Psychosocial Hazards must be managed like Physical Risks, says SafeWork

SafeWork NSW recently issued a prohibition notice to the University of Technology Sydney (UTS), ordering it to pause its staff downsizing program due to serious concerns about psychological harm to employees.

The regulator found that the way UTS was managing its workforce reductions posed an imminent risk of psychosocial injury. The notice followed complaints from staff about poor consultation and the handling of the process. It will remain in force until SafeWork is satisfied that UTS has addressed the health and safety risks.

A SafeWork spokesperson emphasised that under the Work Health and Safety Act 2011 (NSW), employers must treat psychosocial risks like any other WHS issue. This includes managing stress, anxiety and other mental health impacts arising from organisational change.

The National Tertiary Education Union welcomed the decision, saying it sends a clear message to management that staff concerns must be taken seriously and cannot be dismissed.

Our Take

This case is a strong reminder that psychological safety is not optional – it’s a legal requirement. Downsizing and restructures are inherently stressful, but how they’re managed can either mitigate or magnify the harm.

SafeWork’s intervention shows that regulators are willing to act when employers fail to consult or consider the mental health impact of major changes. For employers, this is a wake-up call: psychosocial risks must be assessed, managed and monitored just like physical hazards. Ignoring them can lead to serious legal and reputational consequences.

Action Items:

• Conduct a Psychosocial Risk Assessment: Identify potential mental health impacts of organisational changes and document control measures.

• Consult with Staff Early and Often: Engage employees in the process and provide clear, transparent communication.

• Train Managers on Psychosocial Safety: Ensure managers understand their WHS obligations and how to support staff through change.

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