JAIL terms should be considered for workplace bullies, the Australian Council of Trade Unions told a parliamentary inquiry on Wednesday.
The inquiry is looking into the effects of bullying at Australian workplaces on victims, workplace culture and what can be done to prevent it.
The inquiry was established after the Productivity Commission revealed workplace bullying could cost the nation as much as $36 billion every year.
ACTU assistant secretary Michael Borowick said workplace bullying had been neglected for too long, suggesting tougher penalties, including jail terms in extreme cases.
"Although we need tougher penalties, it is more important that we change workplace culture to ensure bullying does not happen in the first place," he said. "Everyone is entitled to respect at work.
"The effects of bullying are serious, many people who are bullied report depression or other mental health issues and have difficulty returning to work."
Mr Borowick said it was not good enough for employers to ignore bullying. He said employers had to acknowledge their responsibility to provide a safe working environment for workers.
"We need a forum to easily resolve bullying complaints before they escalate.
"Bullying behaviour on its own should be enough to trigger a complaint, rather than waiting for an injury to occur."
The House of Representatives inquiry was initiated by Workplace Relations Minister Bill Shorten in May, and was unlikely to report back before the end of the year.