The Hidden Compliance Risk: Why Your Sexual Harassment Reporting System May Be Failing

Executive Summary

Despite significant legislative reforms and heightened regulatory scrutiny, workplace sexual harassment remains systemically underreported in Australia, creating substantial compliance and organisational risk. New research from Flinders University reveals that only one in five employees who experience harassment report it, not due to a lack of policies, but because reporting systems themselves undermine the psychological needs essential for employees to come forward.

For senior leaders and compliance professionals, this presents a critical challenge: your organisation may have policies in place, but if your reporting mechanisms fail to address fundamental psychological barriers, you are exposed to regulatory penalties, reputational damage, increased attrition, and potential legal action under Australia's strengthened workplace harassment framework.

The Compliance Landscape: Australian Regulations in 2025-2026

Federal Requirements

Australian employers now operate under a comprehensive regulatory framework that demands proactive prevention, not merely reactive response:

Fair Work Act 2009 Amendments (Effective March 2023)

• Explicit prohibition of workplace sexual harassment
• Positive duty on employers to take reasonable and proportionate measures to prevent harassment
• Fair Work Ombudsman, unions, and individuals can seek compensation and penalties
• Employers may face fines up to $93,900 for contraventions of harassment orders

Sex Discrimination Act 1984, Positive Duty (Effective December 2022)

• Proactive obligation to eliminate sexual harassment before it occurs
• Australian Human Rights Commission (AHRC) enforcement powers including formal inquiries
• AHRC now focusing regulatory attention on retail, hospitality, accommodation, food services, arts, recreation, and healthcare sectors
• Proposed civil penalties for breaches currently under consideration

Work Health and Safety (Sexual and Gender-based Harassment) Code of Practice 2025 (Approved March 2025)

• Sexual harassment classified as a psychosocial hazard under WHS legislation
• Four-step risk management process: identify hazards, assess risks, implement controls, maintain and review
• Trauma-informed investigation requirements
• Penalties for WHS non-compliance can exceed $1 million for serious breaches

State-Specific Requirements

Queensland (Effective 1 March 2025)

• Mandatory written sexual harassment prevention plan required
• Must identify specific risks based on worker characteristics (age, gender, sexual orientation, disability) and workplace environment
• Must specify control measures and consultation processes
• Most stringent requirements of any Australian jurisdiction

Victoria (Expected December 2025)

• New regulations strengthening psychosocial hazard management
• WorkSafe Victoria actively recognising sexual harassment as a workplace hazard
• Dual scrutiny from both AHRC and WHS regulators

The Research: Why Employees Don't Report

Key Findings from Flinders University Studies

Two peer-reviewed studies published in 2025 by Dr Annabelle Neall and colleagues provide critical insights for compliance and HR professionals:

Study 1: “Just Not Worth It: A Framework for the Motivational Dynamics of Reporting Workplace Sexual Harassment”

Published in: Work & Stress (2025). DOI: 10.1080/02678373.2025.2607500

The research surveyed over 200 Australian workers and identified three fundamental psychological needs that influence reporting decisions:

• Autonomy, Feeling in control of the process and outcomes
• Competence, Feeling capable of navigating the reporting system
• Relatedness, Feeling respected and supported by the organisation

When these needs are undermined, through unclear processes, fear of backlash, or lack of trust, employees conclude that reporting “isn't worth the emotional toll, the risk to their reputation, or the likelihood that nothing would change.”

Critical employee concerns identified:

• Uncertainty whether their experience “counted” as harassment
• Fear of career damage and being labelled as “troublemakers” or “weak”
• Doubt that reporting would lead to meaningful action
• Perception that the process itself would be punishing
• Lack of reassurance about protection from retaliation

Study 2: “Tracing the Evolution of Workplace Sexual Harassment Reporting and Investigations”

Published in: Aggression and Violent Behavior (2025). DOI: 10.1016/j.avb.2025.102124

This historical review demonstrates that despite legal reforms since the 1980s, reporting systems remain largely ineffective. The research highlights persistent systemic failures:

• Fear of retaliation remains the dominant barrier
• Mistrust in investigation processes is widespread
• Organisational cultures continue to normalise and perpetuate harassment
• Mandatory reporting schemes can backfire by eroding survivor autonomy
• “Paper compliance” does not create cultural change

The Business Case for Transformation

Regulatory Risk

Failure to establish effective reporting mechanisms exposes organisations to:

• Financial penalties: Up to $93,900 for harassment order contraventions; over $1 million for serious WHS breaches
• AHRC enforcement action: Formal inquiries, compliance notices, and potential court orders
• Fair Work Ombudsman investigations: Proactive enforcement powers
• Dual regulatory scrutiny: Both discrimination law and WHS law violations simultaneously

Practical Steps for Senior Leaders

Immediate Actions

1. Conduct a Systemic Audit

• Review current reporting channels against the three psychological needs framework
• Assess whether your system undermines autonomy, competence, or relatedness
• Identify barriers that prevent employees from coming forward
• Benchmark against AHRC's seven standards for positive duty compliance

2. Assess Regulatory Compliance

• Queensland organisations: Ensure written prevention plan is in place (mandatory since 1 March 2025)
• All jurisdictions: Review alignment with WHS Code of Practice 2025 and Managing Psychosocial Hazards Code 2024
• Document risk assessments specific to your workforce characteristics and workplace environment
• Prepare evidence of proactive prevention measures

The Path Forward

The research is unequivocal: paper compliance is not enough. Australian employers face an evolving regulatory landscape where demonstrating genuine prevention efforts is now mandatory, and where ineffective reporting systems constitute both a compliance failure and an organisational liability.

As Dr Neall concluded, “If reporting feels unsafe, ineffective, and isolating, people won't do it. To break that cycle, we need to design systems that restore autonomy, competence, and connection for victims who are already hurting.”

For CEOs, Board Directors, HR managers, and compliance professionals, the question is no longer whether to act, but how quickly you can transform your systems to meet both legal requirements and employee needs.

How Salus Addresses the Core Barriers to Reporting

Obligation mapping removes the uncertainty on the other side too

Once a report is submitted, the person responsible for acting on it is shown exactly what they're required to do for that report type, sourced from the relevant legislation and the organisation's own policy, removing the ambiguity and inconsistency that erodes trust in how complaints get handled.

An evidentiary audit trail, not a black box

Every action taken on a report is timestamped and individually signed, building a defensible record that demonstrates a functioning system was actually used, not just a policy that existed on paper.

Policy gap analysis, before a complaint arrives

Conclusion: Compliance Alone Won't Prevent Harm

Australia's strengthened sexual harassment laws and positive duty requirements demand more than policy updates. Organisations must create environments where employees actually report harassment, and where leadership can see and act on what's been reported.

The evidence is clear: only 1 in 5 employees report harassment under traditional systems. That silence leaves organisations exposed to regulatory penalties and costly claims, and lets harassment continue unchecked.

A guided, trusted reporting channel is designed to change that, not by promising a number, but by removing the specific barriers the research above identifies.

The question for Australian organisations is no longer whether to improve reporting systems, it's whether to act before the next unreported concern becomes a $93,900 fine, a six-figure legal settlement, or a workplace culture crisis.