What SMEs need to know about psychosocial hazard regulations

As of April this year, Australia made key amendments to its Work Health and Safety (WHS) laws to include regulations on managing and mitigating psychosocial hazards in the workplace. This means all employers are now legally obligated to ensure the psychological safety of their employees.

Adhering to these new regulations may seem easy for larger organisations with abundant resources. But what about small businesses? This could be a crucial step and the difference between keeping or losing talent and a big hit to their bottom line.

With three months having passed since the amendments, is the small business community aware of what this means for them?

When employers consider psychosocial hazards at work, they typically think of violence and aggression, harassment, conflicts in the workplace, or traumatic events. However, some common hazards not always immediately apparent to businesses include isolated work conditions, inadequate reward and recognition, lack of role clarity, poor support, and unsustainable job demands. All of these factors can take a toll on an employee’s mental health if not managed correctly.

Considering that one in five Australian workers have reported experiencing a mental health condition, these regulations are essential for keeping psychosocial hazards top of mind. Smaller businesses might find these new rules daunting as they encompass a wide range of subjective considerations, and demand careful monitoring. But even so, it’s vital to ensure you understand the process. If not, business owners could find themselves in hot water, stemming from issues like poor workplace relationships, unfavourable environmental conditions, and even unclear job roles.

What’s at stake?

An employer who fails to effectively manage psychosocial hazards in the workplace risks incurring fines or even receiving a WorkSafe order. Beyond the legal penalties, ongoing incidents in the workplace could tarnish an employer’s reputation and foster widespread employee dissatisfaction; ultimately driving a substantial rise in employee turnover.

Even though these new requirements might seem like a significant responsibility for employers,  it is a benefit in disguise. These new regulations empower employers to put in place measures that tackle common workplace issues. By establishing accurate processes and procedures to manage these matters, employers can lower the risk of workplace hazards, such as bullying and harassment. These requirements also improve an employee’s understanding of workplace hazards, increasing awareness of what a healthy management model looks like. This can support more effective management which includes better access to employee support.

How can SMEs adhere to psychosocial regulations?

Employers of small businesses have the advantage of knowing their business inside and out. They understand the day-to-day intricacies better than anyone. They can leverage these benefits by engaging directly with employees to grasp their perspectives on workplace hazards. This approach can involve regular check-ins, where employers discuss industry-specific psychosocial risks. Employers might also opt for surveys to collect feedback, ensuring anonymity or privacy as needed. When workplace incidents arise, it’s crucial for employers to review these reports and pinpoint opportunities for improvement.

Just as employers address other health and safety risks in the workplace, they can develop a specific risk management plan. This plan will identify, assess, and control risks by measuring and monitoring psychosocial hazards. As part of this process, employers can implement policies to manage and mitigate risks effectively. For example, they can introduce a bullying and harassment policy that provides clear definitions, sets company expectations, and outlines complaint handling procedures. During the risk management plan, employers may also offer additional support to employees, such as training programs, counselling services, and mental health and wellbeing resources.

At an operational level, these regulations may initially pose an additional challenge for small businesses. With their limited resources, small businesses lack the luxury of assigning their HR or work safety teams to manage these risks. However, as employers actively navigate and monitor these risks, they will benefit from the positive impacts on their operations — such as heightened employee retention, increased productivity, minimised workplace conflicts, and an improved, unified team dynamic. Simultaneously, employees will foster an increased sense of belonging in their workplace, greater job satisfaction, professional growth, and enhanced mental wellbeing.

What SMEs can do to stay up-to-date?

While these new regulations might make SMEs uneasy, they are here to stay — and at the end of the day, they’re critical to operational success and cultural resilience. For those still unsure about what these regulations mean for day-to-day business, visiting government websites is the most effective way to stay informed. These websites provide the latest legal updates. An excellent resource is Safe Work Australia, which enables you to subscribe to updates on a range of health and safety-related topics.

Most SME employers would already be considering psychosocial hazards in their daily operations. The regulation requires business owners and management teams to go one step further to ensure the psychological wellbeing of their employees and actively promote and implement a safe work environment for all. Initial efforts might seem burdensome but the increased employee satisfaction and productivity is a priceless return overall.

Sanam Ahmadzadeh Salmani is a legal counsel at Employment Hero.