Last week Victorian Macedon Ranges Shire entered into a court-enforceable undertaking to develop an anti-bullying strategy.
The undertaking followed "partially substantiated" allegations that it had terminated the employment of a worker who had raised concerns about health and safety.
The shire has promised to bring in a consultant to train staff, provide information sessions to other councils and publish an article about its failings.
“Councils are community-based organisations providing essential services. In regional areas, they are major employers," said acting executive director Stan Krpan.
“For any council, any suggestion of bullying affects individuals, and has a chilling effect on staff morale, its local and industry reputation and increases community costs."