NSW WHS legislation update: what it means for managing psychosocial hazards

The Industrial Relations and Other Legislation Amendment (Workplace Protections) Act 2025 (NSW) introduces major changes to how work health and safety laws will be enforced in NSW.

From 1 March 2026, registered industrial organisations, including unions, will be able to commence civil penalty proceedings under the Work Health and Safety Act 2011 (NSW) on behalf of affected workers.*

In most businesses, the greatest exposure lies in a single area, which is psychosocial hazards.

*Reference: https://www.keypointlaw.com.au/keynotes/employment-law-update-what-employers-need-to-know-in-2026/#:~:text=Commencement:%201%20March%202026,with%20approved%20Codes%20of%20Practice

Why psychosocial hazards have become increased risk

Under the WHS laws, psychosocial hazards are already a clear compliance requirement. These include risks such as:

• Bullying and harassment
• High job demands
• Poor organisational change management
• Role ambiguity
• Low job control
• Workplace conflict
• Fatigue

The duties have not changed. You are obliged to remove or reduce risks to psychological health as far as is reasonably practicable.

What has changed is who can enforce those duties. From 2026, unions can initiate civil penalty proceedings directly. That adds to the chances of litigation in which employees claim chronic overworking, inability to respond to grievances, ineffective consultation in restructurings, ineffective fatigue controls, or systemic cultural problems.

Two businessmen sitting and speaking at the office about psychosocial hazards

The implication of this to your business.

1.Complaints can escalate faster

When employees complain of stress, bullying or unreasonable workloads, they can now move beyond internal procedures at a faster rate.

When your systems are not able to clearly show risk identification, assessment and control, then you are more exposed.

2. Documentation will be critical

Evidence in psychosocial issues is about risk assessments, consultation records, workload analysis, incident reports, executive oversight and response to complaints. Unless it is documented, it did not happen.

3.”We didn’t know” is not a defence

Psychosocial risks are widely recognised and supported by regulator guidance. Officers should practice due diligence to make sure that there are proper resources and processe in place.

Common gaps we are seeing

• No official psychosocial risk assessment
• Use of HR complaints procedures rather than WHS risk controls
• No documented workload monitoring
• Weak change management consultation
• Lack of defined fatigue management framework
• Minimal reporting to the board

What you should be doing now

Conduct a formal psychosocial risk assessment

This should not be limited to a staff survey. You require a systematic procedure that determines hazards, evaluates risks and puts in place control measures that are in line with the WHS requirements.

Review workload and fatigue controls

Are job demands reasonable? Are working hours clearly defined? Is there monitoring for chronic overload? These are not HR problems but WHS risks.

Enhance consultation procedures
Make sure that workers and health and safety representatives are adequately consulted, engaged in risk assessment activities and supplied with the appropriate information. Ensure this is documented.

Ensure executive oversight

Psychological health must be visible at leadership level. Boards and directors should receive reporting on psychosocial risk indicators, not just physical injury data.

How BWC Safety can help

The 2026 amendments do not impose any new psychosocial obligations, but they increase the risk of enforcement considerably.

This is not the time for surface-level policies. You must have a justifiable, systematic strategy that is in line with the WHS laws.

• Undertake official psychosocial hazard risk assessment in accordance with WHS requirements
• Determine systemic risk factors like high job demands, lack of role clarity and exposure to fatigue.
• Review and strengthen consultation processes
• Develop practical, proportionate control measures
• lign psychosocial risk management with board and officer due diligence obligations
• Audit existing systems to identify compliance gaps before they become legal exposure

We focus on practical implementation, not just documentation. If your organisation has not yet undertaken a structured psychosocial risk assessment, or if your current framework has not been reviewed recently, now is the time.