Balancing psychosocial safety obligations with legitimate performance management and investigative processes.

Martyn
Apr 1
3 min read

Updated: Apr 2

This article builds on yesterday's blog.

Two recent Australian industrial decisions highlight a critical and often misunderstood psychosocial safety tension in modern workplaces.

How do organisations balance psychosocial safety obligations with legitimate performance management and investigative processes?

Together, these cases provide a clear signal to Boards, Executives, and WHS leaders and expose where organisations are getting it right, and where they are falling short.

My last Blog referred to the recent case of Heidel.

Case 1: Performance management is not bullying (Heidel [2026] FWC 893)

In this decision of the Fair Work Commission, a university employee sought stop-bullying orders after her manager;

Questioned incomplete work
Raised concerns about performance, engagement, and accountability
Flagged a potential Performance Improvement Plan
Indicated remote working arrangements may be reviewed.

The Commission was unequivocal;

This was reasonable management action, carried out reasonably
Communications were professional and respectful
Performance concerns were legitimate and evidence-based
Remote work arrangements can be revisited where performance is not demonstrated.

Critically, the Commission stated;

A worker cannot avoid scrutiny of their performance by characterising it as bullying.

Case 2: Poorly managed investigations can create psychosocial harm

(Secretary, NSW Department of Education v SafeWork NSW (No 2) [2026])

In contrast to Heidel, a decision of the NSW Industrial Relations Commission upheld Statutory Regulatory Improvement Notices against a government employer for failing to manage psychosocial risks during a workplace investigation.

Key failings included;

Excessive investigation duration (took 10+ months)
Lack of clear communication and timeframes to the worker
Allocation of meaningless or underutilised duties (“role underload”)
Insufficient safeguards to protect worker wellbeing during the process.

The Commission reinforced that;

Psychosocial risk obligations are not new, they are an extension of the primary duty of care under WHS legislation.

Importantly, the argument that psychosocial laws are “too unclear to comply with” was rejected outright.

The Strategic Insight: It’s not what you do, it’s how you do it

These cases are not contradictory, they are complementary.

They establish a clear boundary that should form your psychosocial safety risk control strategies.

Lawful and Defensible	Unlawful / Risk Exposure
Clear performance expectations	Ambiguity and poor role clarity
Timely, structured management action	Prolonged, unmanaged processes
Professional, respectful communication	Lack of communication and transparency
Evidence-based decision making	Ad hoc or inconsistent approaches
Work aligned to role capability	Role underload / meaningless duties

Key Lessons for Organisations

1. Performance management is a psychosocial control

Avoiding difficult conversations;

Sets an unacceptable level of behavioural norms
Increases team level stress and inequity
Undermines accountability
Creates broader psychosocial risk.

Unmanaged performance is itself a WHS psychosocial safety hazard.

2. Investigations can be a high risk psychosocial event

Workplace investigations must be treated as;

Structured, risk managed processes, with learning outcomes and not administrative exercises.

Key requirements;

Defined process, timeframes, and escalation triggers
Regular, documented communication
Procedural fairness and transparency
Trauma informed and person centric
Meaningful and appropriate interim duties.

3. “Role Underload” is a real and recognised risk

This case reinforces a critical, but often overlooked hazard, including;

Removing meaningful work without justification
Assigning “holding” duties that lack purpose
Creating social and professional isolation.

This is not benign; it is a psychosocial hazard with real harm potential.

4. Psychosocial Laws are not optional, nor are they unclear

The Commission rejected the argument that compliance is too difficult. For leaders, this means;

The standard is “reasonably practicable”, not perfection
Expectations are grounded in well established WHS principles
Regulators and courts will assess systems of work, not intentions.

5. HR and WHS must be integrated

Both cases expose a common failure;

Treating psychosocial risk only as an HR issue, rather than a WHS obligation, is fraught with risk.

Effective organisations;

Integrate HR processes with WHS risk frameworks
Apply risk management discipline to people processes
Ensure procedural fairness + safety outcomes.

Board and Executive implications

From an Officer due diligence perspective, these decisions require assurance that;

Performance management frameworks are robust, consistent, and defensible
Investigation processes are time-bound, transparent, and risk-controlled
Psychosocial hazards are identified, assessed, and actively managed
Leaders are trained and confident in applying both WHS and employment law principles.