Episode 3, World@Work: Managing psychological health and psychosocial risks in the workplace

Crowley Woodford:

Hello and welcome to this World@Work Podcast. I'm Crowley Woodford and I head up the Ashurst European Employment practice. I'm delighted today to be joined by Scarlet Reid, a new Employment partner in our Australian practice who specializes in Health and Safety, and also Eleanor Reeves, the partner who leads the Ashurst Health and Safety practice in London. Welcome to you both.

In this episode, we're going to consider developments across both Australia and UK, focusing on how employers are addressing psychosocial risks, particularly following the release of ISO 45003, which is the first international standard dealing with managing psychological health in the workplace, as well as the lasting impact of the COVID lockdowns on mental health. And we all know that levels of stress and mental illness have been on the rise in recent years, and the global statistics are pretty staggering. The World Health Organization's World Mental Health Report of last year states that about one in eight people in the world live with a mental disorder, and globally an estimated 12 billion working days are lost every year to depression and anxiety at a cost of $1 trillion per year in lost productivity.

So what's clear from the statistics is that there's an overwhelming business case for minimising mental health situations arising in the workplace because of their substantial impact on business operations. So against that backdrop, let's bring in Scarlet, as Australia seems to be the world leader in legislating with respect to psychosocial risks. Can you share with us the extent to which ISO 45003 has been adopted in Australia?

Scarlet Reid:

Thank you, Crowley. It's a pleasure to be joining you today. As you know, ISO 45003 was published in June 2021. It offers guidelines for organisations to manage psychosocial risks in the workplace as part of an occupational health and safety management system based on ISO 45001, including accountability and transparency of senior management when it comes to identifying and managing psychosocial risk. The Standard defines psychosocial risk as the combination of the likelihood of occurrence of exposure to work-related hazards of a psychosocial nature and the severity of injury and ill health that can be caused by these hazards. Hazards of a psychosocial nature include things such as aspects of work organization and social factors at work. This includes situations such as poor work relationships, harassment, bullying, lack of support, and lack of trust.

The Australian Federal government has undertaken to ratify ISO 45003, but has not yet done so. And while the Standard is not itself compulsory under law, it has clearly had an influence on how Australian work health and safety law has defined psychosocial risk. We expect that our health and safety regulators will look to the Standard as a guide for assessing compliance by Australian companies to manage psychosocial risks.

Crowley Woodford:

Thanks, Scarlet. There are some pretty broad definitions at work there. What has Australia has done under local law to address psychosocial risk in the workplace?

Scarlet Reid:

From a legislative viewpoint, over the past 12 months, many jurisdictions in Australia have introduced updates to their work health and safety regulations to expressly require employers to eliminate psychosocial risks in the workplace, or if that is not possible, to minimize those risks so far as is reasonably practicable. And although the definition of health under the WHS law in Australia has always meant both physical and psychological health, the updated regulations place a renewed emphasis on this aspect of work health and safety. And the new laws define psychosocial risk as "a risk to the health and safety of a worker or other person arising from a psychosocial hazard". A psychosocial hazard is defined as "a hazard that arises from the design or management of work, a work environment, plant at a workplace, or workplace interactions that may cause psychological harm". So essentially anything in the workplace that might cause harm to a worker's mental health, As you can see, there are some clear parallels between this definition in the Australian laws and the definition in ISO 45003.

Crowley Woodford:

Yes, definitely. And many thanks for that overview. I understand that Australia has a range of safety regulators, both state and federal. What's their role in addressing psychosocial risk in the workplace?

Scarlet Reid:

That's right, Crowley. So in Australia, each state and territory has its own separate work health and safety regulator, and there's also a regulator at the Commonwealth level. These regulators have a number of functions including to monitor and enforce compliance with the work health and safety legislation.

Now, unsurprisingly, coinciding with the updates to the work health and safety regulations, we have started to see a real increase in regulatory focus and activities across most jurisdictions with regard to psychosocial risk. For example, regulators are placing an emphasis on psychosocial risk in their strategies and agendas. Safe Work Australia, in its work health and safety strategy for 2023 through to 2033, identifies managing psychosocial risk as in their top three persistent challenges. Many Australian jurisdictions have now introduced codes of practice on managing psychosocial risk. These codes include information on how to identify, assess, and control these types of risks.

Crowley Woodford:

Many thanks for that. I'm sure our listeners will be interested in what teeth there are from the regulator. So in terms of regulator action in Australia, what steps have they taken to enforce the psychosocial risk provisions?

Scarlet Reid:

Well, they're really starting to take some pretty serious steps in Australia, Crowley, in terms of enforcement, including prosecutions, which I'll touch on in a moment. But in the first instance, what we're really starting to see is regulators investigating matters that traditionally have been more the purview of human resources departments. So these are matters such as how employers might deal with and investigate workplace complaints and bullying and harassment type claims. Now, as far as actual prosecutions, which are criminal prosecutions that are brought under the work health and safety laws here in Australia, there are at least two worth noting already. Both relate to suicide. In August 2022, the Commonwealth prosecutor filed three charges against a Commonwealth department alleging breaches of the Work Health and Safety Act per alleged failures in managing risks to psychological health and safety. The charges go to the administration of workplace policies and procedures as they relate to the suicide of a worker in that case.

Earlier this month in New South Wales, the New South Wales Ambulance Service pled guilty to breaching the Work Health and Safety Act in relation to a matter where an ambulance driver was accused of stealing the opioid painkiller, fentanyl, from work and later died by suicide. The court's judgment on penalty in that ambulance matter is expected in the coming months. To our knowledge, this is the first guilty plea related to psychological and psychosocial health and safety in Australia. The Australian experience presents a valuable opportunity for UK employers to get ahead of the regulators and take practical steps to address these risks, from lower level interpersonal issues to more extreme suicide and self-harm threats.

Crowley Woodford:

Yes, many thanks. I'm sure UK clients will be following the judgment of that New South Wales ambulance case very closely to see if there's any lessons to be learned. And speaking of the UK, Ellie, the focus seems to be more on mental health rather than the broader psychosocial risk as in Australia. Perhaps you can explain to us the legal position in the UK in protecting against work-related stress and mental health?

Eleanor Reeves:

Thanks, Crowley. Well, like Australia, employee health includes both their physical and psychological health, and this is protected by UK health and safety law. Employers have a statutory duty of care to protect the health, safety and wellbeing of their employees, and as part of discharging that duty, employers need to undertake a risk assessment including, for example, the risk of work-related ill health. They also need to implement adequate control measures to reduce risk to a tolerable level. Unlike Australia, the relatively new emphasis on psychosocial risk in a work-related health and safety context hasn't stemmed from UK statutes, but I don't think we should necessarily assume that regulations will drive the change in the UK. By way of illustration, during the pandemic, the requirements on employers to control a new risk in the workplace were primarily derived from and enforced under existing health and safety legislation rather than emergency public health legislation.

Crowley Woodford:

Thanks for that. So what is the UK Health and Safety Executive doing to help employers promote mental wellbeing in the workplace?

Eleanor Reeves:

Well, until recently, I think it would be fair to say that the HSE's regulatory focus has been on physical rather than psychological work-related issues, however, HSE has long been collecting data on work-related illnesses, which is often the starting point of the development of their regulatory response. The latest annual statistics are confronting. HSE found that 1.8 million workers suffer from a work-related illness of which 914,000 were related to stress, depression, and anxiety. The cost burden on the economy is estimated to be in excess of £5 billion. And perhaps most confronting of all, this is now the leading cause of long-term absence from work. Work-related mental health issues are likely to have been exacerbated by the pandemic and the isolating effects of working from home, but obviously it would be a mistake to focus solely on where the work is being done. It is also the way it's being done.

So coming back to your question, HSE has a range of online resources, including its well-regarded management standards approach, which is based on the five steps of risk assessment model, and also guidance on managing the risk of suicide. In 2021, HSE also introduced the Working Minds campaign, the objective of which is to raise awareness about how to recognize and respond to the signs of stress, and it highlights the legal duty on employers to protect workers and support good mental health.

Crowley Woodford:

Many thanks. Just picking up on that, the well-named Working Minds campaign, that's based on the five Rs, isn't it? Could you take our listeners through what that entails?

Eleanor Reeves:

Sure. Briefly, the five Rs are first, Reach out. This requires employers to talk to their people based on an individual basis and as a team. Second, Recognize. This requires employers to be cognizant of the signs of stress, which may be affecting their workforce. Third, Respond. When consulting with their workforce, employers are encouraged to listen to the issues experienced by the workforce and to set out agreed action points with their employees. Fourth, Reflect. Employers are encouraged to monitor and keep under review the actions taken. And fifth, Routine. Employers should take regular opportunities to check in on mental health and stress levels to help normalise these types of conversations.

Crowley Woodford:

Thanks. Scarlet mentioned the important point about employers being subject to prosecution in Australia. Do you think that that's something that's going to play out in a similar way in the UK?

Eleanor Reeves:

Whilst it might appear that HSE is lagging behind Australian regulators in prosecuting cases of psychosocial risk, HSE is actually contemplating some form of regulatory intervention in this area. In May last year, HSE published a 10-year strategy which highlighted mental health as a key strategic objective and recognized that whilst the UK has one of the lowest rates of serious work-related injury across Europe, and there's been real progress on how organizations control workplace safety risk, statistics indicate that the same cannot be said for work-related ill health.

Crowley Woodford:

So a lot to do there. But what is HSE doing to make clear that the risks to mental health have to be controlled, and those that fail to control those risks are presumably going to be penalised in some way?

Eleanor Reeves:

HSE is delivering an inspection campaign this year, which aims to reduce work-related ill health through proactive inspection, including enforcement, assurance and evaluation activity. Interestingly though, HSE's guidance on reporting concerns about work-related stress and ill health refers to the need to evidence that a number of staff are affected rather than an individual case. And HSE stresses that it is not the appropriate body to investigate bullying or harassment unless there's evidence of wider organizational failings. They also expect that concern should already have been raised with employers and that they should have been given sufficient time to respond. So whilst it may only be a matter of time before we are likely to see enforcement action being taken, I think psychosocial work-related risk is obviously a relatively new and challenging area, and so if we're talking about prosecution, HSE will need to establish sufficient evidence as well as investing in the public interest.

Crowley Woodford:

Thanks Ellie. So certainly as well as the health and safety considerations, there's also, of course, the risk for employers of employment claims when an employee's suffering from mental health issues. The HSE's definition of stress is the adverse reaction people have to excessive pressures or other types of demands placed on them. Stress is not itself a disability in law in the UK, but of course it can lead to other mental health situations, such as depression. Conditions such as depression or worse can be classed as a disability, which is a physical or mental impairment and has a substantial and long-term adverse effect on a person's ability to carry out day-to-day activities, and a disability is a characteristic protected by the UK's Equality Act. As soon as an employer becomes aware that an employee is disabled, they're under a legal obligation to make any necessary reasonable adjustments and failure to do that could in itself amount to discrimination and give rise to risk.

I won't go into all the potential claims that an employee can bring, but the biggest financial exposure is most likely a disability discrimination claim. This is because it's potentially an uncapped award as well as an additional award that may be made in respect of injured feelings in particularly serious discrimination cases. However, the potential for personal injury claims against an employer is also an area which can sometimes be overlooked, especially with crisis ill health situations like self-harm or suicide. Such a claim could arise from a breach of the employer's common law duty under the tort of negligence to take reasonable care for the health and safety of employees in the workplace.

Scarlet Reid:

And Crowley, it's a very similar situation here in Australia in terms of disability discrimination claims and personal injury claims as negligence claims. So, how are the UK courts dealing with personal injury claims as negligence claims?

Crowley Woodford:

There has been case law, probably the one I'd want to highlight is Corr v IBC Vehicles. That held that employers can be found liable for the suicide of an employee. This case was brought on the grounds of personal injury under negligence, and Mr. Corr took his own life as a result of severe depression, which resulted from physical injuries which were sustained in a workplace accident. The House of Lords ruled that the employer had breached its duty of care to the employee in respect of the physical injury he had suffered. The court also found that there was no break in the chain of causation as a suicide was a consequence of severe depression brought on by that accident. As such, the court held that the employee's severe depression was a foreseeable consequence of that breach.

So in order to mitigate the risk of claims, it's really important that employers train their managers to spot and deal with a potential mental health issue as, and when, it arises, whether the employee is physically in the workplace, or more common now, working remotely.
Let's move on as I think our listeners will probably be really interested to know what each of you is seeing employers do in practice to address the safety concerns surrounding psychosocial risks and mental health issues in the workplace. Perhaps we can start with you Scarlet.

Scarlet Reid:

Sure. In Australia, the model updated regulations set out a non-exhaustive list of relevant matters that people conducting businesses must have regard to when considering what control measures should be put in place to manage psychosocial risk. These measures include things such as the design of work, including job demands and tasks, systems of work, including how work is managed, organized and supported, and things such as workplace interactions or behaviours. Some of the things that we're seeing in practice include employers incorporating ISO 45003 into their existing work health and safety management systems. We're seeing a greater integration and collaboration between human resources and work health and safety departments within the business, and these are areas that were previously seen as operationally quite distinct from one another. And finally, we're seeing the introduction of mental health officer roles, some of which are at an executive level in an organization, and these mental health officers lead plans devoted entirely to mental health initiatives. Ellie, how does that compare with the UK?

Eleanor Reeves:

It's really interesting listening to your perspective, Scarlet. I think there's a lot of common ground with what we are seeing in the UK around how psychological risk is being identified and managed, which is perhaps unsurprising given the global nature of many organizations. It's worth mentioning that a focus on wellbeing can help increase resilience, retention, and productivity, and potentially reduce sickness absence and claims, so it's important to recognize the opportunities for organizations who take this seriously.

Just picking up on your point on risk assessments, which are also a cornerstone of the UK's management approach. As Crowley has mentioned, companies may be concerned whether staff have the experience to identify psychosocial risks and may need support to carry out a suitable and sufficient risk assessment. They also need to think about how to collect information from employees, for example, through surveys and making sure that any data collected is processed in compliance with data privacy laws. Your point about greater integration is a great one, as many organizations will have policies relating to mental health and wellbeing, but may not be tying these together with their health and safety policies and procedures. I agree that the role of ISO 45003 and the external audit framework is likely to assist with properly embedding psychosocial risk with existing safety management systems. And finally, I think the tone from the top, an involvement of leadership is crucial to prevent the risk of any organizational or systemic failings emerging.

Crowley Woodford:

Thanks very much both. So to round up, I think that there are a number of practical tips for employers. Clearly to mitigate the potential of employment and work health and safety claims, managers should be trained. That's a recurring theme here, that training to recognize and deal with mental health issues, and managers of course should not ignore any warning signs like erratic out-of-character workplace behaviours. Employers should be sure to conduct regular and comprehensive risk assessments tailored to each of their different workplace environments and specifically focus on psychological risks, not just physical risks, which have been the traditional but limited area of safety focus. They should then carefully assess current and potential new measures to mitigate those risks.

Organizations should consider mental health in the workplace proactively and engage with their workforce at regular intervals, having conversations about areas of their work which may lead to work-related stress, including demands, control, support, relationships, the role and changes within a person's job. When engaging with the workforce, employers should listen to workers' concerns and feedback and prepare an action plan ready for implementation to address those concerns and issues that may lead to increased work-related stress and poor mental health. Companies should try to normalize the conversation about mental health and make it a routine part of communication, especially with line managers. For those suffering or susceptible to stress, regular conversations with management about working practices can also protect against risk. Companies, of course can use the ISO 45003 framework to integrate good management practices and focus on wellbeing can help increase resilience, retention, productivity, and potentially reduce sickness absence and claims.

So that brings us to the end of this podcast. I'd like to thank Scarlet and Ellie for their time today. To make sure you don't miss any of our future Legal Outlook episodes, subscribe on Apple Podcast, Spotify, or wherever you get your podcasts. And while you're there, you can listen back to our previous episodes and please feel free to leave us a rating or review. Thank you for listening, and goodbye for now.