So let’s start with a person you’ve probably heard a few of your work colleagues mumble about. After a ‘worst case scenario’ has played out.

Yes, that’s right. We’re talking about Murphy’s Law, which has become somewhat of a cliche when it comes to risk mitigation or conversations around ‘worst case scenarios’ in life and in the workplace.

Interestingly, most often, our colleagues talk to us about Mr Murphy after a ‘worst case scenario’ has played out. Why is that?

Most business owners, executives, and senior managers are so busy running the day-to-day activities of their business and serving our clients that we don’t always give the necessary attention to important things until they become urgent.

Unfortunately, when it comes to workplace compliance, for businesses that have not stopped to think about what the impacts would be in the event of a breach in safety, invasion of privacy, or incidents such as workplace bullying, sexual harassment or discrimination, the impacts can be an unpleasant surprise, to say the least!

Likely impacts on your business in the event of a fair work, privacy or health and safety incident:

  • Loss of productivity
  • Decrease in staff morale
  • Increased absenteeism and staff turnover
  • Loss of reputation in the marketplace
  • Workers compensation claims
  • Increased insurance premiums
  • Wasted time in mediation and legal hearings
  • Remedies imposed by a court or tribunal
  • High cost of damages
  • In extreme cases, even criminal prosecution

To put it in perspective, let’s have a look at some recent cases in the Australian workplace:

Breaches of the Work Health and Safety Act can cost up to $3m

Directors convicted and fined $45,000 for Work Health & Safety breach on top of $90,000 fine imposed on the company

An employee in WA was tragically killed in a workplace accident when a pack of crane components slipped in the course of being lifted. The employer company and directors were prosecuted for breaching the OHS Act 1984 (WA) (Act) by failing to provide a safe workplace. The result was that the directors were slugged with a $45,000 fine on top of the $90,000 fine imposed on the company.

Do you provide your workers with a safe workplace?

Breaches of the Privacy Act can cost up to $1.7m

Privacy Legislation Update: $1.7 Million Civil Penalty for a Privacy Act Breach from March 2014

The Privacy Amendment Act 2012 (No. 197, 2012) was passed by the Australian Parliament and took effect on 12 March 2014. The new legislation introduces significant obligations for the protection of personal information held by Australian organisations, as well as material financial penalties.

Do your workers understand their obligations for the protection of personal information?

Incidents of bullying, sexual harassment and discrimination can lead to claims of legal liability against the employer.

Employers Beware: Sexual Harassment Damage Exceeds $330,000 in Recent VCAT Ruling.

In Collins v Smith (Human Rights) [2015] VCAT 1992 (23 December 2015), the Victorian Civil and Administrative Tribunal (VCAT) awarded the complainant in a sexual harassment case over $330,000 in damages. The decision continues the shift in approach to the assessment of damages for sexual harassment contraventions which was affirmed in Richardson v Oracle Corporation Australia Pty Ltd and Tucker[1] (Oracle).

It also reminds employers of the need to take proactive steps to ensure a bullying/harassment-free workplace.

If there was an incident of bullying, sexual harassment or discrimination in your workplace, would your workers know how to identify, report and help resolve it?

Unfortunately, for most businesses, incidents like those mentioned in this article play out when you least expect it.

Because, in today’s business environment, even if you are a good leader and you have a good workplace culture, just one incident from a rogue employee, who you wish you had never hired in the first place, can expose your business if you do not have the necessary protections in place.

That’s why, when it comes to planning for a ‘worst case scenario’ around workplace compliance in today’s business environment, it is important to back up your good leadership practice with a good dose of protection.