For many years, workplace health and safety have been strongly associated with physical risks: machinery, manual handling, falls, hazardous chemicals and electrical safety.
However, the same work health and safety principles also apply to risks arising from how work is designed, organised, and managed; the working environment; and how people interact at work.
The Managing Psychosocial Hazards at Work – Code of Practice provides a practical framework for businesses to identify and manage these risks.
Importantly, psychosocial risk management is not simply about providing wellbeing programs or responding when a worker experiences a mental health problem. It is about identifying work-related hazards and managing risks before harm occurs.
The Code is practical guidance on achieving the standards required by WHS legislation and can be used as evidence in court proceedings about what is known regarding a hazard, risk or control and what may be reasonably practicable.
What is a psychosocial hazard?
The Code defines psychosocial hazards as hazards arising from or in relation to the design or management of work, the working environment, plant at a workplace, or workplace interactions or behaviours, which may cause psychological or physical harm.
That last point is important. Psychosocial hazards are not only about mental health. Exposure can contribute to psychological harm such as anxiety, depression, PTSD and sleep disorders, as well as physical harm, including musculoskeletal injuries and fatigue-related incidents.
The Code explains that stress itself is not an injury. However, frequent, prolonged or severe exposure to stress can cause psychological and physical harm.
What psychosocial hazards should businesses consider?
One strength of the Code is that it moves the conversation well beyond bullying and harassment.
It identifies a broad range of psychosocial hazards, including:
- 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
- poor physical environment
- violence and aggression
- bullying
- harassment, including sexual harassment
- conflict or poor workplace relationships and interactions.
This is an important message for small and medium businesses.
A psychosocial hazard may be something as ordinary as an employee continually having too much work, not knowing which task takes priority, being unable to get assistance from their supervisor, dealing regularly with aggressive customers, or being affected by poorly managed organisational change.
The Code also makes clear that hazards can interact and combine. Workers may be exposed to several hazards at the same time, and this combination can increase the risk of harm
Psychosocial hazards need to be managed like other WHS risks
One of the most useful messages from the Code is that businesses do not need an entirely different safety management system for psychosocial hazards.
The familiar WHS risk management process still applies:
- Identify hazards
- Assess risks where necessary
- Control risks
- Review control measures
Consultation supports every stage of this process. The Code also emphasises that risk management is ongoing, not a one-off exercise.
For an SME, that provides a much more practical way of looking at psychosocial safety.
You do not necessarily need to build another complicated management system. You can incorporate psychosocial hazards into your existing WHS processes, including consultation, risk registers, incident and hazard reporting, workplace inspections, supervisor meetings, change management, training, and management reviews.
Step 1: Identify the hazards
Start by understanding what is happening in the workplace.
The Code says businesses must identify reasonably foreseeable psychosocial hazards arising from the work they undertake. Consultation with workers is an important part of this process.
The Code recommends using several sources of information rather than relying on a single annual survey. Businesses can consider:
- consultation with workers
- surveys and other tools
- observations of work and workplace behaviours
- incident and workers’ compensation information
- complaints and investigations
- workplace inspection reports
- hours worked
- absenteeism and turnover
- exit interviews
- WHS committee records
- previous psychosocial risk assessments.
This is particularly relevant for SMEs because useful information is often already available.
For example, if workers are regularly working additional hours, customers are becoming increasingly aggressive, staff turnover has increased and supervisors are reporting that people cannot keep up with workloads, those pieces of information should not necessarily be considered separately. Together, they may indicate an emerging psychosocial risk requiring further investigation.
Consultation is central to the process
Consultation is one of the strongest themes throughout the Code.
Businesses must give workers a reasonable opportunity to raise psychosocial health and safety issues, express their views and contribute to decision-making. Relevant information must be shared, workers’ views considered, and workers advised of consultation outcomes in a timely manner.
Consultation does not need to be complicated. Depending on the workplace, the Code identifies methods including toolbox discussions, focus groups, surveys, WHS committee meetings, team meetings and individual discussions.
Importantly, regular consultation is preferable to waiting until something goes wrong.
For a small business, this might mean supervisors regularly asking workers:
- What is making your job harder at the moment?
- Do you have enough time and resources to do the work?
- Is anything unclear about your role or priorities?
- Are there situations where you need more support?
The important part is not simply asking the questions. Identified issues need to be considered, acted upon where necessary and followed up.
Step 2: Assess the risk
Once hazards have been identified, the business needs to understand the risk they create.
The Code specifically identifies three important factors:
Duration – How long are workers exposed?
Frequency – How often are workers exposed?
Severity – How severe is the exposure?
The assessment should also consider how hazards interact or combine.
This avoids a common mistake of treating psychosocial risk as simply a survey score.
Consider two businesses where workers occasionally deal with a difficult customer. In one workplace, the incident may be rare, workers have good supervisor support and there are effective escalation procedures.
In another, aggression may occur every day, workers may be understaffed, unable to leave the situation and receive little support.
The hazard may look similar, but the actual risk can be very different.
Step 3: Control the risk
Once the hazards and risks are understood, businesses must eliminate risks where reasonably practicable or, where elimination is not reasonably practicable, minimise them so far as is reasonably practicable.
This is where the Code provides particularly useful guidance.
Effective controls may involve changing:
- the design of work
- job demands and tasks
- systems of work
- staffing or resources
- supervision and support
- the work environment
- workplace interactions and behaviours
- equipment, plant or tools.
This also highlights why an Employee Assistance Program or a psychosocial policy cannot be the entire control strategy.
The Code specifically states that workplace policies can be important but should not be relied upon alone to control psychosocial risks.
If excessive workload is the hazard, for example, telling workers about an EAP does not address the source of the workload. The business may need to review staffing, task allocation, deadlines, resources, work processes, supervision, or job design.
Organisational change deserves particular attention
Change is a normal part of business, but the Code specifically identifies poor organisational change management as a psychosocial hazard.
Changes to staffing, reporting arrangements, work locations, duties, workloads, rosters, technology, equipment and workplace design can introduce new risks.
The Code says consultation about changes affecting WHS should occur as early as possible.
This means you should consider psychosocial risk before implementing the change, rather than waiting to see whether problems occur afterwards.
For an SME, a simple pre-change assessment can be extremely effective:
- What is changing?
- Who will be affected?
- What psychosocial hazards could the change introduce?
- What have workers told us?
- What controls do we need before implementation?
- When will we review the change?
Step 4: Review whether the controls are working
Implementing a control is not the end of the process.
Controls need to be reviewed to ensure they remain effective. The Code requires review in circumstances including where controls are not effectively managing the risk, before relevant workplace changes, when a new hazard or risk is identified, or where consultation indicates a review is necessary.
This creates an important continuous improvement cycle:
- Identify
- Consult
- Assess
- Control
- Review
- Improve
For SMEs, this does not have to mean another major annual review. Regular team meetings, supervisor discussions, monthly pulse checks, incident reviews, and management meetings can all help monitor whether controls remain effective.
Don’t forget to document what you are doing
Another important part of the Code is recording the risk management process and outcomes.
Records may include consultation outcomes, identified hazards, risk assessments, controls implemented and training provided. A risk register can bring this information together.
The Code even provides an example psychosocial risk register in Appendix C that considers frequency, duration and severity of exposure, interacting hazards, existing controls, further controls, responsibility, completion dates and ongoing review.
For businesses, documentation matters because it shows not only that a policy exists, but that psychosocial risks are actively managed.
The role of supervisors and managers
A significant practical lesson from the Code is the importance of frontline leadership.
Supervisors are often the people best positioned to notice when workloads are becoming unreasonable, workers are unclear about responsibilities, customers are becoming increasingly aggressive, team relationships are deteriorating or workers are not receiving adequate support.
The Code recommends designing work so supervisors have manageable workloads, sufficient resources and enough capacity to effectively supervise and support workers. It also recommends regular discussions about challenges, issues and support needs.
Businesses therefore need to do more than tell supervisors that psychosocial safety is important. Supervisors need the time, authority, training and processes to identify issues, consult workers, escalate concerns and help implement controls.
Leadership also has a role
Psychosocial risk management should not be delegated solely to HR or the WHS manager.
The Code states that genuine commitment by PCBUs, officers and organisational leaders is essential because governance and resourcing decisions shape how work is undertaken and influence how effectively psychosocial risks can be controlled.
Officers also have due diligence obligations. The Code identifies reasonable steps including keeping knowledge of psychosocial WHS matters current, understanding relevant hazards and risks, ensuring appropriate resources and processes are available, and verifying that those processes are working.
That makes psychosocial risk a leadership and governance issue, not simply a wellbeing initiative.
What should a small or medium business put in place?
The Code recognises that the way the risk management process is implemented will vary depending on the size and nature of the business. Larger organisations and higher-risk workplaces are likely to require more sophisticated processes.
For an SME, a practical system could therefore include:
- A psychosocial hazards policy and clear responsibilities.
- A psychosocial risk register relevant to the actual work undertaken.
- Regular worker consultation rather than relying only on an annual survey.
- A simple process for workers to report psychosocial hazards and concerns.
- Supervisor training on identifying, discussing and escalating workplace issues.
- A process for assessing psychosocial risks before significant workplace changes.
- Controls focused on the source of the risk, not just individual worker resilience.
- Regular monitoring through incident information, consultation, absenteeism, turnover, complaints and other available information.
- Periodic pulse checks to identify emerging issues.
- Documented actions, responsibilities and review dates.
The objective is not to create paperwork for its own sake. It is to create a repeatable process where an issue is identified, discussed, assessed, acted upon and reviewed.
The key message for business owners
The Managing Psychosocial Hazards at Work Code of Practice changes the conversation from:
“How do we support someone who is struggling?”
to the broader WHS question:
“What is it about the work, work environment or workplace interactions that could cause harm, and what can we reasonably do to prevent or minimise that risk?”
Both questions matter, but they serve different purposes.
Psychosocial risk management is not about diagnosing workers or expecting supervisors to become counsellors. It is about good work design, effective consultation, appropriate workloads and resources, clear roles, good supervision, respectful behaviour, effective change management and responding to hazards before they cause harm.
For small and medium businesses, the system does not need to be complicated. But it does need to be active, documented and ongoing.
That is ultimately the practical message of the Code: manage psychosocial hazards as you would any other workplace health and safety risk – identify them, consult your people, understand the risk, put effective controls in place, and regularly check that those controls are working.
Reference: Managing Psychosocial Hazards at Work – Code of Practice, July 2022, Safe Work Australia.
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