The cross-party committee has recommended new anti-bullying laws for all workers in NSW in a report that is damning of WorkCover.

The committee has also called for independent oversight of the agency, which has responsibility for regulating workplace safety and providing workers compensation.

WorkCover has also been urged to make a public apology to staff including Wayne Butler, an employee it was forced to reinstate after it sacked him for dubious reasons. The committee said this was important to help the organisation rebuild trust with staff.

Deputy president of the NSW Industrial Relations Commission Rodney Harrison described an investigation WorkCover conducted into Mr Butler as little more than a ''witch-hunt'' and characteristic of ''institutional bullying''.

Mr Butler had spent 12 years in WorkCover's Safety, Return to Work and Support Division until being sacked in November 2012 following an investigation Mr Harrison denounced in June last year as ''deplorable''.

The parliamentary inquiry, established in response to a motion by the NSW Greens, found "evidence that alleged widespread use of punitive processes, poor management practices, authoritarianism among senior managers, and denial by senior management that a significant problem of bullying exists within the organisation".

"We highlight the need for the organisation to abandon its culture of denial and cover-up, and to embrace transparency and accountability in order to build trust," the committee's report said.

Greens NSW MP David Shoebridge said WorkCover's entrenched culture of bullying urgently needed to be addressed.

"WorkCover, which is meant to be regulating work safety across the state, has shown itself unable to even address bullying in its own ranks," he said.

"This culture of bullying and denial must be addressed before anyone can have confidence that WorkCover is up to the job of being a state-wide workplace regulator."

Another member of the parliamentary committee, Labor MP Adam Searle, who recommended new laws to protect all workers in NSW from workplace bullying, said they needed to extend to WorkCover and insurers.

"This unhealthy culture must change, and the report provides a road map for that change," he said.

Public Service Association general secretary Anne Gardiner said surveys of WorkCover staff over recent years have consistently shown high levels of bullying with no effective action taken by management.

“When a bullying culture has become prevalent at the NSW workplace safety regulator, which is meant to ensure safety, health and wellbeing across the state, it’s surely time for a serious fresh new look at how the issue is dealt with,” Ms Gardiner said.