Businesses that fail to stop bullying in the workplace now face a new set of penalties following amendments to the Fair Work Act that came into effect last year.

Workers who believe they are being bullied at work can apply to the Fair Work Commission for an order to stop the behaviour.

If the business owner fails to stop it, they could be liable for fines of $10,200 for the individual or $51,000 for the corporation.

The potential impact on small and medium enterprises could be significant, with the Productivity Commission estimating workplace bullying costs the economy between $6 billion and $36 billion a year.

Chris Stallard, executive manager of the speciality portfolio at Vero Insurance, says the penalties could cripple a small business which did not have appropriate cover.

He says entrepreneurs overlook the risks of workplace disputes when they set-up and fail to reassess the growing potential for bullying as their staff numbers grow.

Mr Stallard says management liability insurance was separate but complementary to the cover provided by workers compensation, and it provided protection for a business, its directors, officers and employees against financial liabilities that it could incur in responding to allegations.

“These allegations could come from come from external sources such as a WorkCover WA investigation or internal sources such as an employment-related matter, ” he says.

“Management liability can cover the costs of being legally represented at investigations, the costs incurred in defending claims, any damages or judgements awarded against you, as well as insurable penalties that might arise as a result.”

It is widely accepted that the safest way to avoid such an order from the Fair Work Commission was to have a zero-tolerance attitude to bullying.

So what constitutes bullying in the workplace? According to Safe Work Australia, it is “repeated and unreasonable behaviour directed towards a worker or a group of workers that creates a risk to health and safety”.

The 10 examples provided in its draft guide includes abusive, insulting or offensive language or comments, unjustified criticism or complaints, setting tasks that are unreasonably below or beyond a person’s skill level, spreading misinformation or malicious rumours and excessive scrutiny at work.


© The West Australian

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