On 19 December 2025, the New South Wales Local Court convicted the Australian Department of Defence under section 33 of the Work Health and Safety Act 2011 (Cth). The fine was $188,000. The adverse publicity order, the details of which were still to be confirmed at time of writing, may require the Department to publicly disclose the offence, its consequences, and the penalty imposed to audiences of the regulator's choosing.

This was not a prosecution arising from a physical accident. It was not a fall from height, a machinery incident, or an exposure to a toxic substance. It arose from a performance management process. A 34-year-old RAAF technician had been subjected to four separate Work Plans -- the Department's performance management tool -- over a period of six months. Throughout that process he displayed increasing signs of distress and deteriorating health. His supervisors did not refer him for support. They did not place him on leave. They did not pause the process. They did not take any step to relieve the pressure he was visibly experiencing.

On 28 July 2020, he took his own life at RAAF Base Williamtown.

The conviction was the first time a Commonwealth employer had been found guilty of failing to manage psychosocial risks under federal work health and safety law. Comcare's CEO Colin Radford described the core failure precisely: the risks were obvious and known to Defence through its existing policies and guidelines. Those policies, he said, can only ever mitigate risk if they are applied and followed in practice, and if they are supported by training those responsible for implementing them.

That sentence should be read slowly by every organisation in Australia that has a performance management policy, a performance improvement plan template, or a set of HR guidelines sitting in a document management system. Policies on paper are not controls. They are records of intent. The criminal law now says so.

Content note

This blog discusses a workplace death by suicide. If you or someone you know needs support, contact Lifeline on 13 11 14, Beyond Blue on 1300 224 636, or the Suicide Call Back Service on 1300 659 467.

The Anatomy of the Defence Failure

The Defence prosecution provides the most detailed public account to date of exactly what a failure to manage psychosocial risk in a performance management context looks like in legal terms. Understanding the specific failures matters, because they are common. They are not aberrations of a uniquely dysfunctional workplace. They are the default state of performance management in most Australian organisations.

What Defence admitted

Defence pleaded guilty to a single charge under section 33 of the WHS Act, a Category 3 criminal offence carrying a maximum penalty of $500,000. The guilty plea was an admission that the Department did not take reasonably practicable measures to eliminate or minimise the psychosocial risks associated with its performance management process. Specifically, Defence admitted it failed to provide the necessary training for supervisors involved in the use of the Work Plan procedure.

Comcare identified the risk controls that were available to Defence and that it failed to implement. They were not sophisticated interventions requiring specialist expertise or significant resources. They were training -- training that would have equipped supervisors to:

• understand how a Work Plan may itself be a psychosocial hazard

• identify psychosocial risks in workers who are being managed through a Work Plan

• eliminate or minimise those risks, including by knowing when to refer a worker for medical assessment

• know when to suspend the performance management process

The worker had been placed on four separate Work Plans within six months. He displayed escalating signs of distress. His supervisors knew he was not coping and that he was also dealing with personal issues outside of work. At no point during the entire process did any supervisor refer him for support, place him on leave, or take any other step to address what was happening in front of them.

The Court imposed a $188,000 fine -- in the mid-range for a Category 3 offence -- alongside an adverse publicity order. The original charge brought by Comcare had included the more serious Category 2 offence; Defence pleaded to the lesser charge. Further charges against the same Department relating to psychosocial risks associated with remote work are still pending.

Why this matters beyond the Commonwealth

The Defence conviction was prosecuted under Commonwealth WHS legislation and was the first such conviction of a Commonwealth employer. But the principle it establishes is jurisdictionally universal. Every Australian state and territory has equivalent psychosocial risk obligations under their WHS frameworks. The model WHS Regulations that most jurisdictions have adopted explicitly require PCBUs to identify, assess, and control psychosocial risks using the hierarchy of controls. Victoria's Occupational Health and Safety (Psychological Health) Regulations 2025, which commenced on 1 December 2025, impose equivalent obligations.

Performance management is explicitly recognised as a source of psychosocial risk in the Safe Work Australia model Code of Practice: Managing Psychosocial Hazards at Work, which has been adopted across every Australian jurisdiction. Poor organisational justice -- including lack of procedural fairness, informational fairness, and interpersonal fairness -- is a named psychosocial hazard under that framework. A performance management process that is opaque, inconsistent, or disproportionate engages that hazard directly.

The Scale of the Problem

The Defence conviction sits against a backdrop of rapidly accelerating psychological injury data that should be alarming every risk officer and board in Australia.

17,600

serious mental health workers' compensation claims in 2023-24 -- 12% of all serious claims

161%

increase in mental health claims over the past decade, according to Safe Work Australia data

35.7 weeks

median time lost for a mental health claim -- nearly five times the 7.4-week median for all claims

$67,400

median compensation paid per mental health claim -- more than four times the $16,300 median for all claims

Mental injury compensation claims crossed the $1 billion threshold in 2024-25 -- five years ahead of the projections made by the Committee for Economic Development of Australia (CEDA) in 2021. Analysis by InCheq suggests the total cost of a single mental health claim to an employer -- including direct compensation, productivity loss, recruitment, retraining, and litigation -- typically ranges from $150,000 to $250,000, roughly two to four times the median compensation paid.

These numbers describe the downstream consequences of psychosocial harm that was allowed to escalate. Performance management, when conducted without a WHS lens, is one of the most common acceleration mechanisms. The Commonwealth's own Comcare scheme has identified poor quality people management practices -- including poorly managed change, a breakdown in relationships, and high work pressure and demands -- as primary drivers of mental health claims. A performance management process that adds pressure without adequate support, that imposes unrealistic targets, or that continues without regard for the distress it is visibly causing, is a direct driver of these outcomes.

Performance Management as a Psychosocial Hazard: The Legal Framework

The shift from treating performance management as a purely employment law matter to treating it as a WHS matter is the central legal development that the Defence conviction crystallises. These two frameworks have always coexisted, but they were largely understood to be separate. The Defence conviction demonstrates that they are not.

The WHS dimension

Under the WHS legislation applicable in every Australian jurisdiction, a PCBU has a primary duty to ensure, so far as is reasonably practicable, the health and safety of workers. Health is defined to include both physical and psychological health. A performance management process is a system of work. As a system of work, it must be designed, implemented, and monitored to eliminate or minimise psychosocial risks.

The Commonwealth Code of Practice identifies poor support and low job control as psychosocial hazards. A worker on a performance management plan who has little clarity about what is required of them, little control over how they are assessed, and inadequate support from their supervisors is being exposed to at least two named psychosocial hazards simultaneously. If that exposure is not identified and managed, the PCBU is in breach.

The Defence case makes clear that policies alone are insufficient. The Department had existing policies and guidelines that recognised the psychosocial risks of Work Plans. Those policies did not prevent the conviction because they were not translated into operational capability. Supervisors were not trained to apply them. Risk controls that exist only on paper are not controls.

The Fair Work dimension

Performance management also creates legal risk under the Fair Work Act 2009 (Cth), operating through two distinct mechanisms that are frequently misunderstood.

First, and most commonly encountered, is unfair dismissal. Under section 387 of the Fair Work Act, the Fair Work Commission assesses whether a dismissal was harsh, unjust, or unreasonable by reference to a series of factors including whether there was a valid reason for dismissal, whether the employee was notified of that reason, whether they were given an opportunity to respond, and whether the process followed was fair. A performance management process that leads to dismissal must satisfy all of these criteria. A process that imposed unrealistic targets, failed to provide genuine support, or was designed to manufacture grounds for dismissal rather than genuinely manage performance will be vulnerable to a successful unfair dismissal claim.

Second, and carrying higher legal risk than unfair dismissal, is adverse action under the general protections provisions in Part 3-1 of the Fair Work Act. Under these provisions, an employer must not take adverse action against an employee because that employee exercised, or proposed to exercise, a workplace right. Workplace rights include the right to make a complaint or inquiry about employment -- and that includes raising concerns about workload, about the fairness of performance targets, about the health and safety impacts of a performance management process, or about how the process is being conducted.

Critical distinction: adverse action vs unfair dismissal

Unfair dismissal compensation is subject to a statutory cap (currently $89,700). Adverse action compensation is not capped. A worker who raises a safety concern about their performance management process and is then dismissed, demoted, or subjected to any other detrimental treatment may have a general protections claim with uncapped compensation.

The reverse onus of proof applies. Where a worker alleges adverse action for a prohibited reason, the presumption is that the prohibited reason existed unless the employer can prove otherwise. Documentation of legitimate, contemporaneous, non-retaliatory reasons for each performance management decision is not optional -- it is the only available defence.

Adverse action does not require dismissal. Placing a worker on a performance improvement plan in response to a complaint they made about their conditions, changing their duties, excluding them from opportunities, or subjecting them to increased scrutiny following a complaint can all constitute adverse action if the prohibited reason was operative.

The intersection of these two frameworks creates a scenario where a single poorly managed performance process can expose an employer to simultaneous liability under WHS law (criminal prosecution and fines), employment contract law (psychiatric injury damages following Elisha v Vision Australia [2024] HCA 50), unfair dismissal provisions (compensation up to $89,700), and general protections provisions (uncapped compensation, penalties, accessorial liability for managers).

Four Specific Practices That Create Legal Exposure

Across the WHS, Fair Work, and employment contract frameworks, four specific performance management practices emerge as the highest-risk areas for Australian employers.

1. Using performance management to manage out rather than manage up

The Fair Work Commission has observed, across multiple unfair dismissal decisions, that performance improvement plans are often initiated after an organisation has already made the decision to remove an employee, and are used to construct a procedural record rather than genuinely address performance deficiencies. Where this is the case, the PIPs are not genuine performance management -- they are a documented exit pathway designed to satisfy section 387 of the Fair Work Act.

This approach creates legal risk on two fronts. As a WHS matter, a process that has no genuine intention of supporting improvement, and that therefore applies ongoing pressure without any mechanism for relieving it, is a process that escalates psychosocial risk without any countervailing control. As a Fair Work matter, a worker who perceives the process as pretextual and raises a complaint about it, and is then managed more aggressively or ultimately dismissed, has a strong foundation for an adverse action claim.

2. Setting targets that cannot be met

A performance improvement plan that sets targets the worker cannot reasonably achieve within the timeframe specified is not a performance management tool -- it is a predetermined outcome disguised as a process. Under section 341(1)(c) of the Fair Work Act, a worker has the right to make a complaint or inquiry concerning their employment. Raising a concern that PIP targets are unreasonable is an exercise of that workplace right. Any adverse action taken in response to that complaint -- including escalating the performance process, issuing additional warnings, or ultimately dismissing the worker -- will be scrutinised as potential adverse action.

From a WHS perspective, a worker who faces PIP targets that are structurally unachievable, and who knows that failure means termination, is being subjected to a form of sustained, unavoidable high job demand with no realistic pathway to resolution. That is a psychosocial hazard. The employer who designs such a process has created the hazard.

3. Failing to monitor distress signals during the process

The Defence conviction is definitive on this point. The supervisors managing the RAAF technician's Work Plans could see that he was not coping. That visibility -- that knowledge -- was precisely what activated the duty to act. Comcare's investigation found that the risks were serious and foreseeable to the Department through its existing policies and guidelines. The worker's distress was not a latent risk that materialised without warning. It was an observable, escalating condition that was knowable to anyone paying attention.

This creates an affirmative operational obligation for every manager who is involved in a performance management process. It is not enough to follow the prescribed steps of the process and close each interaction without incident. The process itself requires supervisors to monitor the worker's psychological state throughout, to identify signals of deteriorating wellbeing, and to refer for support, suspend the process, or take other protective measures when those signals appear.

The training gap that Defence admitted -- failing to train supervisors to recognise those signals and respond to them -- is present in most Australian organisations. HR departments design the process architecture. Training for supervisors in how to use that architecture as a WHS tool, rather than purely as a procedural and documentation exercise, is far less common.

4. Continuing the process when a worker is on workers' compensation or has raised a mental health concern

A worker who has made a workers' compensation claim for psychological injury, or who has formally raised a mental health concern in connection with their work, presents a specific and well-recognised legal risk point. Continuing a performance management process in those circumstances -- or initiating one -- requires particularly careful consideration. The reasonable management action defence available under workers' compensation legislation in most jurisdictions provides a potential shield, but it is conditional on the management action being conducted in a reasonable manner. An action that a reasonable person would consider oppressive, discriminatory, or conducted without appropriate regard for the worker's health is not protected.

The intersection with adverse action risk is equally significant. A worker who has exercised a workplace right -- including raising a health and safety concern -- and who is then subjected to intensified performance management may have strong grounds for a general protections claim. The timing of performance management processes relative to complaints, grievances, and workers' compensation claims is one of the most scrutinised elements of any adverse action dispute.

What Reasonably Practicable Control Actually Requires

The phrase 'so far as is reasonably practicable' is sometimes treated by employers as a softening qualifier -- a recognition that perfection is not required. In the context of a criminal prosecution, it is not a qualifier. It is the standard of conviction.

The Defence case demonstrates that reasonably practicable control of psychosocial risk in a performance management context requires, at minimum:

• Training supervisors to understand that performance management tools can themselves be psychosocial hazards

• Training supervisors to identify and respond to psychosocial risk signals in workers who are being managed through those tools

• Establishing clear escalation pathways -- including referral to occupational health, employee assistance programs, or medical assessment -- and training supervisors to use them

• Establishing criteria for suspending a performance management process when a worker's wellbeing requires it, and training supervisors to apply those criteria

• Monitoring and documenting the worker's wellbeing throughout the process, not just their performance outcomes

• Reviewing the process itself as a WHS risk control -- assessing whether its design, duration, frequency, and intensity are proportionate to the performance issues being addressed

Hamilton Locke, in their analysis of the Defence conviction, noted a principle that deserves to be quoted in every HR policy review: policies can only ever mitigate risk if they are applied and followed in practice, and if they are supported by training those responsible for implementing them. Simply relying on policies and procedures as controls is insufficient to eliminate or mitigate psychosocial risks.

This is not a new legal principle. It reflects the fundamental structure of how the hierarchy of controls operates. Administrative controls -- which is what policies and procedures are -- sit towards the lower end of the hierarchy precisely because they depend on human behaviour for their effectiveness. Higher-order controls address the source of the risk: through work design, supervision structures, staffing levels, and the systems through which performance management is conducted.

The NSW Digital Work Systems Development

One further development is worth noting for organisations that use automated or algorithmic performance tracking systems. The Work Health and Safety Amendment (Digital Work Systems) Bill 2025, which passed the NSW Parliament in February 2026, creates specific duties for PCBUs to ensure that the use and allocation of work by a digital work system -- defined broadly to include algorithms, AI, automation, and online platforms -- is without risks to health and safety.

Automated performance tracking software is explicitly identified in commentary on the legislation as a system likely to fall within this definition. Algorithmic management that imposes unreasonable workloads, that monitors workers continuously without transparency, or that generates performance assessments through opaque processes, creates psychosocial risks of precisely the kind that the WHS framework now requires to be managed. Organisations that use such systems need to apply the same WHS lens to their digital performance management architecture as they apply to their human-managed processes.

The Governance Question

For boards and senior leadership teams, the Defence conviction raises a governance question that is difficult to avoid. Performance management is conducted at team leader and middle management level, often without close executive oversight. The psychosocial risks it creates are not routinely reported up governance chains. Workers' compensation claims arising from performance management processes are managed as claims, not as safety data.

The result is that the organisation's most senior decision-makers -- those who bear officer liability under the WHS Act for the exercise of due diligence -- typically have little visibility over the psychosocial risk profile of the performance management processes operating throughout their organisation. They cannot discharge their due diligence obligations in relation to risks they cannot see.

Officer liability under the WHS Act

Under section 27 of the WHS Act (and equivalent provisions in state legislation), officers of a PCBU have a duty to exercise due diligence to ensure the organisation complies with its WHS obligations. This includes taking reasonable steps to acquire and keep up-to-date knowledge of WHS matters, understanding the nature of operations and the hazards and risks associated with them, and ensuring the organisation has appropriate resources and processes to eliminate or minimise WHS risks.

The duty is personal. It cannot be delegated. An officer who fails to ensure the organisation has adequate processes for managing psychosocial risks in performance management -- including adequate training for supervisors, adequate monitoring of worker wellbeing during the process, and adequate escalation mechanisms -- is potentially personally exposed.

The Defence prosecution did not extend to individual officers. That does not mean it could not. The original charges included a Category 2 offence, which carries higher penalties and broader potential for individual accountability. The next prosecution may not settle for the lesser charge.

What Good Performance Management Looks Like Through a WHS Lens

Framing performance management as a WHS matter does not mean abandoning legitimate performance management. It means redesigning it so that the process itself is not a source of harm. The distinction between a lawful, well-conducted performance management process and the kind of process that generates WHS liability, Fair Work claims, and psychiatric injury damages is not a matter of outcome -- it is a matter of design and implementation.

A performance management process designed through a WHS lens will:

• be proportionate to the performance issue being addressed -- the intensity, duration, and frequency of review cycles matched to the severity of the gap

• provide genuine support -- access to relevant training, coaching, tools, and resources that could reasonably enable improvement

• be conducted by supervisors who have been trained in both the procedural requirements and the psychosocial risk dimensions of the process

• include regular wellbeing check-ins that are documented and that create a record of the worker's psychological state throughout

• have clear criteria for pause or suspension -- documented thresholds at which the process is temporarily halted to allow a worker to access support or recover

• be reviewed as a system, not just applied as a template -- with regular assessment of whether the process design itself is generating harm

It will also be integrated with the organisation's broader psychosocial risk management system. Aggregated data from performance management processes -- including workers' compensation claims arising from or during those processes, EAP referrals, and absenteeism patterns -- should feed into the organisation's lead indicator monitoring. The absence of that data in governance reporting is itself a gap in the due diligence framework.

How Salus Supports Safe Performance Management

The primary failure in the Defence case was not a failure of documentation. The Department had policies. The failure was an absence of operational capability: supervisors who could not identify psychosocial risk when it was directly in front of them, and no system for surfacing that risk to those with the authority and responsibility to respond.

Salus addresses both dimensions of that failure.

By providing workers with a confidential, accessible, and trusted reporting channel -- available 24 hours a day, from any location, and with appropriate protections against the fear of retaliation -- Salus creates the infrastructure through which a worker experiencing harm during a performance management process can raise a concern early, before it escalates. Early signals surfaced are early risks addressed. The alternative -- a worker who cannot raise concerns safely, or who does not trust that raising concerns will help -- is a worker whose distress remains invisible to the organisation until it becomes a crisis.

Salus also generates the lead indicator data that governance structures require. Patterns of concern -- in specific teams, in specific processes, at specific times -- are visible to those with the responsibility to act on them. For officers discharging their due diligence obligations under the WHS Act, that visibility is not optional. It is the difference between the exercise of due diligence and the absence of it.

For organisations with performance management processes that carry the risks described in this article -- which is to say, for virtually every organisation in Australia -- Salus provides the reporting infrastructure, the monitoring capability, and the documented evidence of a proactive psychosocial risk management culture that WHS regulators and courts now require to see in practice, not just on paper.

Key takeaways for HR Directors and People Leaders

Performance management is a system of work. Like any system of work, it must be assessed, designed, and monitored to eliminate or minimise psychosocial risks under Australian WHS law.

Policies are not controls. The Defence conviction turned on the failure to translate existing policies into operational supervisor training and capability. The same failure exists in most organisations.

Multiple legal frameworks operate simultaneously. A single poorly managed performance process can generate WHS criminal liability, psychiatric injury damages (Elisha), unfair dismissal claims, and uncapped adverse action compensation -- often from the same set of facts.

Distress signals create the duty to act. When a supervisor can observe that a worker is not coping during a performance management process, the duty to intervene is engaged. Inaction is not a neutral choice.

Governance requires visibility. Senior leaders and officers cannot discharge WHS due diligence obligations over risks they cannot see. Aggregated data from performance management processes -- including claims, EAP referrals, and worker-raised concerns -- must reach governance level.

Psychosocial risk management infrastructure for modern organisations.