Navigating workplace health and safety (WHS) regulations in Australia is a challenge for both new and established businesses. This is particularly so for businesses who operate across State and Territory borders, requiring them to be compliant with the different regimes in place in each jurisdiction. In some instances, businesses are required to comply with obligations under a multitude of safety regimes within a single jurisdiction.
The principal driver of compliance with WHS regulation should always be to ensure the safety of workers and others present within the workplace. However, with significantly increased enforcement activity by regulators across the country, including an increase in prosecutions, the legal risks provide a further and compelling case for the need for compliance. Rather than being an unnecessary or unwanted business expense, safety improvements can in fact assist businesses’ bottom line, including through increased productivity.
Added to the mix of complexity is the rapidly developing area of psychosocial hazards. Several States and Territories have now adopted amendments to WHS legislation to incorporate specific provisions regarding psychosocial hazards. Such hazards are only one of several categories that are likely to face greater scrutiny from regulators in the medium term.
To ensure compliance, it is critical that businesses know and understand the regulations applicable to their operations, and ensure they are appropriately implemented. By staying informed and obtaining expert advice from a regulatory lawyer and other specialist consultants, businesses can materially improve workplace safety and culture, whilst limiting potential legal liability, including the prospect of criminal prosecution.
In this blog, we discuss the status of relevant WHS regulations around Australia, the increased importance of addressing psychosocial hazards in the workplace, and what businesses need to know to ensure compliance.
Why are workplace health and safety laws important?
Health and safety laws across the country are designed to protect both the public and workers, by imposing obligations aimed at keeping workplaces free from hazards and their associated risks. All businesses must comply with these obligations, which means properly managing potential hazards to ensure they are not putting staff and others in harm’s way.
Work Health and Safety Legislation Across Australia
In Australia, under the model Work Health and Safety Act (the Model WHS Act) – adopted by the Commonwealth and all States and Territories bar Victoria – employers have a duty to ensure, so far as is reasonably practicable, the health and safety of their workers and others. Not dissimilar obligations exist under Victoria’s Occupational Health and Safety Act 2004.
Under the Model WHS Act, employers must take steps to eliminate or minimise risks from hazards, including risks arising from psychosocial hazards, and provide a safe and healthy working environment. Whilst the obligation extends only to the implementation of safety controls that are reasonably practicable, the obligation is nevertheless broad reaching, particularly where the risks posed include serious or fatal injuries.
The model WHS Act prescribes a host of specific safety duties, including duties imposed on those who:
- Have management or control of workplaces
- Design, manufacture, import or supply plant, substances, and structures
- Install, construct or commission plant or structures.
The primary duty of care under the Model WHS Act , which precedes the above specific duties, is incredibly broad, adds significantly to the task of compliance, and will commonly usurp the function of the specific duties. It requires that:
A person conducting a business or undertaking must ensure, so far as reasonably practicable, the health and safety of workers engaged, or caused to be engaged by the person; and workers whose activities in carrying out work are influenced or directed by the person; while the workers are at work in the business or undertaking.
The primary duty of care to others at a workplace (that is, those who are not workers) is similarly broad.
The Model WHS Act provides an inclusive list of headline requirements for compliance with the general duty. As a starting point, and at a minimum, businesses should conduct risk assessments to identify hazards, risks and controls in each of those areas. Critically, they include:
- The provision and maintenance of a work environment without risks to health and safety
- The provision and maintenance of safe plant and structures
- The provision and maintenance of safe systems of work
- The provision of any information, training, instruction or supervision that is necessary to protect all persons from risks to their health and safety arising from work carried out as part of the conduct of the business or undertaking.
Aside from these key duties, where a business is operating under a corporate structure, the Model WHS Act imposes a significant, positive due diligence obligation on officers of a business to ensure the corporate entity complies with its obligation under the Act.
Our top 10 points for business are:
- The primary duties impose significant obligations on all businesses to protect workers and others at the workplace
- The concept of a workplace is wide, particularly with an increase in flexible work
- All officers of a business that is a body corporate have a positive due diligence obligation
- Officers include individuals who might not be board members, directors, or company secretaries
- Generally, the task for business under the Model WHS Act is not to achieve what it considers to be an acceptable level of safety, but to implement all control measures that are reasonably practicable, and that eliminate or minimise risks to safety
- The greater the risk to safety, the more likely it is that a control measure will be considered reasonably practicable
- Risk assessments should be conducted in respect of each aspect of the business that poses a potential risk to safety, and should be repeated whenever new hazards or risks arise
- With increased compliance activity, it is critical that risk assessments and agreed safety controls are documented
- Risks from psychosocial hazards will be monitored by regulators to an unprecedented extent
- In terms of regulator activity, psychosocial hazards will not be the only new target in the medium term, with Safe Work Australia recently identifying the following six areas as emerging challenges in its 2023-2032 Australian WHS Strategy :
- Rise of artificial intelligence, automation, and related technologies
- New types of work
- Workforce demographic shifts
- Hybrid work
- Climate-related risks
- More complex supply chains
Status of Psychosocial Regulation in Australia
In May 2021, the Ministers responsible for WHS around Australia agreed to amend the Model WHS Regulations to include specific provisions regarding psychosocial hazards and risks. Many jurisdictions have implemented that agreement, with relevant legislative amendments already having commenced in New South Wales, Western Australia, and Tasmania, and with others due to take effect in the coming weeks and months – the Commonwealth and Queensland on 1 April 2023 and the Northern Territory on 1 July 2023.
Psychosocial hazards and their impact
Hazards in the workplace are many and varied. Psychosocial hazards, as defined in the model Work Health and Safety Regulations (the Model WHS Regulations), are those hazards in the workplace that can cause psychological harm, whether or not they may also cause physical harm. Psychological harm can, in turn, lead to serious injury, serious illness or death.
What is peculiar about psychosocial hazards is that they exist in every workplace, in every industry. That, and the spiraling increase in the number and value of claims for mental injury, are no doubt drivers for the increased focus by regulators on compliance in this area.
Psychosocial hazards can have severe impacts on the health and well-being of employees, and can also impact productivity, morale, and overall workplace culture. It is essential that businesses take steps to address psychosocial hazards in the workplace. The message is simple, if psychosocial hazards are not managed in the workplace, the resulting risks can be catastrophic, and can include death.
The requirement under the Model WHS Act to control safety risks from psychosocial hazards is not new. What is new is the rapid shift in regulator activity, including the rolling out of Codes of Practice, with clear guidance and expectations, with which businesses will be required to be familiar.
Psychosocial hazards – Codes of Practice
Following the agreement by Minsters in May 2021, New South Wales was swift to act, releasing their Code of Practice for Managing psychosocial hazards at work on 28 May 2021. Since that time, Safe Work Australia has published the Model Code of Practice (Managing psychosocial hazards at work), with Tasmania formally adopting it, and Queensland (Managing the risk of psychosocial hazards at work 2022) and Western Australia (Psychosocial hazards in the workplace) publishing their own variations. In addition, safety regulators in Victoria, South Australia, the Northern Territory, and the Australian Capital Territory have all published guidance material on managing psychosocial hazards in the workplace, including in some instances by reference to the Model Code of Practice.
The list of common psychosocial hazards identified in these Codes of Practice is extensive and includes issues that employers may not have previously contemplated. Examples include more commonly known and understood hazards, such as high workload, exposure to traumatic events or material, bullying and harassment; however, other examples include low workload, lack of role clarity, and inadequate reward and recognition.
It has long been possible for safety regulators to conduct compliance and enforcement action for failures to mitigate against the risks associated with psychosocial hazards. Whatever the reasons, there has however, historically been limited compliance activity in this area. Businesses can expect that this will no longer be the case.
In August last year, we saw charges brought against the Department of Defence for allegedly failing to manage psychological risks in the workplace, following Comcare’s investigation into the death of a Royal Australian Air Force member who took his own life (see Comcare’s media release).
Another recent example that demonstrates compliance and enforcement activity by regulators in relation to the management of psychosocial hazards (or the lack thereof), is the commencement of prosecution action against Fortescue Metals Group (FMG) earlier this year by WorkSafe WA. Whilst the charges against FMG relate to alleged non-compliance with statutory notices, those notices were issued by inspectors investigating alleged sexual harassment at FMG workplaces (see WorkSafe WA’s media release).
Cases such as these demonstrate that employers can no longer be complacent. Duty holders can be assured that safety regulators around the country will begin, or continue, to ramp up their activity in this space, and take action in relation to non-compliance.
Benefits of Compliance
The benefits of compliance with WHS laws are wide-ranging, and not limited merely to reducing the risk of injury. They can include reduced costs associated with workplace injury, illness and absenteeism, avoidance of legal penalties and reputational damage, and reduced staff turnover and associated costs.
According to the Productivity Commission’s 2020 report, Mental Health, poor mental health costs the Australian economy around $70 billion per year. As highlighted in CEDA’s 2022 report, Mental Health and the Workplace, whilst workers compensation claims in Australia decreased in the 20 years to 2019-2020, claims for mental conditions increased by almost 60% in the same period, with such claims having the highest level of compensation and a median time off work period of nearly 27 weeks (citing Safe Work Australia: Australian Workers’ Compensation Statistics 2019-20). In addition to the devastating impacts on the individual, these figures paint a very clear picture of the high price paid by business, the community and the economy, for poor management of mental health in the workplace.
A workplace that demonstrates commitment to the safety of its people and invests in staff mental health, is likely to see increased improvement across many aspects of the business, including staff morale and satisfaction, leading to increased loyalty and reputation.
The imperative for best practice WHS compliance by businesses in Australia is as great as ever. With an increase in the national fatality rate adding to the omnipresent need to protect workers and others from injury, the increase in compliance activity, including prosecution activity, has created unprecedented legal risk.
Whilst the increased regulator focus on managing psychosocial hazards is a positive development for workers and employers alike, it adds to the complexity in WHS compliance for business across every sector. Promoting better mental health in the workplace can lead to a more productive and engaged workforce and reduce absenteeism and staff turnover. Employers should take steps to ensure they are complying with their obligations under WHS legislation, and proactively manage psychosocial hazards, to create a healthier and more positive work environment.
Our WHS, Regulatory and Prosecutions team can provide practical advice and training to businesses regarding their WHS legal risks, their responsibilities and compliance. We have experience in advising corporate entities, around the country on their obligations in relation to WHS, including those related to psychosocial hazards. If you need advice or assistance in this area, reach out to our highly qualified WHS, Regulatory and Prosecutions team members.