Enhanced victimisation protections under the Industrial Relations Act 1996 (NSW) - practical guidance for councils

Recent amendments to the Industrial Relations Act 1996 (NSW) (Act), have significantly expanded victimisation provisions, which are set to have a direct impact on employers, including local and state government entities. This article aims to highlight relevant legislation, provide practical steps and examples to support compliance and risk management.

New employee protections and a new approach to enforcement

Under the Act, victimisation occurs when an employee or prospective employee is subjected to a detriment because of a protected reason.

The amendments add additional protected reasons. It is now unlawful to victimise an employee or prospective employee on new grounds, including because they:

• make a complaint or inquiry about their employment or to a public authority about their employer, including about matters other than about their employment;

• engage or propose to engage in industrial organising activities;

• are entitled to a benefit or claim a benefit under workers compensation legislation or in relation to other entitlements for a workplace injury;

• have a characteristic that is protected from discrimination under the Anti Discrimination Act 1977; or

• have a role or responsibility under industrial relations legislation or an industrial instrument.

The provisions relating to enforcement of victimisation provisions have also been amended and enhanced as follows:

• In victimisation proceedings, there was always a rebuttable presumption (subject to proving some threshold matters) that a reason for the detrimental action was the alleged protected reason. However, for the presumption to now be rebutted, the Commission must be satisfied that, objectively, the alleged protected matter was not a substantial and operative reason of the detrimental action; and

• when determining if the alleged matter was not a substantial and operative cause of the detrimental action, the Commission may consider conscious and unconscious factors.

Conscious and unconscious factors in decision-making

Under the new and expanded victimisation provisions, the role of the decision maker and the chain of decision making will be pivotal when the Commission determines whether detrimental action has been taken unlawfully.

When addressing victimisation claims, council must be aware of both conscious and unconscious factors that may be found to have influenced the decisions.

Demonstrating the conscious factors that have been taken into account will generally be straightforward, assuming objective material is available that supports the reasons and process together with witnesses to support those reasons and processes.

Where it will be undoubtedly challenging is how councils can demonstrate what unconscious factors they have taken into account when decisions are made that may have a detrimental outcome for an employee.

Unconscious factors in decision making are mental processes that influence our choices without us being aware of them. These invisible forces can shape preferences, judgments, and actions without the decision maker realising it. Examples of these are unconscious biases related to gender, age, ethnicity or other characteristics that can affect how evidence is interpreted or how parties are perceived. In addition, prevailing workplace cultures or societal norms might influence perceptions.

But lack of insight into one’s motives is no defence.

In the decision of the Full Federal Court of Australia in Barclay v Board of Bendigo Regional Institute of Technical and Further Education (which was cited in the second reading speech in relation to the amendments as the preferred approach in NSW), the Court said:

What is required is a determination of … the “real reason” for the conduct. The real reason for a person’s conduct is not necessarily the reason that the person asserts, even where the person genuinely believes he or she was motivated by that reason. The search is for what actuated the conduct of the person, not for what the person thinks he or she was actuated by. In that regard, the real reason may be conscious or unconscious, and where unconscious or not appreciated or understood, adverse action will not be excused simply because its perpetrator held a benevolent intent. It is not open to the decision-maker to choose to ignore the objective connection between the decision he or she is making and the attribute or activity in question. Yes, that’s right – the real reasons do not even need to be appreciated or understood by a decision maker. So short of getting a hypnotist to prove there were no unconscious factors influencing a decision, how can council possibly address this in their decision making?

Yes, that’s right – the real reasons do not even need to be appreciated or understood by a decision maker.

So short of getting a hypnotist to prove there were no unconscious factors influencing a decision, how can council possibly address this in their decision making?

Implications

These provisions under the Act reflect a broader shift toward accountability in NSW workplaces. They offer stronger protections for employees and place a greater burden on employers to justify detrimental actions.

They also offer an enhanced pathway for employees to take and we expect to see an increase in these types of claims.

Council employers should be deliberate about who makes decisions. To rebut the presumption and to address unconscious factors, the organisation may need to take a conflict of interest approach.

We recommend proactive steps, including:

• Always deal with, resolve and close out complaints as soon as possible;

• Do not over-escalate a complaint or inquiry;

• Limit knowledge of a complaint or inquiry to those who need to action it;

• Structure decisions carefully:

  - consider seeking recommendations from those who are not the final decision makers, or whether the decision should be left to the final decision maker;

  - avoid having conflicted managers involved in or making final calls.

• Document reasons thoroughly: Ensure decisionmaking processes are transparent and well recorded. Keep detailed notes of meetings, communications, and rationale;

• Train leaders; and

• Consider outsourcing the decision and having the service provider decide based on objective and documented facts.

Understanding these changes and implementing robust decision-making processes will be critical to managing risk. And when it comes to defending your decisions, be prepared for a rigorous process – because the Commission will want to know not just what you did, but what you were thinking (consciously or not) when you did it.

New provisions in action

While not involving a council, Walter v Transport Secretary [2026] NSWIRComm 1008 is a recent case which provides some helpful insights to the new jurisdiction.

The case concerned allegations of victimisation under the new expanded provisions, where the employer successfully demonstrated that there was no unlawful basis for the detriment imposed.

Mr Walter alleged victimisation after refusing a routine drug and alcohol test, citing privacy concerns, and him making a complaint regarding alleged inappropriate workplace behaviour.

As a result of Mr Walter’s refusal to undertake the test, Mr Walter was issued a letter reminding him of his obligations and requiring certain remedial actions. The letter stated:

You are reminded that any future failure by you to meet the expected standards of conduct in the workplace may be subject to further remedial and / or disciplinary action.

While the Commission found (it seems reluctantly) that the warning letter could constitute a “detriment” within the meaning of s 213 of the Act, with the new test in mind, the Commission found that:

• Subjectively, the officers of the employer who gave evidence were clear that they initiated the investigation into Mr Walter for failing to participate in the drug and alcohol test; and

• Objectively:

  – all of the evidence pointed to the subjective reasons being the sole reason that Mr Walter was subjected to an investigation into his failure to fully participate in the test; and

  – Mr Walter’s complaint played no part in the employer’s process leading to the warning letter.

With respect to any unconscious factors in this matter, these did not appear to feature heavily in the Commission’s reasoning.

The Commission concluded that the employer had discharged the reverse onus, being that the investigation and subsequent letter were not substantially or operatively caused by Mr Walter’s complaint.

Important in its determination was that the documentary evidence was consistent with the decision makers evidence as to the relevant events.

De-risk your next decision. Contact us for a council victimisation risk check.

Authors: Andrew Yahl & Saige Levy

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This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.