From 1 July 2026, significant changes to the NSW Workers Compensation Scheme have changed how primary psychological injury claims are assessed, particularly those arising from workplace conduct such as bullying, harassment and excessive work demands. The reforms introduce a new “relevant event” test and an objective “reasonable person” test for conduct-related claims, placing greater emphasis on what actually occurred in the workplace and whether the conduct would be considered unreasonable by a reasonable person in similar circumstances.
While much of the discussion has focused on claims management, the real opportunity for employers is prevention.
What should employers be doing now?
The reforms reinforce the importance of proactively managing workplace psychosocial risks before concerns escalate into formal complaints or compensation claims. Employers should consider:
• Reviewing and strengthening psychosocial hazard management strategies and risk controls
• Assessing workplace culture and identifying areas of potential conflict or workplace friction
• Reviewing grievance, complaint handling and conflict resolution processes
• Ensuring managers are trained to have early, constructive conversations when concerns arise
• Strengthening documentation, procedural fairness and communication around management decisions
• Taking prompt action to address issues before they develop into broader workplace disputes or psychological injury claims.
How RehabCo can help
At RehabCo, we believe that early intervention is one of the most effective ways to support both employees and employers.
Our team can assist organisations to:
• Identify and manage psychosocial hazards in the workplace
• Facilitate workplace discussions and early intervention strategies
• Support difficult workplace conversations before issues escalate
• Review workplace processes and risk areas relating to psychological safety
• Provide independent workplace mediation and conflict resolution services
• Deliver education and training for leaders and managers on psychosocial risk management and psychological health at work.
Importantly, we have trained mediators and experienced consultants skilled in facilitating workplace discussions, helping parties navigate conflict constructively and supporting positive workplace outcomes. These services can often resolve concerns early, reducing the likelihood of prolonged workplace disputes, absences or compensation claims
The message is simple: intervene early
The new legislative environment places greater importance on workplace behaviours, documentation and proactive risk management. Employers who invest in psychological safety, effective conflict resolution and early support are likely to be better positioned to manage workplace risks and support their people.
If you’d like to discuss how your organisation can prepare for these reforms, contact the RehabCo team. We’re here to help employers build healthier workplaces and address concerns before they become claims.
Contact RehabCo today to learn more about our psychosocial hazard, workplace mediation and early intervention services
