Beneath the surface: Addressing hidden psychosocial strains in the workplace

Across all industries there is a growing recognition that psychosocial hazards - those related to workplace culture, mental health and organisational factors - pose a significant and often hidden threat to worker wellbeing.

This article explores the evolving legal and regulatory framework around psychosocial risk in Australian workplaces and outlines practical steps businesses can take to comply with new obligations and foster psychologically safe environments.

We examine recent regulatory developments that signal a clear shift in how psychosocial hazards are understood and managed under workplace health and safety laws. We also offer a detailed guide to identifying, consulting on, controlling, and monitoring psychosocial risks to ensure both legal compliance and meaningful cultural change.

Together, these discussions underscore that safeguarding mental health at work is no longer optional: it is an essential dimension of modern workplace safety.

The regulatory landscape

Across jurisdictions, including Victoria, New South Wales, Queensland and Western Australia, recent amendments to Work Health and Safety (WHS) legislation explicitly recognise psychosocial hazards and require employers to manage them with the same rigour as physical risks. These duties are no longer discretionary. Employers are now obligated to assess, control and monitor psychosocial risks, taking 'reasonably practicable' steps to ensure psychological safety. Crucially, these obligations extend to officers and directors, who may be held personally liable for failures in oversight.

In 2022, Safe Work Australia released a model Code of Practice for managing psychosocial hazards at work, providing detailed guidance on how duty holders can comply with their obligations under the model WHS laws. This code formalised the expectation that employers take proactive steps to prevent mental harm, and it has since been adopted or adapted by various state regulators.

The definition of a 'hazard' now expressly includes psychological harm, and enforcement activity is increasing accordingly. In 2023, WorkSafe Victoria issued its first Improvement Notices for failing to manage psychosocial hazards. NSW’s SafeWork Inspectors have since been trained specifically to identify psychological risks during routine audits and inspections.

Further, Safe Work Australia’s 2023–2033 WHS Strategy identifies psychological health as a national priority area. This elevates psychosocial safety to the strategic level of policymaking and resource allocation, ensuring that it remains a focus for enforcement, funding and education campaigns. In this context, businesses cannot afford to treat mental health as a secondary or optional concern. The regulatory shift is clear: psychological safety is safety, and failure to act is no longer defensible, legally or ethically.

Four key steps to compliance and cultural change

1. Identify the hazards

Organisations must first recognise what psychosocial hazards exist in their operations. These may include excessive time pressures, conflicting job demands, lack of role clarity, poor change management and workplace conflict. Tools such as Safe Work Australia’s People at Work survey can assist in systematically assessing these risks. However, it is essential that data collection is not treated as a compliance checkbox, but as the beginning of an ongoing process of awareness and prevention. If you are already aware of psychosocial hazards in your workplace, a further survey may make the situation worse. Proceed directly to taking appropriate action.

Unstructured, high-pressure work environments may require special attention as they can contribute significantly to psychosocial hazards such as chronic fatigue, anxiety, and interpersonal conflict. Without formal risk assessment processes in place, these issues often go unrecognised until they manifest in serious incidents. Investigations into workplace mental health have shown that failure to proactively manage psychosocial risks can result in critical consequences for both individuals and organisations. These cases underscore the importance of early identification and control of stress-related factors, reinforcing the need for structured systems to monitor, assess and address mental health risks before harm occurs.

2. Consult workers

Workers are best placed to articulate the pressures they experience. Consultation through surveys, toolbox talks or formal committees is both a legal obligation and an ethical necessity. It provides insight into how risks are experienced and helps ensure that any response is fit-for-purpose. Effective consultation also fosters psychological safety by building trust and validating worker concerns.

Changes to work schedules and shift patterns can have significant psychosocial impacts, particularly when implemented without adequate consultation with frontline workers. In some sectors, poorly managed roster changes, such as increasing hours and reducing breaks, can lead to fatigue, diminished morale and a heightened risk of workplace incidents. When workers feel excluded from decision-making processes, it can contribute to a sense of disempowerment and reduce trust in management. These conditions not only escalate psychosocial risks but can also undermine safety and performance. This highlights the critical importance of participatory approaches to organisational change, particularly where health and wellbeing may be affected.

It is critical to involve diverse voices, including casual workers, contractors and those in isolated or remote roles. These groups often have less visibility and may be disproportionately affected by psychosocial risks.

3. Control the risks

Control measures must be tailored to the identified risks. These may include redesigning tasks or rosters to reduce overwork, improving supervisory support, training leaders to identify signs of stress or burnout, and ensuring robust anti-bullying and grievance procedures are in place. Embedding mental health into existing WHS systems and communication channels ensures it is treated as a core safety issue rather than an HR initiative.

Effective management of psychosocial risks can yield measurable benefits across safety, wellbeing, and performance outcomes. For example, introducing targeted mental health training and reviewing workload management practices—particularly in response to identified risks like fatigue and stress—can lead to significant improvements. When such measures are implemented, organisations often report reductions in bullying and absenteeism, alongside increased morale and productivity. These outcomes highlight the value of proactively addressing mental health and workload factors as part of a broader risk management strategy.

Leadership also plays a key role in setting the tone. Visible commitment from senior managers to psychosocial safety, through policies and open conversations, creates a culture where mental health is prioritised.

4. Review and monitor

Psychosocial risk management requires continuous oversight. Organisations should monitor key indicators such as staff turnover, absenteeism and complaints. Regular reviews enable early detection of emerging risks and continuous improvement of controls.

Implementing a psychosocial risk framework is only effective when accompanied by ongoing monitoring and evaluation. Without active oversight, initial improvements may erode over time as workload pressures and stressors gradually return. This can result in the re-emergence of mental health issues among workers and, in some cases, lead to legal and financial consequences for the organisation. Continuous monitoring, feedback mechanisms and adjustment of controls are essential components of a robust psychosocial risk management strategy.

Incorporating psychosocial indicators into standard safety audits and management reviews ensures these risks get the attention they deserve at every level of the business. When risks or gaps are identified, organisations must be prepared to act quickly, adjusting policies, reallocating resources, or providing additional training as needed.

Sharing lessons learned from incidents or near misses encourages transparency and continual improvement. It shows workers that the organisation takes psychosocial safety seriously and is committed to learning and evolving.

Conclusion

Managing psychosocial hazards effectively requires more than policy statements. It demands ongoing commitment to practical, worker-centred strategies. By systematically identifying hazards, consulting with employees, implementing tailored controls and continuously reviewing outcomes, organisations can build psychologically safe environments that protect workers and enhance operational performance.

These four key steps align with regulatory expectations and, importantly, demonstrate a genuine investment in worker wellbeing. They also offer a roadmap to transform workplace culture, moving beyond compliance toward resilience and respect.

Ultimately, embedding psychosocial risk management within broader safety systems is essential to meet the evolving legal standards and uphold the moral responsibility every employer has to their workforce.

For more information or assistance, please contact our Workplace Relations & Safety team.

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