By Sarah Fountain, Partner and Adiam Tsegay, Senior Associate

The Victorian Government has recently released the Occupational Health and Safety (Psychological Health) Regulations 2025 (Vic) (Regulations), which come into effect on 1 December 2025, together with an accompanying Compliance Code (Code). The Regulations impose stringent obligations to identify psychosocial hazards, control risks associated with those hazards, and review risk control measures.

Who Do the Regulations Apply To?

 The Regulations impose obligations on:

• employers in relation to their employees;
• employers in relation to independent contractors and employees of independent contractors in respect of matters over which the employer has control or would have control if not for any agreement purporting to limit or remove that control;
• the labour hire provider and the host employer in labour hire situations;
• any person with the management or control of a workplace (limited to matters over which the person has management or control).

What Do the Regulations Require?

The Regulations require employers to:

• identify psychosocial hazards, so far as is reasonably practicable;
• eliminate any risk associated with a psychosocial hazard, so far as is reasonably practicable.  If it is not reasonably practicable to eliminate the risk, the employer must reduce the risk so far as is reasonably practicable;
• review and, if necessary, revise any measures implemented to control risks associated with any psychosocial hazards.

What are Psychosocial Hazards?

Under the Regulations, psychosocial hazard means any factor or factors in—

(a) the work design; or

(b) the systems of work; or

(c) the management of work; or

(d) the carrying out of the work; or

(e) personal or work-related interactions –

that may arise in the working environment and may cause an employee to experience one or more negative psychological responses that create a risk to the employee’s health or safety.

The Code sets out examples of psychosocial hazards, including:

• aggression or violence
• bullying
• exposure to traumatic events or content
• gendered violence
• high job demands
• low job control
• low job demands
• low recognition and reward
• low role clarity
• poor environmental conditions
• poor organisational change management
• poor organisational justice
• poor support
• poor workplace relationships
• remote or isolated work
• sexual harassment.

This list is not intended to be exhaustive.  If an employer identifies another psychosocial hazard that may arise in the working environment, the employer has a duty to control the risks associated with that hazard, so far as is reasonably practicable.

Identifying and Managing Risks Associated with Psychosocial Hazards

Once a psychosocial hazard is identified, an employer should conduct a risk assessment about how and to what extent the hazard creates a risk to health or safety.  If an employer does not have the necessary knowledge and skills to undertake a risk assessment, they should seek assistance from someone who is suitably qualified in occupational health and safety matters.

Once a psychosocial is identified, an employer must, so far as is reasonably practicable, control the hazard by:

• eliminating any risk associated with the psychosocial hazard;
• if it is not reasonably practicable to eliminate a risk associated with the psychosocial hazard, the employer must reduce the risk so far as is reasonably practicable, by:

1. 1. altering the management of work, plant, systems of work, work design or workplace environment;
   2. using information, instruction or training (if none of the risk control measures listed under paragraph a are reasonably practicable), or
   3. using a combination of any of the controls listed in paragraphs a and b, but information, instruction or training must not be the predominant control measure.

Are the Regulations Different to Those in Other States?

Yes. The Regulations are different to the model Work Health and Safety laws in place in other states, but the overall approach in Victoria is consistent with that in other Australian jurisdictions.

Penalties

Non-compliance with the Regulations may constitute a breach of the Occupational Health & Safety Act 2004 (Vic), with penalties for breach of section 23 of more than $360,000 for individuals and $1.8 million for companies.

Key Takeaways for Insurers

1. There is an increased risk of WorkSafe investigations and prosecutions arising from psychosocial hazards.
2. There is an increased risk of common law claims by injured workers and statutory recovery claims by the Victorian WorkCover Authority as a result of breaches of the Regulations.
3. Insurers should take these risks into account when underwriting risks. Consider what information is needed from insureds regarding the steps they are taking to identify and minimise psychosocial hazards.