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Shared Risk of Psychological Safety in Contractual Chains

In today’s workplace, duty of care is no longer just about hard hats and high-vis. It’s also about what’s happening beneath the surface—the psychological wellbeing of your people. And in a contractual chain, that responsibility stretches across principals, head contractors, subcontractors, and labour hire agencies.

Under WHS legislation, every Person Conducting a Business or Undertaking (PCBU) carries a primary duty of care. In large projects, there can be a PCBU at multiple levels. And with that comes concurrent responsibility.

Psychological safety is not a “soft” consideration. It’s firmly embedded in our legal and ethical obligations. Bullying. Harassment. Chronic overload. Exposure to trauma. Unreasonable time pressure. These are foreseeable psychosocial risks—and if they’re foreseeable, they’re manageable.

Consider the scenario where a principal contractor sets an aggressive deadline, backed by financial penalties. A subcontractor responds by pushing extended hours week after week. The pressure trickles down like a domino effect. Fatigue sets in. Stress compounds. Burnout follows.

The question isn’t just “Who’s at fault?” The better questions are “Who had influence? Who had control? Who could see the storm forming?”

A company cannot contract out their duty of care. We cannot pass risk down the chain like a baton and assume it’s no longer ours to carry. WHS law is clear—PCBUs must consult, cooperate, and coordinate. Shared risk demands shared accountability.

Psychological safety in a contractual chain doesn’t happen by accident. It requires

  • Clear and aligned contractual expectations
  • Realistic timeframes that reflect human capacity
  • Adequate resourcing, not optimistic assumptions
  • Open reporting mechanisms where speaking up is safe

Think of it like a rowing crew. If one rower sets an unsustainable pace, the entire boat destabilises. But when cadence, communication, and coordination align, the crew moves powerfully—and sustainably—toward the finish line.

Multiple PCBUs can owe duties at the same time. The opportunity is to recognise that shared responsibility and build systems that protect people before pressure turns into harm.

The future of work will reward organisations that understand this. Psychological safety is not an add-on. It’s a strategic necessity.

The Author

With over 30 years’ experience, from engineering and manufacturing through to consulting, facilitation and speaking, Lauren’s passion and expertise is in helping leaders build businesses for the future.

She helps organisations become “future fit” through pragmatic application of risk management in strategic planning and management systems. Lauren is also passionate about developing future fit leaders through essential leadership skills.

Her book 10% Better – Taking Organisations from Ordinary to Excellence has been acclaimed as a practical and hugely helpful guide for business leaders.

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Lauren Jones

T: 0432 003 300

E: lauren@laurenjones.com.au

(c) Copyright 2025 All Rights Reserved Lauren Jones

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