Psychological injury claims are surging in Australia and the response demands a new alliance between HR and health and safety
Three and a half years since Australia's work health and safety framework turned its focus squarely on psychosocial risk, the question facing HR leaders has shifted from understanding the hazards to knowing what to actually do about them.
According to Dr Rod Gutierrez, senior director at dss+, most organisations have done the groundwork, but this is only just beginning.
"Everyone has probably done a risk assessment and they've got a sense of where they lie in relation to these hazards," Gutierrez said. "But the big question now is: so what? Where to from here? How do we really start to get a handle on reducing harm and understanding how they are affecting our people?"
The urgency behind that question is underscored by the data. Safe Work Australia's Key Work Health and Safety Statistics Australia 2025 report reveals a 14.7% increase in serious mental health injury claims in just one year, rising from 15,300 to 17,600 claims in 2023–24, with mental health conditions now accounting for 12%of all serious claims – the highest proportion ever recorded. The median time lost from work in these claims is almost five times that recorded across all other injuries and diseases.
For Gutierrez, the economics alone demand a structural response. Psychological injury claims represent a relatively small share of the total volume of workers' compensation claims, yet they account for a disproportionate share of the cost.
"The psychological injury claims make a very small percentage of the total claims across Australia, but they make up almost a third of the cost," he said. "These claims are long term, they're complex and they're actually quite disabling for people. They cause a substantial amount of harm."
According to Safe Work Australia, the median compensation paid for mental health conditions in 2020–21 was $58,615 per serious claim, compared to $15,743 per serious claim for all injuries and diseases – and the median time lost was 34.2 working weeks, versus eight weeks for all serious claims.
The legislative response has been building steadily. Safe Work Australia's national model WHS regulations, formally adopted in 2022, require employers to identify and control psychosocial hazards. In Victoria, the Occupational Health and Safety (Psychological Health) Regulations 2025 came into effect on 1 December 2025, requiring employers to identify psychosocial hazards and eliminate any associated risk so far as is reasonably practicable.
A new alliance between HR and safety
The legislation has also forced a structural question that HR professionals are increasingly grappling with: whose problem is this, exactly?
Gutierrez is direct in his response. Traditionally, health and safety departments have been responsible for the physical safety of workers, while HR held responsibility for the psychological dimension of work. Now, by design, those boundaries are dissolving.
"Whilst health and safety departments are probably well equipped to assess and apply the hierarchy of controls to the psychosocial problem, the fact remains that the majority of the controls still lives in the departments of HR," he said. "Work design, scheduling of work, leadership development, change management – all of those things tend to be in the domain of human resources."
The result, he explained, is what he describes as a "dance" between health and safety and HR – one that not every organisation is performing in step.
"In some organisations they're dancing very well and in others they're not so much in tune," Gutierrez said. "Success is absolutely dependent on a very highly collaborative approach from both of those entities within a large organisation."
For HR leaders wondering where they fit in this evolving framework, Gutierrez's answer is unambiguous. He specialises in helping clients build safer and more productive outcomes by strengthening the human performance element of their operational systems and he sees the controls for psychosocial risk as fundamentally a human resources challenge, not a safety one.
"There are people in the HR community saying, 'Do we even belong doing this?' And my answer is absolutely yes, because the controls are very much sitting in some of the areas that are traditionally HR-related," he said.
Preparing for what comes next
Looking ahead, Gutierrez flagged AI as an emerging dimension of the psychosocial conversation that forward-thinking organisations are already starting to factor in – both in terms of how AI changes the nature of work and what new responsibilities it creates for HR leaders.
He noted that leading organisations are considering not just what AI can and cannot do, but what opportunities it opens up for workers and what it takes away.
"The promise of AI is that we're going to have an opportunity to do more of the good work and the grunt work is going to be taken away," he said. "We need the AI to evolve to the point where it does take away some of that lion's share of the grunt work – that will release capacity and capability for people to work on what they need to be working on."
But his most pointed message is aimed squarely at HR professionals unsettled by the pace of change.
"I think the people who should be least scared of AI are human resources professionals, because AI cannot replace a human, no matter how much the hype," he said. "It can imitate, it can optimise, it can do a whole lot of things, but we are not able to yet create the essence of what makes a human brain. Let's remember that the H in HR is for human."
For HR leaders navigating the convergence of psychosocial legislation, AI integration and the evolving relationship with health and safety, Gutierrez's core message is one of clarity of purpose. The tactical and transactional parts of HR may increasingly be automated, but the relational work, the advocacy for people, and the ability to understand what it means to be human at work, will remain the domain of the profession.
