From 1 July 2026, NSW persons conducting a business or undertaking (PCBUs) must comply with an approved code of practice or demonstrate that they manage the relevant hazards and risks to a standard equivalent to or higher than the standard required under the code.
This is the equal or higher test, and it has turned WHS compliance from a workplace safety task into a genuine governance and director risk issue, particularly for businesses that choose to depart from an approved code.
What Actually Changed
The change comes from section 26A of the Work Health and Safety Act 2011 (NSW), which commenced on 1 July 2026. The Industrial Relations Commission of NSW explains the legal status of Codes of Practice, confirming that a PCBU must comply with an approved code unless it can demonstrate that it manages hazards and risks to a standard equivalent to or higher than the standard required under the code. A failure to meet either requirement can give rise to an offence under sections 32 and 33 of the Act.
Before this change, approved codes of practice operated as practical guidance within the broader WHS framework. The NSW Resources Regulator explains the legal status of Codes of Practice, including that courts may regard an approved code as evidence of what is known about a hazard, risk or control and may rely on it when determining what is reasonably practicable. Compliance could also be achieved through another method where it provided an equivalent or higher standard of work health and safety.
For NSW businesses, the question is now more direct. If your business does not follow the applicable code, can you demonstrate why your alternative approach provides an equivalent or higher standard?
No Incident is Required
This is the part directors and senior officers most often overlook. A prosecution under section 26A does not depend on a worker being injured or an incident occurring first. The obligation is concerned with whether the business complies with the code or can demonstrate that its alternative manages hazards and risks to the required standard. A failure to meet either requirement can itself give rise to an offence.
In practice, an outdated procedure or a documentation shortfall can become a compliance problem on paper alone, well before anything goes wrong on site.
The Two Questions a Court Will Ask
The Industrial Relations Commission of NSW sets out the questions the Industrial Court will consider when this provision is tested. Does the PCBU comply with the applicable code? If not, how does it manage the relevant hazards and risks instead, and does that approach provide a standard of health and safety that is equivalent to or higher than the standard required under the code?
There is no third option. A general claim that the business has a strong safety culture will not answer either question.
A PCBU departing from a code should be able to demonstrate the basis for its alternative approach through appropriate risk assessments, consultation, technical advice, training records and evidence that the controls are actually being applied and reviewed. The decision to depart from the code should be deliberate, risk-based and capable of being explained if later scrutinised by a regulator or court.
Why This is a Governance Issue
WHS responsibilities do not sit solely with a safety manager. Officers of a PCBU already carry positive due diligence duties under section 27 of the Work Health and Safety Act 2011 (NSW), including keeping current knowledge of work health and safety matters and ensuring the PCBU has appropriate resources and processes to eliminate or minimise risks.
For officers, the new requirement also has a direct governance dimension because it intersects with their existing due diligence obligations. Warlows Legal has previously examined what a director’s statutory duties actually require, and boards should have visibility over where the business follows approved codes, where it departs from them and why, rather than assuming an operational team has the issue covered.
For businesses operating across more than one state, the position needs care. WHS laws are not uniform nationally, so this NSW change should not be read as an automatic Australia-wide shift. Safe Work Australia explains how WHS laws operate across Australian jurisdictions, with the Commonwealth, states and territories responsible for regulating and enforcing their own WHS laws.
Businesses should confirm whether a particular code applies in their jurisdiction before assuming the same legal requirement applies elsewhere.
What PCBUs Should Review Now
Treat this as a governance review rather than a routine safety update.
- Identify the relevant codes. Work out which approved codes of practice apply to your operations and whether they are already built into your risk management processes.
- Review any departures. Where the business uses a different method, document why that approach provides an equivalent or higher standard, supported by appropriate evidence.
- Check the evidence trail. Risk assessments, consultation records, technical advice, training records and audit reviews should support the controls being relied on.
- Brief the board. Directors should receive enough information to understand material WHS risks, significant departures from a code and the reasoning behind those decisions.
Getting the Framework Right
The equal or higher test does not require every PCBU to follow a code word for word. It does require a business choosing another approach to demonstrate the standard of health and safety its alternative provides, with evidence rather than assertion. For directors and officers, the real question is whether the organisation’s WHS decisions were properly considered, supported by evidence and subject to appropriate oversight.
Warlows Legal advises businesses and their boards on employment law, workplace compliance and governance obligations. Our employment law team can help PCBUs review their WHS frameworks, assess their approach against the equal or higher standard and strengthen director due diligence before a regulator asks the questions first.
If your business has not reviewed its code of practice position since 1 July 2026, now is a sensible time to do so. Contact Warlows Legal to arrange a confidential discussion about where your governance framework currently stands.
This article is general information only and does not constitute legal advice. You should obtain specific advice tailored to your business, industry and jurisdiction before acting on anything in this article.
