What Australia's new mental health laws mean for employers

A raft of new mental health regulations is coming to Victoria, Australia – and employers will need to adapt.

The new regulations, which are based on the recommendations of the Victorian Royal Commission into Mental Health, have been designed to help organisations build mentally healthy workplaces.

From September 1, 2023, all employers in Victoria will have to take steps to identify and manage psychosocial hazards in the workplace.

This comes as mental health among Australia’s workforce hits new lows.

Poor mental spiralling and costing the economy billions annually

According to Gallup’s just-released State of the Global Workplace 2023 Report, Australian employees are among the world’s most stressed and engage in ‘quiet quitting’ at work at a significantly higher percentage than the world average.

The report found that nearly half (47%) of Australian workers experience stress during much of their working day.

With the introduction of these regulations, responsibility would fall to employers to protect the mental health of their employees.

That’s good news for employees but also for business, given that mental health claims at Australian workplaces have reached record levels, increasing 50% over the last five years – and expected to cost businesses US$70 billion annually, according to Australia’s Productivity Commission.

For Victoria, Australia’s second-smallest state, and the first state to introduce such measures, the issue is especially troubling, with poor mental health costing the Victorian economy $22 billion each year in lost productivity and healthcare costs.

So, what would employers be expected to implement under these new laws?

What steps employers will need to take

Essentially, employers will need to identify, assess and manage workplace psychosocial hazards – factors that can have a negative impact on mental health, like bullying, harassment, excessive workload, and lack of control over work – and then develop and implement risk controls to minimise these.

Providing employees with information and training about psychosocial hazards, as in what they are and how to manage them, is also required, along with giving workers access to confidential support services for mental health concerns.

Among the psychosocial safety measures that employers must take:

1. Establish a workplace culture that is supportive of mental health
2. Provide employees with clear expectations about their work
3. Provide employees with the resources and support they need to do their jobs
4. Create a workplace that is free from bullying, harassment, and discrimination
5. Provide employees with opportunities for development and growth
6. Encourage employees to take breaks and vacations
7. Provide employees with access to confidential support services
8. Monitor the effectiveness of psychosocial safety measures
9. Take action to address any psychosocial hazards that are identified
10. Provide training to and communicate employees about psychosocial hazards and how to manage them