When PHS backfires

Regulation is changing fast.

Provinces like Nova Scotia are introducing new laws that require leaders to manage not just physical safety , think ladder falls, trip hazards, or broken equipment, but psychological safety too.

That means stress, bullying and traumatic exposure are now recognized as workplace risks and employers are required to protect workers from harm.

This is a historic shift. And it carries huge opportunity: to improve culture, reduce disability claims, and create healthier, more effective organizations.

But it also carries real risk.

When regulation changes, claims often rise

We’ve seen this pattern before. After legislation is introduced or a major mental health campaign is launched, there’s often a spike in mental health sick days, short-term disability claims, and workers’ compensation for psychological injury.

Why?

Because for the first time, people feel seen. Validated. One client told us:

“We started training staff on mental health, what the signs are, how to speak up, how to access support. What happened? Psychological injury claims went up. So did the number of people taking mental health days.”

This isn’t necessarily a bad outcome. It likely would have happened anyway, given growing awareness and changing regulation. But it does highlight a risk.

Some of these claims may reflect genuine injuries. Others may stem from misunderstandings, where employees interpret routine stress or standard management practices as harm.

That’s why it’s far better for these issues to surface through an employer-led process, with structure, support, and planning, rather than through a wave of unanticipated claims, confusion, and burnout.

But here’s the risk: Awareness without understanding

When we raise awareness without building understanding, we create confusion — and that confusion can be costly.

Confusion about:

• What actually constitutes psychological harm
• When distress becomes a diagnosable psychological injury, and when it’s just part of the job
• Whether standard management practices like feedback, accountability, or performance reviews are violations of psychological health and safety

Without clear education for both leaders and employees, well-intentioned initiatives can backfire: driving up claims, eroding trust, and putting employers on the defensive.

Not all stress is injury

The law focuses on psychological injuries, which are diagnosable mental illnesses such as post-traumatic stress disorder (PTSD), major depressive disorder, and generalized anxiety disorder, when they result from unmanaged psychosocial hazards in the workplace.

These injuries don’t arise from ordinary stress. They occur when specific aspects of work, like high demands, low control, chronic conflict, discrimination, or lack of support, are left unmanaged. When those factors lead to a diagnosable condition, legal obligations are triggered.

For example:

A leader assigning tight deadlines, following up on tasks, or delivering performance feedback is engaging in standard management practice, even if it causes temporary stress.

But if that leader is consistently aggressive or demeaning, and the psychological demands become unmanageable, eventually resulting in a diagnosable mental illness, then it becomes a psychological injury and a legal risk.

Understanding this distinction is critical. It is not about eliminating stress, but about preventing it from escalating into harm.

So how do we get ahead of the confusion?

If we want these laws to protect people and prevent false assumptions, we need to train both sides: leaders and employees.

Here’s what that looks like in practice:

1. Train everyone on what PHS really means

Start with clear definitions:

• Psychological injury = a diagnosable condition caused or worsened by work.
• Psychosocial hazard = aspects of work that could harm mental health (like excessive demands, bullying, poor role clarity).
• Reasonable management = feedback, discipline, or restructuring done respectfully and fairly.

Make sure both leaders and employees understand these distinctions.

2. Clarify the boundary between stress and harm

Stress is part of work. So is discomfort. But harm is when distress becomes clinical and persistent, often due to repeated or extreme exposure.

Use real examples in training. Build in time to discuss gray areas. Get feedback from your teams and not just legal opinions.

3. Support leaders to document decisions and act with empathy

Managers don’t need to be therapists. But they do need to:

• Communicate clearly
• Avoid retaliatory behaviour
• Listen when people speak up
• Follow consistent, fair processes

Train them to spot warning signs early and know when to escalate or involve HR.

Final thoughts

We’re in a transition period.

PHS legislation marks a fundamental shift in how we think about safety. But without education, the best laws in the world will lead to misinterpretation, mistrust, and claims that could have been prevented.

If your organization is rolling out PHS, or preparing for new legislative requirements, don’t stop at leadership training. Equip employees too.

Because once we start measuring psychological harm, we have a responsibility to prevent it.

Want to prepare your organization for PHS legislation and reduce mental health risks at work?

📞 Book a free 15-minute strategy call to learn how our PHS Diagnostic and training programs can support your team.