People Matters – with HRCentral
27th July 2026
By HRCentral
Managing Psychosocial Hazards – New Legal Obligations for NSW businesses
From 1 July 2026, a significant change was made to the Code of Practice: Managing Psychosocial Hazards at Work in NSW. Instead of only being a guidance document practices, this Code has now become a legal obligation under section 26A of the Work Health and Safety Act (WHS Act).
This means businesses operating in NSW, including interstate organisations with NSW operations, must now comply with the Code or demonstrate that they have implemented measures that achieve an equivalent or higher standard.
In NSW, regulators no longer need to prove that psychological harm has occurred; a failure to comply with the Code may itself constitute a breach of the WHS Act. The only other jurisdiction which also has a psychosocial Code that carries this additional legal obligation is QLD.
As a reminder, a psychosocial hazard is anything that could cause psychological harm (e.g. harm someone’s mental health). In general, businesses must eliminate or minimise psychosocial risks so far as is reasonably practicable by applying the four-step risk management process:
1. Identify hazards
2. Assess risks
3. Control risks
4. Review risk controls
In practice, most workplaces will need to take a closer look at how work is organised and how people interact. This may involve reviewing policies, consulting with workers, and checking whether day-to-day practices genuinely reduce harm.
Employers should also revisit their systems after incidents, staff changes or reports of psychosocial harm. These reviews don’t need to be complex; they simply need to show that the organisation has thought about the risks and taken reasonable steps to address them.
The key message is that awareness alone (or even just policies and training) is insufficient - employers must be able to prove that they are actively managing psychosocial risks and meeting their legal obligation.
Whilst following the Code is legal obligation in NSW and QLD, we recommend that FTMA members across all States and Territories have robust risk management systems in place to proactively manage psychological risks.
For further information, please reach out to an HR Specialist at HR Central on 1300 717 721 or hr@hrcentral.support.
