Psychological hazards and risks in the workplace: is your house in order?

Work Health & Safety (WHS) laws impose a duty of care on employers to ensure the health and safety of their employees in the workplace and this includes ensuring that workplaces are both physically and mentally safe for employees.

A recent case concerning Court Services Victoria (CSV) has demonstrated the importance of maintaining a psychologically safe working environment. CSV was fined $379,157 for its toxic work culture and psychologically unsafe environment, specifically concerning the environment of the Coroner’s Court of Victoria.

Here we explain the intricacies of this case, the importance of psychological safety in the workplace, and what employers need to be aware of when it comes to fostering a safe working environment.

The case

Between December 2015 and September 2018, employees were exposed to a multitude of unsafe work practices, including role conflict, high workloads, and inappropriate workplace relationships and behaviours. Many employees took periods of leave due to feeling stressed and humiliated, and some even experienced PTSD. The impacts of the environment were so severe that it led to an employee committing suicide, and several others not returning to the workplace after periods of leave.

The Court heard that although employees complained about bullying and favouritism, as well as suffering verbal abuse, intimidation, invasions of privacy and threats about their progression, CSV didn’t take appropriate action to deal with the numerous risks to the psychological safety of its employees.

CSV pleaded guilty to a single charge of not maintaining a safe working environment for its employees.

What does the law say?

New obligations to manage psychosocial hazards were introduced in Victoria in late 2022, which requires employers, so far as is reasonably practicable, to identify psychosocial hazards, which includes bullying, sexual harassment, aggression, violence, high or low job demands and anything in the work environment which may cause an employee to experience one or more negative psychological response that creates a risk to their health and safety. The CSV case demonstrates just how seriously the OHS regulator is approaching psychological safety in the workplace, and that it has the enforcement strategy and resources to reflect its intentions. It’s apparent that fines of the magnitude handed down on CSV will become more and more commonplace for serious non-compliance.

A prosecution by Worksafe Victoria is only one potential risk businesses will face when psychological hazards and risks are mismanaged. Employers also need to consider workers compensation claims, adverse action claims under the Fair Work Act 2009 (Cth), discrimination claims under Federal or State-based discrimination legislation, as well as indirect costs such as higher employee turnover and absenteeism.

What should employers be doing going forward? Risk assessments are key

Businesses have a positive obligation under the OHS legislation to assess and manage psychological hazards and risks. They must therefore ensure that they’ve taken action to identify, mitigate, and eliminate psychosocial risks in the workplace through the undertaking of risk assessments and the implementing of associated control measures.

Having regular check-ins with employees about how they’re managing their workloads and allowing them to express any concerns they have about the workplace is important in managing psychosocial hazards but is also key in creating a supportive environment. In workplaces where there’s significant exposure to traumatic material and high workloads, employers should ensure they’re undertaking risk assessments and implementing measures to address these issues.

About our author

Zaynab Aly is a Senior Workplace Relations Consultant at Citation Group. Armed with her law degree, she has a particular interest in the retail industry and regularly provides advice on workplace matters to find solutions for clients.