Psychosocial hazards are becoming one of the most significant workplace safety concerns in Australia. Beyond physical risks like slips, trips, and machinery accidents, psychosocial hazards affect mental health, workplace culture, and long-term business sustainability. Since 2023, Safe Work Australia requires PCBUs (Persons Conducting a Business or Undertaking) to identify, assess, and control psychosocial risks as part of their WHS duties.
Ignoring these hazards is no longer just a human issue, it’s a compliance, reputational, and financial risk.
A psychosocial hazard is anything in the design, management, or environment of work that increases the risk of psychological or social harm. They are different from “stress” because they are structural, not just individual. Examples include:
- High job demands – excessive workload, unrealistic deadlines.
- Low job control – workers have no say in how or when tasks are done.
- Poor support – lack of supervision, unclear communication.
- Conflict and bullying – interpersonal disputes, harassment, exclusion.
- Remote or isolated work – lack of connection or access to help.
- Role ambiguity – unclear expectations, clashing instructions.
These hazards affect worker wellbeing, increase absenteeism, and can contribute to long-term psychological injury claims.
Why Businesses Must Act
Psychosocial risks are now one of the fastest-growing categories of workers’ compensation claims. For employers, the impacts include:
- Increased turnover and absenteeism.
- Loss of productivity due to burnout and disengagement.
- Financial penalties and potential regulatory enforcement.
- Damage to reputation and culture.
Investing in prevention saves costs and improves resilience.
Legal Obligations Under WHS Law
PCBUs have a duty to ensure, so far as reasonably practicable, the health and safety of workers. Since amendments to WHS regulations in 2023, this explicitly includes psychosocial risks.
Key requirements:
- Identify psychosocial hazards in the workplace.
- Consult with workers and HSRs on risks.
- Assess risks by considering likelihood, severity, and existing controls.
- Implement reasonably practicable controls (policies, workload changes, training, consultation).
- Review and continuously improve.
Failure to comply can result in investigations, fines, and prosecution.
Practical ways to identify risks include:
- Worker surveys on workload, culture, and support.
- Exit interviews to capture hidden issues.
- Regular team consultation with HSRs.
- Incident reporting for bullying, harassment, or conflict.
- Observation by supervisors and managers.
Employers should treat psychosocial hazards like any other WHS risk, systematic, evidence-based, and documented.
Risk Assessment and Control Measures
Managing psychosocial hazards requires applying the Hierarchy of Control:
- Elimination – redesign roles to remove excessive demands.
- Substitution – adjust workloads or systems.
- Engineering controls – redesign workspaces to reduce isolation.
- Administrative controls – policies, rostering, supervision.
- PPE (last resort) – resilience training or counselling services (not a substitute for fixing root causes).
Best Practices for Employers
- Provide clear job descriptions and expectations.
- Train leaders on recognising and responding to psychosocial risks.
- Monitor workloads and redistribute tasks fairly.
- Encourage open reporting of bullying and harassment.
- Foster a culture of respect, diversity, and inclusion.
- Support flexible work arrangements while ensuring connection.
- Rising Psychological Injury Claims
- Workers’ compensation data across Australia showed a steep increase in psychological injury claims (stress, bullying, harassment, trauma).
- These claims take longer to resolve and cost 3–4 times more than physical injury claims.
- Regulators realised businesses weren’t managing the risks proactively.
- International Standards Pressure
- The International Labour Organisation (ILO) and ISO 45003 (Occupational Health and Safety Management – Psychological Health and Safety at Work) put global pressure on member countries to formalise mental health protections.
- Australia aligned its WHS framework with these standards.
- COVID-19 Acceleration
- The pandemic exposed and amplified psychosocial risks — isolation, job insecurity, blurred work-life boundaries.
- Regulators saw that without clear duties, many employers ignored or downplayed these risks.
- Cultural Shifts in Work
- The stigma around mental health declined, and workers started demanding safer workplaces not just physically but psychologically.
- Unions and worker groups lobbied strongly for enforceable standards.
- Consistency Across States
- Before 2023, some states like NSW already had guidance on psychosocial hazards. Harmonisation was needed to make national WHS law consistent.
- Legal Test Cases
- High-profile bullying, harassment, and suicide cases drew media attention and highlighted gaps in regulation.
- Regulators could no longer justify leaving psychosocial hazards in the “guidance only” category.
For many years, workplace safety in Australia focused almost exclusively on physical risks — slips, trips, falls, or exposure to hazardous substances. But workers’ compensation data began telling a different story. Psychological injury claims, including stress, bullying, and harassment, were climbing steadily year after year. These claims weren’t minor either. They took longer to resolve, were harder to prove or disprove, and often cost three to four times more than physical injury claims. Regulators recognised that without stronger rules, businesses had little incentive to tackle the root causes of these issues.
At the same time, international pressure was mounting. The International Labour Organisation called on member states to strengthen protections around mental health at work, and the release of ISO 45003 — the first global standard on psychological health and safety at work — set a clear benchmark. For Australia, aligning national WHS law with these global frameworks became both a reputational and practical necessity.
Then came COVID-19. The pandemic turned what had been simmering risks into urgent hazards. Workers were suddenly isolated, jobs were uncertain, and the boundaries between work and home blurred overnight. Stress, burnout, and mental health claims surged. Regulators could see that leaving psychosocial hazards in the category of “guidance only” was no longer viable.
Cultural shifts also played a role. As stigma around mental health declined, workers began to demand safer workplaces not just physically, but psychologically. Unions and advocacy groups pushed hard for enforceable standards, pointing to tragic cases of workplace bullying and harassment that ended in serious harm or even suicide. These high-profile incidents highlighted glaring gaps in regulation and forced the issue onto the national agenda.
Finally, there was a need for consistency. While states like New South Wales had already started addressing psychosocial hazards in their WHS codes of practice, the lack of harmonisation meant businesses operating across borders were left confused. The national update in 2023 closed that gap, ensuring psychosocial hazards were formally recognised and enforced across all jurisdictions.
Psychosocial hazards are not limited to a single type of job or industry. They can emerge in offices, construction sites, hospitals, warehouses, or even home-based work. What makes them unique is that they stem from the way work is organised, managed, and experienced by people, rather than from physical equipment or substances.
One of the most common hazards is excessive job demands. This might take the form of unrealistic deadlines in an office setting, constant patient load in a hospital, or relentless production quotas in a factory. Over time, sustained high demands without appropriate support can push workers into chronic stress and eventual burnout.
Equally damaging are situations of low job control. When workers have little to no say in how their tasks are performed or scheduled, they lose a sense of autonomy. An employee who is micromanaged or whose roster constantly changes without notice will often feel disempowered and disengaged.
Another widespread psychosocial hazard is poor support. This includes inadequate supervision, lack of access to resources, or inconsistent communication from management. For example, a junior staff member left to figure out complex tasks without training is not only set up for failure but also exposed to serious psychological pressure.
Workplace conflict, bullying, and harassment remain some of the most severe psychosocial risks. These behaviours create hostile environments where employees may feel unsafe to speak up, collaborate, or even show up to work. Left unchecked, bullying can escalate to long-term psychological injury and legal liability for the business.
Some hazards are tied to the nature of the work itself. Remote or isolated work is increasingly common in industries like mining, agriculture, or long-haul transport. Workers in these settings may experience loneliness, lack of access to immediate help, and disconnection from team culture. Even modern hybrid work arrangements can lead to similar issues when remote employees are excluded from team communication or development opportunities.
Finally, role ambiguity is an often overlooked hazard. When job expectations are unclear or constantly shifting, workers may spend more time worrying about whether they are doing the right thing than actually performing their duties. This uncertainty breeds frustration, anxiety, and reduced confidence.
Together, these examples highlight that psychosocial hazards are not “soft issues.” They are concrete, observable conditions in the workplace that can, and must, be managed with the same seriousness as physical risks.
Q: Is stress the same as a psychosocial hazard?
No. Stress is the outcome. A psychosocial hazard is the cause e.g. unrealistic workload.
Q: Who is responsible for managing psychosocial hazards?
PCBUs have the legal duty, but officers, managers, HSRs, and workers all play a role.
Q: Can resilience training replace hazard management?
No. Training is useful, but hazards must be eliminated or controlled at the source.
Q: How do psychosocial hazards impact workers’ compensation?
Psychological injury claims are rising sharply. They often cost three times more than physical injury claims.
Turning Compliance Into Culture
Psychosocial hazards are not just a compliance tick-box. They’re a test of leadership and organisational culture. Businesses that actively manage them reduce costs, retain staff, and build trust.
For PCBUs and managers, the question is not if psychosocial hazards exist, but how well they’re managed.
