Psychosocial Hazards as WHS Risks: A Mandatory Requirement for Proactive Management

This article is essential reading for Persons Conducting a Business or Undertaking (PCBUs), including Company Directors, as well as WHS/Safety Officers, and Senior Leaders. It addresses the critical, and increasingly scrutinised, obligation to proactively manage psychosocial hazards as a core component of Work Health and Safety (WHS) risk management, focusing on the mandated use of the hierarchy of controls and the significant legal risks of non-compliance. 

 

 

1. The Legal Mandate: Psychosocial Hazards are WHS Hazards

Under Australian WHS legislation, PCBUs have a primary duty of care to ensure, so far as is reasonably practicable, the health and safety of workers. This duty explicitly extends to both physical and psychological health. The regulatory landscape has evolved to explicitly recognise and treat psychosocial hazards factors in the design or management of work that increase the risk of work-related stress and can lead to psychological or physical harm as WHS hazards requiring the same rigorous risk management approach as physical hazards. 

Examples of Psychosocial Hazards include: 

• High Job Demands: Unreasonable workload, tight deadlines, or high emotional labour. 

• Low Job Control: Lack of autonomy or inability to influence how work is done. 

• Poor Support: Lack of supervisory or peer support, or inadequate resources. 

• Poor Organisational Change Management: Failure to consult, communicate, or manage the impact of changes. 

• Poor Organisational Justice: Unfairness in decision-making, reward, or grievance processes. 

• Workplace Bullying and Harassment: Repeated, unreasonable behaviour directed toward a worker. 

• Remote or Isolated Work: Lack of social contact or immediate assistance.1 

Harm arising from these hazards can include: psychological injury (e.g., anxiety, depression), physical injury (e.g., musculoskeletal disorders from stress-related muscle tension), or even post-traumatic stress disorder (PTSD). 

 

 

2. The Requirement: Proactive Risk Management Using the Hierarchy of Controls

The law requires PCBUs to follow a mandatory, systematic risk management process for all hazards, including psychosocial ones: Identify, Assess, Control, and Review. Crucially, the Hierarchy of Controls must be applied to determine the most effective and reasonably practicable control measures. 

 

Applying the Hierarchy to Psychosocial Hazards 

The primary focus must be on eliminating the hazard or reducing the risk at the source, rather than solely relying on individual-level coping strategies. 

Level	Control Type	Description	Example Psychosocial Control
1. Elimination	Most Effective	Remove the hazard completely.	Eliminate tasks that offer no value and create unnecessary workload; Cease unreasonable time pressures.
2. Substitution		Replace the hazard with a safer option.	Replace 24/7 client response expectations with a shared, scheduled on-call roster.
3. Engineering		Isolate people from the hazard (often limited application for psychosocial).	Implement software tools to automate repetitive tasks, thereby reducing cognitive load and demand.
4. Administrative		Change the way work is done (e.g., procedures, training).	Develop and strictly enforce clear policies for managing change and consultation; Implement mandatory training for managers on reasonable job demands and respectful behaviour.
5. Personal Protective Equipment (PPE)	Least Effective	Protect the worker (Not applicable for psychosocial hazards).	N/A

Key Takeaway for Leaders: Training employees in resilience (Administrative Control) is a valid strategy, but it is not sufficient on its own. The law requires PCBUs to first look at eliminating or redesigning the work itself (Levels 1-3) to prevent the harm from occurring. Focusing solely on individual resilience is a failure to control the hazard at the source and significantly increases legal exposure. 

 

 

 

3. The Legal Risks of Non-Compliance

Failure to proactively manage psychosocial hazards using the hierarchy of controls poses significant legal and financial risks for the PCBU and individual officers. 

1. Regulatory Enforcement (Prosecution): WHS Regulators can issue improvement notices, prohibition notices, and substantial fines for breaches of the primary duty of care. 
   1. PCBU Penalties: Fines can range from hundreds of thousands to millions of dollars for category 1 or 2 offences, especially if a serious injury or fatality results from chronic work-related stress or psychological harm. 
   2. Officer Penalties: Individual Directors and Senior Leaders can be personally prosecuted for failing to exercise due diligence to ensure the PCBU meets its WHS obligations. This includes understanding the risks (like psychosocial hazards), resourcing their control, and verifying their effectiveness. Penalties can include heavy fines and even imprisonment. 
2. Civil Claims (Workers’ Compensation and Damages): A demonstrated failure to implement effective controls (especially by skipping higher-level controls) significantly strengthens a worker’s claim for workers’ compensation for psychological injury. Furthermore, a finding of negligence can expose the PCBU to large common law damages claims if the company could have reasonably foreseen the harm and failed to implement effective preventative measures. 
3. Industrial Relations Risks: Poor management of psychosocial hazards can lead to: 
   1. Disputes and Stop Work Orders: Workers may raise safety concerns leading to WHS disputes or, in extreme cases, refuse to perform work they reasonably believe poses an imminent risk to health. 
   2. Union Action: Increased industrial action or scrutiny from unions advocating for safer work environments. 
   3. Adverse Action Claims: Claims under the Fair Work Act 2009 where a worker is subjected to detrimental conduct for raising a WHS concern. 

 

4. Action Plan for PCBUs and Senior Leaders

Proactive management is not only a moral imperative but a legal necessity. Leaders must demonstrate due diligence in this area. 

1. Acknowledge and Integrate: Explicitly recognise psychosocial hazards as part of the formal WHS Risk Register and management system. 
2. Resource and Train: Allocate adequate resources and ensure Managers and WHS Officers are trained to identify, assess, and control psychosocial risks, with a focus on applying the Hierarchy of Controls. 
3. Consultation is Key: Proactively consult with workers and WHS Representatives about factors in the work environment that cause stress or harm. This consultation is mandatory and critical for identifying hazards effectively. 
4. Prioritise Design: Focus effort on designing out the hazards (e.g., redesigning processes to reduce unreasonable demands, clarifying roles, improving change management procedures) before relying on ‘patch-up’ administrative controls. 
5. Audit and Review: Regularly audit the effectiveness of control measures. If administrative controls (like training) are the only measures, ask: “Are we meeting our primary duty to eliminate or minimise the risk at the source?” 

By proactively and systematically applying the Hierarchy of Controls to psychosocial hazards, PCBUs and their officers can meet their mandatory WHS obligations, protect their people, and significantly mitigate substantial legal and reputational risk. 

 

 

NB Employment Law is uniquely positioned to assist PCBUs in meeting these complex, mandatory WHS duties and shielding their leadership from personal liability.  

We provide crucial support through legally privileged services, beginning with Legal Compliance Audits of your existing WHS framework, policies, and operational processes to ensure they address psychological health risks effectively. Our focus extends to helping you design and validate legally sound Risk Assessment methods, such as anonymous staff surveys and structured consultation protocols, that accurately pinpoint high-risk psychosocial hazards like poor change management or high job demands. Critically, we assist PCBUs in developing Hierarchy of Controls Strategies that prioritise redesigning work (elimination) over mere training (administrative), which is essential for compliance. Furthermore, we deliver targeted Officer Due Diligence Training to Company Directors and Senior Leaders, equipping them with the knowledge necessary to meet their personal obligations and actively prevent criminal prosecution.  

Should regulatory scrutiny arise, we provide expert legal advice and representation to manage WHS Regulator inquiries or investigations, ensuring a robust, legally defensible response that seeks to protect both the PCBU and its officers.