SafeWork NSW withdraws landmark psychosocial risk prosecution

SafeWork NSW has withdrawn a landmark psychosocial risk prosecution against Western Sydney Local Health District (WSLHD) following 3 weeks of hearing and the calling of 20 witnesses by SafeWork. Ashurst defended WSLHD in the proceedings.

The prosecution was commenced in 2022 when SafeWork alleged that WSLHD failed to manage psychosocial risks when responding to and investigating complaints, concerns and grievances made about and by two staff members. The prosecution is one of the first safety prosecutions considering alleged failures to manage psychosocial risks. It comes at a time where there has been increased regulatory focus on psychosocial safety.

SafeWork's withdrawal of the prosecution signifies the real difficulty with proving breaches of the WHS Act in the context of managing psychosocial risks. While it was acknowledged during the proceedings that complaint and grievance handling processes are inherently stressful, the Court noted that the causing of stress through these processes is not a breach of the WHS Act. Due to the withdrawal of the proceedings by SafeWork, the Court was not required to make any determination about the types of steps that should be taken by an employer to avoid stress becoming a risk of psychological injury.

The SafeWork NSW Code of Practice on Managing Psychosocial Hazards at Work, while not published at the time of these proceedings, includes a section on reasonable management action. In accordance with the Code, while managing psychosocial hazards and risks may require decisions that may be perceived as causing stress and therefore a WHS risk, reasonable management action, when carried out lawfully and in a reasonable way is a legitimate way to manage workplace behaviours. We anticipate that this concept will be the subject of judicial consideration in future WHS prosecutions alleging failures to manage psychosocial risks.

This is an evolving space and we will discuss further in an upcoming podcast episode about this development soon.

Authors: Scarlet Reid, Partner; Heidi Kornman, Senior Associate and Joycelyn Tang, Lawyer.