‘Archaic’: $100k compensation cap for workplace bullying, sexual harassment slammed

As part of the NSW government’s recently passed compensation reforms, a cap has been placed on damages sought for workplace bullying or sexual harassment of $100,000.

Much was made of the NSW government’s push for major reforms of the state’s compensation scheme, heavily pushed by NSW Treasurer Daniel Mookhey, yet highly criticised by workers and compensation lawyers, claiming the proposed changes were extremely “rushed”.

Despite the waves of criticism, the reforms passed, with new jurisdictions for workplace bullying and sexual harassment being implemented.

The change means that the NSW government will establish a “one-stop shop” through the NSW Industrial Relations Commission (IRC) for complaints pertaining to bullying and sexual harassment. The remedies for these contraventions will include “ordering a public apology, ordering an employer to take specified actions to stop unlawful conduct, or ordering damages of up to $100,000”.

“Workplace bullying causes serious harm to worker health and organisations. According to the Productivity Commission, bullying is estimated to cost up to $36 billion annually in Australia,” said NSW Minister for Industrial Relations Sophie Cotsis.

“The amendments establish a ‘one-stop shop’ for handling complaints through the IRC and enhance its powers to resolve disputes and support injured workers’ return to work.

“This legislation follows the passing of laws in 2023, which restored the independence of the industrial umpire, creating the structure needed to deliver meaningful improvements to the working lives of hundreds and thousands of workers in the state.

“I would like to thank all those associated with this bill, including unions, business and the community, for their ongoing advocacy.”

Mia Pantechis, principal employment lawyer at plaintiff law firm Maurice Blackburn, claims that the specific changes to workplace bullying and sexual harassment fail to “make sense”.

“The NSW government has made a big change to how workplace bullying and harassment claims are dealt with. But amidst all the public celebration, an important point is being missed,” said Pantechis in a LinkedIn post.

“The NSW Industrial Relations Commission will now have the power to award compensation for bullying and sexual harassment. Sounds good. So, what’s the catch?

“The compensation will be capped at $100,000.

“Put simply, that cap doesn’t make sense and should be scrapped.”

According to Pantechis, putting a compensation cap on such contraventions is “archaic” considering the long-term effect the behaviour can have on the victim.

“Bullying and sexual harassment often lead to severe psychological injuries and a loss of earning capacity. On any measure, the harm is worth far more than $100,000.

“That cap is archaic and diminishes the harm. It’s entirely out of step with contemporary community standards. And it doesn’t reflect the prevalence and severity of bullying and harassment in workplaces,” Pantechis said.

The reforms are expected to commence on 1 July 2026.