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Psychosocial Hazards in Australian Workplaces for HR Leaders: The Law Has Changed. Here Is What HR Leaders Now Need to Understand.

By Felicity Menzies8 min read
Psychosocial Hazards in Australian Workplaces for HR Leaders: The Law Has Changed. Here Is What HR Leaders Now Need to Understand.

This is the first article in a three-part series on psychosocial hazard regulation in Australia. Article 2 examines what enforcement now looks like in practice. Article 3 covers the most common compliance gaps and how to close them.

For much of the past two decades, workplace mental health was often treated as a wellbeing issue: important, but managed through awareness campaigns, resilience training, Employee Assistance Programmes and manager education.

That position has now changed.

Psychosocial risk is no longer a cultural or HR matter sitting adjacent to safety obligations. It is a safety obligation. Employers are now expected to identify psychosocial hazards, assess the risks they create, implement controls, consult workers, monitor effectiveness and be able to demonstrate that reasonably practicable steps have been taken to prevent harm.

For HR leaders, this is a significant shift. Decisions about workload, leadership behaviour, organisational change, performance management, job design, misconduct response, workforce surveillance and digital work systems may now be scrutinised through a WHS or OHS lens.

The practical implication is clear: wellbeing initiatives are not enough. Organisations now need risk management systems that address the sources of psychological harm at work.

What the data shows

The regulatory shift is grounded in a claims picture that has changed substantially over the past decade.

Mental health conditions accounted for 17,600 serious workers’ compensation claims in 2023–24, representing 12% of all serious workplace injury claims and a 14.7% increase from the prior year. Over the longer term, mental health claims have grown by 161% since 2013–14, the largest increase across any major injury group.

The cost and duration of those claims set them apart from physical injuries. The median time lost for mental health claims is 35.7 weeks, approximately 4.8 times the median across all other injuries and diseases, with median compensation reaching approximately $67,400.

The three primary causes identified in the data are workplace harassment and bullying, work pressure, and exposure to violence and harassment.

The national framework

At the federal level, the Commonwealth Work Health and Safety (Managing Psychosocial Hazards at Work) Code of Practice 2024 provides practical guidance on how to prevent harm from psychosocial hazards, including both psychological and physical harm. It was developed in response to key recommendations of the 2018 review of the model WHS laws.

Across the harmonised model WHS jurisdictions — Queensland, New South Wales, South Australia, Tasmania, the Northern Territory, Western Australia, the ACT and the Commonwealth — psychosocial hazards are now addressed through WHS Regulations and supported by approved codes of practice.

The Commonwealth Code also expanded the recognised hazard catalogue beyond the Safe Work Australia model by introducing three additional examples: job insecurity, fatigue and intrusive surveillance.

This matters because it makes clear that psychosocial risk is not limited to bullying, harassment or interpersonal conflict. It can arise from the way work is designed, managed, resourced, monitored and changed.

What this means for HR in practice

Many of the most significant psychosocial hazards sit squarely within areas where HR has influence, accountability or advisory responsibility.

For example:

  • excessive workloads may be linked to workforce planning, resourcing and job design;
  • role ambiguity may arise through restructures, poor communication or unclear accountability;
  • poor organisational change management can create uncertainty, insecurity and loss of control;
  • bullying and harassment may reflect leadership, culture and conduct system failures;
  • ineffective grievance or investigation processes can compound harm;
  • fatigue may be linked to rostering, staffing levels and work intensity;
  • intrusive surveillance may arise through productivity monitoring, digital platforms or AI-enabled management tools.

This does not mean psychosocial risk is “owned” by HR alone. It is a whole-of-organisation WHS obligation requiring governance, operational accountability and leadership capability. But HR is often central to the systems, practices and decisions that either create risk or help control it.

Jurisdiction by jurisdiction

Victoria brought the final piece of the national picture into place. The Occupational Health and Safety (Psychological Health) Regulations 2025 come into effect on 1 December 2025. They require employers, so far as is reasonably practicable, to identify psychosocial hazards and eliminate any associated risk, or where elimination is not reasonably practicable, reduce and control that risk.

Victoria’s supporting instrument is the Compliance Code: Psychological Health. Its hazard definition is broader than the model framework, extending to factors that may cause an employee to experience negative psychological responses, including cognitive, emotional and behavioural responses and the physiological processes associated with them.

New South Wales strengthened its position through the WHS Regulation 2025, which commenced on 22 August 2025 and explicitly requires the hierarchy of control measures to be applied to psychosocial risks.

Queensland goes further than other jurisdictions in one specific area. From 1 March 2025, PCBUs have been required to prepare and implement a written prevention plan for identified risks from sexual harassment and sex- or gender-based harassment.

For national employers, the key point is that psychosocial risk obligations are now in effect across Australia, but the legal instruments, terminology and control expectations differ between jurisdictions.

This creates an important compliance challenge for organisations operating across multiple states and territories. A generic national wellbeing programme is unlikely to be sufficient.

The hierarchy of controls divide

One of the most consequential regulatory differences concerns whether psychosocial hazards must be managed using the hierarchy of controls.

The hierarchy of controls is the ranked system traditionally applied to physical hazards. It requires employers to consider whether a risk can be eliminated before relying on less effective controls, such as administrative measures or training.

This distinction matters because many organisations still default to lower-order controls when managing psychological health risks. Common examples include awareness training, manager toolkits, EAP promotion, mental health first aid, resilience programmes or wellbeing campaigns.

These initiatives may be useful, but they do not usually address the source of the risk.

If the hazard is excessive workload, the control may need to involve resourcing, prioritisation, role redesign or work allocation.

If the hazard is poor organisational change, the control may need to involve consultation, communication, sequencing, decision transparency and support for affected workers.

If the hazard is bullying or harassment, the control may need to involve leadership accountability, conduct systems, reporting pathways, cultural norms and consequences for unsafe behaviour.

The regulatory direction is clear: organisations are expected to move beyond individual coping strategies and address the organisational conditions that create harm.

AI and digital work systems: the next regulatory frontier

The most recent development in this space extends psychosocial obligations into a domain many employers have not yet fully considered: the technology used to manage and monitor work.

The Commonwealth Code’s inclusion of intrusive surveillance as a named psychosocial hazard is already live. Excessive monitoring can create psychosocial risks even where it is introduced with good intentions.

For HR leaders, this has practical implications. Productivity tracking software, AI-assisted rostering, automated performance scoring, algorithmic allocation of work, recruitment screening tools, sentiment monitoring, digital surveillance and platform-based work systems may all need to be assessed not only for privacy, fairness and discrimination risk, but also for psychosocial risk.

New South Wales has gone further with specific legislation. In February 2026, the NSW Parliament passed the Work Health and Safety Amendment (Digital Work Systems) Act 2026, amending the Work Health and Safety Act 2011 (NSW) to make explicit that employers must ensure their use of digital work systems, including artificial intelligence, algorithms, automation and online platforms, does not put workers’ health and safety at risk.

The Act introduces a new primary duty requiring PCBUs to ensure, so far as is reasonably practicable, that workers’ health and safety is not put at risk from the use of digital work systems. It also introduces a specific duty addressing the allocation of work by digital systems. The Act has not yet commenced and will take effect by proclamation.

Separately, in December 2025 the Commonwealth published the first National AI Plan, confirming that Australia will for now rely on existing laws and sector regulators rather than introducing a standalone AI Act or immediate mandatory guardrails.

For most employers, this means the WHS framework is likely to be one of the primary operative instruments for managing AI-related psychosocial risk.

The key shift for HR leaders

The organisations most exposed to legal action are not necessarily those with no wellbeing initiatives. They are often organisations that continue to treat psychosocial harm as an individual resilience issue, an interpersonal conflict issue or an HR case management issue, rather than as a systemic work health and safety risk.

That distinction is now critical.

A mature approach to psychosocial risk requires more than support after harm has occurred. It requires prevention, governance, consultation, control design, monitoring and evidence.

For HR leaders, this means asking different questions:

  • Are psychosocial hazards formally integrated into our WHS risk management system?
  • Are we identifying risks arising from work design, leadership, change, workload, conduct and digital systems?
  • Are we relying too heavily on training, awareness and EAP access?
  • Do we have evidence that controls are in place and working?
  • Are executives and boards receiving meaningful reporting on psychosocial risk?
  • Are HR, WHS, legal, risk and operational leaders working from the same framework?

The legal framework has changed. The remaining question is whether organisational systems, leadership practices and governance structures have changed with it.

Article 2 in this series examines what enforcement of these obligations now looks like in practice. Scheduled for publication week beginning 1 June.

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