Workplace Bullying, what Australian Employers Must Do

Every Australian business that employs people, or engages contractors or volunteers, carries a legal obligation to prevent workplace bullying and to act when it is reported. This is not a question of workplace culture or best practice. It is a set of enforceable legal duties that sit across three overlapping regimes: work health and safety law, which requires you to protect workers from psychological harm; the Fair Work Act 2009 (Cth), which gives workers a right to apply for orders to stop bullying and protects them from retaliation; and anti-discrimination law, which now imposes a positive duty to eliminate discrimination, harassment and victimisation.

The obligations apply from the moment you take on your first worker, whatever the size of your business. There is no headcount threshold, no probation period, and no small business exemption. If a worker is bullied and you did not take reasonable steps to prevent or respond to it, you can face a WHS prosecution, orders from the Fair Work Commission (FWC), or a compensation claim. This article sets out who the duties apply to, what each duty actually requires, and what happens if you fall short.

Who carries the obligation, and who it protects

The duties attach to different people depending on the regime, and each protects a specific class of worker:

WHS duty holders: Every person conducting a business or undertaking, known as a PCBU, must ensure, so far as reasonably practicable, the health and safety of workers. That covers companies, sole traders, partnerships and not-for-profits. The duty is owed to everyone who carries out work for you, including employees, contractors, subcontractors, labour hire workers, apprentices, trainees and volunteers.
Fair Work stop-bullying applicants: Under s 789FC of the Fair Work Act 2009 (Cth), a worker who reasonably believes they have been bullied at work may apply to the FWC for an order to stop it. The definition of worker is broad and includes contractors and subcontractors, not just employees. The jurisdiction only extends to workers in a constitutionally-covered business, which covers constitutional corporations (that is, most incorporated companies), the Commonwealth and its authorities, and businesses conducted principally in a Territory or Commonwealth place. A sole trader or partnership may fall outside the FWC's stop-bullying jurisdiction, but the WHS and anti-discrimination duties below still apply to them.
Positive duty holders: Under s 47C of the Sex Discrimination Act 1984 (Cth), employers and PCBUs must take reasonable and proportionate measures to eliminate unlawful sex discrimination, sexual harassment, hostile workplace environments and victimisation.
The trigger: Under s 789FD of the Fair Work Act 2009 (Cth), a worker is bullied at work when an individual or group repeatedly behaves unreasonably towards them, or towards a group they belong to, and that behaviour creates a risk to health and safety. The behaviour must be repeated; a single one-off incident does not meet the Fair Work definition. It also must create a risk to health and safety, which includes psychological health.

The carve-out that matters most to managers is in s 789FD(2) of the Fair Work Act 2009 (Cth): reasonable management action carried out in a reasonable manner is not bullying. Performance feedback, task allocation, investigating misconduct and enforcing standards are all legitimate management action, provided they are reasonable in substance and in how they are delivered. What removes the protection is action that is disproportionate, inconsistent, targeted at one individual, or delivered in a humiliating way.

The WHS duty to protect psychological health

The centrepiece of your obligations is the primary duty of care in s 19 of the Work Health and Safety Act 2011 (NSW), mirrored in the WHS law of every state and territory. A PCBU must ensure, so far as reasonably practicable, the health and safety of workers while they are at work. That includes providing and maintaining a work environment without risks to health and safety. Under the NSW Act, health is expressly defined to include psychological health, which is why bullying, unreasonable workloads and other psychosocial hazards sit squarely inside the duty.

The standard is not perfection. It is what is reasonably practicable, judged against the likelihood and severity of the harm and the availability and cost of controls. But the starting point, under s 17 of the NSW Act, is that you must eliminate risks to health and safety so far as reasonably practicable, and where elimination is not possible, minimise them.

In practical terms, meeting the duty means:

Identify psychosocial hazards: Look for the conditions that allow bullying to occur, such as high job demands, low job control, unclear expectations, poor change management, and a lack of support for reporting.
Assess the risk: Work out which workers or groups are exposed and how serious the risk is, including during periods of restructure, high workload or management change.
Control the risk: Put controls in place, such as clear behaviour standards, transparent workload allocation, complaint procedures, and training for managers. The hierarchy in s 17 applies to psychosocial risks as much as physical ones.
Consult your workers: WHS law requires you to consult workers on matters that directly affect their health and safety, which includes how risks of bullying are managed.
Keep records: Document the risk assessments, the controls you adopted, and the training you delivered. If a regulator or a court later asks what you did, the records are your evidence.

The duty falls on the business, but individuals are exposed too. Under s 31 of the NSW Act, officers of a PCBU can be prosecuted in their personal capacity for WHS offences, so directors and senior managers cannot simply delegate psychological safety away.

The Fair Work Act: stop-bullying orders and the management-action line

The Fair Work regime operates as a safety net on top of WHS law. A worker who reasonably believes they have been bullied at work can apply to the FWC under s 789FC of the Fair Work Act 2009 (Cth) for an order to stop the bullying. The application can be made by an employee or by a contractor, and there is no requirement that the bullying be reported to you first.

If the FWC is satisfied that the worker has been bullied at work and there is a risk it will continue, it may, under s 789FF, make any order it considers appropriate to prevent the worker from being bullied. Common orders include requiring the business to review or implement an anti-bullying policy, deliver training, change reporting lines, or have the Commission monitor the workplace. The FWC cannot order compensation or fines in this jurisdiction, but the orders are binding, and a business that ignores them faces contempt-style consequences and significant reputational damage. In deciding what orders to make, the Commission must take into account the outcomes of any investigation you have already run and any grievance procedures available to the worker, which is a strong incentive to investigate properly and promptly yourself.

This is where the reasonable management action carve-out earns its keep. The FWC will not treat proper performance management as bullying, but you need to be able to show the action was reasonable and was carried out reasonably. That means documenting the performance issues, the feedback you gave, the support you offered, and the deadlines you set. Managers who act sensibly but keep no records often find themselves unable to prove the carve-out when it matters.

The positive duty under anti-discrimination law

Where bullying is connected to a protected attribute, such as sex, race, age or disability, a separate set of obligations is engaged. Since the Respect@Work reforms, s 47C of the Sex Discrimination Act 1984 (Cth) imposes a positive duty on employers and PCBUs to take reasonable and proportionate measures to eliminate unlawful sex discrimination, sexual harassment, hostile workplace environments and victimisation. This is not a reactive duty. You are expected to take steps to prevent the conduct occurring, not merely to respond to complaints.

What is reasonable and proportionate depends on the size, nature and circumstances of your business and your financial and other resources. A two-person shop is not held to the same standard as a national employer, but every business is expected to take some measures, and the AHRC now has powers to investigate compliance with the duty.

Employers also carry vicarious liability for their people. Under s 106 of the Sex Discrimination Act 1984 (Cth), an employer is treated as having done an unlawful act committed by an employee or agent in connection with their employment, unless the employer took all reasonable steps to prevent it. State and territory anti-discrimination laws operate on similar principles for other protected attributes. In practice, this means a well-drafted policy, real training and a functioning complaints process are not paperwork. They are the difference between the business being liable and having a defence.

What to do when a complaint lands

The way you respond to a bullying complaint is itself part of your legal obligation. A response that is slow, dismissive or biased can convert a manageable issue into an FWC application, a discrimination claim or a WHS incident. A defensible response generally looks like this:

Acknowledge promptly: Confirm receipt of the complaint in writing and take it seriously, whatever you think of its merits.
Assess risk and act: If there is an immediate risk to anyone's safety, take interim steps, such as separating the people involved, while you investigate.
Investigate impartially: Gather the evidence from all sides, preserve documents and messages, and keep the process confidential. For complaints against senior staff, consider an independent investigator.
Decide and act: If the complaint is substantiated, take appropriate action, which may range from training and an apology to formal discipline.
Communicate and follow up: Tell the parties what will happen next, without breaching privacy, and check in afterwards to make sure the behaviour has stopped.

You must also protect the person who complained. Under s 340 of the Fair Work Act 2009 (Cth), it is unlawful to take adverse action against a worker because they exercised a workplace right, and making a complaint about bullying is the exercise of a workplace right. That means no demotion, no changed roster, no sidelining, and certainly no dismissal, of a worker for having raised a concern. Retaliation is its own legal claim, and it is often the claim that succeeds even where the underlying bullying is not made out.

What happens if you get it wrong

The consequences of failing the duties are real and specific:

WHS prosecutions: WHS regulators investigate psychological injuries just as they do physical ones, and the penalties are set at the same level. Using the NSW Act as the example, a Category 1 offence (gross negligence or reckless conduct) carries a maximum of 90,424 penalty units for a body corporate, which is just under $10 million at the NSW rate of $110 per unit, and up to 10 years imprisonment for an individual. Category 2 offences (a failure that exposes someone to a risk of death or serious injury or illness) carry up to 18,128 penalty units for a body corporate, and Category 3 (simple failure to comply with a duty) up to 6,070 penalty units. Each state and territory sets its own figures, but the scale is comparable across Australia.
FWC orders: The Commission can order your business to implement policies, deliver training and submit to monitoring, with ongoing consequences if you do not comply.
Compensation claims: A worker who suffers psychological injury can claim workers' compensation, and claims of this kind push up your premium and your claims history. Workers can also sue for discrimination, breach of contract or negligence.
General protections and unfair dismissal claims: Dismissing or disadvantaging a worker who complained exposes you to a general protections claim under the Fair Work Act 2009 (Cth), and an unfairly handled dismissal can become an unfair dismissal application, both with compensation and reinstatement exposure.

A compliance checklist for your business

Use this checklist to test whether your business is meeting each of the duties described above:

Write an anti-bullying policy: Set out what is and is not bullying, give examples, and state the consequences of breaching the policy. Make it part of your staff handbook and reference it in employment contracts.
Train your managers: Managers are the people who either prevent bullying or create it. Train them on the difference between performance management and bullying, and on how to handle a complaint.
Establish a reporting channel: Give workers a confidential way to raise concerns, including about managers, and make clear that reporting will not be held against them.
Run a psychosocial risk assessment: Treat psychological risks like any other WHS hazard. Identify them, control them, and document what you did.
Investigate every complaint: Use a consistent, documented process, with interim risk measures where needed.
Review regularly: Update your policy and training as the law and your workforce change, and learn from the complaints you receive.

Where a lawyer actually helps

You do not need a lawyer to run a small business, but there are points in the bullying lifecycle where professional help earns its cost. A lawyer can review and draft your anti-bullying policy, employment contracts and complaint procedures so they match your size and risk profile. For complaints against senior staff or directors, an independent external investigator, often a lawyer, gives the process credibility the business cannot achieve in-house. And if the FWC, a WHS regulator or a court becomes involved, early advice about your options, the evidence you need, and the likely outcomes will usually save you far more than the advice costs.

The management-action gap

If there is one duty Australian employers most often miss, it is not the policy. It is proving that reasonable management action was reasonable, in substance and in manner, when a worker challenges it. Performance management that is fair, documented and consistently applied is the strongest protection you have against bullying claims, because s 789FD(2) of the Fair Work Act 2009 (Cth) takes reasonable management action outside the definition of bullying altogether. The same action without records, without consistency, and without a paper trail is what turns an ordinary disciplinary conversation into an FWC application or a compensation claim. This week, review how your managers document performance issues, and make sure your anti-bullying policy is real, current and applied. If it exists only as a file on a server, the gap between what you think your obligations are and what the law requires is wider than you believe.