ABSTRACTAustralian workplaces are increasingly becoming culturally diverse. As a space of involuntary encounter of racial difference, multicultural workplaces are significant sites for understanding how workers deal with cultural difference. Involuntary cross-cultural encounters are a facet of living with cultural difference which can produce discomfort, tension and conflict in the workplace. The study of workplace social relations has traditionally focused on practices of racial discrimination. In this paper, we shift the focus to examine different modes of negative inter-ethnic interactions at work through the lens of discomfort. It suggests that analysing tension and conflict arising in multicultural workplaces as racially motivated or simply racist fails to capture other factors that adversely affect inter-ethnic interaction. This paper presents findings from a research into workplace interaction in the Australian employment services providers to emphasise that changing work conditions and increasing cultural diversity have profound impact on the workers’ experiences of workplace relations.