Psychological wellbeing study finds leaders ‘alarmingly unaware’ of obligations

26 November 2021

Research by Victorian Chamber members Swinburne University of Technology and Readiness, concludes business leaders need to ‘lift their game’ when it comes to psychological wellbeing in the workplace.


In this article, the Chamber highlights the obligations of employers in this crucial area and offers advice and assistance to enable businesses to ensure meaningful and positive wellbeing outcomes in the workplace.  

A new national study of 1,058 Australians by Swinburne University on behalf of Readiness, a workplace mental health and wellbeing platform, finds that business leaders are “alarmingly unaware” of their obligation to provide a psychologically safe workplace for their employees.  

It underscored the troubling reality that psychological wellbeing is lagging far behind physical safety in the workplace, with only 40 per cent of senior managers (including directors, heads of departments and chief executives) indicating they were aware of the relevant legislation requiring them to provide a psychologically safe workplace.  

Furthermore, 33 per cent of HR professionals weren’t aware of relevant legislation, with that number increasing to 48 per cent when the organisation didn’t have a formal HR department.  

Additionally, the larger the organisation, the poorer the perceived culture is around psychological wellbeing.  

Contrary to the view of those working in HR and senior positions within the organisation, employees also believe their organisation should be doing more to address psychological wellbeing, with the study highlighting a strong disconnect between the perceived and actual level of support.  

Readiness Co-Founder and former St Kilda Football Club Sports Science Manager Simon Kearney said, “One of the key findings was the discrepancy in perception between employees and employers regarding psychological wellness and support. It became clear when reviewing the results that there is a lack of initiative among employers to proactively employ mental health and wellbeing programs to support staff. 

“These results are concerning and a wake-up call for business owners across Australia, particularly those small-to-medium sized businesses without an HR representative.  

“If business leaders – no matter what sector they are in – don’t fully understand how to protect the psychological safety of employees, they risk not only harsh penalties, but also a less productive and well workforce.”  

When reviewing the industries and sectors that scored the lowest, blue-collar workers ranked lower on the psychological wellbeing culture as well as the availability of wellbeing support systems, procedures and resources, compared with white-collar workers.  

Primary production, construction and financial services scored the highest levels of psychological wellbeing, with manufacturing, administration and health care scoring the lowest.  

Victorian Chamber assistance 

The research conducted by Readiness clearly indicates a lack of awareness and understanding in the business community regarding their legal obligations to protect the mental health of their employees, according to Victorian Chamber Acting Manager, Health, Safety and Wellbeing, Anton Zytnik

“In fact, an employer’s obligations extend far beyond safety laws when it comes to mental health in the workplace.  

“The modern workplace also needs to understand how to manage performance and conduct issues in accordance with industrial relations laws, particularly when poor mental health is raised by the employee as the mitigating circumstance that led to their poor performance or misconduct.”  

Business owners who don’t act on supporting their employees’ psychological wellbeing can face risks such as prosecution, costly worker’s compensation claims, a reduction in productivity and an increase in absenteeism.  

“Other key areas of law that employers need to navigate include workers’ compensation, disability discrimination and privacy.” Mr Zytnik added.  

“For example, how would you react as a manager if one of your employees submitted a workers’ compensation claim for work-related stress that you felt had arisen from a fair and reasonable disciplinary process?  

“How would you respond to an employee who requests a part-time working arrangement on the advice of their doctor, who has recommended against full-time work due to the employee’s mental health condition?  

“Additionally, how do we navigate these challenging questions while ensuring that sensitive health information that our employees may disclose to us is handled according to best practice workplace privacy principles?”  

Mr Zytnik encouraged members wishing to improve their knowledge to contact the Victorian Chamber.  

“We encourage anyone who wishes to explore these complex topics to consider attending our half-day course 'Mental health fundamentals for managers,' and emerge with greater confidence as a manager and as a business.” 

To access a summary of the research findings, visit:   

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