Psychosocial Risks Now a Legal Priority: What NSW Employers Must Know About New WHS Laws and Union Powers
Two major legal reforms are reshaping workplace health and safety in NSW — and every employer should take notice.
The NSW Government has:
- Enacted Section 26A of the Work Health and Safety Act 2011, giving legal force to approved Codes of Practice, and
- Passed legislation allowing unions to prosecute employers for WHS breaches — a major shift in how compliance may now be enforced.
These changes significantly raise the legal and operational risks for employers, especially around psychosocial hazards like bullying, overwork, and toxic workplace culture. But the most concerning development for many employers is the expanded role of unions in enforcement — including their legal right of access to workplaces.
Section 26A: Codes Are Now Enforceable Standards
Under the new Section 26A, businesses must comply with an approved Code of Practice — or demonstrate they’ve implemented an equal or better risk control approach.
The first Code expected to be approved?
Managing Psychosocial Hazards at Work.
This Code outlines employer obligations to manage:
- Bullying, harassment and discrimination
- Unsafe workloads and job demands
- Poor leadership, unclear roles, and organisational change
- Workplace trauma, aggression or isolation
- High-pressure or high-stress environments
In practical terms, this means psychosocial risks now carry the same legal weight as physical safety hazards. Failing to address them could result in regulatory enforcement, civil penalties, or criminal prosecution — especially with new actors now empowered to take action.
Union Powers to Prosecute: A Strategic Risk for Employers
Under the new laws, unions can now bring criminal prosecutions against employers for WHS breaches — including those involving psychological harm. This introduces a new and potentially adversarial enforcement pathway.
While unions must:
- First consult with SafeWork NSW, and
- May only prosecute if the regulator declines to act,
…this change gives unions direct access to the legal system as WHS enforcers. And crucially, the law allows any penalty imposed by the court to be paid to the union, rather than the State.
This creates:
- A financial incentive for enforcement
- A political incentive for unions to take a stand on cultural and psychosocial issues
- A risk of strategic litigation against employers with poor culture, fractured relationships, or weak internal grievance processes
Unions now have a clear pathway to pursue compliance and penalties when employers fail to address worker complaints — especially in workplaces with entrenched psychosocial risks.
Union Right of Entry: Enforcement at the Front Door
This prosecutorial power is amplified by existing union right-of-entry provisions under the Fair Work Act and WHS Act.
Union officials with a valid WHS permit:
- Can enter workplaces without employer consent to inquire into suspected safety breaches
- Can inspect records, interview workers, and take notes/photos of work areas
- May exercise their right of entry based on a single worker concern or a perceived risk to health and safety
With unions now empowered to prosecute, these access rights effectively turn union officials into on-the-ground WHS investigators — particularly when it comes to psychological hazards that are harder to detect but deeply felt by employees.
For employers, this means:
- A greater risk of surprise workplace visits
- Immediate scrutiny of culture, workloads, and management practices
- The potential for onsite issues to trigger legal proceedings under WHS law
Psychosocial Hazards: Now a Core WHS Obligation
The Code of Practice on Managing Psychosocial Hazards at Work is likely to be the first Code formally approved under Section 26A. Once approved, compliance will be legally mandatory unless an employer can demonstrate a superior system.
This means employers must now:
- Identify and assess psychosocial risks in the same way they manage physical risks
- Develop and implement risk control measures, not just policies
- Actively manage and respond to workplace culture, leadership, communication, support, and work design
- Keep detailed documentation of risk management, complaints, and responses
Summary: What This Means for Employers
The combined effect of these reforms is a significant escalation in WHS enforcement risk. Employers can now be held to account through:
- SafeWork NSW investigations
- Union-led prosecutions, where the regulator declines
- Union right-of-entry actions prompted by complaints or disputes
- Civil claims and workers’ compensation linked to psychosocial harm
Employers should treat these changes as both a compliance issue and a cultural reset opportunity.
What Employers Must Do Now
To reduce risk and stay compliant:
- Conduct a psychosocial risk assessment as required by the Code.
- Train all managers and supervisors on psychosocial hazards and legal duties.
- Update your WHS management system to include mental health and culture risks.
- Review your internal complaints and investigation processes for transparency and effectiveness.
- Prepare for union scrutiny and right-of-entry — proactively, not reactively.
- Document everything — especially your compliance efforts, risk controls, and staff engagement.
Final Word
Psychological health is now front and centre in workplace law. With enforceable standards under Section 26A and unions empowered to prosecute, the risks of non-compliance — legal, reputational and operational — have never been higher.
If your workplace isn’t actively managing psychosocial hazards, it’s not just a wellbeing issue — it’s now a legal liability.
Employers who lead on culture, systems and engagement will thrive. Those who ignore the warning signs may find themselves not just visited, but prosecuted — by either the regulator or the unions.
Need help preparing your workplace for psychosocial compliance or union entry?
