In this landmark case, the Commonwealth Department of Defence became the first Commonwealth employer to be convicted and fined for failing to manage psychosocial risks, following the suicide of a Royal Australian Air Force technician during an intensive performance management process. The decision sends a clear message to all employers: performance management is a WHS process as much as it is an HR process, and psychosocial risk control must be built into every step.

The case in brief

On 28 July 2020, a 34‑year‑old RAAF technician took his own life while on duty at RAAF Base Williamtown near Newcastle, NSW. In the months leading up to his death, he had been subject to repeated performance management through “Work Plans” and was showing increasing signs of distress and ill health, alongside known personal stressors.

The Department of Defence used a draft Work Plan procedure as a performance management tool, but had not provided adequate training to supervisors on the psychosocial risks associated with that process. Despite existing policies and guidelines about psychological health, these were not effectively implemented in practice and concerns about the worker’s wellbeing were not escalated or acted on in a timely way.

The legal outcome

Defence pleaded guilty in the NSW Local Court to a single Category 3 offence under section 33 of the Commonwealth Work Health and Safety Act 2011 (WHS Act). The Court found that Defence had breached its primary duty of care under section 19(1) by failing to take reasonably practicable steps to eliminate or minimise psychosocial risks to the worker arising from the performance management process.

Magistrate Brett Thomas convicted the Department and imposed a $188,000 fine, against a maximum available penalty of $500,000 for the offence. The Court also made an adverse publicity order under section 236 of the WHS Act, requiring Defence to publicise the offence, its consequences and the penalty imposed – underlining the reputational impact that can follow a psychosocial WHS breach.

This is the first time a Commonwealth employer has been convicted of failing to manage psychosocial risks under federal WHS laws, and it confirms that psychological hazards are treated no differently to physical hazards.

What the Court said about psychosocial risk

The case makes it clear that performance management itself can be a psychosocial hazard where it creates or exacerbates stress, anxiety, perceived humiliation or job insecurity. The Court accepted that Defence knew the worker was not coping, knew he was also experiencing personal issues, and that there were “serious and foreseeable” risks to his mental health in continuing the performance management process without additional safeguards.

Key shortcomings identified included:

• No effective training for supervisors on how Work Plans could operate as a psychosocial hazard.
• No systematic process to identify, assess and control psychosocial risks arising from performance management.
• Failure to act on warning signs of distress, including failure to consider pausing the process or referring the worker for medical assessment.
• A gap between written policies on mental health and the actual practices of managers on the ground.

Regulators and the Court emphasised that having policies “on paper” is not enough; employers must ensure risks are actively identified, controls are implemented, and managers are competent and supported to apply those controls.

Lessons for employers

For employers, the case is a timely reminder that WHS obligations extend squarely into performance management, capability and misconduct processes. Practical lessons include:

• Treat performance management as a WHS activity: Before initiating or escalating a performance process, assess whether the process itself may create psychosocial hazards (for example, repeated formal reviews, time pressure, threat to job security) and plan controls.
• Train managers on psychosocial risk: Ensure supervisors understand that tools like performance improvement plans, work plans or formal warnings can be psychosocial hazards if poorly designed or rigidly applied. Training should cover early warning signs of distress, how to have difficult conversations, when to seek HR/WHS input, and when to pause or modify the process.
• Integrate HR and WHS systems: Align your performance management policies with your psychosocial risk management framework, so that risk assessment, consultation, control measures and escalation pathways are built into HR procedures.
• Respond to warning signs and medical information: When an employee shows signs of deteriorating mental health – such as tearfulness, withdrawal, complaints of stress, or medical certificates indicating psychological injury – consider reasonable adjustments, including slowing, modifying or pausing performance action and obtaining appropriate medical advice.
• Document risk decisions: Record the steps taken to identify and control psychosocial risk during performance management, including any changes made to processes and any offers of support, referral to EAP, or medical assessment. This documentation will be critical if your decisions are later scrutinised by a regulator or court.

An example in practice might be an underperforming employee whose manager notices increasing anxiety and tearfulness during review meetings: instead of pushing ahead unchanged, the organisation pauses formal meetings, involves HR and WHS, offers support, seeks medical guidance, and adjusts timeframes and communication methods – all while still addressing the performance concerns in a controlled, documented way.

Action points: embedding WHS into performance management

Employers who want to reduce risk after this decision should consider a structured uplift program:

• Review performance management and misconduct procedures to identify psychosocial hazard “hot spots” (e.g., stacked warnings, public criticism, sudden role changes).
• Update procedures to include mandatory psychosocial risk checks before and during formal processes, including triggers for escalation or suspension of the process.
• Build mandatory manager training on psychosocial hazards, with case-based scenarios, focusing on how to manage performance in a psychologically safe way.
• Ensure your psychosocial risk register and WHS consultation processes explicitly cover performance management activities and not just workload or bullying.
• Audit past and current performance processes for high‑risk patterns (for example, repeated plans, long-running disputes, mental health disclosures) and intervene early where needed.

This case confirms that regulators will scrutinise how organisations manage psychological health risks in day‑to‑day people management, not just in extreme bullying or traumatic incident scenarios. For employers, the message is simple: you cannot separate performance from safety – and failing to manage psychosocial risks in performance management now carries real legal, financial and reputational consequences.