How Psychosocial Safety Now Sits At The Heart Of Workforce Change

Australia's workplace safety regulators are now closely scrutinising restructuring exercises through the lens of employee psychosocial safety, issuing enforcement notices where consultation and planning fall short. With psychosocial safety now central to work health and safety expectations in Australia, we examine what this means for employers.

Psychosocial risk has shifted rapidly in recent years, from an emerging area of interest to a central pillar of contemporary work health and safety (WHS) strategy. While last year was marked by assertive enforcement activity, strengthened internal governance frameworks, and a clear elevation of expectations directed at boards and senior executives. the most significant developments are ahead. Indeed, in 2026, our Australian firm expect psychosocial safety to become a defining feature of organisational performance and a core determinant of trust and social licence.

The central question for organisations is therefore not whether psychosocial safety will reshape leadership and operational priorities, but how confidently and deliberately they will embed it into the design and governance of work, including transformation and change exercises. In this article, we explore how psychosocial safety has evolved in Australia and what these developments mean for employers preparing for a potential restructure.

Embedded psychosocial duties

Across Australia, psychosocial duties are now fully embedded in WHS legislation.

With new Occupational Health and Safety (Psychological Health) Regulations 2025 (Vic) having commenced in Victoria in December 2025, all jurisdictions have formal frameworks for identifying, controlling and monitoring psychosocial hazards.

These frameworks reinforce a consistent expectation: psychosocial hazards must be managed with the same rigour as physical risks, and compliance cannot be satisfied through training and awareness alone where structural or systemic controls are reasonably practicable.

Increased scrutiny from regulators

Regulators have begun acting on this expectation. In fact, SafeWork agencies are now conducting investigations and issuing enforcement notices in relation to organisational change processes that expose workers to psychosocial hazards.

This includes alleged failures to consult, inadequate assessment of foreseeable impacts, and insufficient planning of the transition period. The shift is deliberate; regulators now view poor change management not as an HR misstep, but as a potential WHS breach.

This is particularly evident in sectors where large-scale restructures are common, such as higher education, health and the public sector. Significant enforcement attention is also emerging in customer-facing industries, where risks relating to aggression, violence, and trauma exposure are increasingly recognised as core psychosocial hazards requiring proactive management.

At the same time, the scope of employer obligations is expanding well beyond traditional work design considerations. Advances in technology, particularly digital monitoring, algorithmic decision-making and automated work allocation, are creating new psychosocial risks associated with heightened surveillance, reduced job control, role ambiguity and perceived unfairness. As these risks emerge, regulators are placing sharper expectations on employers to assess, manage and consult on technology-driven hazards as part of their broader WHS duties.

Taken together, these developments demonstrate a decisive shift: psychosocial safety is no longer a peripheral compliance concern. It has become a central consideration in organisational change, workforce strategy, technological investment and cultural governance.

Six key principles: Managing psychosocial risk in organisational change

Restructure and transformation activities inevitably create uncertainty, and uncertainty is a well-established psychosocial hazard. Stress, conflict, disengagement and perceived unfairness can arise quickly when change is handled poorly. For 2026, organisations should keep the following principles front of mind:

• Treat psychosocial risk management as a technical discipline, not a communication task – A risk assessment alone is insufficient. Organisations must also demonstrate how psychosocial hazards have been identified, what options were considered to eliminate or minimise them, and why chosen controls are reasonably practicable. Controls should focus on redesigning work, clarifying roles, adjusting workloads and improving governance, not merely providing information or training.
• Consultation must be early, genuine and ongoing – This includes consultation required under WHS legislation and any obligations arising under awards, enterprise agreements or contractual commitments. Consultation cannot occur only at the point of decision; workers and unions must have an opportunity to contribute meaningfully before plans become fixed. Larger organisations may need extensive, multi-layered consultation pathways to comply "so far as is reasonably practicable".
• Risk management must address both the transition and the future state – Employers must assess not only the hazards arising during the change process, but also the risks that may arise once the new operating model is implemented. Issues such as role clarity, job demands, reporting structures, technological changes and capability requirements must be analysed and controlled.
• Cross-functional capability is essential – Change projects require coordinated input from WHS specialists, HR, Industrial Relations (IR), legal, operational leaders and senior executives. Fragmented ownership leads to gaps in risk management and increases the likelihood of enforcement action. A dedicated project team, working as one integrated function, can prevent misalignment that otherwise creates psychosocial harm.
• Plan early and deliberately – Early planning gives organisations time to anticipate foreseeable psychosocial hazards, develop targeted controls, and undertake meaningful consultation. It also reduces the risk of rushed decisions, unmanaged workloads and inadequate support during implementation.
• Integrate WHS, IR and organisational design – Workplace relations and WHS compliance cannot be treated as parallel streams during restructures. They must sit within a single, coordinated plan that addresses consultation obligations, risk controls, workforce impacts and communication strategy in a unified way.

Takeaway for employers

Psychosocial safety is entering a new phase as community and regulatory expectations continue to rise.

Whilst the absence of case law continues to sow uncertainty for employers and regulators alike, organisations that embed psychosocial risk management into the design and governance of work, supported by capable leaders, coherent data, disciplined assurance and continuous consultation, will be well placed to meet their legal obligations and build more resilient, engaged and high-performing workforces.

Those who continue to treat psychosocial safety as a compliance afterthought will face intensifying regulatory scrutiny, reputational risk and operational disruption.

For 2026, the mandate is clear: choose controls that matter, measure what counts, and close the loop, again and again. Safe, well-designed work is better work. In the year ahead, it will also be the standard against which organisations are judged.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.