notify the regulator of psychosocial hazards, nor adequately covers injuries and illness that emerge over time or that are not immediately evident.

In July 2023, Safe Work Australia commenced a process of public consultation to consider changes to incident notification requirements. Potential reform being canvassed includes the broadening of employer’s obligation to notify the regulator so as to adequately capture psychological injuries and psychosocial hazards that occur in the workplace. Options being considered include: introducing periodic reporting (six monthly) for periods of worker incapacity due to a work-related injury or illness of ten or more days; immediate notification for attempted suicide, suicide and other deaths related to work-related psychological harm; and periodic reporting of psychosocial hazards which includes worker exposure to traumatic events as well as bullying and harassment.

The outcome of that consultation process may well give rise to further law reform, and reinforces the view that psychological injuries and psychosocial risks are an increasingly important area of focus for work, health and safety regulation.

Retail sector

Whilst not tied to work, health and safety legislation, but still noteworthy as a significant measure aimed at improving psychological and physical safety of workers in the retail sector, NSW has recently amended its criminal legislation^[7] to make it a criminal offence to harass or assault a retail worker in the course of the worker’s duty. Assaulting, throwing a missile at, staking, harassing or intimidating a retail worker without harm caused carries a maximum penalty of 4 years imprisonment. An assault that causes physical harm carries a maximum penalty of 6 years imprisonment, and where significant harm is caused carries a maximum penalty of 11 years imprisonment.

This legislative change comes on the back of reported research that indicated 85% of retail workers have been abused or assaulted at work.

It also follows criminal law reform in South Australia in 2022 that increased the penalties for assaulting a retail worker.

Takeaway

With increasing regulatory attention on workplace psychosocial risks, it is critical that businesses look to implement safety compliance systems, or review the effectiveness of existing safety compliance systems, as soon as possible. The aim would be to have safety systems in place to ensure that there is proactive identification and effective management not just of hazards causing physical harm, but psychological harm as well.

[1] For example, in New South Wales, a business’ failure to meet its primary duty of care under the Work Health and Safety Act 2011 (NSW) can expose it, depending on the seriousness of the offence, to a category 1, 2 or 3 offence. The maximum penalty for those offences (as committed by a corporate) ranges between 5,770 penalty units (equivalent to $634,700 AUD) to 34,630 penalty units (equivalent to $3,809,300 AUD).

[2] Work, health and safety harmonised legislation refers to ‘model work health and safety laws’ that have been enacted in all states and territories in Australia (including at the Commonwealth level), except Victoria, which has distinct legislation regulating work health and safety.

[3] See for example the definition of ‘health’ under s. 4 of the Work Health and Safety Act 2011 (NSW).

[4] South Australia has committed to introducing such a code to support its psychosocial risk management regulations which will take effect in December 2023.

[5] The variation is that NSW, Tasmania, Western Australia have adopted regulation reflecting the Model Work Health and Safety Regulations position of not prescribing that managing psychosocial risks be subject to the hierarchy of control measures referenced elsewhere in the regulations.  The Commonwealth, Qld, South Australia, ACT and Northern Territory have required that managing psychosocial risks be subject to the hierarchy of control measures.

[6] Victoria, which has not enacted the model work health and safety laws, is currently considering options for the development of psychological health regulations and an accompanying compliance code as part of its work, health and safety laws.

[7] Crimes Act 1900 (NSW), s60G.