Australia: SafeWork Orders Temporary Pause on Redundancies Due to Psychological Risk

Authors: Lauren Brouwer-French & Liav Benstock

SafeWork, NSW’s safety regulator, issued a ‘prohibition notice’ to the University of Technology Sydney causing it to have to pause its plans to make hundreds of staff redundant. While the prohibition notice has since been lifted, the intervention of SafeWork in this process highlights the increasing importance of preventing psychological harm and proactively protecting the psychosocial safety of employees.

Employers operating in Australia should be aware of the regulator’s capacity to intervene in their change management decisions if the mental health of employees is not properly addressed.

 

Significance of SafeWork intervention

While SafeWork often intervenes in matters concerning physical safety, this appears to be the first time that SafeWork has actively caused an employer to pause a redundancy process (albeit temporarily) due to the risk of psychological harm to employees. Employers have a duty of care to minimise and/or eliminate risks, so far as reasonably practicable, to the physical and psychological health of its workers. SafeWork’s recent intervention makes it clear that the regulator is increasing its focus on ensuring that employers meet their positive duties to minimise (or eliminate) psychosocial hazards at work.

 

What is a prohibition notice?

A prohibition notice can be issued by SafeWork if it holds a reasonable belief that an activity in a workplace is occurring (or may occur) which involves (or will involve) a serious risk to the health and safety of a person due to their immediate or imminent exposure to a hazard. If SafeWork holds that reasonable belief, then it can direct a business (or person who has control over the activity) to either stop carrying on with the activity altogether, or stop carrying on the activity in a certain way. The prohibition notice can remain in place until SafeWork is satisfied that the risk to health and safety has been resolved or remedied.

Key Action Points for Companies and In-House Counsel

Proactive steps should be taken by employers to eliminate psychosocial risks to employees as far as reasonably practicable.

Some best practice tips for employers to implement include:

• identifying and assessing whether upcoming plans, events or any other matters may cause psychological harm to employees;
• implementing effective controls to deal with any risks identified; and
• re-assessing, on an ongoing basis, whether the control measures that have been implemented are effective.

SafeWork NSW has developed the Model Code of Practice for Managing psychosocial hazards at work, which employers should ensure they read and understand.

Best practice tips for employers in restructures include:

• Ensuring that all obligations in the Fair Work Act, Modern Awards and Enterprise Agreements in relation to restructures and redundancies are complied with.
• Engaging in genuine consultation with employees before any final decisions are made.
• Allowing employees the opportunity to explain to their employer the impact of any proposed restructure, and to suggest alternatives to alleviate that potential impact.
• Communicating with employees, including in relation to the outcome of any decisions made by the employer, in a thoughtful and empathetic manner.
• Ensuring that employees have access to psychological support such as through an Employee Assistance Program.

 

If you require legal advice or assistance, please contact our Harmers Workplace Lawyers team on + 61 2 9267 4322.