While ensuring the psychological safety of workers continues to be a topic of great interest for businesses, the term “psychosocial risks” continues to be an area of frustration, causing businesses headaches as a result of the confusion, including from concerned employees, about what does/does not constitute a “psychosocial risk”.
In an effort to address this confusion some states have introduced laws and regulations, regulators have published codes of practice, and businesses have reviewed and revised their risk management frameworks.
Nevertheless, concerned workers continue to be vocal (arguably to the point of excess) about the protections they are/should be afforded at work against psychosocial risks. And regulators are, in turn, using their powers to enforce compliance in relation to those perceived risks. A trend that will persist for some time, we expect.
To provide business with some certainty in these uncertain times, we unpack some recent, current and future developments in the “psychosocial” safety space.
Recent: WorkSafe WA discontinues prosecution of Department of Justice
In a case that would have been WorkSafe WA’s first attempt at prosecuting a failure to ensure the psychological safety and health of workers, it commenced proceedings against the state’s Department of Justice in late 2024. The charges related to an alleged failure to provide and maintain a safe work environment, which had resulted in a former prison officer suffering a serious psychological injury. The charges would have attracted fines of up to $3.5 million.
However, the regulator withdrew the prosecution last month, on the basis of “fresh evidence” obtained in the course of the proceedings, noting that the Department of Justice has improved its management of psychosocial hazards in recent years.
This WA case follows a NSW decision, which was the first we are aware of, where SafeWork NSW withdrew its prosecution of Western Sydney Local Health District after three weeks of hearings. These matters highlight the challenges of proving alleged breaches of the WHS Act in the context of psychosocial risk management and reiterate the importance of having appropriate controls that are implemented and reviewed.
Current: NSW’s new WHS regulations commenced on 22 August 2025
The new Work Health and Safety Regulation 2025 (NSW) contain a raft of changes and updates to the state’s regulatory framework. In relation to psychosocial risks specifically, a change has been made to the prescribed method of management of those risks.
The previous version of the regulations expressly carved out the use of the “hierarchy of controls” for the purpose of managing psychosocial risks. That carve out has now been removed.
Accordingly, to the extent a psychosocial risk cannot be eliminated, businesses in NSW now must:
- substitute, wholly or partly, the hazard giving rise to the risk with something that gives rise to a lesser risk;
- isolate the hazard from persons exposed to it; and/or
- implement engineering controls.
Where a psychosocial risk remains, businesses must implement administrative controls to minimise the risk. And if a psychosocial risk still remains, suitable PPE must be provided to minimise the residual risk.
The hierarchy of controls provides a clear framework for businesses to follow when determining appropriate measures to manage psychosocial risks. It requires that the most effective controls, those offering the highest level of protection, are considered first. Businesses in NSW should review their existing psychosocial hazard controls to ensure they are aligned with this framework.
Future: Victoria’s highly anticipated psychological health regulations commence on 1 December 2025
Initially slated as a progressive (and potentially onerous) step towards the management of psychosocial risks at work, the final form of Victoria’s long-anticipated regulations closely aligns with existing frameworks already in place across other Australian states and territories.
Victorian employers have long been required under the Occupational Health and Safety Act 2004 (Vic) to provide a working environment that is safe and without risks to health, including psychological health. What the new regulations bring is greater clarity on what employers must do to meet those duties in relation to psychosocial hazards.
Under the Victorian regulations, employers must, where elimination of a risk is not reasonably practicable, reduce the risk by altering:
- the management of work;
- plant or systems of work;
- work design; or
- the workplace environment.
Providing information, instruction or training may only be relied upon as a sole control where no other measures are reasonably practicable, and must not be the predominant form of control when used in combination.
Notable absences from the final version of the regulations include the originally planned requirement for employers to:
- prepare “prevention plans” that identify psychosocial risks and controls measures to be implemented, among other things; and
- provide a six-monthly report to the regulator about psychosocial complaints received.
These proposed inclusions received widespread pushback from industry stakeholders. While the requirement for prevention plans was ultimately removed, WorkSafe has published a prevention plan template which, although not mandatory, provides a practical starting point for employers developing their own plans.
WorkSafe Victoria has also released the Psychological Health Compliance Code, offering practical guidance on how to comply with the new duties. The code also provides detailed, hazard-by-hazard examples of control measures, including identification of overlapping psychosocial risks. Although adherence to the code is not mandatory, failure to follow it may be used as evidence of what was “reasonably practicable” to implement.
In addition, WorkSafe Victoria has also established a specialist Psychosocial Inspectorate, signalling increased regulatory focus and stronger enforcement in this space.
With the commencement date fast approaching, Victorian employers should review and benchmark current practices against the new regulations and compliance code, identifying and addressing any gaps.
Looking ahead: balancing psychosocial health and regulatory oversight
With mental health challenges on the rise, any reforms that prioritise early identification and mitigation of risks are a welcome step forward. This legislation across Australia reflects a shift from traditionally reactive practices, toward a model that emphasises proactively assessing risks and implementing controls before harm occurs.
That said, there remains uncertainty around the scope of intervention, particularly given the subjective and context-dependent nature of many psychosocial issues. Trends across the country, including regulators increasingly using enforcement action to drive compliance, raise the potential for overreach. As businesses navigate this evolving regulatory landscape, the central challenge will be striking a balance between meeting compliance requirements and fostering genuine, systemic cultural change.
The views expressed in this article are general in nature only and do not constitute legal advice. Please contact us if you require specific advice tailored to the needs of your organisation’s circumstances.