Victorian case highlights importance of psychosocial risk policies and training

In the case, WorkSafe Victoria charged an employer with breaching its duties as an employer under theOccupational Health and Safety Act 2004 (Vic) (‘the Act’). Under the Act, employers have an obligation to provide and maintain for employees a working environment that is safe and without risks to health, so far as is reasonably practicable. To do this, employers are required to eliminate risks to health and safety, as far as reasonably practicable, or to reduce those risks so far as is reasonably practicable.

WorkSafe investigated and then prosecuted the employer, after an employee complained to it about their experience working at the company. The complaint involved allegations that a company director had made inappropriate comments, including sexual remarks, to an employee. The director’s alleged conduct seemed likely to constitute sexual harassment and created a risk to the psychological health and safety of the employee – although the court did not make a finding about the conduct.   

Ultimately, a Magistrates Court in Victoria found the employer guilty of a single charge of failing to provide or maintain a workplace that was safe and without risks to health. The court fined the company A$100,000, plus ordered it to pay over A$6,000 in legal costs. It found the employer had no formal systems in place to reduce, manage or address inappropriate workplace behaviour. It found the only system or measure that the employer had in place to handle employee concerns was a monthly meeting.

As a measure to prevent health and safety risks to employees, the meeting was entirely inadequate. Accordingly, the court found that the employer failed to put in place reasonably practicable measures that could have reduced the risk of employees being exposed to psychological harm. In particular, the court said that it would have been reasonably practicable to:

• have policies and procedures which outline for employees the acceptable and appropriate standard of behaviour in the workplace, and explain what unlawful and unacceptable behaviour is, including sexual harassment;
• have procedures or policies which set out reporting mechanisms for employees, and how the employer will respond to reports; and
• implement policies and procedures by conducting appropriate workplace behaviour training for all levels of the business, including management and front-line workers, on appropriate behaviour and reporting.

The employer had failed to take any of these steps.

When setting the penalty, the court took into account deterrence, putting employers on notice that not having appropriate policies, reporting mechanisms and training in place is not acceptable.

What this means for employers

This decision reinforces the significant legal risks to employers – including significant monetary penalties – associated with failures to manage workplace psychosocial safety risks. It also demonstrates the scope of the powers of the safety regulator and its willingness to implement those powers to help ensure employers prioritise the management of psychosocial safety risks.

The court found that the company had breached the law by failing to have any relevant policy in place; or to conduct training on when behaviour is inappropriate, how to identify and deal with it when it does occur and the process of investigating allegations. It is critical that employers, no matter what size, have as a minimum policies and procedures in place to give guidance on, and deal with, appropriate workplace behaviour. Reporting mechanisms, and training managers to handle complaints, are also essential.

Requirements for companies, directors and managers to correctly identify and handle the risks involved in psychosocial harms in Australia are continuing to rise. Employers are being held to increasingly high standards when setting expectations for workplace behaviour and when responding to complaints and other incidents. Compliance with these obligations is becoming more onerous and complex, as new legal developments and legislation are introduced.

Managing workplace psychosocial safety risks is complex, but having relevant policies in place and conducting training is the baseline requirement for all employers. Other measures that employers can take to help ensure they are taking all reasonably practicable measures to eliminate or reduce the risks of psychological injury in the workplace include:

• ensuring policies about discipline and investigation processes are regularly reviewed and fit for purpose, giving clear but flexible guidance to a variety of actions including discretion about when a full investigation is required;
• ensuring appropriate personnel with relevant experience and expertise conduct investigations and that any relevant policies are followed;
• educating and training HR and frontline managers to provide options for dealing with grievances and disputes and to make decisions about when investigations are required and how to conduct them in a procedurally fair way;
• ensuring compliance is being documented to limit exposure to legal claims;
• taking a proactive approach to psychosocial safety risks, including by conducting a risk assessment and implementing control measures as part of any formal workplace investigation; and
• consulting on and implementing a harassment and discrimination prevention plan.