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Code of Practice Mental Health Australia: Why the NSW Code matters

At a glance:

  • In an Australian first, SafeWork NSW has introduced a new Code of Practice for mental health in the workplace
  • Marsh explain what is meant by this new Code of Practice and whether it is mandatory
  • Statistics about psychological hazards in the workplace and learnings from across the globe 

Every workplace in NSW has a legal duty of care to their employees to protect them from psychosocial hazards such as bullying and harassment, violence in the workplace and remote and isolated work. 

Over the past 12 months, Marsh has observed a notable increase in workers’ compensation and salary continuance (income protection) claims for mental health. 

There is increasing pressure on functions responsible for managing, as far as is reasonably practical, exposure to psychosocial hazards at work. However, the pandemic pressure-cooker with its fast-paced change and blurred lines between home and work lives has highlighted just how unclear an employer’s responsibilities can be.  

On 28 May  2021, SafeWork NSW released an industry-wide mental health Code of Practice for Managing Psychosocial Hazards at Work (May 2021) to provide organisations with resources and guidance on this issue. This is an approved Code of Practice under Section 274 of the Work Health and Safety Act 2011 (NSW) (WHS Act), and is the first of its kind in Australia. 

What is the purpose of the Code of Practice?

  1. Provides organisations and their representatives with practical guidance on processes that can be implemented to identify and manage psychosocial hazards at work.  
  2. Articulates the roles, responsibilities and obligations of PCBUs (Persons Conducting a Business or Undertaking). 
  3. Outlines the steps involved for systematically identifying and managing psychosocial risks in the workplace.

Why it matters

The  WHS Act outlines that a person conducting a business or undertaking (PCBU) or the employer, has a duty to ensure control measures are taken to eliminate or minimise the health and safety hazards and risks in the workplace, or the place where the work is carried out. 

The Code defines psychosocial hazards as “aspects of work and situations that may cause a stress response which in turn can lead to psychological or physical harm”.

Courts and safety regulators may rely on the Code of Practice as evidence of what is known about a hazard(s) and to assist in determining what is considered “reasonably practicable” to address it.

Mental health in the workplace statistics

So which industries are most vulnerable? According to a five-year data review conducted by SafeWork Australia, occupations with the highest risk for mental health claims are: 

  1. Defence force members, fire fighters and members of the police force 
  2. Automobile, bus and rail drivers 
  3. Health and welfare support workers 
  4. Prison and security officers 
  5. Social and welfare professionals

The nature of these occupations and industries suggests that workers who receive compensation for a work-related mental health condition tend to be those who have high levels of interaction with other people, are often providing a public service and often doing their job in difficult and challenging circumstances.

Across all states/territories and industry sectors, there is a significant gap between the importance employees place on a mentally healthy workplace and how mentally healthy they believe their workplace actually is (i.e. importance versus performance). A TNS Social Research study revealed that the industries with the widest gap between the perceived importance and performance of mental health are: 

  • Agriculture
  • Public administration and safety
  • Transport
  • Postal and warehousing 

The newly released Code of Practice will be particularly useful for organisations in these industries.

Is the Code mandatory?

There are no fines or penalties for failing to comply with the Code of Practice, however, the Code can be used by courts and safety regulators when determining what is reasonably practical.

Learnings from across the globe

Prior to the recent release of the new Code of Practice in NSW, Australia did not have its own local standards and historically relied on a number of international frameworks, as outlined below:

  • Canadian Standard for Psychological Health and Safety in the Workplace (CAN/CSA-Z1003-13 / BNQ 9700-803/ 2013) 
  • International Standard for Occupational Health and Safety management (ISO 45001)
  • International Standard for Occupational Health and Safety management – Psychological Health and Safety at Work: Managing Psychosocial Risks – Guidelines (ISO / DIS 45003)

Canadian Standard for Psychological Health and Safety in the Workplace (CAN/CSA-Z1003-13 / BNQ 9700-803/ 2013)

Pre-pandemic, the Canadian Standard was widely recognised as the best-practice approach to managing mental health within workplaces. This standard set voluntary guidelines and resources to help organisations promote mental health and prevent psychological harm at work. The Canadian Standard is framed around recognising and taking action on 13 psychosocial factors that can affect the mental health of employees:

  1. Psychological support
  2. Organisational culture
  3. Clear leadership and expectations
  4. Civility and respect
  5. Psychological job demands
  6. Growth and development
  7. Recognition and reward
  8. Involvement and influence
  9. Workload management
  10. Engagement
  11. .Work/life balance
  12. Psychological protection from violence, bullying, and harassment
  13. Protection of physical safety

The Canadian Standard provides a comprehensive framework to help organisations of all types guide their current and future efforts in a way that provide the best return on investment and includes information on:

  • Identifying psychological hazards in the workplace
  • Assessing and controlling risks in the workplace associated with hazards that cannot be eliminated
  • Implementing practices that support and promote psychological health and safety in the workplace
  • Growing a culture that promotes psychological health and safety in the workplace
  • Implementing systems of measurement and review to ensure sustainability of the overall approach.

Until recently, this standard has been the guiding light for organisations who were proactively attempting to improve mental health and wellbeing for their employees. Although it did lay the foundations for the way organisations viewed and engaged with mental health risks, it did not fully reflect the Australian workplace experience. In comparison, the new Code of Practice is more relevant and practical for Australian businesses as it acknowledges the different cultural implications, regulatory frameworks and legislation requirements. 

International Standard for Occupational Health and Safety management (ISO 45001)

ISO 45001 is the internationally recognised assessment specification for occupational health and safety management systems. It enables organisations to manage operational risks and improve their performance. It also provides guidance on how to manage the health and safety aspects of business activities and looks at ways of preventing accidents, reducing risk and improving overall employee wellbeing.

ISO 45001 is a globally recognised certificate of Occupational Health and Safety Management, which highlights an organisation’s commitment to the policies and processes needed to reduce work injuries.  ISO 45001 accreditation demonstrates an organisation’s commitment to the wellbeing of employees and continued enhancement of employee welfare. This certification also provides a competitive advantage by improving brand reputation and performance capacity in the market.

This standard is somewhat limited in its support for workplaces specifically attempting to manage psychosocial risks, although it does provide excellent guidance regarding general OHS risk and control measures.  

International Standard for Occupational Health and Safety management – Psychological Health and Safety at Work: Managing Psychosocial Risks – Guidelines (ISO / DIS 45003)

The new ISO 45003 was recently published following an extensive inquiry process. The guidelines provide organisations with information on promoting wellbeing at work and managing the psychological health and safety risks within an occupational health and safety framework or management system. It addresses numerous ways in which a worker’s psychological health can be impacted, including organisational culture, poor leadership, excessive workload, and unproductive communication styles.

The new ISO 45003 standard is seen by many as a long overdue look at psychological health and safety. Whilst there are plenty of ISO standards that look at the physical aspects of health and safety management, little has been done to provide a guided framework around how organisations can protect their employees mentally.

ISO 45003 includes information on how to recognise the psychosocial hazards that can affect workers and offers examples of effective actions that can be taken to manage these. Because ISO 45003 is designed as a guide, rather than a formal accreditation, it recognises that many organisations do not have the capacity to employ specialists to manage psychological health, and that it needs to be handled by people sometimes wearing multiple hats in the workplace. 

However, whilst ISO 45003 is designed as a stand-alone document, it will also feed into and support those organisations who are looking to achieve or maintain their ISO 45001 accreditation. Organisations designing health and safety management systems for ISO 45001 will not have to design a new one for ISO 45003.

Have a question or need guidance?

If you would like to learn more about how the various standards may apply to you and your business, including how to adopt the new Code of Practice for NSW, please reach out to your Marsh representative or contact us here. 


Disclaimer: The information contained in this publication provides only a general overview of subjects covered, is not intended to be taken as advice regarding any individual situation, and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. LCPA No. 21/183

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