Compliance Update: Amendments to WHS Laws

On the 6th June this year Safe Work Australia announced major amendments to the model Work Health and Safety Act and model Work Health and Safety Regulations. Whilst the amendments cover a range of issues, there are two key changes you should be aware of. They are in relation to managing psychosocial risk and a proposed prohibition on insurance for penalties. How will these, and the other changes, affect you?

The overall aim of the changes is to make sure that WHS matters are taken more seriously and that as an employer, you are providing safer working conditions for your staff. The focus on managing psychosocial risk and insurance are at the heart of the changes.

Psychosocial Risk

In the past, this related to bullying and wellbeing within a workplace. The amendments widen the scope to now consider how work is designed and performed. They define psychosocial hazard and psychosocial risk and provide guidance about assessing risk and determining the appropriate control measures.

A psychosocial hazard is described as any hazard that:

• arises from, or relates to the design or management of work, a work environment, plant at a workplace or workplace interactions or behaviours
• may cause psychological harm (whether or not it may also cause physical harm)

Psychosocial risk is defined as any risk to the health or safety of a worker or other person arising from a psychosocial hazard.

The Reality of Managing Psychological Risk

Psychosocial risk management, the recognition, assessment and prevention of workplace factors (work design, management, environment, plant, interactions or behaviours) which may cause psychological harm expands the employers’ responsibility for risk management into areas difficult for the layman, and perhaps even professional psychologists, to grapple with.  Questions abound:

• What exactly is psychological harm? 
• Will employers be expected to modify the workplace and worker behaviors to meet the sensibilities of all workers, so no-one is unusually stressed, anxious or otherwise disturbed? 
• What will this mean for the employment of people with existing anxieties potentially exacerbated by outspoken or gregarious workers?  
• What sort of behaviors will employers be expected to monitor to ensure no worker is at psychosocial risk?

Happily, Safe Work Australia has produced an Explanatory Statement for the model Work Health and Safety Regulations.  Unhappily, it appears the Parliamentary Draftspersons were untroubled by any of the above curly questions. They devote their explanatory skills to pointing out the requirement for a PCBU to implement control measures eliminating and minimising psychosocial risks, so far as is reasonably practicable, and the myriad issues PCBUs should factor into their psychosocial risk assessments including duration, frequency and severity of exposure of workers to “assists PCBUs to assess psychosocial risk and therefore identify what control measures are reasonably practicable”. 

No explanatory newsprint is wasted on how the PCBU might measure or benchmark any of the above risk factors but plenty of additional explanation is provided on more issues for the PCBU to note and factor into their psychosocial risk management efforts. These include “how psychosocial hazards may interact or combine, supporting the need to holistically consider the interaction of any hazards present, including that they may interact or combine to create new, changed or higher risks” i.e. introducing synergistic psychosocial risks. 

As any Occupational Hygienist will tell you, it is very difficult to quantify synergistic chemical exposure risk, even where we have good data on the individual chemical health risks.  Is it reasonably practicable to expect a PCBU (e.g. a tradesperson with a few labourers working for them) to assess synergistic psychosocial risks with little or no data on the individual risks?  No further explanatory material provided on this yet.

The regulations go on to require the PCBU to factor into their psychosocial risk assessment:

• Work design “job demands and tasks (e.g. high job demands or exposure to traumatic events) at the organisation or systems level”.  What constitutes a systems level traumatic event is not explained.   
• Work systems i.e. management, organisation and support “clarifying . . . what a system of work and how systems may give rise to, or help control, psychosocial risks, and assisting PCBUs manage job demands, low control and poor support”.
• Design, layout and environmental conditions (e.g. safe entry and exit facilities), welfare of workers (e.g. design for good visibility and safe access to welfare facilities and accommodation).
• Plant, substances and structures e.g. inadequate equipment or tools. 
• Workplace interactions or behaviours requiring PCBUs to identify and control harmful behaviours (e.g. violence, aggression, bullying, harassment, sexual harassment, conflict and poor workplace relationships) 
• Information training, instruction and supervision (e.g. poor support, lack of role clarity) and training, instruction and supervision supporting bullying policies. 

The explanatory exposition sums up with:

• The instruction that the above “matters that a PCBU must consider” go towards identifying and assessing psychosocial hazards and risks, and implementing effective and reasonably practicable control measures, through consideration of:
  • key sources of psychosocial hazards (e.g. systems of work used)
  • the context of the work and the wide range of psychosocial risks (e.g. plant used) 
  • the most effective and reliable control measures (e.g. the design of the work), and 
  • the need to support the implementation and maintenance of control measures (e.g. training and supervision).”
• A considerably confusing: “consideration is not limited to matters as they currently exist and the PCBU must also have regard to what changes, if any, should be made to those matters . . . e.g. a PCBU must consider existing plant, substances and structures . . . but also consider whether different or additional plant, substances or structures should be in use in the workplace to manage psychosocial risks.” 

JTA will be making enquiries on the practical definitions of key terms and implications of these regulatory changes and how WHS practitioners and PCBUs should respond to meet Safe Work Australia compliance expectations.  At first glance, PCBUs could simply talk to their people regularly about what upsets or stresses them at the workplace, do their best to fix identified issues and record the process.  

However, this and other reasonably practicable psychosocial risk management measures will not make all workplaces anxiety and stress free for all workers.  The current tactic of Governments laying psychosocial problems at the feet of PCBUs won’t fix that.

Insurance

There are new offences that prohibit insurance and indemnity agreements for WHS penalties. This means that businesses may no longer be able to enter into a contract of insurance to cover them for fines they receive for breaching WHS laws. However, you will be able to purchase insurance for investigation costs and legal representation.

The amendments make it an offence to:

• Enter into a contract of insurance or other arrangement under which the person or another person is covered for liability for a monetary penalty under the model WHS Act
• Provide insurance or a grant of indemnity for liability for a monetary penalty under the model WHS Act
• Take the benefit of such insurance or such an indemnity

What Do I Need To Do?

The model WHS laws underpin the WHS Laws enacted by the parliaments of the Commonwealth and each state and territory (except for Victoria). The changes must be adopted by each state/territory government before they take effect. This means that they do not create any immediate legal obligations and are not enforceable. 

Having said that, they are likely to be adopted by the Commonwealth, states and territories in the coming months. In fact, some jurisdictions have already introduced some of the amendments

We recommend that you regularly monitor and review changes to any WHS laws that affect your business to make sure that you remain compliant. It makes sense to be prepared for expected changes by starting to review how you manage psychosocial risks and hazards in line with the new amendments as well as investigate your current insurance arrangements.