Humour and banter within the workplace can be a double-edged sword. On one hand, it can foster camaraderie, boost morale, and enhance team dynamics. On the other hand, inappropriate jokes, especially those that cross into realm of sexual harassment or target specific attributes like race, gender identity, or sexual orientation, can have profound and lasting negative effects on employees and the overall workplace environment.

In this blog, we highlight the dangers of inappropriate jokes in the workplace. While humour can be a valuable tool for building connections among colleagues, inappropriate jokes are a brand of humour that can erode trust, damage employee well-being and tarnish a company’s reputation. In addition to these practical ramifications, these jokes can land employers squarely in legal hot water.

We will begin by canvassing the key legal risks associated with inappropriate jokes within the workplace. This will be followed by a case illustration of what can happen when inappropriate jokes are not properly dealt with. To conclude, we provide some practical guidance on how you can protect your staff and mitigate these risks from materialising within your organisation.


The consequences of inappropriate jokes extend far beyond mere discomfort or offence. There are three major legal risks that employers need to be aware of when it comes to inappropriate humour in the workplace, each carrying potentially severe consequences.

Breach of Safety Laws

From a safety law perspective, the first and perhaps most significant risk revolves around a breach of safety laws. Across various states and territories, employers are legally required to ensure the health and safety of their employees as far as reasonably practicable (see for example, section 21 of the Victorian Occupational Health and Safety Act 2004).

Inappropriate jokes, especially those of a sexually harassing nature or targeting specific attributes, can amount to a psychological hazard within the workplace. Such a hazard, if not adequately managed, can lead to significant distress among those who are targeted, and in some cases, even result in the development of psychiatric conditions.

Failing to implement adequate controls to eliminate or mitigate these risks can place employers in breach of applicable safety laws. This is a risk of considerable magnitude, as it can lead to criminal liability for employers. In such cases, not only could employers face potential jail time, but they may also be subject to significant monetary penalties.

Breach of Bullying Laws

The Fair Work Act 2009 introduces another layer of risk associated with inappropriate jokes in the workplace. When these jokes are made repeatedly and create a risk to the health and safety of workers, the affected employee has the option to apply for a stop bullying order at the Fair Work Commission. Moreover, if the inappropriate jokes are of a sexual nature, they also have the option to apply for a stop sexual harassment order.

While the Fair Work Commission does not have the authority to award monetary compensation for these orders, this is not to say these orders are not capable of creating real repercussions for your organisation. They can result in substantial reputational harm for your business, and significant operational disruptions if, for example, the order requires certain employees whose work normally overlaps to be kept apart. 

Worker’s Compensation

Perhaps the most direct and immediate consequence of inappropriate jokes leading to psychological harm in an employee is the potential for worker’s compensation claims. 

If an employee develops a psychiatric condition as a result of being targeted by inappropriate jokes within their workplace, the employee has the option to make a worker’s compensation claim – and their likelihood of success in such claims would be high.

When this occurs, the business’s worker’s compensation premiums are likely to increase significantly, adding a financial burden to the legal and reputational costs.

Other Legal Risks

There are a multitude of other legal risks that could flow from inappropriate jokes in the workplace (or failing to deal with them properly) including claims under discrimination or sexual harassment law (depending on the content of the jokes). Both employers and employees can be held liable under such actions and the award of damages can be significant.

An aggrieved employee might also be able to claim – in extreme circumstances – that they were forced to resign from the workplace and then bring a claim under unfair dismissal law.

Case Illustration

To better understand the real-world ramifications of inappropriate workplace jokes and the legal risks they entail, let’s delve into a case that sheds light on the potential consequences.

In the case of Green v State of Queensland, Brooker and Keating [2017] QCAT 008, Green was employed as a cleaner at a school. He shared a good working relationship with colleagues Brooker and Keating. They often engaged in light-hearted banter and practical jokes as a way to bond with one another, a common scenario in many workplaces.

However, one day, Brooker and Keating decided to enact a practical joke on Green. Seeking retaliation for a previous prank, they set up a classroom to create the illusion that two other employees, who were rumoured to be involved in an affair, had engaged in sexual activity within that space. The setup included pillows, condoms, and wine bottles strategically placed to make it look real. Green, unaware that this was a prank, intended to confront one of the employees he believed was involved in the affair. It was only later that Brooker revealed the truth to Green.

What followed was a downward spiral for Green, who was profoundly affected by this incident. The humiliation and distress he experienced eventually led him to turn to alcohol as a coping mechanism. As time went on, the psychological toll manifested in the form of anxiety and post-traumatic stress disorder.

As a result of this, Green decided to take legal action and lodged a sexual harassment claim against Brooker and Keating, as well as their employer, the State of Queensland. The Queensland Civil and Administrative Tribunal ruled Brooker and Keating were directly liable, and the employer was vicariously liable by not having taken all reasonable steps to prevent the incident from happening. The Tribunal awarded Green approximately $156,000 in compensation.

Key Takeaway

The takeaway from this case and the blog is crystal clear: not all jokes have funny consequences, and some can be incredibly harmful. 

Employers have a positive duty to ensure the well-being and safety of their staff, and this responsibility extends to preventing inappropriate banter and maintaining a healthy workplace culture.

So, how can organisations effectively mitigate these risks and create a workplace where humour and respect coexist harmoniously? 

Establish Clear Policies

The first and crucial step in mitigating the risks associated with inappropriate jokes and banter is to establish a clear and comprehensive policy. This policy should outline what constitutes acceptable behaviour within the workplace and explicitly state what forms of banter are not appropriate. 

Given the primary aim of such a policy is to protect the psychological health and safety of staff, it is essential to consult widely with employees before implementing it to ensure it is fit for purpose and reflective of the organisation’s values.

Provide Adequate Training

Once the policy is in place, employers must ensure that all staff members are adequately trained. If your organisation lacks the expertise to provide appropriate training, consider enlisting the help of experts who can guide you in developing and implementing these policies effectively. 

Training should not be a one-time event but an ongoing process that keeps employees informed and aware of the organisation’s expectations regarding behaviour and respect.

Consistent Enforcement and Regular Review

A policy document about inappropriate jokes and banter is only effective if it is consistently enforced. Employers should actively monitor and address breaches promptly. Additionally, policies need to evolve with the changing dynamics of the workplace and societal norms. Regularly reviewing and updating these policies ensures that they remain effective and fit for purpose in safeguarding the workplace’s well-being.

Create Open Channels for Reporting

It is vital to establish both formal and informal channels for employees to raise concerns about inappropriate banter within the workplace. When an employee brings such an issue to your attention, it is essential to respond promptly and with sensitivity. Recognise that employees may have been enduring discomfort for some time before gathering the courage to report it. A swift and empathetic response not only addresses the immediate concern but also demonstrates a commitment to a safe and inclusive workplace.

In conclusion, this case is an important reminder that inappropriate jokes in the workplace can have severe consequences, both legally and emotionally. Employers bear the responsibility of actively preventing such behaviour and fostering a culture of respect and inclusion. By implementing clear policies, providing training, consistently enforcing rules, and maintaining open communication channels, organisations can mitigate risks and create workplaces where all employees feel safe, valued, and respected.

If you have any questions or need further guidance on creating policies or addressing workplace issues, please do not hesitate to contact our team.


The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact HR Connect for advice.

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