In May 2025, an employer was served with an $100,000 fine for failing to provide a safe workplace for their employees. In doing so, the Magistrates' Court found that the employer had failed to create a suitable policy on what was appropriate and inappropriate behavior and implement that policy by training managers, supervisors and employees. This case highlights that employers have an active duty to their employees to ensure a safe work environment and the significant financial penalties and reputational risk if they fail to comply.
Background
Blisspell Pty Ltd, the employer, operated a business under the name of Toy Networx from a factory in Reservoir. A Toy Networx employee had made allegations of inappropriate behavior at the workplace alleging that the director of the employer had made several remarks and had sent text messages of a promiscuous nature that had crossed professional boundaries and intruded into her personal life.
A subsequent WorkSafe investigation commenced in October 2022 and concluded in January 2023 and found that the employer had no "formal system in place to identify, prevent, manage, investigate or respond to the inappropriate workplace behavior alleged, due to an absence of the following:
- A policy or procedure regarding management and prevention of inappropriate workplace behavior;
- A process for employees to report allegations of inappropriate workplace behavior;
- Documents/information for employees and managers regarding inappropriate workplace behavior; and
- A process to investigate allegations of inappropriate workplace behavior."
WorkSafe Executive Director of Health and Safety Sam Jenkin said sexual harassment was a serious workplace safety issue known to cause both psychological and physical harm.
Decision
The employer had failed to appear at the Court hearing and therefore, the prosecution was successful in an ex parte application meaning the case was determined summarily against the employer.
The Court had found that the employer had failed to:
- Develop a workplace policy outlining appropriate and inappropriate conduct, including sexual harassment.
- Develop a clear policy defining unacceptable behaviours and establishing a reporting and response process for employees who experience sexual harassment; and
- Implement said policy through training their managers, supervisors and employees.
Notably, in passing the sentence, the Court considered:
- That the employer had no processes in place at all, the only thing in place were communal monthly meetings which in no way were sufficient noting that "regular team meetings or informal chats don't count as adequate measures to control inappropriate behaviour, particularly when power dynamics often inhibit workers from expressing concerns."
- The impact on the worker who alleged sexual misconduct;
- The objective seriousness of the matter; and
- That the only appropriate disposition was a fine with conviction and that the magnitude of the amount would serve as a deterrent.
As such, the employer was served with a $100,000 fine and ordered to pay costs of $6,060.
Takeaways for Employers
This decision highlights the overarching duties that employers have to their employees to keep their workplace safe. Section 21 of the Occupational Health and Safety Act 2004 (Victoria) (the Act) acknowledges that employers have a duty to provide and maintain so far as reasonably practicable, a working environment that is safe and without risks to health. Section 21 of the Act requires employers to:
- Provide and maintain (so far as reasonably practicable) safe plant (machinery and tools) and systems of work;
- Ensure the use, handling, storage and transport of plant and substances is safe and without risks to health;
- Ensure that the workplace under their control is safe and without risks to health. In section 5 of the Act health is defined as including psychological health;
- Provide adequate facilities (washrooms, toilets, lockers, dining areas, first aid) so far as reasonably practicable; and
- Ensure information, instruction, training and supervision to the workers so that they can work safely.
A failure to comply with section 21 of the Act may lead to a fine of up to 1,800 penalty units ($366,318) for a natural person and 9000 penalty units ($1,831,590) for a body corporate. Penalty units are used to define the amount payable for fines for many offences. One penalty unit is currently $203.51 as at 1 July 2025.
The Victorian Government has confirmed new psychological health regulations will be introduced by the end of the year. The new Occupational Health and Safety (Psychological Health) Regulations will put psychosocial hazards on the same footing as physical ones and are expected to make a meaningful difference to safety and wellbeing in many Victorian workplaces. Psychosocial hazards are work-related factors with potential to cause harm, such as bullying, sexual harassment, aggression or violence and exposure to traumatic events.
We will continue to keep you informed of these developments as they occur.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
