Employer obligations: toxic behaviours and psychosocial risks

As an ardent advocator for DE&I, lawyer Alexandra Shields has been pleased to see organisations increasingly taking a proactive approach towards eliminating toxic behaviours and psychosocial risks from the workplace.

“What I'm seeing is that many clients are recognising the importance of getting on the front foot in relation to these issues,” says Shields, partner at Norton Rose Fulbright.  

Reducing psychosocial risks has evolved into such an essential part of business operations, the issue should be part of boardroom discussions, she says.

“The big obligation on employers is to develop a culture whereby positive behaviours are role modelled from the top down. So this needs to be at the top of the agenda for boards and senior executive teams. It should be a matter that is seen as part of an ESG strategy in the same way as financial and commercial matters because it does affect an organisation's bottom line.”

Upcoming masterclass on psychosocial risks

Shields will be a speaker at the upcoming HRD Employment Law Masterclass in Sydney in November.  As part of her presentation, she will be looking at organisations’ obligations under law with regards to toxic behaviour and psychosocial risk, and best practice to develop a positive, safe and effective workplace.

“Toxic behaviours in the workplace must be eliminated not only to comply with legal obligations but also because it directly inhibits inclusion. I am passionate about driving DE&I in my own firm and for my clients, to have positive workplaces and improved business outcomes.”

Some organisations have put extensive training programmes in place, she notes. These include workshops and modules, both in person and online, to assist in preparing managers to deal with negative behaviours and ensure senior leadership teams understand the gravity of workplace obligations.

Workplace risks to health and safety includes psychosocial hazards

Changes to the law have come into effect through the Respect@Work: Sexual Harassment National Inquiry Report and changes to the Fair Work Act, she says, which place a positive obligation on employers to minimise the risk of sexual harassment occurring in the workplace. There are also increased powers for the Fair Work Ombudsman and the Fair Work Commission in the way in which they deal with sexual harassment in the workplace.

That ties in with the Model WHS laws which makes clear that risks to health and safety includes psychosocial hazards, which includes toxic behaviours.

Shields says the best way to avoid these is to champion a holistic approach - creating a safe and positive culture.

“Not only is it a legal obligation to minimise toxic behaviours in the workplace but it creates better business outcomes to ensure that you have true DE&I,” she says.

“It needs everyone in the organisation to understand their personal liabilities in dealing with toxic behaviours and appropriate behaviours, as well as the organisation's vicarious liability for the behaviour of its employees.”

That should be backed with systems “whereby employees are protected with anti-victimisation mechanisms to be able to speak out openly with regards to complainants,” says Shields.

Workplace psychosocial hazards risk criminal liability for organisations

Poor behaviour that isn’t appropriately addressed will cost organisations, she says.

“Those costs can come through legal claims, absenteeism, staff turnover, loss of productivity, and reputational issues. A big focus at the moment is organisations under fire from a reputational perspective because of not managing workplace behaviours appropriately.”

Other serious consequences of not dealing appropriately to manage psychosocial hazards in the workplace include criminal liability, penalties and worker compensation claims by individual employees, as well as the cost of management time, legal expenses and damages in respect of individual employees.

 “All states and territories have always had an obligation to maintain the health and safety of workers. That includes both psychological safety and physical safety. So it's not really a change to the legislation that is still coming into effect - there is simply a calling out now that psychosocial safety is considered part of that obligation.”

An additional challenge, says Shields, is understanding what constitutes toxic behavior.

“We are very clear on what unlawful behaviour is as a legal definition, and we know what inappropriate behaviour is - and behaviour that's in breach of an organisation's policies, code of conduct or its values or standards of behaviour. But looking more broadly, what are the behaviours that are psychosocial risks for employees? It’s not a one size fits all and so organisations should apply both the safety and an HR lens to managing it.”