Psychosocial risks present compliance challenges

Last week’s World Safety Day (28 April) has drawn attention to the biggest workplace risks in 2026 and identified where employers are falling short.

Serious workplace injuries have increased at a rate of 34.5 per cent decade on decade, and according to one legal expert, many SMEs are not even meeting basic workplace health and safety obligations.

LegalVision employment practice group leader Joel Hayden told HR Leader that “the most common risks are still basic and preventable, particularly around manual handling, unsafe equipment and poor supervision”.

Hayden identified the industries where workplace risks are most prevalent: construction, manufacturing, and logistics, where injuries are commonly from lifting, falling, or surrounding machinery use; hospitality and retail, specifically, regarding fatigue, understanding, and customer aggression; and within the office environment, where psychosocial risks are driven by workload pressures and long hours.

Psychosocial risks are presenting a new challenge for employers, being both harder to define and treat. They are also, Hayden said, “less visible and often build over time”.

The issue, he identified, is that many still treat mental health and psychological issues as personal issues, rather than workplace risks.

“The difficulty lies in recognising early warning signs and linking them to specific work practices,” he said.

SMEs are, however, being pushed to take psychosocial risks more seriously. Hayden acknowledged that regulators are moving with the times, by “increasingly treating psychosocial risks as enforceable safety obligations, not optional wellbeing initiatives”.

However, this is also “creating confusion about what compliance looks like in practice”.

He said: “Agencies like Safe Work Australia and state regulators are signalling that poor mental health outcomes can trigger investigations and penalties, particular[ly] in high-pressure sectors like healthcare, construction and professional services.”

“This has improved awareness, but some SMEs respond by over-documenting policies without changing day-to-day practices, which does little to reduce actual risk.”

What needs to change, according to Hayden, is the transformation of outdated policies that may be suitable for physical injuries, which are easier to define, to a properly tailored assessment. Also crucial is consulting employees, which, he said, is not always conducted despite it now being a core legal requirement.

Speaking of legal consequences, improvement or prohibition notices, fines up to the millions, personal liability for directors and officers and increased inspections, enforceable undertaking, and regulatory action are all possible if needs are not met.”

Hayden said: “Clear role expectations, realistic deadlines, and properly resourced teams are the most effective controls. Training managers to identify early signs of burnout and respond appropriately is equally important.”

“While these changes are not technically complex, they require consistent leadership attention and a willingness to adjust workflows, which is often where SMEs struggle.”

And according to updates to the Model Work Health and Safety Regulations, employers are also obligated to actively identify and monitor risks, especially in workloads, conflict, and support – and implement controls where appropriate.

However, he said: “The most effective change is shifting from reactive reporting to proactive risk management built into everyday operations.”

“SMEs that embed these practices into daily management are far better placed to meet their obligations and avoid enforcement action.”

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