Review of SafeWork NSW concludes: increased enforcement expected

What you need to know

• In late 2022, the NSW Government commissioned the Honourable Justice Robert McDougall KC to undertake an independent review of SafeWork NSW's performance of its enforcement, educational functions, structure and organisational separation, and governance and culture.
• The 12-month review, which focussed on identifying deficiencies and recommendations at the organisation level, is now complete. Yesterday, the Final Report was issued.
• SafeWork is set to: establish a system enabling it to access claims data held by workers' compensation insurers, increase its enforcement activities against workplace psychosocial hazards, and become a separate regulatory arm under just some of the 46 accepted recommendations.

What you need to do

• NSW Work Health and Safety Minister Sophie Cotsis officially endorsed the recommendations yesterday, and confirmed plans to transform SafeWork NSW into a standalone regulator.
• The timeline for implementing the recommendations is not yet clear. However, in the meantime, all businesses should closely review their policies and procedures for managing complaints and grievances by workers as these systems are set to be under increased scrutiny from SafeWork.

Health and Safety & HR – Two Birds, One Stone

The Final Report refers to submissions which raise concerns about the failure to use workers' compensation data effectively to inform SafeWork about at-risk workers, and shortcomings related to accessing this data.

It is these submissions which led the Honourable Justice Robert McDougall KC to emphasise the close alignment of the interests of workers' compensation insurers with SafeWork, and to recommend that 'a system be established to enable SafeWork to have access to claims data held by workers’ compensation insurers for the purpose of identifying at-risk industries, PCBUs and workers and targeting programs of education and inspection accordingly.'

The Honourable McDougall KC makes a further, related recommendation that Parliament consider enacting legislation to remove prohibitions and restrictions that would inhibit SafeWork's access to the workers' compensation data.

We will have to wait and see if Parliament enacts legislation to the effect stated above. However, the significance of the recommendation to grant SafeWork inspectors a right to access workers' compensation claims cannot be understated.

Businesses should expect to see a considerable increase in regulatory oversight of their HR practices, particularly in relation to performance management and managing misconduct. This means businesses will have to develop a wholistic approach to their employment practices and consider how these practices interrelate with and respond to work health and safety.

Psychosocial health and safety a clear priority

Just as employers are struggling to manage psychosocial risks in the workplace (see our Psychosocial and Psychological Risks in the Workplace Report), the Final Report suggests SafeWork is facing a similar challenge.

The Final Report highlights submissions which suggest SafeWork NSW itself 'is failing to address emerging harms such as psychosocial harms', and that its inspectors lack awareness of 'invisible' hazards, 'particularly psychosocial hazards like workload'.

It is these submissions which inform the recommendations that SafeWork NSW:

(a) 'train more of its inspectors specifically in dealing with psychosocial hazards, or alternatively, employ additional personnel to be trained as inspectors with specific training in dealing with psychosocial hazards'; and

(b) 'work with employer groups, unions and HSRs in individual industries to create industry forums whose role is to identify psychosocial hazards in the relevant industry, to educate PCBUs and workers about those hazards, and to develop and implement strategies to minimise them'.

At first glance, these recommendations simply reflect the already increasing regulator focus on workplace psychosocial health and safety in Australia. Organisations should however be mindful of how this push for greater education within the agency will lead to greater confidence (and competence) among its inspectors to investigate workplace psychological hazards.

We also anticipate the emergence of a similar 'two birds, one stone' approach in this space. While the Final Report acknowledges that workers should normally use workplace processes to deal with psychosocial hazards (such as bullying or harassment), it states 'there will be cases where the worker is justified in bypassing those processes and going straight to SafeWork'. The number of these cases may increase as SafeWork's inspectorate becomes better equipped and better informed.

What's next

As SafeWork embarks on its transformation into a standalone regulator, we can expect to witness stronger, more responsive regulatory work health and safety enforcement in NSW, particularly around the investigation of complaints relating to psychosocial hazards.

Organisations should prepare for increased involvement by SafeWork in previously employment-specific and HR practices.

Please contact your Ashurst advisor should you wish to discuss any of the upcoming changes.

Authors: Scarlet Reid, Partner; Peta Banbas, Lawyer; and Gemma Harvey, Graduate.