Date posted: 08/08/2024 6 min read

Employers need to look after employee mental health

New employer laws mean companies need to take care of employee mental health and reduce anxiety in the workplace.

Quick take

Workplace cultures are evolving in response to legal mandates that emphasise greater employer responsibility for mental health.
Accountants often find themselves acting as emotional supporters, navigating heightened stress levels both personally and on behalf of their clients.
Practical tips for safeguarding mental wellbeing involve identifying and addressing psychosocial hazards early.

By Sonakshi Babbar

Photography by Caroline Purser

In September 2022, EY Oceania launched an independent review of its workplace culture after the tragic death of a 27-year-old accountant in the firm’s Sydney office. This incident sent shock waves through the accounting and finance world, highlighting the urgent need for employers to understand and improve the workplace experiences of their employees.

The statistics paint a concerning picture. According to the Psychological Health and Safety in the Workplace report released by Safe Work Australia in 2024, mental health conditions accounted for 9% of all serious workers’ compensation claims in 2021–2022, a 36.9% increase since 2017–2018.

Similarly, a New Zealand Workplace Barometer survey conducted in 2020 revealed that 42.4% of respondents reported high psychosocial risk, leading to negative outcomes such as job strain and depression.

The link between work and mental wellbeing is undeniable. The World Health Organization highlights burnout as an outcome of poorly managed workplace stress. That's why 67% of professionals, as detailed in the Hays Barometer Report, believe it’s crucial for employers to prioritise employee mental health and wellbeing.

In response, laws have been strengthened to expand employer responsibilities beyond physical safety, with a comprehensive focus on psychosocial safety. This marks a significant shift in legal obligations for employers.

“Work, health and safety law doesn’t require employers to diagnose or treat mental health conditions, but it does require them to ensure work does not harm workers’ mental health.”
Marie Boland, Safe Work Australia

The legal landscape

Anna Feringa, award-winning international speaker, trainer and workplace mental health consultant in Melbourne says, “There has always been an obligation in each Australian state’s work, health and safety [WHS] act that each employer should provide a safe workplace, being both physical and psychological. We had all this information about physical safety and hazard identification, compliance manuals and e-learning, but we never had that type of information about psychosocial safety.

“Now, Australian WHS law has been amended to further elaborate on psychosocial hazards and risk management, including further information and guidance. More emphasis has been placed on employer consequences attached to psychosocial safety breaches, similar to physical safety breaches,” says Feringa.

She explains that clearer guidelines and new information have been introduced, providing details on how employers should proactively monitor the workplace environment to ensure the ongoing mental safety of their employees.

According to Marie Boland, CEO of Safe Work Australia, the national policy agency for WHS, “Persons conducting a business or undertaking [PCBU], such as employers, have a positive duty under WHS laws to eliminate or minimise both the physical hazards for office-based work, as well as the psychosocial hazards that can harm workers’ mental health.”

Psychosocial hazards include high job demands, low job control and poor support, as well as interpersonal hazards like bullying, harassment, violence and aggression, Boland says.

“This doesn’t require them to diagnose or treat mental health conditions, but it does require them to ensure work does not harm workers’ mental health.”

Similarly, in New Zealand, the Health and Safety at Work Act 2015 ensures that PCBUs must, so far as is reasonably practicable, provide and maintain a work environment that is without health and safety risks.

The work environment includes the physical work environment and the psychological work environment, including overcrowding, deadlines, work arrangements (such as the effects of shift work and overtime arrangements), and impairments that affect a person’s behaviour, such as work-related stress and fatigue, and drugs and alcohol, as per WorkSafe New Zealand.

“Accountants not only have to worry about their own mental health, but also take care of clients who might be really struggling with the financial pressure.”
Anna Feringa

Why compliance matters

WHS regulators and inspectors have various tools at their disposal to ensure compliance. These range from providing information, guidance, education and advice, to imposing fines and jail time.

Feringa explains that the consequences of not following the rules can be serious and include:

Provisional improvement notices: these can be issued by a regulator or health-and-safety representative and must be displayed where all clients and staff can see them, with a dedicated timeline to mitigate the hazard where reasonable and practicable.

Common-law payouts: these occur when a worker’s compensation matter is taken to court and overseen by a magistrate, potentially resulting in payouts ranging from hundreds of thousands to millions of dollars.

Industrial action: companies may experience strikes or other forms of industrial action as a consequence of failing to ensure a safe work environment.

Anti-bullying orders: issued by the Fair Work Commission, these orders can be particularly disruptive as they can shut down operations until the issues are fixed.

The model WHS laws in Australia stipulate penalties of up to 20 years in jail or fines up to A$18 million for the most serious breaches.

Under the Health and Safety at Work Act in New Zealand, the maximum penalty for a serious breach of the due diligence duty is imprisonment for up to five years and/or a fine of up to NZ$600,000 for individuals who are a PCBU and NZ$3 million for organisations.

“Leaders can actively provide guidance and access to resources for stress management to help individuals navigate work-related challenges.”
Matt Vaughan, MV Corporate Health and Heal Me Well

Practical tips for workplace mental wellbeing

Mental wellbeing is not merely in our heads – it’s in our social, political and economic circumstances. When combined with a poor workplace culture, these external factors greatly impact employees’ feelings at work.

In the accounting and finance sector these challenges can be magnified, as we are also dealing with financial health. Feringa has found that accountants and people working in the financial sector are required to sometimes play the role of emotional counsellors by supporting individuals or businesses to better cope or survive in the current economic environment.

“The dynamics around how people are operating in finance has certainly gotten a lot more stressful over the last couple of years. Accountants not only have to worry about their own mental health, but also take care of clients who might be really struggling with the financial pressure.”

Creating a psychologically safe workplace for accountants and finance professionals requires thoughtful and effective work design.

Here are some tips for managers and leaders:

1. Identify and address psychosocial hazards early

Boland recommends implementing a risk management process to identify, assess, and control hazards.

“Early hazard identification allows for more effective and reliable control measures. If you consider the risks early, you can often implement more effective and reliable (and less costly) control measures,” she says. “For example, if you identify the risk of harmful behaviours from clients, you can design the office layout to improve visibility and have secure areas where workers can retreat.”

Feringa adds it’s important to address risks on the basis of three factors – severity, frequency and duration.

“Much like physical safety, employers have an obligation to mitigate or reduce the risk of existing or future harm caused by an identifiable or foreseeable hazard. Hazards can be identified by a leader or WHS representative, or reported directly by the worker,” says Feringa.

“Reporting, of course, depends on whether an organisation has an appropriate psychological safety climate. That is: do people feel safe enough to speak up?”

2. Lead by example

According to a study by The Workforce Institute at UKG across 10 countries, 69% of people said their managers had the greatest impact on their mental health, on par with the impact of their partner. It puts the responsibility on managers to lead by example in promoting a resilient workplace with positive behaviours.

Christchurch-based Matt Vaughan, CEO and founder of MV Corporate Health and Heal Me Well, says, “Managers and leaders must demonstrate resilience and positive coping mechanisms within the organisation. They should promote open discussions about obstacles and offer guidance to their team members on overcoming them.”

Feringa points out that resilience building is most effective when systematic issues in the workplace are addressed first.

“All leaders from the board down need to understand that they have a positive duty to consult with their workers and have a system in place where psychosocial hazards can be safely raised and addressed. It is not about resilience to a poorly designed workplace anymore, it is about fixing the nature of work, not the individual,” she adds.

3. Plan and prioritise workloads

For half of New Zealand workers, workload expectations were a major driver behind burnout, according to a report released by global workplace creation experts Unispace in 2023.

Given their close interactions with team members, managers have first-hand knowledge of the challenges, workloads and specific situations each employee faces. This positions them uniquely to support workload management effectively, says Feringa.

“By helping teams prioritise tasks and clearly communicating these priorities to upper management, managers can alleviate undue stress and improve productivity,” she adds.

High job demands are a psychosocial hazard that can be effectively managed through work design, says Boland. “For example, PCBUs may be able to plan deadlines to avoid peak work demand periods and ensure necessary tools and resources are available to workers from the start.”

4. Support your team with mental health resources

Employees should be provided with mental health support and resources so that they can take adequate steps to manage their own mental health, says Vaughan.

“Leaders can actively provide guidance and access to resources for stress management to help individuals navigate work-related challenges,” he says.

However, resources on their own aren’t enough. According to Feringa, “this can be difficult if workers are operating in an environment that is psychologically unsafe”.

She says, “Stress reduction techniques can often be a Band-Aid approach. To resolve the problem from the root, risk assessments, worker consultation and the re-design on how work is done will create mentally healthier workplaces.”

5. Cultivate a healthy workplace culture

Vaughan says leaders can play an important role in establishing a culture where team members feel supported and appreciated through certain behaviours and rituals.

“For example, advocating for breaks, self-care practices, and setting clear boundaries between work and personal life can be effective in promoting a culture with healthy work-life balance.”

According to the 2022 Gartner Culture in a Hybrid World report, 81% of organisations encourage frequent manager-employee check-ins to keep employees connected to culture.

“Set aside time for weekly check-ins with your team members – doing it any less frequently will make it harder to detect problems and implement timely intervention,” he says.

Australia

If you are looking for mental health resources, CA Wellbeing offers a wide range of support for CA ANZ members, including an employee assistance program (EAP) with three free therapy sessions for members and their families. In addition, the CA Advisory Group offers counselling and support for CAs facing ethical dilemmas or weighing career decisions.

Other sources of mental health support include:

Beyond Blue, 1300 22 4636

Black Dog Institute, 02. 9382 2991

LifeLine Australia, 13 11 14