The Occupational Health and Safety Act 2004 (VIC) (OHS Act), places an obligation on all employers in Victoria to ensure a safe and healthy working environment for their employees, so far as reasonably practicable.
The Victorian Government recently announced new Occupational Health and Safety (Psychological Health) Regulations (Regulations) which will elevate psychosocial risks to the same level as physical hazards.
Oz 22 Painting Pty Ltd – Increasing Emphasis on Managing Psychosocial Risks
A recent decision emanating from the Sunshine Magistrates Court highlights the importance of managing psychosocial risks and implementing reasonably practicable measures to eliminate or reduce psychosocial risks in the workplace.
Oz 22 Painting Pty Ltd (Oz 22) was found to have breached section 26 of the OHS Act by failing to ensure that the workplace and the means of entering and leaving the workplace were safe and without risks to health.
In May 2022, a female employee joined Oz 22 on a trial period. The director’s husband, himself a former director of the company, made inappropriate comments about her appearance and personal life. The situation worsened in July 2022 when the employee was scheduled to meet the director’s husband at a train station to be driven to a job, however, she was instead driven around by him for 1.5 to 2 hours and pressured to spend the rest of the day with him and accompany him to a hotel. The employee resigned following the incident and filed a complaint with WorkSafe Victoria’s psychosocial operations inspectorate regarding the treatment she had endured at Oz 22.
The Court held that Oz 22 had failed to devise a policy regarding appropriate and inappropriate workplace behaviour with respect to sexual harassment and had failed to implement that policy, thereby failing to ensure the workplace and its access points were free of risks to health and safety. Oz 22 was convicted and fined $90,000, as well as $6,792 in costs. The Court considered the duration of the contravention (61 days), the impact on the employee, and the need for general deterrence when it comes to sentencing.
New Regulations Mandate Employers to Manage Psychosocial Risks
Psychosocial risks include any work-related factors that have the potential to harm employees, such as bullying, sexual harassment, violence, aggression, or exposure to traumatic events.
The new Regulations will explicitly require employers to manage these psychosocial risks, which may lead to further successful prosecutions and significant penalties if employers fail to implement the processes and procedures contained in the Regulations and accompanying Compliance Code. If psychosocial risks cannot be eliminated, employers must take steps to minimise them by, for example, altering work management practices or providing training. Employers will also be required to develop written prevention plans for key psychosocial hazards like bullying, sexual harassment, and occupational violence. In addition, employers will be required to report complaints related to these hazards to WorkSafe.
The Regulations are expected to be finalised in October 2025 and come into effect on 1 December 2025. As a result, employers in Victoria should expect a lot more regulatory and prosecutorial activity in this area on the part of WorkSafe.
If you are concerned about your business’ compliance with these upcoming legislative changes, please contact our Workplace Relations and Safety specialists for assistance.
This article was written by Anthony Lawrence, Partner, Nick Zavattiero, Solicitor and Gabriella Katz, Law Graduate.
