What may be meant as an innocent comment via social media by an employer to an employee may lead to bosses facing lawsuits for unlimited damages for harassment, bullying or discrimination.

"Employers need to think very carefully before they allow employees to become 'friends' on their social networking sites," Lunn says. "Allowing employees to openly access your Facebook or MySpace account opens you to defamatory material being placed on there or just the perception your engagement with some employees is more favourable to them than to other employees.

"You could be seen to be discriminating against an employee that you don't befriend. It is important to remember that the employer-employee relationship doesn't stop at the office door."

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Under the Fair Work Act's adverse action clause, workers can sue for unlimited damages over actions that adversely affect their job, injure or discriminate, or threaten such actions.

Lunn says businesses should look to develop a social media policy or review their existing technology and HR policies to outline precisely what is acceptable and unacceptable in regards to the use of social media both during business hours and after hours.