A psychosocial hazard in the workplace refers to any factor that has the potential to harm a person’s mental or physical health. In April 2023, Safe Work Australia made amendments to the Work Health and Safety Regulations, which requires any person running a business to manage psychosocial risks in the work environment.
The hazards as defined by Safe Work Australia include but are not limited to excessive workload, role clarity, poor organisational justice, poor support from management and isolation due to remote work.
Typically the hazards are caused by how work is designed, orgnaised and managed as well as the broader social and economic factors within the work environment. Outlined below are details of the 14 Psychosocial hazards.
Business owners should take psychosocial hazards seriously due to both legal and financial imperatives. Recent changes to Work Health and Safety regulations in Australia now explicitly require employers to manage psychosocial risks, with non-compliance potentially resulting in significant penalties.
Moreover, psychological injury claims are nearly twice as costly as physical injury claims and lead to longer processing times and more lost workdays. By proactively addressing these hazards, businesses can avoid legal issues, reduce workers’ compensation costs, and minimize productivity losses associated with absenteeism and presenteeism.
Beyond legal and financial considerations, managing psychosocial risks is crucial for overall business success and sustainability. A workplace that prioritises psychological safety fosters increased employee well-being, engagement, and retention, ultimately leading to improved productivity and innovation. It also enhances the company’s reputation, making it easier to attract top talent and maintain positive relationships with stakeholders. By creating a healthier work environment, business owners not only fulfill their ethical responsibility but also position their organisations for long-term success in an increasingly competitive and mentally demanding business landscape.
A Psychosocial Hazard Audit is an anonymous survey conducted within your organisation, designed to allow staff to provide honest feedback on the presence of psychosocial hazards in the workplace.
The questions are tailored to each of the 14 potential hazards identified by Safe Work Australia, and the responses are compiled into a comprehensive report for your business.
This report provides a clear understanding of any potential risks within your organisation, offering an invaluable opportunity to proactively mitigate these hazards before they negatively affect your operations. It is crucial to take the audit results seriously and implement appropriate measures to reduce the likelihood of these risks materialising in the workplace.
Training management in preventing psychosocial hazards is vital for legal compliance and cost reduction. With recent changes to Work Health and Safety regulations in Australia, well-trained managers can help organisations meet their obligations and avoid penalties.
Since psychological injury claims are nearly twice as costly as physical claims, equipping managers to identify and mitigate these risks can significantly lower workers’ compensation costs and productivity losses.
Effective training also fosters a positive workplace culture that prioritises employee well-being. Managers who promote psychological safety enhance engagement and job satisfaction, leading to improved organisational performance and talent retention.
By investing in this training, organisations not only fulfill their ethical responsibilities but also position themselves for long-term success.
Bailey v Peakhurst Bowling & Recreation Club Ltd [2009] NSWDC 284 (NSW District Court, Levy SC DCJ, 3 November 2009)
Summary: An employee was awarded $507,550 in compensation after experiencing prolonged harassment and bullying by her supervisor at work.
Over two years, the employee faced continuous verbal abuse, threats of job loss, coercion to violate liquor licensing regulations, and pressure to give up her union membership. Additionally, changes to her job classification resulted in reduced pay and seniority, coupled with wage underpayments.
This sustained mistreatment severely impacted her mental health, leading to diagnoses of Generalised Anxiety Disorder, Post-Traumatic Stress Disorder, and depression. Her mental health professionals indicated that returning to any form of paid employment was improbable. The District Court of New South Wales found that the employer failed in its duty of care to maintain a safe working environment and consequently awarded damages to the employee.
In the case of Oliver v Bassari (Human Rights) [2022] VCAT 329, the Victorian Civil and Administrative Tribunal underscored that merely having a sexual harassment policy is inadequate. Devorah Oliver, employed at Hebeich Pty Ltd, was awarded $150,000 after enduring sexual harassment by a coworker.
The Tribunal found that the employer’s minimal actions—providing an electronic handbook and insufficient staff discussions—failed to meet the required preventive measures.
This ruling highlights the essential need for employers to ensure their policies are not only well-documented but also thoroughly understood and actively enforced to truly protect employees and comply with legal obligations. Regular, detailed training and vigilant monitoring of workplace behaviors are critical in upholding these standards.
