Business Insight

Every organisation in Australia must act to manage psychosocial risks in the workplace

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    What you need to know

    • On 1 October 2022, the Work Health and Safety Regulation 2017 was amended to include specific requirements around managing psychosocial risks
    • Psychosocial risks in NSW must be managed the same way as physical risks, with the exception that the hierarchy of controls (which apply to physical risks) will not apply

    What you need to do

    • Conduct risk assessments to identify psychosocial hazards in your workplace and mitigate risks for all workers from the most senior to most junior workers
    • Treat psychosocial risks with the same rigour applied to physical health and safety risks
    • Take an holistic approach to psychosocial risk management rather than a siloed approach that is only responsive to conduct related incidents

    Regulatory environment

    Safety regulators have had powers to regulate the psychosocial risk environment from the inception of the health and safety legislation in the 1980s.  However, most safety regulators have focussed in the past on physical safety risks.  

    As a result of increasing community expectations, media scrutiny following some high-profile incidents and allegations of misconduct and inquiries into particular industries and their management of psychosocial issues, there is now visibility, investment and active enforcement by regulators across Australian jurisdictions of psychosocial risks. A combination of new legislation and regulator guidance is being delivered across the country reinforcing the need for organisations to act on this risk.

    Changes in NSW

    The Work Health and Safety Amendment Regulation 2022 has come into force on 1 October 2022. It inserts psychosocial hazards and psychosocial risk management into the Work Health and Safety Regulation (NSW).

    The new provisions make clear that psychosocial hazards and risks come within the obligations imposed on  Persons Conducting a Business or Undertaking (PCBU) in NSW, and make clear they must be managed.

    The regulation defines a psychosocial hazard as one that arises from or relates to the design or management of work, a work environment, plant, workplace interactions or behaviours – that may cause psychological harm, whether or not it may also cause physical harm. A psychosocial risk is one to health or safety arising from a psychosocial hazard.

    In managing psychosocial risks obligations under the WHS Regulation apply. This includes the obligation to eliminate the risks so far as is reasonably practicable, or if that is not possible to minimise the risks so far as is reasonably practicable. Consideration of what is reasonably practicable may also require navigation of competing legislation such as industrial instruments and employment focused legislation. Treading the path of the right controls – particularly in response to worker misconduct related hazards – requires careful consideration.

    In managing the risks the hierarchy of controls provided under the WHS Regulation for dealing with other risks does not apply. This is because the hierarchy is not neatly adapted to psychosocial risks – and may potentially increase other risks through implementation. For example, isolating a person perceived to have engaged in adverse behaviour may have a converse risk to the person in question.

    The WHS Regulation provides a non-exhaustive list of relevant matters PCBUs must have regard to in considering what control measures should be put in place. These include the design of work, including job demands and tasks, systems of work, including how work is managed, organised and supported, design and layout, and environmental conditions, of the workplace including facilities for the welfare of workers, and workplace interactions or behaviours. Methodically documenting these inputs and considerations will not only assist PCBUs in covering the array of workers and work types that arise in their business or undertaking, but also think strategically throughout the worker lifecycle in managing risks.

    What should PCBUs be doing?

    The methodology of conducting risk assessments, analysing risk environments and risk types, consulting on proposed control measures, and then reviewing and monitoring systems after implementation, in appropriate succession will support a robust management of this type of risk. 

    PCBUs may also consider reviewing matters that have historically been dealt with in isolation as 'human resources' or legal matters through this lens to determine if systemic interventions could reduce the broader psychosocial risk environment. Similarly, the way in which (physical) health and safety matters have been managed may not be appropriately adapted for managing psychosocial risk management - for example, consultation and communication protocols may need to be reconsidered to meet the expectations and requirements of sensitive and dynamic psychosocial risks.

    Importantly, the controls implemented for one worker group may not be suitable for all worker groups. For example work context and job requirements for executives and frontline workers are likely to be quite different and give rise to different types of psychosocial risks.

    Respect@work laws

    A bill to implement some of the recommendations of the Respect@Work report has recently been introduced to the Federal Parliament. See also our publication Respect@Work laws introduced: A positive duty to prevent sexual harassment for further information about actions Employers should be taking to prepare for a positive duty to take reasonable and proportionate measures to eliminate workplace sexual harassment, victimisation and sex discrimination as far as possible.

    Authors: Trent Sebbens, Partner; Tony Morris (Partner, Risk Advisory); and Lauren Brignull (Director, Risk Advisory).

    Ashurst Risk Advisory Pty Ltd (ABN 74 996 309 133) provide services under the Ashurst Consulting brand and are part of the Ashurst Group. Ashurst Consulting services do not constitute legal services or legal advice, and are not provided by Australian legal practitioners. The laws and regulations which govern the provision of legal services in the relevant jurisdiction do not apply to the provision of non-legal services. For more information about the Ashurst Group and the services offered, please visit www.ashurst.com.

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