This article is part of a series focusing on themes that will form part of the discussion at Kingston Reid's Future Workplace Law Summit 2026. The Summit will bring together experts from law, technology and business to explore the challenges and opportunities shaping tomorrow's workplace.

TheSummitwill be held over 2 days in Sydney on 3–4 September 2026.

Visit our Events page for further information and tickets.

Psychosocial hazards have become a central feature of modern WHS compliance, but they do not fit neatly within traditional ideas of workplace risk. Unlike physical hazards, they are often relational, cumulative and highly dependent on context, making them difficult to identify, assess and control in a practical way.

This article examines how PCBUs are expected to manage those risks under the model WHS Laws, and considers whatSafeWork NSW v Western Sydney Local Health District (No 3) [2025] NSWDC 48 reveals about the evidentiary challenges of proving when a workplace stress constitutes a risk of harm.

Spotting psychosocial hazards before they cause harm

Under the model WHS Laws, a Person Conducting a Business or Undertaking (PCBU) has the primary duty of care to ensure, so far as is reasonably practicable, the health and safety of workers at work. The PCBU also has obligations to other persons affected by the business or undertaking.

As part of that assessment, PCBUs must identify and assess hazards and the associated risks, before determining what controls may eliminate or minimise harm.

Physical risks are comparatively straightforward to assess: a large hole in the floor creates an obvious fall risk, and the response (a barrier and warning signage) is self-evident.

Psychosocial hazards can be more difficult to identify, assess and manage. Unlike most physical hazards, psychosocial ones are intangible and result from people’s behaviours, interactions or business practices.

To assist, SafeWork Australia has published the Code of Practice: Managing psychosocial hazards at work (Code).[1] The Code defines psychosocial hazards as those arising from the design or management of work, the working environment, plant, or workplace interactions or behaviours, that may cause psychological and physical harm.

The Code cites common examples of psychosocial hazards, including: high or low job demands; low job control; poor support; lack of role clarity; poor organisational change management; inadequate recognition and reward; poor organisational justice; traumatic events or material; remote or isolated work; and poor physical environment. It also identifies harmful behaviours such as violence and aggression, bullying, harassment, and poor workplace relationships as psychosocial hazards.

To identify whether risks are present, the Code requires PCBUs to: consult with workers and HSRs; use surveys and anonymous reporting tools; observe work, workplaces and behaviours; review incident and complaint records, hours worked, absenteeism and exit interviews; look for trends; and maintain accessible reporting channels suited to the organisation’s risk profile.

Central to any psychosocial risk analysis is stress. The Code recognises stress is not itself an injury but a physiological and psychological response that becomes harmful when frequent, prolonged or severe. Psychologists, on the other hand, recognise that stress can be a good because it sharpens focus, boosts energy and motivates action. No wonder employers are confused.

Stress is an unavoidable feature of working life. There is, however, a meaningful distinction between a general risk of stress arising from a hazard and an individual worker’s response to it, and one that PCBUs, regulators and courts may assess differently.

In SafeWork NSW v Western Sydney Local Health District (No 3) [2025] NSWDC 48, although the decision focused on the admissibility of particular evidence, it provides rare judicial observations on how psychosocial risk should be assessed in practice.

SafeWork NSW prosecuted Western Sydney Local Health District (WSLHD) for a Category 3 offence under section 33 of the Work Health and Safety Act 2011 (NSW) (WHS Act) (a pure risk charge), alleging breach of the section 19(1) primary duty of care.

WSLHD employed two nurses at a secure mental health facility. After a patient incident prompted complaints about the nurses' conduct, an internal investigation followed. The prosecution alleged the investigation was mishandled in two respects:

• One of the nurses had been inappropriately questioned and without a risk assessment, causing distress, and WSLHD failed to act on her subsequent complaints, and
• WSLHD failed to apply its own policies and procedures: the nurses were notified by telephone on a Friday evening of their removal from clinical duties; no receiving manager was available the following Monday; and formal correspondence was delayed.

Tragically, both nurses died before the criminal hearing. It was not alleged that WSLHD's conduct caused their deaths or that either nurse suffered actual harm.

The central evidentiary question was whether statements made by the nurses to colleagues about their subjective feelings of stress, concern and upset were admissible in the prosecution.

WSLHD challenged the evidence on relevance grounds, submitting that a PCBU’s duty is prospective and that focusing on the nurses' subjective reactions invited impermissible hindsight reasoning rather than establishing a general class of risk.

Scotting DCJ rejected this submission. His Honour held that WSLHD had misconceived the prosecutor's case: the allegation was not that any specific injury proved the risk, but that a risk of psychological harm was inadequately controlled because WSLHD failed to apply its own policies. Evidence of the nurses’ stress was therefore relevant to whether such a risk existed.

His Honour noted that the guidance material recognises that frequent, prolonged or severe stress can give rise to a risk of injury, and that the nurses' statements were therefore capable of rationally affecting the assessment of whether such a risk was present.

The court also observed that some stress is inherent in any workplace investigation, but that WSLHD's duty was to balance management action against the obligation to minimise psychosocial risks so far as reasonably practicable. Scotting DCJ stated (emphasis added):

This case must be distinguished on its facts from cases where exposure to a hazard will automatically prove exposure to the risk. For example, in Prime Marble & Granite Pty Ltd v SafeWork NSW [2024] NSWCCA 105 SafeWork NSW conducted onsite air quality testing and knew that the workers were being exposed to silica dust at the PCBU’s site that was in excess of the prescribed safe exposure limit. The analogy to be drawn in this case is that the nurses may have been exposed to stress, but it is still necessary for the prosecutor to prove that it was stress of the requisite kind that may give rise to a physical or psychological injury.

Stress affects individuals differently and some individuals are more susceptible to psychological harm. An individual may have an unforeseeable reaction to a relatively innocuous event: Tame v New South Wales [2002] HCA 35; (2002) 211 CLR 317. The foreseeability of the impact of stress on a worker will depend on what the PCBU knows or ought to have known about the circumstances of the worker, the psychosocial hazards in the workplace and the system of work. It may be that an unforeseeable response by a worker to a psychosocial hazard is not reasonably practical to guard against but will depend on the circumstances of the case.

• PCBUs must identify and assess psychosocial hazards. Mere exposure to stress is not itself an injury. Rather, it must be established that the stress was of a kind capable of causing physical or psychological injury (think frequent, severe or prolonged).
• Workplace investigations can themselves generate psychosocial risks — PCBUs must balance legitimate management action against the duty to eliminate or minimise harm so far as reasonably practicable.
• Foreseeability is assessed on the facts. Liability turns on what the PCBU knew or ought to have known about the worker, the hazards present, and the system of work.
• Proactive compliance with the Code (including worker consultation, hazard surveys, and accessible reporting channels) provides a defensible foundation for managing psychosocial risk.

--

References

[1] Most states have incorporated their own version of the Code, which largely replicates its contents. See:Managing the risk of psychosocial hazards at work Code of Practice 2022 for Queensland; Code of Practice: Managing psychosocial hazards at work for NSW; Work Health and Safety (Managing Psychosocial Hazards at Work Code of Practice) for the ACT; Managing psychosocial hazards at workfor Tasmania; The Code of Practice for managing psychosocial hazards at work for South Australia; Psychosocial hazards in the workplace: Code of practice for Western Australia; and Managing psychosocial hazards at workfor the NT

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.

Photo by Milad Fakurian on Unsplash