Psychosocial Pulse – Edition 5: Regulatory Compliance and Employer Rights in Psychosocial Safety

As mental health becomes a central focus in workplace safety, construction business owners must navigate a growing set of legal obligations under Work Health and Safety (WHS) laws and the Fair Work Act 2009 (Cth). But while supporting worker wellbeing is essential, employers also have rights that protect their ability to run safe, productive, and fair worksites. 

This edition explores how to align your practices with legal obligations and industry standards for psychosocial safety, while understanding and exercising your rights as an employer. 

Legal duties under WHS laws 

Under updated WHS regulations, employers (or PCBUs, ‘Persons Conducting a Business or Undertaking’) must: 

• Identify and assess psychosocial hazards such as high job demands, poor support, bullying or remote work. 

• Implement control measures to eliminate or minimise risks “so far as is reasonably practicable.” 

• Consult with workers and health and safety representatives. 

• Monitor and review the effectiveness of control measures regularly. 

In construction, this means proactively managing risks like fatigue, isolation, unclear job roles, and interpersonal conflict. Failure to comply can result in penalties, legal action, and reputational damage. 

Fair Work obligations around mental health 

The Fair Work Act requires employers to: 

• Approve personal/carer’s leave for mental health reasons (e.g. stress, anxiety, depression). 

• Make reasonable adjustments to support workers returning from mental health leave (e.g. flexible hours, lighter duties). 

• Avoid discrimination based on mental health status. 

• Maintain confidentiality around worker health information. 

Employers must also have clear policies for leave, return-to-work, and workplace behaviour to ensure compliance and protect their teams. 

Understanding employer rights 

While obligations are increasing, employers retain important rights that help maintain operational integrity and fairness. These include: 

• Right to Request Medical Evidence 

You can ask for reasonable documentation (e.g. medical certificates) when workers take mental health leave. This helps ensure leave is genuine and supports planning. 

• Right to Enforce Performance Standards 

Employers can initiate performance management if an worker’s mental health affects their ability to meet role requirements, provided the process is fair, documented and sensitive to the worker’s condition. 

• Right to Decline Unreasonable Adjustments 

Employers are only required to make reasonable adjustments. If a request imposes unjustifiable hardship or disrupts operations, it may be lawfully declined. 

• Right to Manage Conduct and Safety 

Employers can take disciplinary action if a worker’s behaviour poses a risk to others or breaches workplace policies, even when mental health is a contributing factor. The key is to act fairly, document decisions, and avoid discriminatory treatment. 

• Right to Protect Other Workers 

If a worker’s mental health condition results in aggressive, disruptive, or unsafe behaviour, employers have a duty to protect other workers. This may involve reassignment, mediation, or disciplinary action, provided it’s dealt with lawfully and with care. 

• Right to Maintain Business Viability 

You are not obligated to implement changes that compromise safety, productivity, or profitability. Each accommodation request should be assessed case-by-case. 

Conclusion 

Balancing psychosocial safety with employer rights is not only possible, it’s essential. By understanding your obligations and asserting your rights respectfully, you can protect your workforce and your business. 

Next week, we’ll wrap up the series with Creating a Psychosocial Safety Action Plan, a practical guide to implementing everything we’ve covered into a clear, site-ready strategy. 

This week’s reflection for business owners and supervisors: 

• Are your policies and practices protecting both your workers and your business? 

• What’s one step you can take this week to strengthen compliance and clarify expectations? 

If you have any questions or need further guidance, please don’t hesitate to contact our Workplace Relations team: 

📞 (02) 6175 5900 
📧 workplace@mba.org.au