Governments around the world are introducing stricter requirements on employers to actively protect mental health in the workplace. Failure to do so could result in penalties, civil liability, and even reputational damage.
Key takeaways
- Depression and anxiety cost the global economy US$1 trillion annually in lost productivity.
- Employers in the UK and Japan face legal duties to protect workers' mental health.
- Non-compliance can trigger civil claims, statutory penalties and reputational damage.
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The business case for employers to protect mental health in the workplace has never been clearer. According to the World Health Organization, depression and anxiety alone account for 12 billion lost working days globally each year, a staggering US$1 trillion in diminished productivity.
For GCs and compliance officers, the imperative extends beyond spreadsheets and productivity metrics. In a growing number of jurisdictions, protecting employees' mental health is a legal obligation, not a discretionary benefit or simply a case of best practice.
Superficial wellness perks, meditation apps, yoga classes and mental health days may signal good intentions, but they fall short of what the law increasingly demands: a genuine, systematic commitment to safeguarding emotional well-being.
For companies operating across borders, the regulatory patchwork is complex. Some countries seek to address this through general occupational health rules, and others fail to address the issue at all.
Why companies should prioritise mental health protection
Despite the varying levels of protection around the world, there is a growing global expectation for employers to do more. Companies with strong mental health programmes may gain a competitive advantage in talent markets, even in the absence of legal requirements. Employees who feel their company prioritises mental health are more likely to be satisfied with their job, more productive and loyal.
Understanding where your organisation must act, and how, is critical to managing both compliance risk and potential civil liability.
Which countries have a legal duty to protect workplace mental health?
While no single global standard exists, a pattern is emerging across jurisdictions that reveals how legal systems are translating workplace mental health into an enforceable obligation for employers.
The UK and Japan both impose a broad “duty of care” on employers to protect workers’ mental health.
The UK’s Health and Safety at Work Act 1974 creates a statutory framework requiring employers to protect employees from psychological as well as physical risks. Employers must therefore take reasonable steps to keep employees safe from harm. The UK Health and Safety Executive last year opened investigations concerning suspected organisational failures in managing mental health risks. Failure to satisfy these duties can lead to potential claims for damages, such as breach of contract or personal injury claims.
Article 5 of Japan’s Labor Contracts Act 2007 embeds similar obligations, requiring companies to take measures to ensure the safety and health of employees while they are working. Like in the UK, a breach of this duty in Japan can lead to civil liability for damages if an employee suffers harm, including mental health disorders, as a result of the working environment.
This preventative approach finds its most prescriptive expression in Australia's evolving framework. Victoria’s new regulations – which take effect on 1 December 2025 – move beyond general duty-of-care principles to granular compliance requirements. For instance, employers must document prevention plans for psychosocial hazards, identifying risks, proposing controls, detailing implementation and evidencing employee consultation. Businesses in Victoria that fail to comply will face a penalty of an undisclosed size.
While reasonable steps are not explicitly defined in UK and Japanese law and will often be determined by courts, Australia is codifying exactly what those steps must include, a template that regulators elsewhere may follow.
Brazil's recent reforms support this global trend and aim to address mental health harm in the workplace. As of May 2025, Brazilian employers have been required to conduct mental health risk assessments and implement corrective measures where hazards are detected. The penalty structure – around US$1,000 per violation, plus reputational damage and litigation risk – mirrors Australia's enforcement philosophy. Both jurisdictions recognise that without meaningful penalties, compliance remains optional.
Yet the regulatory landscape remains fragmented. Hong Kong, for instance, imposes no equivalent duties.
How can employers protect mental health at work?
Normalise conversations about mental health
It’s important for senior management to lead by example to cultivate a positive culture where mental health is openly and honestly discussed. Introducing regular personal check-ins that don’t solely focus on work will provide an opportunity for employees to seek support if they’re struggling and eliminate shame. In Japan, employers of 50+ employees must conduct “stress check” assessments to identify high-stress environments and intervene early.
Employers should provide forums for sharing challenges, clear routes for raising concerns and communicate organisational changes transparently. These steps will build trust and demonstrate that well-being is a shared priority.
Increase awareness and implement training
Businesses can prioritise mental health awareness by training managers and supervisors to spot early signs of emotional distress and how to respond appropriately. Training should develop skills in open communication and active listening, enabling managers to understand how workplace pressures affect well-being.
Some mental health conditions are legally classed as disabilities, under the UK Equality Act 2010 (EqA) for example, when they have a substantial and long-term impact on daily life. Employers should raise awareness of this so staff understand that not all disabilities are visible and that legal protections may apply.
Extending mental health literacy training to all staff will reduce stigma and improve confidence in addressing mental health issues. Embracing campaigns like Mental Health Awareness Week and freely available tools, such as Safe Work Australia’s guidance on psychological hazards and Brazil's Ministry of Labour and Employment’s psychosocial risk factor resources can help businesses identify and manage risks.
Introduce reasonable adjustments
There is no “one size fits all” approach. Employers should aim to respect and facilitate individual circumstances by asking what adjustments each employee needs and adapting the work environment to suit their preferences, especially following an absence from work.
Making reasonable adjustments where workplace policies disadvantage employees with mental health conditions is a legal requirement under the UK's EqA and under Australia’s Disability Discrimination Act 1992. Flexible hours, extra time for tasks, modified assignments and time off for therapy are examples of workplace accommodations employers can implement.
Employers should also handle flexible working requests fairly and tread carefully when implementing return-to-office mandates that could disadvantage employees with mental health conditions, as failure to accommodate may lead to discrimination claims.
Implement support mechanisms
Employers should establish comprehensive support systems that make professional assistance accessible through Employee Assistance Programmes (EAPs) or partnerships with confidential counselling providers, where employees can benefit from privacy outside of their work. Resources should be widely promoted and communicated regularly to ensure employees know help is available when they need it.
Businesses may consider subsidising therapy costs or can follow in the footsteps of progressive companies like Comcast and Delta Airlines who are offering on-site counselling. For many workers, this convenience is critical as high costs, long waitlists and limited availability often prevent access to mental health care.