Many New Zealand workers are feeling burned out and stressed like never before. Yet some employers still believe that’s a personal problem, not a legal one, and may be surprised to learn the law says otherwise.
It’s true that, unlike Australia, New Zealand has no standalone legislation naming burnout, bullying or harassment as workplace hazards. However, the gap is covered by existing legislation which defines health as both physical and mental, and imposes on every employer a duty to identify, assess and control psychosocial risks with the same rigour they’d apply to a wet floor or faulty machinery.
Sanam Ahmadzadeh Salmani, Employment Counsel at Employment Hero, has spent nearly a decade advising employers across high-risk sectors and describes preventing psychosocial harms as ‘an invisible duty.’ “For the longest time, the conversation has always been that it’s related to physical injuries,” she says. “But now we’re looking at what parameters we can put in place at work to reduce mental harm. That’s where the conversation has shifted.”
The Legal Framework Already Covers Mental Health
Ahmadzadeh Salmani says while they generally have good intentions, the small business operators she meets are often unaware of their obligations towards them. “I’ve heard time and time again that New Zealand is just a very unique place where we don’t actually have the legislation in place to govern this,” she says.
But, she explains, that’s untrue; Section 16 of the Health and Safety at Work Act 2015 defines health as encompassing both physical and mental health. She acknowledges the law is less specific than in Australia, where all states have regulations covering psychosocial hazards. New South Wales has gone even further and legislated against AI-related workplace risks. “We’re in a very interesting place because New Zealand doesn’t only operate on health and safety legislation. They also operate within case law,” Ahmadzadeh Salmani says.
The Health and Safety at Work Act definition means the standard identify-assess-control framework employers use for physical hazards applies equally to psychosocial risks like chronic understaffing, unrealistic workloads and toxic management behaviour.
The obligations extend further than most employers realise. Under section 23 of the Health and Safety at Work Act, employers are required to notify WorkSafe NZ of serious workplace incidents – a duty most would associate with physical accidents. “If you get taken to hospital because you’ve got heart palpitations, severe panic attacks, mental health breakdowns, it could be a notifiable event,” Ahmadzadeh Salmani says.
Failing to notify WorkSafe New Zealand of a serious mental health incident in the workplace could constitute a separate legal offence. Salmani notes that WorkSafe has recently revamped its guidance on psychosocial safety, releasing a substantial new guidance pack that signals enforcement focus is shifting.
“If you had a live wire hanging and you visited a site and you saw that there was a puddle of water directly under it, what would you do in that circumstance?” Salmani asks. “That’s exactly the approach that you would take in a corporate setting when you’re looking at toxic behaviors in the workplace.”
A Health and Safety at Work Bill is currently before Parliament and may further strengthen these obligations. But employers do not need to wait for new legislation to act.
Burnout and the $105,000 Wake-Up Call
The consequences of inaction can be seen in case law. In 2024, the ERA handed down a record award in Parker v Magnum Hire, the highest compensation for hurt and humiliation on record in New Zealand at the time.
“We were shocked when the outcome was $105,000 paid out to the employee,” Salmani recalls. “What the facts showed was that a director had quite an aggressive management style. They were verbally abusive and they caused a staff member to have a panic attack.”
The panic attacks were so severe that the employee’s surgical incisions ruptured. The ERA identified two critical failures: the harm was foreseeable and the business had no bullying policy or reporting system in place.
Salmani points out that the employees most vulnerable to psychosocial hazards are often the highest performers. Chronic understaffing, 50-hour workloads crammed into 40-hour contracts, and managers promoted without leadership training can create conditions where burnout becomes systemic.
“For people that burn out, they were actually really good employees, very well-performing employees,” she explains. “They start feeling undervalued, they start pulling away from the work, they start becoming resentful,” she says. Non-compliant managers can pose a cultural and a legal liability. “No longer can you say that I haven’t got the training or I haven’t understood how to manage correctly because in certain scenarios, when you go to the Employment Relations Authority, those managers will be witnesses, they will be called into question as well,” Salmani says.
Moving Beyond Intention to Prevention
Ahmadzadeh Salmani says the Parker v Magnum Hire case confirmed the ERA examines workflows and policies, not sentiment. “It’s not about your intention anymore,” Salmani says. “It is about the impact that has been made and about your systems that you have in place.”
Paper compliance is no longer enough. Ahmadzadeh Salmani points to sexual harassment prevention as a clear example, noting that the 2023 amendment to the Employment Relations Act extended the personal grievance timeframe for sexual harassment from 90 days to 12 months.
“No longer is it okay to just have a sexual harassment policy and to say that this is what unwanted conduct is,” she says. “You need to go beyond that.” Going beyond means interactive training with real-world scenarios, clear and current reporting lines with alternatives when a direct manager is the problem, and third-party risk assessments covering contractors, suppliers and customers.
She recommends a practical three-step audit every SME owner can start immediately. First, audit work design: look for overloaded employees, unrealistic KPIs and chronic vacancies absorbed by existing staff. Second, audit culture by examining turnover patterns and tracing personal grievances back to root causes. Third, audit paperwork to ensure policies are tailored to the specific workplace, not lifted from a generic template.
“Go to your employees,” Salmani suggests. “They’re the best at telling you where the issues may be, what they’re seeing on the floor, what they’re seeing when you’re not there. You don’t want it to bubble up into a personal grievance.”
Ahmadzadeh Salmani says protecting staff will, in turn, protect a small business. “You can run your business efficiently, commercially, effectively. But it is really important that you are looking and making sure that you are treating these particular issues, these hazards, as real genuine risks in the workplace.”
