Workplace Bullying: Australian Employer Obligations and How to Prevent Costly Claims

Workplace bullying costs Australian employers billions of dollars every year in lost productivity, absenteeism, high staff turnover, and legal liability. More importantly, it causes serious harm to people.

Since 1 January 2014, the Fair Work Commission has had jurisdiction to deal with workplace bullying claims — and since the psychosocial hazards reforms of 2022–2025, WHS regulators have become increasingly active in investigating and prosecuting employers for failing to control bullying as a workplace hazard.

Understanding your obligations and building effective prevention systems is both a legal requirement and a business imperative.

What Is Workplace Bullying Under Australian Law?

Under the Fair Work Act 2009, workplace bullying occurs when:

• An individual or group of people repeatedly behaves unreasonably towards a worker or group of workers
• The behaviour creates a risk to health and safety

Both elements must be present. A single incident of unreasonable behaviour may not be bullying — but it can still be harassment, discrimination, or a WHS issue.

Examples of bullying behaviour:

• Persistent criticism, belittling, or humiliation
• Excluding someone from workplace activities or communication
• Giving unreasonable workloads or impossible deadlines
• Screaming, yelling, or aggressive communication
• Spreading rumours or making false allegations
• Withholding information necessary for the person to do their job
• Deliberately changing work arrangements to inconvenience someone

Reasonable management action is not bullying. Providing performance feedback, issuing formal warnings, directing work, and making legitimate operational decisions — even if the employee disagrees with them — are not bullying when carried out reasonably and in good faith.

The distinction between bullying and legitimate management action is one of the most common issues in Fair Work Commission bullying matters.

Bullying Under WHS Legislation: Psychosocial Hazards

Since 2022, psychosocial hazards — including workplace bullying — have been explicitly included in the WHS duties of PCBUs (employers) under the harmonised WHS legislation.

Under updated regulations in most states:

• Bullying is identified as a psychosocial hazard
• Employers must conduct risk assessments for psychosocial hazards
• Employers must implement control measures to eliminate or minimise the risk of harm
• These obligations are enforceable by WHS regulators, not just the Fair Work Commission

This means workplace bullying is now regulated in two separate forums with two separate penalty regimes:

1. Fair Work Commission — employees can apply for an order to stop bullying
2. WHS regulators — can investigate, issue notices, and prosecute for failing to control psychosocial hazards

The Fair Work Commission Anti-Bullying Jurisdiction

Workers can apply to the Fair Work Commission to stop bullying if they are still employed and the bullying is ongoing. The FWC can:

• Make orders for the individual or group to stop the bullying behaviour
• Order the employer to implement training, counselling, or changed reporting arrangements
• Order the employer to review its bullying policies and procedures

The FWC cannot award compensation under the anti-bullying jurisdiction. For compensation claims, employees must use other avenues (workers' compensation, personal injury litigation, discrimination claims).

Applications must be made within 6 months of the bullying conduct. The FWC prioritises anti-bullying applications — they are dealt with relatively quickly compared to other FWC matters.

Employer Liability for Employee Bullying

As an employer, you can be held vicariously liable for bullying by your employees — if you did not take all reasonable steps to prevent the conduct.

What "all reasonable steps" looks like for a small business:

1. A written anti-bullying policy — clearly stating what bullying is, that it is not tolerated, and the consequences for breach
2. Training for all employees — including managers, on what bullying is and what to do if they experience or witness it
3. A clear complaints procedure — so employees know how to report concerns
4. Prompt investigation of complaints — when a complaint is made, investigate it seriously
5. Consequences for perpetrators — if bullying is found to have occurred, take appropriate disciplinary action

If you have not done these things, your vicarious liability exposure is significant.

The Cost of Bullying Claims

Beyond the FWC, bullying often gives rise to:

Workers' compensation claims: Workplace bullying frequently causes psychological injury — anxiety, depression, PTSD. Workers' compensation claims for psychological injury are among the most expensive, often involving extended time off work and significant medical expenses.

Personal injury litigation: A worker who suffers a psychological injury from bullying may sue the employer in negligence. Damages in such cases can be substantial.

Discrimination claims: If the bullying is related to a protected attribute (age, disability, sex, etc.), there may be an additional discrimination claim under state or federal legislation.

Constructive dismissal: If a worker is effectively forced out of their job by bullying, they may make an unfair dismissal or general protections claim on the basis that they had no reasonable alternative but to resign.

Building an Effective Anti-Bullying System

1. Policy

Your anti-bullying policy should:

• Define bullying clearly, with examples
• State that bullying will not be tolerated
• Explain the difference between bullying and reasonable management action
• Set out the complaints procedure
• State the consequences for those who engage in bullying
• Encourage early reporting

2. Training

Train all employees — not just managers — on:

• What bullying is and is not
• Their right to raise concerns
• How to raise concerns
• What happens when a concern is raised

Training should not be a one-off exercise. Refresh training annually or when significant workplace changes occur (e.g., restructuring, new managers).

3. Complaints Procedure

Your complaints procedure should:

• Provide multiple reporting avenues (direct supervisor, HR, or an alternative person if the supervisor is the alleged bully)
• Ensure confidentiality to the extent possible
• Set out the investigation process and timeline
• Protect complainants from retaliation

4. Respond to Early Warning Signs

Bullying typically escalates over time. Early warning signs include:

• Increased absenteeism or sick leave in a team or individual
• Complaints about interpersonal conflict
• High staff turnover in a particular area
• Withdrawal or changed behaviour

Supervisors should be trained to recognise these signs and respond early — before the situation escalates to a formal complaint.

5. Risk Assessments for Psychosocial Hazards

Under WHS law, you must now proactively assess and manage the risk of psychosocial hazards — including bullying — in your workplace. This means:

• Identifying the risk factors in your specific workplace
• Assessing the likelihood and severity of harm
• Implementing appropriate controls

For high-risk environments (e.g., high-pressure sales environments, shift work, isolated work settings), more intensive controls are appropriate.

What to Do When You Receive a Bullying Complaint

1. Take it seriously — never dismiss a complaint as "drama" or interpersonal conflict without investigation
2. Ensure confidentiality — limit disclosure to those who need to know
3. Separate the parties if necessary to prevent ongoing contact during the investigation
4. Conduct a fair investigation — interview the complainant, the alleged bully, and any witnesses
5. Make findings and act — if bullying is found, take appropriate disciplinary action; if not found, explain the outcome to the complainant
6. Document everything — the complaint, the investigation, your findings, and the outcome

An investigation that is perceived as biased or perfunctory — even if the finding is correct — will not protect you from a FWC or WHS investigation.

How Reguladar Helps

Workplace bullying obligations now sit at the intersection of WHS law, Fair Work Act protections, and anti-discrimination legislation. Reguladar tracks your obligations across all three domains — surfacing what you must have in place (policies, risk assessments, training programs) and alerting you when regulatory changes affect your obligations.

For businesses in high-risk sectors — hospitality, construction, healthcare — Reguladar identifies the specific psychosocial hazard management requirements that apply to your industry.

Build your workplace compliance obligations in one place. Start your free compliance check at Reguladar and see everything that applies to your business today.