The rising tide of psychological injuries in NSW workplaces is demanding a critical shift in how we address workplace safety. With proposed legislative changes on the horizon, businesses must prepare for a new era focused on prevention and proactive support. This article explores the impending reforms, the undeniable link between bullying and mental health, and actionable strategies for employers to consider taking to cultivate healthier, more resilient work environments. For professionals navigating the complexities of employee well-being, workplace relations, and organisational health, understanding these changes is paramount.
In a speech to the NSW Legislative Council on 18 March 2025, Treasurer Daniel Mookhey highlighted alarming statistics: psychological injury claims have doubled in six years, represent a disproportionate cost to the workers' compensation system, and lead to significantly longer recovery times compared to physical injuries.
To directly address this escalating issue, the NSW government plans to introduce Bills that will redefine 'psychological injury,' clarify the boundaries of 'reasonable management action' to distinguish it from bullying, and grant the Industrial Relations Commission jurisdiction over bullying and harassment disputes. This proposed legislative action directly responds to the documented prevalence of bullying in Australian workplaces, as evidenced by concerning survey results. Additionally, changes to the workers compensation scheme will adjust the whole-person impairment threshold for claims.
Bullying and harassment are prevalent issues in Australian workplaces. The NSW Public Sector Commission's 2024 survey revealed that 14% of respondents experienced bullying, with a staggering 21% witnessing it. Similarly, the Australian Public Service Employee Census reported 10.5% of employees experiencing bullying or harassment. These statistics showed the direct link between bullying and psychological injury, a connection further supported by Safe Work Australia's workers' compensation data, which highlights a significant increase in both the number and duration of psychological injury claims.
Despite the availability of effective treatments for conditions like depression, anxiety, and post-traumatic stress disorders, the prolonged duration of workers’ incapacity remains a significant concern.
Our practical experience reveals a recurring workplace theme: missed opportunities for early intervention. Despite the availability of effective mental health treatments, prolonged absences due to psychological injury often stem from delayed or inadequate employer responses. This missed opportunity creates a detrimental cycle: an employee becomes ill and takes leave, feeling that their report was not taken seriously. The employer’s insurer may investigate, but addressing the reported bullying or harassment becomes challenging if the injured worker is too unwell or unwilling to participate. As the absence lengthens, the injured worker's sense of injustice grows, diminishing the likelihood of a successful return to work.
Employers have a duty under work health and safety legislation to ensure the health and safety of workers, including their psychological health. However, there is limited research on effective strategies to prevent workplace bullying. SafeWork NSW’s Code of Practice provides guidance on managing psychosocial hazards and responding to reports of psychological risks. Research by s[specialist workplace psychologists indicates that upskilling managers to provided proactive supportive behaviours can reduce mental health-related sick leave and aid in workers' recovery.
The path forward demands a collective commitment to fostering workplaces where psychological safety is not just a policy, but a lived reality. This isn't just about compliance; it's about creating environments where people thrive. These legislative changes represent a significant step, but true transformation hinges on proactive leadership and genuine empathy. By embracing early intervention, robust risk management, supportive policies, and well-trained leadership, we can mitigate the devastating impact of workplace bullying and psychological harm.
Centium understands that every organisation is unique, which is why we customise our psychosocial health and safety services to align with your specific needs and objectives. Our team works closely with you to facilitate in-depth discussions, understand your challenges, and develop tailored strategies and solutions that effectively address your risk profile and operating environment.
For more information refer to our previous blog on managing psychological risk in the workplace: https://centium.com.au/news/psychosocial-injury-risk-in-the-workplace-understanding-the-risks-management-strategies/
