Global Workplace Insider

WARNING: Content that may be distressing

The recent sentencing of a Commonwealth government department (Department) for failing to manage psychosocial risks arising during performance management processes is a defining moment for Australian workplaces. It reinforces a point that regulators have been signalling for some time: management of psychosocial hazards are a core part of an employer’s work health and safety (WHS) obligations, and they must be managed with the same discipline applied to physical risks. 

The Department was charged in 2022 with three offences pursuant to the Work Health and Safety Act 2011 (Cth) (the Act) in connection with the death of a 34-year-old technician who tragically took his own life after being placed on four separate Work Plans (used as a performance management tool) in a 6-month period. The Court found that the Department had not provided the necessary training to its supervisors about use of its performance management tool.

According to the Comcare media release, the worker had displayed increasing signs of distress and ill-health and at no point during the process did the supervisors refer the worker for support, place him on leave or take other steps to relieve the pressure the worker was experiencing.  Risk controls available to the Department included training supervisors to:

• understand how the use of the Work Plan (used as a performance management tool) may be a psychosocial hazard;
• identify psychosocial risks associated with workers subject to performance management through Work Plans; and
• eliminate or minimise psychosocial risks arising from Work Plans, including by providing guidance as to when to refer a worker for medical assessment and when to suspend the performance management process.

The Department pleaded guilty to one charge and was convicted and sentenced to a fine of $188,000 and an adverse publicity order (which has not yet been published at the time of writing this article).  It is the first time a Commonwealth employer has been convicted of offences under the Act relating to management of psychosocial risks. 

Further charges are pending against the same Department in relation to alleged psychosocial risks arising from remote work.

Key themes

Three key themes stand out:

1. Psychosocial risk is a mainstream WHS compliance issue: Regulators expect organisations to treat psychological health with the same rigour as physical safety. That includes identifying foreseeable risks arising from HR processes.

• Performance management processes may give rise to psychosocial hazards such as poor organisational justice: Where performance processes are repetitive, prolonged, poorly communicated, or inconsistently applied, they may create or aggravate psychological harm. That psychosocial risk must be assessed and eliminated or minimised so far as is reasonably practicable.  Performance management processes should include a risk assessment process and be responsive to changes in risk. 

• Supervisors are critical to compliance: A policy alone will not be an effective risk control measure if those responsible for implementing that policy or procedure are not appropriately trained.

What Organisations Should Do Now

1. Strengthen supervisor capability

Provide training for supervisors so that they understand:

• what psychosocial hazards look like in practice
• how performance processes can contribute to risk to psychosocial health
• when to pause, escalate, or redesign an HR process to respond to risks to psychological health
• their personal WHS obligations

2. Review performance management frameworks

Consider whether your HR processes:

• are clear, consistent, and proportionate
• include wellbeing checkpoints
• avoid unnecessary repetition
• provide mechanisms for oversight

3. HR and WHS functions

Psychosocial risk management cannot sit in a silo. HR, WHS, and operational leaders should work together and share ownership of the psychosocial risk controls in the performance management context.

4. Document relevant decision-making in relation to risk

Evidence that psychosocial risks were identified, assessed, and managed during an HR process is good practice and may also be useful evidence in future.

The Takeaway

For persons conducting a business or undertaking (PCBU) and employers, the path forward is clear: build capability, strengthen systems, and ensure supervisors understand the dual nature of their role – managing performance and managing risk.