Australian regulator calls for penalties and NDA restrictions in harassment cases

In a new report, published as part of its 'Speaking from Experience' project, the AHRC made 11 recommendations based on “what workers from diverse backgrounds think needs to change to make workplaces safer”, based on a survey of over 300 workers about their experiences with workplace sexual harassment.

The report highlighted that the AHRC does not currently have the power to apply to a court for a civil penalty order for a serious or repeated failure to comply with the positive duty to stop sexual harassment.

In relation to the AHRC’s current powers, the report said: “To make sure workplaces follow the rules of the Positive Duty, the Commission can conduct inquiries into organisations. Where the Commission makes a finding of non-compliance, it may issue a ‘compliance notice’ telling them what actions the organisation must take, or stop taking, to address the issue.”

“If the organisation does not comply, the Commission can ask the federal courts for an order to comply. The court can also make any other appropriate order. The Commission may also enter into legal agreements with organisations, which are known as ‘enforceable undertakings.”

The report, however, criticised the AHRC’s lack of powers to seek penalties against employers who breach the positive duty. Giving the AHRC power to do so is consistent with a recommendation of the Australian Law Reform Committee released in January 2025, and the powers of the state and federal safety regulators.

The AHRC has recommended the introduction of numeric targets for equality; amending laws to restrict the use of confidentiality and non-disclosure agreements (NDAs) in workplace sexual harassment cases; and updating national guidance on trauma and violence informed responses.

Aaron Goonrey, an expert in workplace discrimination at Pinsent Masons, said: “The introduction of the positive duty was intended to drive cultural change and reduce workplace sexual harassment - but, instead, we’re seeing a troubling rise in complaints.”

“This isn’t just a legal obligation; it’s a wake-up call. Employers must move beyond 'tick and flick' exercises and take real, proactive steps to create safe, respectful environments,” he said.

“Since its implementation in December 2022, the positive duty has required organisations to prevent unlawful conduct before it occurs, not merely to respond after the fact. Yet the growing number of sexual harassment and discrimination claims suggests that many workplaces are still falling short.”

Goonrey pointed to international developments in countries such as the US, UK, Ireland and Canada, which have already taken steps to restrict the use of NDAs in sexual harassment cases.

“This report recommends Australia follow suit as silencing victims only appears to deepen the harm and erodes trust.  Lawyers and HR practitioners need to realise and advise our clients and stakeholders that NDAs are optional and not necessarily a requirement,” he said.

Other recommendations from the report include funding a specialist organisation to deliver education and outreach on workplace safety and health, and amending the Workplace Gender Equality Act 2012 (Cth) to require data collection on the experiences of workers with disabilities and from diverse backgrounds.

Emma Lutwyche, an expert in equality and diversity law at Pinsent Masons, said: "The recommendation to expand the data collection and reporting on a broader range of characteristics than gender is consistent with what we are seeing in other jurisdictions such as the UK.”

“If implemented, the requirement on employers to collect, report, and set targets against these additional employee attributes will significantly increase the compliance burden on employers. However, the benefits for employers of understanding the needs and characteristics of their workforce are significant. We know that innovation and growth are strengthened through diversity, so ensuring the workplace is safe for diverse workers is critical.” 

Commenting on the focus on neurodiversity in the report, Lutwyche said: “The Respect @ Work report and current AHRC guidance on complying with the positive duty do not mention neurodiversity at all. In contrast, the Speaking from Experience report has a strong focus on the experiences of neurodiverse workers and the impact of intersectionality on their experiences.”

“Assuming the recommendation to update guidance materials is followed, we suspect the AHRC will update it to include that neurodiversity is a key risk factor for sexual harassment. This would be in addition to the risk factors that the Respect @ Work report identified, such as being under 30, being from a culturally or linguistically diverse background, being a migrant worker or identifying as LGBTIQA+,” she said.

“We are seeing significantly increased cases of employers having to manage grievances and legal claims involving complainants, and respondents, who identify that they are neurodiverse. We recommend that employers start including neurodiversity in their risk assessments and harassment prevention plans now, so that these risks can be appropriately managed.”