All employers have been increasingly expected to take a very active approach to providing a psychologically safe workplace. The most recent push has come from the state and territory safety regulators, led by the federal safety authority SafeWork Australia in implementing new codes and regulations for managing the risk of psychosocial hazards in the workplace.

What are psychosocial hazards? What risks do they pose to a workplace? And what obligations does a person conducting a business or undertaking (PCBU) have to manage those hazards? In this regard, Government Departments and Agencies as well as state owned corporations together with many other entities are PCBUs.

This article explores these issues, gives a snapshot of where each state and territory is up to in enacting regulations concerning psychological hazards and discusses steps an employer or PCBU can take to meet their obligations.

What are psychosocial hazards?

Psychosocial hazards at work are situations or an aspect of a role that may induce a stress response from a worker. A stress response in itself is not necessarily an injury, however, if stress becomes frequent, prolonged or severe, it can lead to psychological or physical harm. For example, if a project must be undertaken within a tight timeframe and the work is not going smoothly, that circumstance may lead to a significant increase in stress.

Stress can also result from the way in which ordinary day to day work is done. A stress response can stem from:

  • the way the tasks or job are designed, organised, managed and supervised
  • tasks or jobs where there are inherent psychosocial hazards and risks
  • the equipment, working environment or requirements to undertake duties in physically hazardous environments
  • social factors at work, workplace relationships and social interactions.

Unsurprisingly, many parts of work could be a psychosocial hazard. Common psychosocial hazards to watch out for include:

  • job demands (involving sustained high or low levels of physical, mental or emotional effort)
  • role overload (giving workers too much to do)
  • role underload (not giving enough work)
  • role conflict (disputes between workers about their roles)
  • lack of role clarity
  • low job control
  • conflict or poor working relations
  • poor support from supervisors and managers
  • bullying
  • harassment
  • remote or isolated work
  • inadequate reward and recognition.

While the risks from bullying and harassment are clear, one of the more difficult areas of risk for a PCBU to manage is the possibility of psychosocial hazards arising from the management of a person’s employment – such as from poor managerial support, a lack of reward and recognition or poor management of workflow. For example, if a PCBU has an inexperienced manager who does not effectively manage a worker’s workload (for example, last minute allocation of work) and does not provide the proper support, over a prolonged period of time (depending on the severity and the frequency of psychosocial hazards) a worker may be exposed to psychological harm or physical harm.

How serious are psychosocial hazards?

Psychosocial hazards are serious and can be very costly to a business. To assist in understanding the seriousness that psychosocial hazards pose to the workplace, we have set out some of the statistics in the Safe Work Australia’s Key Work Health and Safety Statistics 2022 (Key WHS Statistics) below.

The Key WHS Statistics state that mental health conditions made up 9.3 per cent of all serious workers compensation claims in 2020-21. This percentage may increase as it is subject to revisions in further years as claims are finalised. Serious claim is defined as “all accepted workers’ compensation claims for an incapacity that results in a total absence from work of one working week or more, excluding fatalities and journey claims”.

Importantly, even though the percentage may be below 10 per cent of all serious claims, the Key WHS Statistics show that mental health conditions are one of the most costly injuries to employers – including in terms of time off and compensation paid. In 2019-20 the median time lost for mental health conditions was 30.7 working weeks per serious claim. This is significantly higher compared to the median time off for physical injuries and diseases, being a median time off of 6.2 working weeks per serious claim.

To combat the seriousness of psychosocial hazards, SafeWork Australia in 2022, took steps to amend the Work Health and Safety Regulations (Model Regulations). We have set out the context to these changes below.

Legislative changes

Stepping back to November 2017, SafeWork Australia appointed Marie Boland to conduct a review into the Model Health and Safety Laws. In December 2018, Ms Boland handed down her final report, which found, among other things, that while the Model Work Health and Safety Act 2011 (Cth) (Model Act) had an obligation for PCBUs to take reasonably practicable steps to ensure workers are not exposed to risks to their psychosocial health, the review found that the Model Regulations did not deal adequately with the risk.

In July 2022, SafeWork Australia amended the Model Regulations to:

  • impose a positive duty on a PCBU to manage psychosocial risks and implement control measures to eliminate the risks so far as is reasonably practicable, or if not reasonably practicable to do so, minimise the risks so far as is reasonably practicable
  • introduce relevant factors for PCBU’s to consider when determining what control measures to implement and
  • introduce a definition of psychosocial hazards and risks.

SafeWork Australia also published a model Code of Practice, Managing Psychosocial Hazards at Work (Model Code). A code of practice assists a PCBU in meeting their obligations under the relevant state or territory legislation – noting each state and territories publish their own codes of practice to sit alongside the relevant legislation and will often adopt the Model Code.

Each state and territory are now at various stages of implementing the Model Code and the Model Regulations – we have set out where each state is up to, as of November 2023 in the graphic below.

Obligations under the Model Code

Put simply, the Model Code requires no more than the general model framework of managing any other work health and safety risk. However, what is significant is how the Model Code applies this framework to managing psychosocial hazards.

Broadly, the Model Code requires a PCBU to:

1. Identify the psychosocial hazard

Employers must proactively identify aspects of its workplace, worker’s role, or situations that could potentially harm workers or others in the course of conducting the business or undertaking.

This includes identifying those aspects which may induce a stress response including the list we have set out in this article. For example, do you have the best processes in place for dealing with work-on-the-go that will be efficient but not expose workers to undue stress?

2. Assess the risks to health and safety

Where a psychosocial hazard exists, there is a risk. A risk assessment should be done to identify the gravity of the risk of harm, including the number of workers or others affected, taking into account all relevant factors, including the duration, frequency and severity of their exposure to the hazard (or hazards). It may be that a one-off project will cause a spike in stress, but otherwise your processes are adequate. Asking your workers will give you some insight.

3. Implement control measures

Once psychosocial hazards are identified and the risks are assessed, an employer is in a position to control the risks. If it’s reasonably practicable to do so, the risk must be eliminated. If it’s not, the risk must be minimised as far as reasonably practicable. Control measures will include defining job roles clearly, providing work to the level of skills and experience appropriate for that worker, re-designing any processes where there is a need for greater communication or potential for overload of work.

4. Review the control measures

Employers should regularly review the effectiveness of the control measure(s) implemented to ensure they are working as intended.

While these are the obligations under the Model Code, a PCBU should review and check the relevant regulations and code of practice introduced in their relevant states and/or territories where the PCBU operates.

Takeaways for PCBUs – including Government Departments and Agencies

Complying with a PCBUs obligations regarding psychosocial hazards can feel like a daunting task. However, it is important for PCBUs to monitor their workplaces and identify areas of concern.

A PCBU should conduct a risk assessment of their workplace and review whether their current control measures are adequate to control psychosocial hazards. Largely this will involve feedback from workers and training of managers on how to manage teams and workload, as well as how to look for signs of excessive stress. PCBUs should develop and implement proper control measures considering the guidance provided in the state or territories relevant code of practice.

Due to the nature of psychosocial hazards, managing psychosocial hazards will be an ongoing task for many businesses. It is essential that PCBUs and employers proactively and continually review and assess the risks to psychological health in the workplace in addition to physical health and build and adopt an effective risk management process to manage those risks.

Authors: Stephen Trew, Michael Selinger & Olivia Lawrence

Disclaimer The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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