Psychological injuries at the centre of WHS reforms

Psychological Injuries are at the forefront of changes to key legislation proposed by the NSW Government.

Changes are imminent for work, health and safety (WHS) legislation in both New South Wales (NSW) and Queensland (Qld) to address increased psychological injuries to workers and risks associated with sexual harassment.

Proposed NSW changes

The NSW Government has launched a reform of key legislation designed to address increased claims for psychological injuries to workers, with an initial focus on prevention and, failing that, on quick treatment.

The reform includes the introduction of two key Bills:

1. Workers Compensation Legislation Amendment Bill 2025 (NSW) (Workers Compensation Bill), and
2. Industrial Relations Amendment Bill 2025 (NSW) (Industrial Relations Bill).

The Workers Compensation Bill amongst other amendments, seeks to implement systems to focus on the prevention of psychological injuries. Despite receiving significant negative feedback from various industry bodies, the NSW Government introduced the Workers Compensation Bill to Parliament on 27 May 2025.

It includes various provisions, including:

• Adding 'excessive work demands' as a new compensable cause of psychological injury
• Clarifying and updating important concepts like reasonable management action (s 8D) and thresholds for accessing long-term payments (s 151H)
• Strengthening anti-bullying protections, providing for an expedited eight-week claim assessment process for psychological injuries caused by bullying or harassment
• Providing a right for workers to bring claims for bullying or harassment through the Industrial Relations Commission (IRC)
• Establishing clearer dispute resolution pathways and improving access to timely outcomes (s 280AC), and
• Modernising benefits and compensation thresholds to better reflect the cost of living and community expectations (s 32AA).

The Workers Compensation Bill is intended to be passed and effective from 1 July 2025.

This is one-half of the final reforms, with the other half being amendments to the Industrial Relations Bill which are intended to establish a bullying and sexual harassment jurisdiction in the IRC with new powers to address such conduct before injuries occur.

Recent Qld changes

In the meantime, the Qld Government has amended the Work Health and Safety Regulation 2011 (Qld) to implement stringent requirements to ensure positive compliance under the Sex Discrimination Act 1984 (Cth).

The amendments, which came into effect from March 2025, concern the mandatory implementation of sexual harassment prevention plans for all persons conducting business or an undertaking in Queensland, and provides that such plans must:¹

• Be in writing
• State each identified risk
• Identify control measures and matters implemented
• Describe the consultation undertaken regarding the plan
• Set out the procedure for dealing with reports of sexual harassment or sex or gender-based harassment at work, and
• Be set out and expressed in a readily accessible and understandable format by workers.

Failure to comply with these requirements results in a maximum of 60 penalty units ($9,678).

Implications for you

Avenues for raising disputes regarding both bullying and sexual harassment currently exist in the Fair Work Commission (FWC) but are not well utilised. It is unclear whether the link with the workers' compensation legislation to mandate these avenues (albeit in the IRC instead of the FWC) will increase their usage and will result in an uptick in these types of claims.

For Queensland employers, you should already have taken steps to ensure that you have sexual harassment prevention plans implemented in your workplace. We expect that WorkSafe Qld will conduct a series of audits to ensure compliance with these new provisions in the coming year.

Although the changes to the Work Health and Safety Regulation 2011 (Qld) provisions are the first of its kind for any State, we expect that the other States may well follow suit shortly. Notably, the current Work Health and Safety Regulation 2017 (NSW) (WHS Regulations) is set to be automatically repealed on 1 September 2025.² Whilst changes similar to Queensland are not currently proposed as an amendment, there is scope for the NSW Government to include similar provisions in its new WHS Regulations.

Workers Compensation Legislation Amendment Bill 2025 (NSW)

Industrial Relations Amendment Bill 2025 (NSW)

Sex Discrimination Act 1984

Footnotes

¹ Section 55H, Work Health and Safety Regulation 2011 (Qld).

² Due to the operation of the Subordinate Legislation Act 1989 (NSW).

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.