Psychosocial Workplace Risk Management

Australian workplaces are facing a sustained rise in psychosocial injury claims that is outpacing every other category of workplace harm. Mental health conditions now account for 9% of all serious workers compensation claims a 36.9% increase since 2017–18. This trajectory is not slowing.

The financial and operational consequences are substantial and measurable:

• Time off work: People with a physical injury claim lose, on average, six weeks of work. For psychological claims, the average lost time is 20 weeks.
• Return-to-work rates: Psychiatric injury claims result in workers being less likely to return to work 73.3% return compared to 93.3% for physical injury claims.
• Long-term separation: 88% of workers with physical injuries typically return to work within 13 weeks. In stark contrast, 40% of workers with psychological injuries remain separated from their workplace after one year.
• Claim costs: The average cost of psychological injury claims with weekly payments is twice as high as for physical injury claims — mainly because twice as much work time is lost.
• Secondary injury risk: Secondary psychological injuries — those arising from a physical injury — cost five times more than a physical injury claim alone, and result in almost triple the average time off work.

This is not about employees simply performing poorly – this is about understanding what an employee is experiencing in the workplace or their wider life that has led them to need support from their employer.  Employees are often capable and experienced but struggling in the here and now.  Some problems may not have easy solutions – we can help to work out how best to manage issues and provide a clear way forward that will positively impact the organisation as a whole.  The consequences of not managing complex situations effectively may include:

• Elevated stress and burnout in surrounding team members
• Disproportionate demands on management time and HR resources
• Increased absenteeism and presenteeism in affected colleagues
• Elevated risk of formal grievance, bullying complaints, and workers compensation claims from those working alongside them
• Reputational harm and turnover in high-performing staff who leave rather than escalate

Under the Work Health and Safety Act 2012 (TAS), employers have a legal obligation to provide a safe and healthy workplace for their employees. The Work Health and Safety Regulation 2022 (TAS) provides additional guidance on the requirements to identify and manage hazards that may pose a risk to employee health and wellbeing.

The 2022 Regulations include a new regulation that makes it mandatory for workplaces to manage psychological health and prevent psychosocial hazards  including workplace bullying, traumatic events, and conflict or poor workplace relationships.

In January 2023, WorkSafe Tasmania released their Code of Practice on Managing the Risk of Psychosocial Hazards at Work. This code is considered a minimum standard for managing psychosocial risks in Tasmania.

Psychosocial hazards identified in the Code of Practice include harmful behaviours such as violence and aggression, bullying, harassment, and conflict or poor workplace relationships and interactions.

Critically, the obligation sits with the employer to proactively identify and manage these hazards not simply respond to complaints after harm has occurred. Reactive management is no longer sufficient to meet your duty of care.