Many business owners believe that as long as they don’t encourage bad behaviour, they’re doing enough. The truth is, under Australian law, workplaces now have what’s called a positive duty, a legal obligation to proactively prevent unlawful conduct, not just respond when it happens. That includes sexual harassment, sex discrimination, sex-based harassment, creating a hostile work environment on the grounds of sex, and victimisation.

Whether your business is in retail, healthcare, construction, education, professional services, or hospitality, this law applies to you. It requires leaders to take real, measurable steps to prevent misconduct, not rely on goodwill or assumptions that “it won’t happen here.”

What the Positive Duty legislation requires

Under the Sex Discrimination Act 1984 (Cth), as amended by the Respect@Work reforms, employers and business operators (PCBU’s) must take reasonable and proportionate measures to eliminate, as far as possible, unlawful conduct in the workplace.Some of the key actions include:

Risk Assessment – Identify where and when risks may arise, such as in certain roles, environments, teams, or situations with power imbalances or customer interaction.

Policies and Procedures – Develop and maintain clear, accessible policies, reporting pathways, investigation procedures, and disciplinary outcomes. But remember, policies alone aren’t enough.

Training and Education – Ensure all employees, from entry level to senior leadership — understand what behaviour is acceptable, how to speak up, and what bystander action looks like. Training should be regular, practical, and embedded into the culture.

Monitoring, Review, and Improvement – Actively monitor workplace culture, respond to feedback, and update systems when incidents or patterns emerge.

Leadership and Accountability – Leaders must set the tone, take reports seriously, prevent victimisation, and demonstrate zero tolerance for inappropriate conduct. Positive behaviour needs to be demonstrated from the top.

Since December 2023, the Australian Human Rights Commission has had the power to investigate and enforce compliance, so this is not optional.

What happens if you don’t take it seriously?

Case law is showing that simply having policies or handbooks won’t protect a business if culture and practices fall short.

Oliver v Bassari (2022, Victoria, VCAT 329)

A beauty therapist was awarded $150,000 in damages after her employer failed to prevent sexual harassment, despite having policies and a handbook in place. The business had not taken “reasonable and proportionate” steps to prevent misconduct.

Mad Mex / Food Court case

A young worker experienced ongoing harassment from her manager, leading to damages of around $305,000. Policies existed, but leadership inaction and poor supervision made the employer liable.

The message is clear, paperwork doesn’t equal protection.

Common misconceptions that undermine compliance

Many leaders think:

  • “Our culture is good – everyone gets along.”
  • “We already have a policy, so we’re fine.”
  • “That sort of thing wouldn’t happen here.”

But misconduct rarely starts as an obvious problem. It creeps in through ignored comments, “harmless” jokes, unreported discomfort, or power dynamics that go unchecked. Across industries, examples include:

  • A supervisor making repeated comments that go unchallenged.
  • A customer or contractor behaving inappropriately, and employees not knowing how to respond.
  • A manager dismissing a report as “banter” or “misunderstanding.”
  • Over time, these moments build into patterns that damage trust, morale, and safety and put the business at legal risk.

Why investment in training and culture is strategic

Legal and financial risk – Court decisions can result in large damages and legal costs. Reputational harm and staff turnover add to the impact.

Staff wellbeing and retention – People want to work where they feel respected and safe. Poor culture drives disengagement and exits.

Customer and client reputation – Word spreads fast. Clients, partners, and the public notice how businesses handle (or ignore) these issues.

Performance and productivity – Safe, inclusive teams perform better, communicate more effectively, and stay longer.

Investing in culture isn’t a compliance exercise it’s a long-term business strategy.

Key takeaways for business leaders

  • Assume risk exists – Every workplace has dynamics that can go wrong.
  • Policies are not protection – Action, accountability, and culture are.
  • Training – It must be regular, relevant, and engaging.
  • Leaders set the standard – The tone from the top shapes everything.
  • The law is enforceable – With regulatory oversight and potential investigation.

Final thought

Whether you lead a small business or a large organisation, the question isn’t if inappropriate behaviour could occur, it’s when, and how well prepared you are to prevent and respond to it. The positive duty is more than a legal requirement, it’s a cultural opportunity. Building a workplace where people feel safe, respected, and heard is not only the right thing to do,  it’s smart, sustainable business.

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