From 1 March 2026, registered organisations in NSW can initiate WHS prosecutions where SafeWork declines to act or does not commence proceedings within 12 months. The NSW Parliament also removed the moiety ban, which means courts can now direct a portion of every penalty straight to the prosecuting union.

This is a fundamentally different enforcement landscape for psychosocial compliance in NSW.

What changed

The Workplace Protections Act 2025 dismantled three barriers that previously made union-led prosecution near-impossible.

First, the old process forced unions through a restrictive multi-stage gate. A union could only act after SafeWork declined to prosecute, the Director of Public Prosecutions then advised SafeWork that a prosecution should proceed, and SafeWork declined a second time. The new pathway removes the DPP step entirely: a union consults SafeWork, and if SafeWork declines or fails to commence proceedings within 12 months, the union files directly.

Second, unions previously could only prosecute Category 1 and Category 2 offences. The Act now extends that power to any WHS offence, including Category 3, which covers the broad failure to comply with a health and safety duty. That is the category most likely to capture psychosocial compliance gaps, because it does not require the prosecution to prove the breach exposed anyone to a risk of death or serious injury. A failure to comply with the duty is enough.

Third, the moiety ban prevented courts from directing any portion of a penalty to a prosecuting union. The Act removed that prohibition. As Pinsent Masons noted, if a court imposes a $1 million penalty against a body corporate, the union can seek a moiety of $500,000. That creates a self-funding enforcement model that did not exist before March this year.

Why psychosocial hazards will attract the first test cases

Psychosocial compliance gaps produce a binary evidence trail that makes them the most prosecutable category of WHS failure. Either your organisation maintains a psychosocial hazard register, or it doesn't. Either you conducted a risk assessment that maps to the Code of Practice hazard categories, or you didn't. Either you consulted workers on psychosocial risks and documented that consultation, or you didn't. A union preparing a prosecution does not need to reconstruct a complex physical chain of causation. It needs to ask for the paperwork.

Three regulatory changes from the second half of 2025 compound the exposure. The Workplace Protections Act made Codes of Practice legally binding under new section 26A of the WHS Act. A PCBU must now either comply with the Managing Psychosocial Hazards at Work Code or demonstrate an equivalent or higher standard. Falling short of the Code is itself a potential breach, even without an incident. Alongside this, the WHS Regulation 2025 now requires organisations to manage psychosocial risks using the hierarchy of controls, not just policies or EAPs. And SafeWork NSW must now report every six months to the Minister on psychosocial complaints and enforcement activity, creating a public record of where the regulator identified issues but did not prosecute.

That last point matters. A union looking for its first test case now has a reporting trail that shows exactly where SafeWork received complaints, issued notices, and stopped short of prosecution.

The psychosocial hazard penalties reinforce the economics. Under the model WHS Act as adopted in NSW, maximum penalties for a body corporate now exceed $2 million for a Category 2 offence and $700,000 for a Category 3 offence, with annual CPI indexation pushing those figures higher each year. Mental health claims already cost approximately four times more than physical injury claims and take five times longer to resolve. When a union can recover a significant portion of the penalty, psychosocial compliance fines in Australia become the most financially accessible prosecution pathway in WHS.

What this looks like in practice

A union identifies a workplace where members raised psychosocial hazard concerns through grievances, incident reports, or HSR consultation. The organisation responded with an EAP referral and a policy review but never conducted a structured risk assessment against the Code of Practice and never documented higher-order control measures. The union consults SafeWork. SafeWork declines or does not act within 12 months. The union files proceedings and asks the court to compel production of the organisation's psychosocial hazard register, risk assessment records, control implementation evidence, and worker consultation records.

The union's officials also gained expanded evidence-gathering powers under the same Act: they can now take photographs, videos, measurements, and samples related to suspected WHS contraventions. And SafeWork NSW can now share confidential investigation information with unions in certain circumstances, provided the matter was raised by the union and disclosure does not prejudice ongoing proceedings.

For organisations still relying on engagement surveys and informal wellbeing conversations as their psychosocial compliance system, this combination of powers turns every unresolved complaint into a potential prosecution brief.

What to do about it

Your psychosocial risk management now needs to withstand scrutiny from a motivated, financially incentivised prosecutor with evidence-gathering powers and access to regulatory intelligence, not just a regulator balancing competing priorities. That means maintaining a current psychosocial hazard register, conducting documented risk assessments mapped to the Code of Practice, implementing and monitoring higher-order control measures with clear ownership and timelines, and recording genuine worker consultation at every stage.

The question is no longer whether your regulator will act. It's whether anyone will.

Disclaimer: This article provides general information on psychosocial compliance in Australian workplaces. It does not constitute legal advice. Organisations should consult qualified professionals for advice specific to their circumstances. Data cited is sourced from Safe Work Australia and relevant state regulators as of the date of publication.