Fair Work Act
Lack of Sleep, Poor Decisions and Rising Workplace Risk: Why Councils and SMEs Should Pay Attention
Lack of Sleep, Poor Decisions and Rising Workplace Risk
Introduction: The Hidden Cost of Workplace Fatigue
Across Australia, many workplaces still treat exhaustion as a sign of commitment. Employees who work late into the night, managers surviving on minimal sleep, and executives constantly “pushing through” are often praised for their dedication.
However, growing research suggests this culture may be creating a serious governance and compliance risk for Local Government, government agencies, and SMEs.
How Lack of Sleep Impacts Decision-Making
Lack of sleep does far more than reduce productivity. Research now links fatigue to poor judgment, inflexible thinking, impaired decision-making, and unethical behaviour.
Tired employees are more likely to cut corners, ignore procedures, make reactive decisions, and fail to properly consider the consequences of their actions. Fatigue also reduces emotional control and increases “tunnel vision” thinking, where individuals focus only on immediate outcomes rather than long-term risks.
Fatigue and Unethical Behaviour in the Workplace
Importantly, one of the first abilities people lose when tired is the capacity to reflect on the ethical consequences of their actions. This means exhausted employees are more likely to rationalise shortcuts or justify conduct they would normally recognise as inappropriate.
What begins as “just getting the job done” can quickly evolve into procedural breaches, poor workplace behaviour, or misconduct.
Governance Risks for Local Government and Public Sector Organisations
For councils and government organisations, this creates significant risk.
Fatigued staff may:
- Overlook procurement requirements
- Mishandle complaints
- Fail to maintain proper records
- Make poor decisions under pressure
- Ignore compliance obligations
In environments where accountability, transparency, and procedural fairness are critical, even small lapses can lead to allegations of misconduct, governance failures, reputational damage, or legal scrutiny.
Many investigations into workplace misconduct, fraud, corruption, and compliance breaches reveal a common factor — employees operating under excessive workload pressure and chronic fatigue.
Why SMEs Are Particularly Vulnerable
For SMEs, the danger can be even greater.
Small businesses often operate with limited staff, high workloads, and minimal internal oversight. Owners and employees frequently manage multiple responsibilities while working extended hours. Over time, fatigue can weaken internal controls and create conditions where errors, poor judgment, or even fraudulent conduct become more likely.
Common Workplace Failures Linked to Exhaustion
An exhausted finance employee may fail to identify suspicious transactions. A fatigued manager may ignore bullying or harassment complaints. An overworked staff member may manipulate records simply to keep up with unrealistic expectations.
These issues are rarely isolated incidents. They are often symptoms of a workplace culture where fatigue has become normalised.
Workplace Fatigue as a Risk Management Issue
The issue is not simply employee wellbeing — it is organisational risk management.
Businesses and councils that reward constant overwork may unintentionally be increasing their exposure to fraud, misconduct, poor workplace culture, and legal liability.
Forward-thinking organisations are now recognising fatigue as both a workplace safety issue and a governance issue. Managing workloads, encouraging healthy work practices, and reducing burnout are no longer optional wellbeing initiatives — they are essential risk mitigation strategies.
Creating a Sustainable Workplace Culture
Leaders should ask themselves an important question:
Are we rewarding productivity — or simply rewarding exhaustion?
Organisations that prioritise sustainable workloads, ethical leadership, and employee wellbeing are far more likely to maintain strong governance, effective decision-making, and healthy workplace cultures.
Conclusion: An Exhausted Workplace Is Not a High-Performing Workplace
The message for leaders is simple: an exhausted workplace is not a high-performing workplace.
It is a workplace operating with reduced judgment, weakened ethical safeguards, and increased exposure to serious organisational risk.
For Local Government, government agencies, and SMEs, managing fatigue is no longer just a wellbeing initiative — it is a critical governance and compliance priority.
Workplace behaviour and culture
Bullying, Harassment, and Misconduct
Workplace behaviour and culture go far beyond being merely human resources concerns.
These concerns centre on governance, compliance, and risk management.
These issues directly affect governance, compliance, and risk management.
- Formal complaints
- Workplace investigations
- Sick leave and workers’ compensation claims
- Staff resignations
- Unfair dismissal claims
- Legal action
- Reputational damage
- Loss of productivity
- Audit and governance issues
So workplace behaviour is a critical organizational risk—not just a personality issue.
What Exactly Defines Workplace Behaviour?
Workplace behaviour includes:
- Bullying
- Harassment
- Sexual harassment
- Discrimination
- Aggressive management styles
- Conflicts between staff
- Inappropriate language
- Misuse of authority
- Misconduct
- Breaches of the Code of Conduct
- Victimisation
- Unprofessional behaviour
These behaviours erode workplace culture and pose serious risks to the organization.
Why Workplace Culture Matters
Workplace culture is often described as:
“The way we do things around here.”
If the culture allows:
- Bullying
- Harassment
- Aggressive behaviour
- Poor management behaviour
- Ignoring complaints
- Favouritism
- Conflicts of interest
- Lack of accountability
Policies cannot resolve the issue because staff prioritise organizational culture over formal rules.
Toxic workplace culture often leads to:
- High staff turnover
- Increased sick leave
- Low morale
- Complaints
- Investigations
- Loss of staff
- Difficulty recruiting staff
- Reputational damage
Workplace culture is a governance matter, forged by the tone set from the top.
Bullying in the Workplace
Workplace bullying involves repeated unreasonable behaviour that threatens health and safety.
Examples include:
- Yelling at staff
- Constant criticism
- Excluding staff
- Setting unrealistic deadlines
- Withholding information
- Public humiliation
- Threatening job loss
- Excessive monitoring
- Misuse of performance management
- Spreading rumours
Bullying often escalates into both a WHS and HR issue.
Harassment and Sexual Harassment
Harassment encompasses any behaviour that:
- Offends
- Humiliates
- Intimidates
Sexual harassment includes:
- Unwelcome comments
- Jokes
- Messages
- Emails
- Physical contact
- Requests for dates
- Inappropriate comments
- Displaying inappropriate material
Organizations now bear a proactive responsibility to prevent sexual harassment, not just respond to complaints.
Misconduct
Misconduct may include:
- Breaches of the Code of Conduct
- Inappropriate behaviour
- Misuse of resources
- Conflicts of interest
- Fraud or theft
- Breaches of policy
- Failure to follow lawful and reasonable directions
Misconduct often sparks formal investigations.
Why These Issues Become Major Problems
Workplace behaviour issues can quickly escalate into major problems when:
- Complaints are ignored
- Managers do not act
- Managers are the problem
- There is no reporting system
- Policies exist but are not followed
- Investigations are not handled properly
- There is no training
- Leadership tolerates poor behaviour
- There are no consequences
Many major workplace investigations stem from a minor issue that was first overlooked.
What Organizations Should Have in Place
To proactively manage workplace behaviour risks, Councils, and organizations should implement:
- Code of Conduct
- Workplace Behaviour Policy
- Bullying and Harassment Policy
- Complaint Handling Procedure
- Investigation Procedure
- Training for managers
- Training for staff
- External investigator available
- Confidential reporting process
- Proper documentation
- Leadership training
- Clear consequences for misconduct
This forms a key part of a strong compliance and governance framework.
The Role of Managers and Leaders
Managers and leaders shape workplace culture in important and impactful ways.
Staff closely watch how managers act and what they allow.
When managers:
- Ignore bad behaviour
- Do not act on complaints
- Play favourites
- Bully staff
- Do not follow policy
- Do not document issues
As a result, the workplace culture will deteriorate.
Culture Flows Powerfully from the Top Down.
Final Thought
Many organizations see workplace behaviour issues as solely the responsibility of Human Resources.
They are not.
These issues touch on governance, risk management, legal matters, and reputation.
If workplace behaviour is not managed effectively, it will inevitably become:
- A complaint
- An investigation
- A legal issue
- A reputational issue
A powerful way to manage workplace behaviour is to:
- Set clear standards
- Train staff and managers
- Act on issues early
- Investigate properly
- Ensure leadership sets the right example
Remember
Workplace culture springs from influences that go far beyond formal policies.
It is shaped by the behaviour you allow.
Contact [email protected] if you need help in this area.
