The NSW Government has implemented comprehensive initiatives to address mental health in the workplace, recognizing the critical importance of psychological well-being for employees and organizational success. Through strategic frameworks, regulatory approaches, and targeted support programs, NSW aims to create workplaces that prioritize psychological health and safety while reducing the significant economic burden associated with workplace mental ill health.
The Psychological Health and Safety Strategy 2024-2026
SafeWork NSW's Psychological Health and Safety Strategy 2024-2026 represents a focused approach to reducing psychological harm to workers by supporting businesses in managing factors that impact mental health. This strategy emphasizes that preventing psychological harm needs to be a core focus for every business in NSW. The vision outlined in the strategy is for all NSW workplaces to ensure psychologically healthy and safe work environments for their employees.
The strategy builds upon the foundations established by the previous NSW Mentally Healthy Workplaces Strategy 2018-2022, which successfully increased awareness and understanding of mentally healthy workplaces and enhanced the capability of NSW businesses to create such environments. While continuing efforts to raise awareness and build capability, the new strategy places increased emphasis on compliance, particularly with high-risk and large businesses and government agencies that may not be meeting their legal Work Health and Safety (WHS) duties.
The NSW Government has allocated $5.6 million in funding over the next two years to implement this strategy, with programs delivered through the Black Dog Institute and Transitioning Well. These resources will support the strategy's objectives and help address psychological risks in workplaces across the state.
Understanding Psychosocial Hazards and Legal Obligations
A fundamental aspect of NSW's approach to workplace mental health involves addressing psychosocial hazards—factors in the design and management of work that have the potential to cause psychological harm. In 2022, NSW became the first state to add a clear definition of psychosocial hazards and risks to its WHS regulation by adopting Safe Work Australia's model regulation. This regulatory clarification establishes a legal framework for identifying and managing psychological risks in the workplace.
The Code of Practice for Managing Psychosocial Hazards at Work, published in May 2021, provides guidance to businesses on the importance of mental health at work and how to meet their obligations under WHS laws. This Code represents the first of its kind in Australia and has been influential in raising employer awareness and understanding of mental health in the workplace context.
Businesses in NSW have a legal duty to prevent psychological harm, just as they do for physical harm. This obligation requires employers to identify psychosocial hazards, assess associated risks, and implement control measures to eliminate or minimize these risks. The strategy recognizes that while information and tools for providing psychologically healthy workplaces have been available for some time, consistent implementation and compliance remain challenges for many organizations.
Support for Small Businesses and High-Risk Industries
Small businesses represent a significant portion of NSW's economic landscape, with approximately 850,000 small businesses employing 1.7 million people or about 43% of the state's private sector workforce. Recognizing that these businesses generally have fewer resources and less capability to manage mental health effectively, the strategy includes targeted support initiatives.
The programs delivered through the Black Dog Institute and Transitioning Well specifically focus on small businesses, providing them with the resources and support needed to protect psychological health at work. These initiatives include:
- Practical tools, resources, and webinars to help businesses implement effective mental health practices
- Translation of all resources to reach and support culturally and linguistically diverse workers, who are identified as a high-risk category for psychological injury
- Building capability across SafeWork NSW's inspectorate to better understand and address psychological health issues
- Industry forums whose role is to identify psychosocial hazards specific to different industries
The strategy also acknowledges that some industries and workers may be at greater risk of psychological harm and require additional support. The approach focuses on workplaces, industries, and workers at higher risk based on data and evidence, ensuring that resources are directed where they are most needed.
Economic Impact and Business Benefits
Workplace mental ill health represents a substantial economic burden for Australian businesses, with national estimates reaching up to $39 billion each year due to lost participation and productivity. These costs include both absenteeism (where staff are away from work) and presenteeism (where staff attend work while experiencing stress or mental health issues), which alone is estimated to cost approximately $1,680 per employee annually.
Beyond the ethical imperative to prevent psychological harm, a psychologically healthy workplace offers clear business benefits. Research indicates that mentally healthy workplaces experience improved productivity and a quicker return to work for employees experiencing mental health challenges. These outcomes contribute to reduced costs associated with workers' compensation claims and other workplace-related expenses.
The previous NSW Mentally Healthy Workplaces Strategy 2018-2022 demonstrated these benefits through independent evaluation, which showed lasting changes in workplaces as a result of businesses participating in strategy programs, along with improved productivity and reduced time off work and claim costs.
Compliance and Regulatory Actions
The 2024-2026 strategy introduces a stronger compliance component compared to its predecessor. While the previous strategy focused primarily on raising awareness and building capability, the new strategy emphasizes regulatory action for organizations that fail to meet their legal obligations.
Large businesses and government agencies at high risk of psychological injuries can expect compliance checks from SafeWork NSW. Regulatory actions may include issuing improvement notices, prohibition notices, or formal regulator warnings. In cases of repeated non-compliance or serious breaches of WHS laws, SafeWork NSW may initiate prosecution against workplaces.
This balanced approach combines support and education with accountability, recognizing that while most businesses want to do the right thing by their employees, some require stronger incentives to fully address psychological health and safety in the workplace.
Previous Achievements and Future Directions
The NSW Mentally Healthy Workplaces Strategy 2018-2022 achieved significant results, including:
- Increased awareness and understanding of mentally healthy workplaces
- Enhanced capability of NSW businesses to create mentally healthy environments
- Lasting positive changes in participating workplaces
- Improved productivity and reduced time off work
Notably, the strategy exceeded its target of 90,000 businesses taking effective action to create mentally healthy workplaces, demonstrating the program's reach and impact.
Looking forward, the Psychological Health and Safety Strategy 2024-2026 aims to:
- Further build capability in high-risk industries to comply with duty to manage psychosocial risks
- Ensure workplaces in high-risk industries sustain their compliance improvements
- Improve regulatory action on psychosocial matters
- Encourage more workplaces to take effective action toward becoming mentally healthy
The strategy also emphasizes measuring workplace wellbeing, with the development of the Workplace Wellbeing Assessment created in consultation with customers to help organizations evaluate their psychological health and safety performance.
Conclusion
NSW's comprehensive approach to workplace mental health demonstrates recognition of both the human and economic dimensions of psychological wellbeing in work environments. By combining education, support, regulation, and measurement, the state aims to create workplaces where psychological health is prioritized and protected. The focus on small businesses, high-risk industries, and culturally diverse communities ensures that support reaches those who need it most, while the emphasis on compliance establishes clear expectations for all employers.
The substantial economic costs of workplace mental ill health highlight the business case for investing in psychological health and safety, alongside the ethical imperative to prevent harm. As NSW continues to implement and refine its strategies, the state aims to set a benchmark for effective workplace mental health approaches that other jurisdictions may adopt and adapt.
For organizations and workers seeking support, the NSW Government's Mental Health at Work portal provides access to information, training, coaching, and resources to promote mentally healthy workplaces. Through these coordinated efforts, NSW is working toward its vision of psychologically healthy and safe work for all its workers.