Mental health at work – employer’s obligations

When the topic of workplace health and safety is discussed, people often think of bright orange cones and 'CAUTION: slippery when wet' signs. There is increasing awareness about the importance of mental health in ensuring a safe and productive workplace. Today is World Mental Health Day, so it is timely to explore employers' obligations in relation to ensuring a mentally healthy workplace.

Under the Health and Safety at Work Act 2015 (HSW Act), employers have an obligation to eliminate (or if not reasonably practicable, to minimise) risks to health and safety. The HSW Act includes both mental health and physical health in the definition of 'health'. Employers are required to take reasonable precautions to protect employees against psychological harm and to provide reasonable support for employees affected by mental health or disabilities.

Signs of mental harm at work include employees taking large amounts of sick leave, showing decreased performance, changes in mood or physical appearance. Some of the most significant causes of mental harm at work are high workloads, having stressful work and poor work / life balance. Being subjected to bullying or harassment at work can also have a significant impact on mental health.

In recent years, WorkSafe has increased its focus on mental health. It has published a draft good practice guidelines for managing psychosocial risks at work and in 2020 established a Mentally Healthy Work team. Case law has also reflected an increased focus on mental health at work. The recent case of Wiles v The Vice-Chancellor of the University of Auckland highlighted that employers must be proactive in addressing psychosocial harms that their employee's suffer, such as threats and harassment (see our August 2024 edition of the Employment Echo for more information).

In addition, the Employment Relations Authority has shown a willingness to impose high penalties against employers who fail to protect its employees from psychosocial harm. In Parker v Magnum Hire Ltd, a 2024 case, the Authority awarded NZ$105,000 in compensation for hurt and humiliation caused to an employee due to the bullying and harassment they had experienced, and for an unjustified suspension and constructive dismissal.

We have not yet seen a WorkSafe prosecution for failing to provide a safe workplace in relation to psychosocial harm in New Zealand. However, it may only be a matter of time. WorkSafe have stated that they may consider intervening where a business has failed to manage significant work-related mental health risks, such as where there are multiple incidents, a high level of harm, or industry-wide or organisation-wide failings.

In Australia, there have been significant sanctions imposed on employers who fail to protect their employees from psychosocial harm. In 2023, Court Services Victoria (which oversees the Coroners Court of Victoria) was ordered to pay nearly AU$380,000 in penalties due to a toxic workplace culture which contributed to the suicide of one of its staff members (see here for more information).

Australia also recently introduced a legal 'Right to Disconnect', which allows employees to refuse to monitor, read or respond to contact from an employer or third party outside of ordinary working hours. As working excessive hours impacts mental health, this legislative change signals a growing effort to address psychosocial harms to employees.

Key takeaways

Employers have obligations to take precautions against mental harm at work. Just because there has not yet been any WorkSafe prosecutions for workplace mental harm under the HSW Act does not mean that these obligations should be ignored. Employers should consider the following:

• Ensure work is designed in a way that does not place excessive workloads or stress on workers.
• Ensure leaders are trained in how to lead and manage staff appropriately.
• Ensure leaders are trained in identifying and addressing workplace mental harm and know how to support staff in these circumstances.
• Consider implementing wellness programs to minimise mental health risks such as EAP or mental health first aid.
• Encourage workers to self-report any mental health concerns and have a process in place for doing so. Ensure that workers feel they can raise their issues, that it will be discussed with them and appropriate action will be taken.
• Conduct internal 'check-ins' of workers who are showing signs of mental harm in order to identify any risks to mental health early.

This article was written with the assistance of Harriet Phillips, a Law Graduate in the Employment team.