Creating Safer Workplaces: Addressing Psychosocial Hazards Effectively

Psychosocial health is recognised in Australia as a core Work Health and Safety (WHS) issue. As a result, businesses are expected to identify, assess, and control risks to psychological health with the same discipline applied to physical hazards. That requires attention to how the work is designed, managed, and supervised, workplace behaviours and conditions that may cause harm.

What are psychosocial hazards?

Psychosocial hazards in the workplace are defined as aspects of work or the work environment that may cause psychological harm, such as stress, anxiety, depression, or Post Traumatic Stress Disorder (PTSD). These issues may arise from workplace demands, management practices, or the workplace environment.

Common examples include:

• High workloads;
• Low role clarity;
• Poor support;
• Bullying and harassment;
• Exposure to traumatic events; and
• Poorly managed organisational change.

If not managed correctly, these hazards can contribute to psychological injury, absenteeism, high turnover, reduced productivity, and workers’ compensation exposure.

Who do the obligations apply to?

Under section 19 of the Work Health and Safety Act 2011 (NSW) (WHS Act), the primary duty of care rests with a person conducting a business or undertaking (a PCBU). That includes corporations, government entities, sole traders, not-for-profits, and small and medium-sized enterprises. All businesses have an obligation to manage psychosocial risks so far as is reasonably practicable. This includes taking necessary steps to reduce the likelihood of harm, the degree of injury possible, understanding potential hazards and the available controls, as well as the suitability of those controls.

Officers of a PCBU owe due diligence obligations to ensure the PCBU complies with its duties. While there is an onus on workers to take reasonable care for their own health and safety and comply with reasonable instructions, the PCBUs must consult workers on WHS matters so far as is reasonably practicable to ensure psychosocial risks are identified and minimised. In practice, this means PCBUs should be striving to be proactive to ensure that risks are identified, discussed with workers, then managed through ordinary supervision, reporting, and safety processes.

Key legal framework

The key NSW framework is the WHS Act, the Work Health and Safety Regulation 2025 (NSW) (the Regulation) and the SafeWork NSW Code of Practice: Managing Psychosocial Hazards at Work (Code of Practice).

The Regulation deals expressly with psychosocial risks, in particular, the requirement for psychosocial risks to be controlled, by applying the hierarchy of controls in the event elimination is not reasonably practicable. In practical terms, businesses should not rely only on training or employee assistance programs. Where reasonably practicable, the Regulation notes that PCBUs should prioritise measures such as redesigning work, clarifying roles, improving supervision, adjusting staffing, and strengthening complaint pathways.

Case law such as the decision in Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 471 reinforces that, where psychological harm is reasonably foreseeable, employers may be liable for failing to provide a safe work environment. In this decision, the Court found that Nationwide News Pty Ltd (the Employer) was vicariously liable for the sustained bullying and abusive conduct of a supervisor towards another employee, Mr Naidu (the Employee). The Court found that senior management was aware of the conduct and failed to intervene, resulting in extensive psychosocial harm to the Employee. Upon review by the New South Wales Court of Appeal, the Employee was awarded $1,946,189.40 in damages.

The practical message is clear; bullying, abusive conduct and obvious psychological risks should be treated as material safety issues. Therefore, businesses should consider their approach to psychosocial risk management to ensure it is addressed with the same consistency as other significant WHS risks.

What should businesses be doing now?

Businesses need to maintain processes that ensure psychological hazards are treated with the same level of seriousness as other workplace risks. This can be done through the following methods:

• Review of psychosocial risks as part of the organisation’s WHS framework, not as a standalone wellbeing exercise.
• Identify the hazards most relevant to the business, such as workload, bullying, customer aggression, fatigue, traumatic material, or poor change management.
• Consult workers and, where applicable, health and safety representatives when identifying risks and selecting controls.
• Assess whether existing controls address the underlying source of risk, not just the symptoms.
• Prioritise higher-order controls where reasonably practicable, including work redesign, clearer responsibilities, improved supervision, and appropriate resourcing.
• Maintain records of identified hazards, consultation undertaken, controls adopted and review processes.
• Review controls regularly, particularly after complaints, incidents, or significant organisational change.

Although smaller businesses may have fewer formal systems, they are still expected to identify foreseeable psychosocial hazards, consult workers, and implement sensible controls that are reviewed on an ongoing basis.

Psychosocial hazards are now a central component of WHS compliance. Businesses that embed psychosocial risk management into governance, work design and day-to-day safety systems will be better placed to meet their obligations and support a healthier workforce.

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