The new psychosocial risk legislation: getting on the front foot

According to the updated Work Health & Safety (WHS) laws which came into effect on 1 April 2023, a person conducting a business or undertaking (PCBU) must manage the risk of psychosocial hazards in the workplace.

With state and federal authorities releasing new codes of practice and updated WHS regulations, the pressure is on workplaces to pay attention to these laws and address psychosocial risks arising from psychosocial hazards in the workplace that affect the health and safety of the workers.

While Australian businesses have been tackling issues relating to physical harm in the workplace and prioritizing physical safety over recent decades, the same attention has not been given to workplace psychosocial safety. In fact, worker’s compensation claims for mental health are set to double by 2030, according to a report by the Committee for Economic Development of Australia (CEDA).

To give you a quick snapshot of the impact of psychosocial hazards in Australian workplaces—in 2019-20, mental stress was the fourth largest cause of serious workers’ compensation claims, responsible for 8% of serious claims. In the same year, the median cost of compensation claims from mental stress was $46,400 and workers spent, on average, 27 weeks away from work because of mental stress.

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Leadership and psychosocial risk.

Managing psychosocial risks in the workplace and implementing effective strategies that support and protect employees require leadership and management to understand psychosocial hazards and their impacts, keep abreast of the latest psychosocial risk policies, procedures, and regulations, and develop skills to promote a mentally healthy workplace culture. It’s also essential for leaders and managers to prioritise their own mental health, which enables them to function as effective leaders, provide proactive support, and promote psychosocial safety with empathy. 

Now more than ever, leadership should empower themselves with practical and preventative tools and training in workplace mental health and psychosocial risks.

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What are psychosocial hazards.

Psychosocial hazards are aspects of work that have the potential to cause psychological or physical harm and pose a (psychosocial) risk to the health or safety of a worker or other person. These hazards are factors that relate to the design or management of work, such as high job demands or poor support from managers.

According to the 2022 Indicators of a Thriving Workplace Survey conducted by Superfriend, inappropriate workload was the most poorly addressed hazard in Australian workplaces followed by low recognition, poor change management and management support, and low job control.

Some commonly identified psychosocial hazards in the workplace are:

• Job demands
• Remote or isolated work
• Bullying
• Harassment
• Low job control
• Lack of role clarity
• Poor change management
• Poor organizational justice
• Violence and aggression
• Poor Support
• Traumatic events or materials
• Poor physical conditions
• Conflict or poor workplace interaction

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Impact of psychosocial hazards.

With one in five Australian adults experiencing mental health illness in any given year, it’s difficult to avoid the conversation about mental health in the workplace.

According to The Australian Institute and Centre for Future Work, 15-45% of mental health problems experienced by employees are attributed to workplace conditions.

Workers can develop mental health issues prior to employment or during their time with your organisation. In either case, psychosocial hazards at the workplace can impact employees, causing stress and affecting the mental health of employees or exacerbating already existing mental health issues. This can also increase the risk of psychological harm and physical health issues in workers.

If not managed effectively, psychological risks will ultimately impact your organisation with serious economic implications—including absenteeism, lower productivity, high employee turnover, reduced worker participation and high workers’ compensation costs. In fact, it is estimated that poor psychological health and safety costs Australian organisations $6 billion a year.

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Managing psychosocial risk.

As someone who supervises or manages employees, you have most likely managed employees who experience mental health issues at some point in their lives. No doubt, you understand that addressing psychosocial hazards and preventing psychological harm is the key to a healthy and safe workplace.

It’s difficult to pinpoint the impact of specific hazards in isolation as employees are exposed to a combination of psychosocial hazards, which can affect them negatively. According to Worksafe Victoria, employers should not consider hazards in isolation and it’s vital to identify psychosocial hazards affecting employees’ health and well-being and take appropriate action to control the impact of those hazards.

The Model Code of Practice: Managing psychosocial hazards at work is an approved code of practice under section 274 of the Work Health and Safety Act (the WHS Act) and provides practical guidance on how to achieve the standards of work health and safety required under the WHS Act and the Work Health and Safety Regulations (the WHS Regulations), and effective ways to identify and manage risks.

The code of practice is an important resource and tool for leadership to address and control psychosocial hazards in the workplace and also achieve compliance with WHS regulations.

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Leading with mental health.

As a Work Health & Safety (WHS) specialist or a wellbeing leader in your organisation, you play a crucial role in the health and wellbeing of your employees. But it is also important to prioritise the mental health of those in leadership and management positions and recognise that the mental wellbeing of the workplace is linked to mentally healthy leadership.

It’s difficult for leaders to function from an empty cup and provide good leadership at the same time. But, when leaders and managers focus on their own mental wellbeing, they not only enhance their health but also become effective role models for employees, thus providing better leadership that creates a culture of care and wellbeing.

The Health at Work Leading Mental Health workshop is a comprehensive tool that promotes the mental health of leaders and managers and increases their awareness and understanding of mental health issues in the workplace. It provides powerful knowledge and practical guidance on compliance and psychosocial risk obligations and gives leadership the tools to promote, provide, and support better mental health in the workplace. To find out more about this workshop contact us.