JENNIFER CARTER | PEOPLE & CULTURE MANAGER
From 1 December 2025, Victorian businesses are required to comply with new Occupational Health and Safety (Psychological Health) Regulations.
These regulations recognise that psychological health is just as important as physical safety and place clear obligations on employers to actively manage risks in their workplace. Failure to comply sits within Victoria’s broader OHS framework, meaning breaches can result in significant penalties, including fines for both businesses and individuals, and in serious cases, prosecution.
For many business owners, this can feel like another layer of compliance. In reality, it is about taking a more structured approach to something that already exists in every business. How work is designed, how people are managed, and how teams interact all impact performance and wellbeing. Often, these risks are not immediately visible until they begin to affect your team or results.
The regulations require employers to manage psychological risks in the same way as physical safety risks:
Psychological hazards may include:
These are not new issues, but they are now clearly part of your legal obligations.
The minute you employ someone, you are responsible for both their physical and psychological safety.
A common challenge we are seeing is that many businesses are aware of risks but have not documented or formally addressed them. Without a clear process, it can be difficult to demonstrate compliance if something goes wrong.
For example, we worked with a legal practice experiencing tension between solicitors and support staff. The partners initially viewed this as a performance issue. A closer review identified psychological hazards linked to unclear role boundaries and inconsistent expectations.
The firm moved to a structured approach by documenting hazards, clarifying roles, setting consistent expectations, and introducing simple communication and escalation processes. This created a clear and repeatable way to manage the risk.
As a result, the tension was resolved, and the firm was in a stronger position to demonstrate compliance.
Poorly managed psychological risks often lead to inefficiencies such as rework, communication breakdowns, or leaders spending time managing avoidable issues.
In one case, frequent check ins with managers for direction and unclear priorities were disrupting workflow and slowing productivity. This led to stop start work and rework. By clarifying priorities, decision making, and workload allocation, the team improved efficiency and reduced pressure.
Clear roles, realistic expectations, and capable leadership are all part of managing psychological risk and driving engagement.
Leadership behaviour has a direct impact on psychological safety. How leaders set expectations, manage workload, communicate, and respond to issues can either reduce or amplify risk. Inconsistent direction, delayed feedback, or poor handling of conflict can create uncertainty and pressure.
Do people feel safe to ask questions, challenge ideas, and admit mistakes? Are they involved in decisions that impact their work? When these conditions are not present, frustration and disengagement follow.
Investing in leadership capability, including people management, communication, decision making, and change management, helps create consistency and clarity. This reduces risk and supports performance.
Many business owners believe they understand how their team is feeling. Often, there are gaps between perception and reality.
Simple and consistent ways to gather feedback, such as check ins or surveys, help identify risks early and allow issues to be addressed before they escalate.
Start by building a clear picture of what is happening in your business. You cannot manage risks you cannot see.
WorkSafe Victoria’s WorkWell Survey helps gather meaningful data about your team’s experience and identify pressure points.
The WorkWell Toolkit then provides practical guidance to design and implement control measures.
Document hazards, assess risk levels, and record controls in a simple risk register. This helps demonstrate compliance and creates clarity.
Develop an action plan to address key risks. This is not a one-off exercise. Revisit your approach regularly, for example annually, to measure impact and adjust.
You do not need to navigate this alone.
Your Client Advisor can connect you with a trusted HR partner to help assess your position and implement practical steps.
WorkSafe Victoria’s WorkWell Toolkit also provides free tools and guidance.
These regulations introduce a clear compliance requirement. More importantly, they highlight the connection between how work is managed, employee health, safety and wellbeing and business performance.
Taking a structured approach to psychological safety supports compliance, performance, and a healthier, more engaged and sustainable team.
If you would like support, get in touch with your Client Advisor. We’d love to help!
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