Employment and Safety: Psychosocial hazards and other developments

The latest issues, decisions and proposed changes impacting business and workplace risk 27 min read

Restaurant owner faces 10 years in jail and over $1 million in fines for wage theft

By Veronica Siow and Georgia Permezel

In a landmark case, Wage Inspectorate Victoria has commenced proceedings against a restaurant owner for allegedly breaching Victoria's wage theft laws. If found guilty of the relevant charges, the restaurant owner will face up to 10 years in jail and over $1 million in corporate fines.

Key takeaways

This case is a timely reminder for all employers to:

• ensure their employees are being paid in accordance with their contracts of employment and any applicable industrial instrument/s;
• familiarise themselves with any wage theft laws relevant to their business' jurisdiction/s; and
• maintain employee entitlement records.

Background

On 1 July 2021, wage theft laws commenced operation in Victoria which effectively make it an offence to:

• dishonestly withhold employee entitlements; and/or
• falsify or fail to keep employee entitlement records to obtain a financial advantage.

Breaching these laws may lead to up to 10 years’ jail for individuals and a $1,090,440 fine for companies.  

Current Case

In this case, Wage Inspectorate Victoria is alleging that The Macedon Lounge and its officer contravened Victoria's wage theft laws by dishonestly withholding in excess of $7,000 of employee entitlements from four staff members.

The charges against The Macedon Lounge and its officer are the first to be laid under Victoria's wage theft laws and indeed the first of their kind in any Australian jurisdiction.

The matter is listed for mention in the Broadmeadows Magistrates Court on 21 February 2023.

Employment class actions update — a squeeze on commissions?

By Jaime McKenzie, Kelly Roberts and Emily Grutzner

Bradshaw v BSA Limited (No 2) [2022] FCA 1440

A court has reduced a litigation funder's commission by 33%, finding that 'significantly lower' commission rates are warranted in employment class actions brought under the Fair Work Act 2009 (Cth) (FW Act).

Key takeaways

• Commission rates for employment class actions should be lower than for other class actions in light of the significantly reduced risk of the funder being required to meet adverse costs orders or provide security for costs due to the 'no costs' jurisdiction of the FW Act, and the other avenues which facilitate access to justice for claimant employees – such as employee unions, the Fair Work Ombudsman and law firms offering 'no win no fee' payment arrangements.
• As stated in our Class Action Risk 2022 Report, employment class actions have become increasingly popular, including in relation to underpayment of wages. It remains to be seen whether this downward pressure on litigation funders' commissions will provide a deterrent for litigation funders financing employment class actions.

Background

As is required in class actions, the parties were seeking the court's approval for a proposed $20 million settlement of an action filed in 2020 on behalf of 5,600 current and former workers engaged as independent contractors by telecommunications contractor BSA Limited (BSA). The applicants claimed that they were in fact employees of BSA and therefore owed various employee entitlements under the FW Act, such as overtime, sick leave, annual leave and superannuation.

Decision

While the court approved the overall settlement figure, it amended the parties' proposed Settlement Distribution Scheme by reducing the litigation funder's commission payment from $5.5 million (27% of the settlement sum) to $3.732 million (18.66% of the settlement sum) – a 33% reduction.

This adjustment was based on the court's consideration of whether the commission rate was 'just', having regard to the funder's role in facilitating access to justice and what the court considered to be an appropriate reward for the risks that it bore.² The court considered that, in general, funding commission rates in employment class actions should be 'significantly lower' than those in commercial class actions, because:

• There is a far lower risk in an employment class action of the funder being required to meet adverse costs orders or provide security for costs because claims brought under the FW Act invoke a 'no costs' jurisdiction.
• There is diminished demand for funded employment class actions, because in many cases there will be other bodies such as unions and the Fair Work Ombudsman that have the capacity to sue and obtain relief for affected employees. Those alternate pathways provide access to justice without the workers having to pay legal costs or give up a portion of the settlement proceeds to pay funders' commissions.
• Litigation funders face competition for employment class actions from law firms willing to conduct the claim on a 'no win, no fee' basis. Although such law firms tend to charge an 'uplift fee' from any final settlement sum, 'no win, no fee' arrangements in the 'no costs' jurisdiction provide group members with substantial certainty that the litigation will not leave them out-of-pocket.

Implications                            

The 33% reduction applied to the funder's commission in this case may well give funders pause as they assess the commercial viability of backing employment class actions. Whether or not this has any follow on impact for your ongoing employment class action risk remains to be seen. We'll be watching closely.

Victoria's first workplace manslaughter charge

By Sam Betzien, Alana Perna and Hannah Jorgensen

WorkSafe Victoria has laid its first industrial manslaughter charge since the law came into effect on 1 July 2020. The charge is against the director of a stonemasonry business for the death of a subcontractor.

Under section 39G of the Occupational Health and Safety Act 2004 (Vic), a person must not engage in conduct that is negligent and breaches a duty that the person owes to another person, where such conduct causes the death of that other person. The maximum penalty for this offence for an individual is up to 25 years' imprisonment.

The incident occurred in October 2021, when the director of a stonemasonry business was operating a loaded forklift on a sloped surface at the Somerton factory. The forklift tipped over and landed on the subcontractor, aged 25, fatally crushing him.

The matter was listed for a filing hearing at the Melbourne Magistrates' Court on 2 November 2022. WorkSafe has not named the director or the stonemasonry business at this stage.

WorkSafe's brief publication about the charge is available here.

Industrial manslaughter laws - are they working? 

By Sam Betzien, Alana Perna and Hannah Jorgensen

The offence of industrial manslaughter was introduced into the Work Health and Safety Act 2011 (Qld) in 2017 following a best practice review of the existing legislative framework. Subsequently, a similar offence provision for industrial manslaughter was implemented in the Northern Territory, Victoria, the Australian Capital Territory and Western Australia (see our related Insight).

Five years later, a review into the deterrent effect and utility of Queensland's industrial manslaughter provisions has been announced.

State Industrial Relations Minister Grace has indicated that the review will be completed by:

• Deirdre Swan, the former Queensland Industrial Relations Commission Deputy President;
• Craig Allen, the former Director General of the Office of Industrial Relations; and
• Charles Massy, a barrister with specialties in employment and IR law.

Assisting the above three independent reviewers will be a team of industry-leading academics in work health and safety law. Minister Grace indicated that 'the review will also have a strong focus on consultation with stakeholders including industry groups, employers, registered industrial organisations, the legal profession, academics and government agencies'.

We expect the review to produce valuable insights into the effectiveness of industrial manslaughter laws and may lead to legal reform pending its findings.

Domestic violence - implications for work health and safety obligations

By Sam Betzien, Alana Perna and Hannah Jorgensen

Research published in a Monash University report shows that family and domestic violence (FDV) significantly impacts the ability of victim-survivors to attend work, fulfil the expectations of their role, participate in the workplace and meaningfully engage in their workplace obligations. The report further indicates that these impacts can have significant work health and safety (WHS) implications. In response, two recommendations are provided:

• every Australian workplace should prioritise the implementation of a FDV policy that is easy to follow, widely communicable and accessible to all employees; and
• Australian workplaces should prioritise the cultivation of a compassionate workplace culture that is well informed about the impacts of FDV.

Employers should take active steps to understand the duty of care and WHS obligations to employees experiencing FDV.

If passed, the proposed amendments to the Anti-Discrimination Act 1992 (NT) would be the most significant changes to the Act since it was passed. The Bill can be viewed here.

Case update - injury at work Christmas party found to be compensable

By Sam Betzien, Alana Perna and Hannah Jorgensen

A recent South Australian Employment Tribunal (the Tribunal) decision serves as an important reminder that injuries sustained at work-related functions can occur in the course of an employee's employment. The respondent in that case sustained leg and hip injuries while attending a Christmas social function that was arranged, and paid for, by her employer. The event involved overnight accommodation, lunch, unlimited alcohol and provision of a spa bath. The employee sustained the relevant injuries while exiting the spa bath in a heavily intoxicated state. 

The employee sought compensation for medical expenses and weekly payments for incapacity under the Return to Work Act 2014 (SA) (the RTW Act). ReturnToWork SA rejected those claims on the basis that she had not been directed to attend the Christmas function, and therefore had failed to prove that her injury occurred in the course of her employment or that the activity constituted a part of her employment. The employee applied to have the decision reviewed by the Tribunal.

By reference to common law case authority, ReturnToWork SA submitted that the employer had not 'induced or encouraged' the employee to attend the Christmas party and, as such, there was not a sufficient connection with the employee's employment. The Tribunal rejected these submissions, on the basis that the cases relied upon all related to incidents that had occurred at remote locations during an interval in the performance of the employee's duties. The Tribunal also rejected submissions that the function was an activity that was purely social in nature.

The Tribunal found that the employee's attendance at the weekend away, including her use of the spa bath, was within the scope of the employer's request to attend a social activity. Further, the Tribunal found that she was injured from her involvement in a social activity she was requested by her employer to undertake and had not engaged 'in a frolic of her own'. The employee was entitled to claim the compensation sought from ReturnToWork SA.

Paid family and domestic violence leave - an update

By Veronica Siow, Tegan Ayling, Alana Perna and Hannah Jorgensen

The Senate has passed the Fair Work Amendment (Paid Family and Domestic Violence Leave) Bill 2022 (Cth) (Bill), with amendments (visit our earlier Insight for a summary of what was originally contained in the Bill). The Bill has been enacted after receiving Royal Assent on 9 November 2022. The majority of entitlements under the Bill came into force on 1 February 2023, and some further entitlements will come into force from 1 August 2023 for small businesses.

Under the Bill:

• all national system employees will be entitled to 10 days of paid family and domestic violence leave (FDV);
• any information provided by an employee for the purpose of taking paid FDV leave can be used only for ensuring their entitlement to FDV;
• employers will be prohibited from taking adverse action against an employee for taking paid FDV leave;
• relevant parties can apply to the Fair Work Commission (FWC) for a review of an enterprise agreement that is on foot at the time the FDV becomes an entitlement; and
• what information can be included on an employee payslip when FDV leave is taken will be regulated.

Amendments to the Bill

Four key changes result from the Senate amendments to the Bill:

• Independent review: the Minister must cause an independent review to be conducted 12 months after the paid FDV leave entitlement commences, or as soon as practicable thereafter. The review must consider the impact on small businesses, sole traders and people experiencing FDV.
• Employee information: an employer must not, without consent, use information provided by an employee related to taking paid FDV leave for any purpose other than satisfying itself that the employee is entitled to take the leave. In particular, an employer must not use any information provided to take adverse action against an employee taking paid FDV leave.
• Enterprise agreements: an employer, employee or employee-organisation covered by a pre-commencement enterprise agreement may apply to the FWC for consideration of whether the terms of the agreement are detrimental compared to the paid FDV leave entitlement. The FWC will have power to vary the terms of the applicable enterprise agreement to make it consistent.
• Payslip information: an employer who provides a payslip to an employee related to the taking of paid FDV leave must not include certain information set out in the regulations.

Federal Budget

The Federal Government has committed to providing $3.4 million over four years to support the development and delivery of education, support services and advice to assist with the implementation of the new NES paid FDV leave entitlement. This support will be targeted at the needs of small business employers.

Confidential information, counselling and support is available for anyone impacted by FDV at the national sexual assault, domestic and family violence counselling service 1800 RESPECT (1800 737 732).

Not a Wisr move: employee dismissed for making complaints

By Tegan Ayling and Emily Grutzner

Kantor v WISR Finance Pty Ltd [2022] FedCFamC2G 672

Key takeaways

• Employers should be careful when taking any adverse action against an employee, particularly in the context of the employee having made a complaint. If an employee brings an unlawful adverse action claim, the employer will need to prove that they did not take the action for the unlawful reason alleged.
• It is important to always have a decision-maker who can give evidence about the real reason for their decision. Even then, narrowing down the real reason can be complex. Courts will heavily scrutinise any adverse action taken by an employer following a complaint, particularly when it involves viewing the employee's alleged misconduct more harshly and acting more hastily in response.

Background

Ms Kantor alleged that her former employer, Wisr Finance Pty Ltd (Wisr), breached the general protections provisions of the Fair Work Act 2009 (Cth) (FW Act), by firing her because she made workplace complaints.

Wisr said Ms Kantor was fired for misconduct, after she used Skype to send what Wisr's CEO said were offensive and inappropriate messages. Specifically, Ms Kantor sent a message to a colleague stating, 'I feel like punching someone', followed by a further exchange where the same colleague said 'I will uppercut them for u' and Ms Kantor replied, 'you better'.

Ms Kantor's complaints were about:

• Wisr's CFO giving her personal mobile number to a third party without her consent;
• how communications at Wisr should be improved and that she was not being listened to;
• unacknowledged messages, a lack of support, feeling like she had no voice, and a general lack of urgency in the company and a lack of cohesion between her efforts and those in operations;
• Wisr's COO being overheard saying he wanted to punch Ms Kantor in the face;
• the circumstances of Ms Kantor's onboarding, internal communications between Ms Kantor and senior managers, staffing and performance targets, and a reiteration of complaints 1 and 4;
• Wisr failing to adequately address Ms Kantor's earlier grievances, particularly complaint 4; and
• the handling of Ms Kantor's complaint about Wisr's COO and other matters that caused Ms Kantor stress.

A couple of days after Ms Kantor's last complaint, she was dismissed for the inappropriate Skype messages.

Decision

Other than complaint 7, Wisr argued that none of Ms Kantor's complaints were proper workplace complaints. The court accepted this for complaints 2 and 3, saying that expressing frustration about internal management, structural or operational issues is 'part and parcel of the ordinary workplace dynamic'. While these were complaints in the colloquial sense, they were not complaints within the meaning of the FW Act. They were not about Ms Kantor's employment rights or entitlements, or protections or obligations owed by Wisr.

However, there was a connection between complaints 1, 4, 5 and 6 and the CEO's decision to dismiss Ms Kantor.¹ The CEO's view that there was an inherent hypocrisy in Ms Kantor's complaints because she complained about the COO saying he wanted to punch her, notwithstanding that she too had expressed a desire to punch someone, meant her complaints were a reason for her dismissal. In dismissing her, the CEO had judged Ms Kantor's Skype messages more harshly and acted opportunistically and with greater force than if her complaints were never made.

Ms Kantor was awarded $41,785.73 plus superannuation for lost income, and $7,000 compensation for the impact on her mental health. There will be a further hearing on penalties to be imposed on Wisr for breaching the FW Act.

Deliveroo driver is not an employee: a significant shift away from the contractor vs employee multi-factorial test

By Lachlan Boucaut and Alana Perna

Deliveroo Australia Pty Ltd v Franco [2022] FWCFB 156.

The Fair Work Commission (FWC) has overturned a finding that a Deliveroo driver was an employee. Instead, it found that on a proper application of recent High Court cases, the driver was an independent contractor. This is a significant decision regarding the engagement of workers in the gig economy.

Key takeaways

• The FWC has confirmed that a determination of whether someone is an employee or contractor should focus on the contract, and not on an assessment of how the contract operates in practice.
• It is more important than ever that contracts are carefully drafted to reflect the true intentions of an independent contractor relationship.

Background

The driver was engaged to provide delivery services in 2017 under the Deliveroo Supplier Agreement. In April 2020, his contract was terminated for poor performance and delays. The driver brought an unfair dismissal claim in the FWC on the basis that he was an employee protected from such treatment.

Initially, and on a reasonable application of case law at the time, the FWC found that the driver was an employee who had been unfairly dismissed, and ordered his reinstatement.

Deliveroo appealed this decision and it was heard before the Full Bench. Its decision was reserved pending the Rossato decision, which called into question the ongoing application of the existing multi-factorial test in Hollis v Vabu where 'there is no reason to doubt that the terms of the relationship are committed comprehensively to the written agreement by which the parties have agreed to be bound'.

This was confirmed last year by the High Court's decisions in Personnel Contracting and Jamsek which confirmed the new 'contract is king' approach in the independent contractor vs employee debate (for more information please see our earlier article here).

The Full Bench's key considerations

The Full Bench considered the Deliveroo Supplier Agreement, and determined that the terms which both parties agreed indicated that the driver was an independent contractor. The key factors were:

• Deliveroo's lack of control over the driver's performance of services, including over how long or when the work is performed, the route taken to perform the work, and which equipment the driver preferred to use, noting that the Full Bench distinguished this from Deliveroo's entitlement to impose performance standards;
• the driver's own provision of requisite equipment to perform the duties, which he regularly used for his own personal use (and as such the personal was not 'overshadowed by the mechanical');
• the driver's unfettered right to delegate the work to another worker without Deliveroo's prior approval (despite it not being commercially practical to do so); and
• the requirement to pay an administrative fee of 4% to access Deliveroo's service platform.

Ultimately the Full Bench found in favour of Deliveroo following the Personnel Contracting and Jamsek decisions, but stated that it would have favoured finding that the Deliveroo driver was an employee instead of a contractor based on the previous multi-factorial test.

Not 'appy Jan: dismissal after responding to boss on workplace app was unfair

By Lachlan Boucaut and Katherine Polazzon

Renee Royall v Aussie Kids Pty Ltd [2022] FWC 2301

The Fair Work Commission (FWC) awarded compensation for unfair dismissal to an employee who had her shifts cancelled and access to a workplace rostering app revoked after she publicly responded on the app to an email from her employer about staff absenteeism.

Key takeaway

• Termination of employment at the employer's initiative can occur even where they did not intend to end the employment relationship, provided that their actions are the principal contributing factor leading to the end of an employment relationship.

Background

The applicant, Royall, was a casual Early Childhood Educator employed by Aussie Kids Pty Ltd (Aussie Kids). Her manager emailed all staff expressing disappointment in the number of staff absent from work on a particular day. Royall responded to this email publicly through Tanda, a rostering app. After this, she was reprimanded, her shifts for the week were cancelled and her account on Tanda was deactivated. Royall subsequently lodged an unfair dismissal claim.

Aussie Kids objected to the claim, arguing that Royall was not protected from unfair dismissal as:

• she had not served the minimum employment period; and
• she had not been dismissed within the meaning of s386(1) of the Fair Work Act 2009 (Cth).

Decision

18 week unpaid leave period did not break continuous service

Aussie Kids argued that the employment relationship was terminated by a period of unpaid parental 'leave' in 2022. The FWC found that while this leave period did not count as a period of employment, it did not break her continuous service. The actions of the parties indicated there would be further engagements as they maintained contact during the leave period, and it was expected that Royall would return to work following the leave period.

Conduct of employer amounted to dismissal

Aussie Kids also denied dismissing Royall, arguing that Royall's shifts were cancelled because a surplus of staff meant that Royall was no longer required to work; and pointing to other staff who did not have Tanda access. The FWC found these arguments unconvincing. It said that Royall's employment was terminated at the initiative of Aussie Kids; with the principle contributing factor to the dismissal being Aussie Kids cancelling Royall's shifts for an entire week and withdrawing access to Tanda; and that even if it was not Aussie Kids' intention, this had the probable result of terminating Royall's employment.

Dismissal was unjust and unreasonable

Having found that Royall was entitled to make her unfair dismissal claim, the FWC said that Royall's dismissal was unjust and unreasonable, on the basis that the dismissal lacked a valid reason and involved various procedural failures.

Federal Court clarifies requirements for guarantee of annual earnings

By Chloe Wilton and Emma Gillman

Association of Professional Engineers, Scientists and Managers Australia v Peabody Energy Australia Coal Pty Ltd [2022] FCA 945

Federal Court finds that employees are not high income employees

The Federal Court recently determined that 20 former employees of Peabody Energy (Peabody) were not 'high income employees' for the purposes of the Fair Work Act 2009 (Cth) (the Act), as the remuneration provisions in the employees' contracts of employment did not constitute a guarantee of annual earnings for a guaranteed period.

Key takeaways

When drafting a guarantee of annual earnings, employers must ensure:

• the guarantee includes a written undertaking that the employer will pay the employee an amount of earnings for a specified period of time;
• the amount of earnings exceeds the high income threshold;
• the period of the guarantee is fixed or determinate (and is at least 12 months);
• the employee accepts the undertaking, and agrees with the amount of the earnings; and
• the employee is notified that the relevant modern award that would otherwise apply to the employee will not apply to the employee for the period of the guarantee.

Background

The Association of Professional Engineers, Scientists and Managers Australia brought a claim against Peabody, claiming that it had breached the Black Coal Mining Industry Award 2010 (the Award) by failing to pay accrued but untaken personal/carer's leave to 20 former employees upon their retrenchment. Peabody claimed that the Award did not apply to 19 of the 20 employees, as the employees were high income employees.

The parties did not dispute that 19 of the 20 employees were paid above the high income threshold at the time of their retrenchment. The key question for the Court to consider was whether the employees had a guarantee of annual earnings for a guaranteed period, such that they were high income employees.

Decision

The Court determined that the remuneration provisions in the employees' contracts of employment did not constitute a guarantee of annual earnings for a guaranteed period for the purposes of the Act. This is because Peabody had not given a written undertaking to each employee that it would pay them an amount of earnings above the high income threshold for a fixed or determinate period.

The Court did not consider that an offer by an employer to pay a particular salary to an employee was sufficient to constitute the giving of an undertaking to pay an amount of earnings for a fixed or determinate period for the purposes of the Act.

As the employees did not have a guarantee of annual earnings for a guaranteed period, the employees were not high income employees, and the Award applied to them at the time of their retrenchment. This meant that they were entitled to be paid out their personal/carer's leave in accordance with the Award.

The need for restraint when drafting post-employment restraints

By Lachlan Boucaut, Mikaela Heise and Maddie Toohey

Label Manufacturers Australia Pty Ltd v Chatzopoulos [2022] NSWSC 1059

The Supreme Court declined to enforce post-employment restraints (including non-solicitation and non-competition restraints) against a Chief Executive Officer (CEO) due to their unreasonableness. The restraints would have, at their maximum, operated for two years post-employment and applied beyond Australia, including in North America, Europe and the Asia-Pacific region (Restraints).

Key takeaways

• Consideration should be given to post-employment restraints when transferring employment or varying terms and conditions of employment.
• Employers should ensure post-employment restraints do not go beyond what is reasonably necessary to protect legitimate business interests.

Background

In March 2018, Jim Chatzopoulos began working as the CEO of Label Manufacturers Australia Pty Ltd (LMA). Prior to this, Mr Chatzopoulos had worked as the CEO of another company in the same corporate group, TMA Australia Pty Ltd (TMAA) before his transfer to LMA.

In June 2021, Mr Chatzopoulos' role was made redundant and he was placed on gardening leave until December 2021. In May 2022, Mr Chatzopoulos sought to commence new employment with a competitor.

Court findings

The court first considered whether the letter transferring Mr Chatzopoulos' employment from TMAA to LMA (Transfer Letter) had also transferred the Restraints, such that they continued to apply. The Transfer Letter simply stated that, apart from the change to Mr Chatzopoulos' employer, the terms and conditions of his employment as set out in his employment contract with TMAA would remain the same.

The court held that the Restraints had been transferred because in its natural meaning, the Transfer Letter referred to all of the terms and conditions on which Mr Chatzopoulos had been employed by TMAA, including the Restraints specified in his employment contract.

The court then considered the reasonableness of the Restraints. Generally, post-employment restraints will be deemed unenforceable, unless the restraints protect the employer's legitimate business interests and go no further than is reasonably necessary to protect those interests.

LMA sought to address inherent issues with the reasonableness of the Restraints by submitting narrower restraints at trial (Revised Restraints). However, even in their narrowed form, the reasonableness of the Revised Restraints remained questionable. For example, the non-solicitation clause sought to prevent Mr Chatzopoulos from approaching customers or clients of the broader corporate group, even where he had not had any dealings with them during his employment.

Ultimately, the court did not consider the Restraints to be reasonable and dismissed the application, ordering LMA to pay Mr Chatzopoulos' costs.

Psychosocial hazards - Model Code of Practice and related updates 

By Sam Betzien, Alana Perna and Hannah Jorgensen

Although work health and safety obligations have always extended to a duty on employers to manage the risks associated with workers' psychological health as well as physical health, psychosocial risks have historically not received as much focus under safety legislation or by regulators. This has changed in recent years. 

Early last year, the national Work Health and Safety (WHS) Laws were amended to refer specifically to psychosocial risks. These amendments came about in response to Marie Boland's finding that the existing WHS Laws did not adequately deal with psychosocial risks.

More recently, Safe Work Australia (SWA) published a Model Code of Practice (the Model Code), which provides practical guidance to persons conducting a business or undertaking (PCBUs) on managing psychosocial hazards at work. It also includes advice on identifying, assessing and controlling work-related psychosocial hazards such as poor support, remote/isolated work, bullying and sexual harassment.

For the Model Code to be enforceable within a jurisdiction, it must first be approved as a code of practice. Although an approved code of practice is not legally binding, it may be used during court proceedings as evidence of what is expected conduct and what is reasonably practicable in the circumstances.

Current approach to psychosocial hazards in Australia

As at the date of this Insight, none of the Australian states or territories have formally adopted the entire Model Code. The present legal position for each state and territory in relation to the Model Code and managing psychosocial hazards is set out below:  

• Victoria: Victoria has not adopted the harmonised model WHS laws and is not expected to adopt the Model Code. However, since May 2021 the Victorian Government has been committed to introducing regulations addressing psychological health. WorkSafe Victoria prepared the Occupational Health and Safety Amendment (Psychological Health) Regulations in response and invited public submissions on the proposed regulations. The response period closed on 31 March 2022, with a total of 79 submissions being received. WorkSafe is currently in the process of considering these submissions and amending the regulations to reflect public input. The regulations were originally anticipated to be introduced by 1 July 2022 but have been delayed due to the extensive number of submissions received. We anticipate that these regulations will be formally introduced in the coming months.
• New South Wales: On 16 September 2022 the New South Wales Government implemented the Work Health and Safety Amendment Regulation (the NSW Regulation). The NSW Regulation largely took effect from 1 October 2022, and incorporates the Model Code provisions regarding psychosocial risks, including those requiring PCBUs to manage psychosocial risk in the workplace. New South Wales also has its own independent WHS Code of Practice (the NSW Code), which provides guidance on eliminating and minimising psychosocial hazards in the workplace. The NSW Code largely reflects earlier guidance from SWA before the Model Code taking effect.
• Western Australia: Western Australia adopted the model WHS laws in March 2022 and may therefore adopt the Model Code in due course. The state currently has its own independent WHS Code of Practice, which was adapted from the NSW Code and reflects earlier SWA guidance principles.
• Queensland: The Queensland Government has introduced an independent Code of Practice for managing the risk of psychosocial hazards at work, which is expected to take effect on 1 April 2023 (the QLD Code). The QLD Code is similar to the Model Code but provides more detail on the risk management process for psychosocial hazards, and includes materials such as multi-sector case studies and examples. The Queensland Government has also introduced the Work Health and Safety (Psychosocial Risks) Amendment Regulation 2022, which largely mirrors the provisions in the national model WHS Regulations regarding the obligations imposed on PCBUs and control measures for psychosocial risks. This regulation is expected to take effect from the same day as the QLD Code, on 1 April 2023.
• South Australia: South Australia has not yet approved the Model Code. No commentary has been released on whether or when it might do so.
• Northern Territory: The Northern Territory has not yet approved the Model Code. No commentary has been released on whether or when it might do so.
• Australian Capital Territory: The Australian Capital Territory has not yet approved the Model Code. No commentary has been released on whether or when it might do so.

A question remains about whether each jurisdiction will adopt the Model Code in its entirety (maintaining the harmonisation of WHS laws across Australia), or if each state and territory will choose to implement different parts of the Model Code or, potentially, a code that is more consistent with the Victorian regulations (once finalised).

Different regulations across the various states and territories will have practical impacts on businesses that operate in multiple jurisdictions. We recommend employers continue to monitor whether the Model Code has been adopted in their local jurisdiction/s and, if so, to what extent.

Guidance materials for employers

SWA has released an infographic to assist employers in understanding their duties in relation to psychosocial risks. The infographic recommends that psychosocial hazards be managed by following the same four-step risk management process that is used to manage physical hazards. This involves the following steps:

• Identify any psychosocial hazards and risks;
• Assess all identified hazards and risks to consider their impact on workers;
• Control risks by eliminating and minimising them as much as possible; and
• Review any control measures implemented, to ensure they are effective.

A comprehensive guide to ISO 45003, the global standard on how to manage psychosocial risks at work, has also been released. This guide provides employers with details of how ISO 45003 fits within Australia's existing WHS rules (including recent WHS reforms) in Australia.

In light of these updates, we recommend that employers consider how their existing WHS processes can be enhanced to align with continuing updates to managing psychosocial health in the workplace.