Workplace Conduct & The IRC’s New Role
From 1 July 2026, the Industrial Relations Commission of NSW (IRC) has assumed an important new role in determining certain workers compensation disputes involving psychological injuries.
Under the reforms, where a worker claims that a primary psychological injury was caused by workplace bullying, excessive work demands, sexual harassment or racial harassment (collectively described as “relevant conduct”) the IRC may be required to determine whether that conduct meets the statutory definition before the workers compensation claim can progress.
How does the new jurisdiction work?
The IRC does not determine whether the worker is ultimately entitled to workers compensation. Its role is narrower: to decide whether the workplace conduct alleged by the worker constitutes “relevant conduct”.
The new jurisdiction applies to NSW workers, including private-sector workers, subject to several exclusions including police officers, paramedics, firefighters, coal miners, volunteers and federal government employees. It generally applies where the worker notified their employer of the psychological injury after 1 July 2026.
A matter can reach the IRC where the worker has made a workers compensation claim, the insurer has disputed liability on the basis that the alleged behaviour was not relevant conduct, the worker has sought an internal review, and the insurer maintains that position following the review.
What constitutes “relevant conduct”?
The IRC may determine whether conduct amounts to:
Bullying – repeated unreasonable behaviour towards a worker or group of workers;
Excessive work demands – repeated or persistent demands beyond the requirements of the worker's role that are unreasonable in the circumstances;
Sexual harassment; or
Racial harassment.
Importantly for employers, the IRC may consider whether the alleged conduct was reasonable management action. This means management action that was reasonable in the circumstances and carried out in a reasonable way.
Performance management, disciplinary processes and workplace investigations should therefore be approached carefully. It may not be enough for an employer to demonstrate that there was a legitimate reason for taking action; the manner in which that action was carried out may also be scrutinised.
What happens after the IRC's determination?
If the matter does not resolve at conciliation, it may proceed to arbitration. The IRC will then issue a certificate of determination stating whether some or all of the alleged conduct constituted relevant conduct.
That determination is legally binding and cannot subsequently be reconsidered by the Personal Injury Commission (PIC). If the IRC determines that the conduct was not relevant conduct, the worker is not entitled to further workers compensation for that injury. If relevant conduct is established but the insurer maintains other grounds for disputing liability, those remaining issues may proceed to the PIC.
Employers should also be aware of the short procedural timeframe: a respondent served with an application must enter an appearance within seven days.
The NSW Government has reinforced the IRC's expanded role by appointing a new Deputy President and four additional Commissioners to support its new bullying, harassment and workers compensation functions.
For employers, the reforms make robust documentation, properly conducted management processes and early legal advice increasingly important when workplace conduct allegations intersect with psychological injury claims.
Article by Kayte Lewis and Ee-Shuen Goh
This article is general in nature and is not legal advice. If you need help dealing with workplace bullying and harassment or require assistance with updating your workplace contracts, procedures and policies, or other employment law matters, Voice Lawyers can assist you.
We help people and businesses navigate the complexities of the Fair Work Act and workplace laws with confident and practical advice. You can contact us at office@voicelawyers.com, give us a call at 02 9261 1954 or use the link on our website to book a consultation to speak with one of our lawyers.