Partnership. Expertise. Commitment.
Our industry experts provide insurance coverage, services and solutions tailored to meet your specific needs.
Directors now have personal liability under the Work Health and Safety Act 2022 for psychological injuries, but what exactly is psychosocial risk and how do you build a psychologically safe workplace?
In June, 2022, Safe Work Australia made some updates to the model Work Health and Safety laws. One of the key amendments to the laws was clearer definitions of psychosocial hazard and psychosocial risk. They also provide an express obligation on a business to manage psychosocial risks in accordance with risk management principles, which are to identify hazards, eliminate or minimise risks so far as is reasonably practicable, and maintain and review control measures.
Psychological wellbeing in the workplace is now a safety issue and boards and Directors have personal liability as part of their due diligence obligations under the Work Health and Safety Act 2011. These obligations include a responsibility to reduce psychosocial hazards and to create psychologically safe workplaces. In short, they have a personal responsibility to demonstrate mitigation of psychological injuries.
The new model Work Health and Safety Regulations define psychosocial hazards broadly to include any hazard that arises from or relates to the design or management of work, a work environment, plant at a workplace, workplace interactions, or behaviours that may cause psychological harm. A person conducting a business must eliminate psychosocial risks, or if that is not reasonably practicable, minimise them so far as is reasonably practicable.
Psychosocial risk is defined as any risk to the health or safety of a worker or other person arising from a psychosocial hazard. Psychosocial risks are socially disruptive factors like bullying, harassment, lack of support, poor job design with isolation, and work overload. These hazards can cause stress and this stress can cause either psychological harm such as anxiety, depression, post-traumatic stress disorder, and sleep disorders; or physical harm, such as musculoskeletal injuries, chronic disease or fatigue related injuries.
A psychosocial hazard is anything that could cause psychological harm, which is harm to someone's mental health. Common psychosocial hazards at work include:
Psychosocial hazards can create stress, which can cause psychological or physical harm. Stress itself is not an injury, but if workers are stressed often, over a long time, or the level of stress is high, it can cause harm.
Psychological harm may include anxiety, depression, post-traumatic stress disorder and sleep disorders. Physical harm may include musculoskeletal injuries, chronic disease or fatigue related injuries.
Psychosocial risk factors are things that may affect workers' psychological response to their work and workplace conditions, such as high workloads, tight deadlines, lack of control of the work, and working methods.
A recent study at Google, revealed that the highest-performing teams have one thing in common: psychological safety, which is the belief that you won't be punished when you make a mistake. Studies show that psychological safety allows for moderate risk-taking, speaking your mind, creativity, and sticking your neck out without fear of having it cut off. These are all the behaviours that lead to market breakthroughs.
Positive emotions, like trust, curiosity, confidence, and inspiration, broaden the mind and help us build psychological, social, and physical resources. We become more open-minded, resilient, motivated, and persistent when we feel safe. Solution-finding and creativity and divergent thinking also increases.
The study at Google reveals that they key to true success is a win-win outcome. The way to foster this is to make everyone think about all the commonalities they have with the other person before they go into discussions and negotiations, like family, friends, hope and beliefs.
University of Washington research shows that blame and criticism reliably escalate conflict, leading to defensiveness and disengagement. Instead, promote curiosity, ask for feedback and work towards solutions.
Another strategy is to regularly ask your team how safe they feel and what could enhance their feeling of safety, using tools such as surveys. The benefits of a psychologically safe workplace also include more learning and development opportunities, and better performance.
So now you know what psychological safety is and some steps to build it. What will you do to make sure your company, and your people, and safe from psychological harm today?
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient's industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers' control.
Insurance brokerage and related services to be provided by Arthur J. Gallagher & Co (Aus) Limited (ABN 34 005 543 920). Australian Financial Services License (AFSL) No. 238312