With growing awareness of the harmful effects of bullying at work, employers must be proactive in identifying and managing these risks to avoid financial penalties, legal claims, and reputational damage.
This guide outlines the key legal risks of workplace bullying in NSW and the legal frameworks that apply.
1. Work Health and Safety (WHS) Prosecutions
Under the Work Health and Safety Act 2011 (NSW), employers are legally required to ensure a safe working environment. Failure to prevent or address bullying in the workplace can result in:
– Fines up to $10 850 000 for corporations.
– Fines up to $1 085 000 and/or 10 years’ imprisonment for individuals, including directors and managers.
– Investigations and regulatory action by SafeWork NSW.
2. Workers’ Compensation Claims
Workplace bullying often results in psychological injury, leading to workers’ compensation claims under the Workers Compensation Act 1987 (NSW). Employers may face:
– Financial liabilities for medical treatment, income support, and rehab.
– Rising insurance premiums.
– Productivity loss due to extended staff absences.
3. Unfair Dismissal & Adverse Action Claims
Employees who are dismissed or suffer negative consequences after lodging bullying complaints may file:
– Unfair dismissal claims under the Fair Work Act 2009 (Cth).
– Adverse action claims, alleging retaliation for exercising workplace rights.
Risks include:
– Court-ordered compensation or reinstatement.
– Civil penalties and personal liability for managers.
– Costly litigation and reputational harm.
4. Stop Bullying Orders (Fair Work Commission)
Employees experiencing ongoing workplace bullying can apply to the Fair Work Commission (FWC) for a Stop Bullying Order. This may require:
– Immediate changes to workplace systems or behaviours.
– Increased compliance monitoring and procedural changes.
5. Negligence & Breach of Contract Claims
Failure to address bullying at work may lead to:
– Negligence claims for failing to provide a safe workplace.
– Breach of contract claims, where the employer fails to uphold duty-of-care provisions.
– Compensation for pain and suffering, and court-imposed damages beyond workers’ comp entitlements.
Courts and Tribunals
– WHS Prosecutions: NSW District & Supreme Court
– Workers’ Compensation: Personal Injury Commission (PIC)
– Unfair Dismissal/Adverse Action: Fair Work Commission → Federal Courts (if unresolved)
– Stop Bullying Orders: Fair Work Commission
– Negligence/Breach Claims: NSW District & Supreme Court
Key Steps to Prevent Workplace Bullying
– Develop and enforce clear anti-bullying policies.
– Train managers and staff to recognise and respond to bullying.
– Take all complaints seriously and investigate promptly.
– Keep clear, confidential records of all bullying allegations and actions taken.
– Foster a culture of psychological safety.
WHS Law Updates: Psychosocial Hazards (Effective 1 October 2022)
– Employers must identify and control psychosocial hazards, including bullying.
– Assess interaction with job design, systems, and workplace culture.
– Refer to SafeWork NSW’s Code of Practice: Managing Psychosocial Hazards at Work.
See reference from Safe Work NSW
Director Liability
Section 27 of the WHS Act: company officers and directors may be personally liable if they fail to exercise due diligence.
– Up to $1 088 355 and 10-years’ imprisonment
Read more Director obligations; Officer duties; Penalties
Recent Notable Cases
1. SafeWork NSW v WSLHD (2025)
– Case withdrawn after extensive hearings but marked regulatory intent. Read Case law
2. Qantas Ground Services (2024)
– First successful WHS prosecution for discriminatory conduct in NSW.
Read case summary
Final Thoughts
Proactively managing bullying in the workplace is not just good practice – it’s a legal obligation.
Disclaimer
This article provides general information about legal risks associated with workplace bullying in NSW and does not constitute legal advice. Employers should consult a qualified employment lawyer for tailored legal advice.
Authoritative Sources
– Work Health and Safety Act 2011 (NSW)
– Work Health and Safety Regulation 2022 (NSW)
– Fair Work Act 2009 (Cth)
– Workers Compensation Act 1987 (NSW)
– SafeWork NSW Code of Practice: Managing Psychosocial Hazards at Work
– Fair Work Commission – Stop Bullying Orders Jurisdiction
– Personal Injury Commission of NSW
– NSW District Court & Supreme Court case law
– SafeWork NSW v WSLHD (2025), Qantas Ground Services (2024). Prosecutions register