Is it legal to record conversations in Australia?

I work with this woman who needs constant supervision because she can't use common sense when doing daily tasks. She has to be corrected quite frequently because of this. She is now saying that we all bully her. Since when did making sure someone was doing their job become bullying! This has been going on for months and gets worse everyday. I feel as though she does most things on purpose to make her "bullying" case stronger.
Anyway, it has recently come to my attention that when she goes out for lunch, she puts her iphone in her bag on record and leaves it in the staff room and tapes the private conversations my co-workers and I have. She also leaves it in her pocket during work time and as soon as someone approaches her she presses record and tapes the conversations people have with her.
I was told this by a co-worker who has been quite friendly with her in the past but no longer is. By friendly, I mean they were sleeping together!
Now as far as I know, this is not legal. Can someone help me out with this? I need to know if I should take this further.

You can only record conversations without the other person's knowledge if you are doing so under the protection of a court order.

This is why when you ring a call centre you will usually hear "Your call maybe recorded for quality coaching purposes, tell the operator if you do not want this to happen"

If you are recording someone in any situation you must tell them so they are aware and can also ask you not to if they wish.

Personally I would take her iPhone and dump it in the toilet. She can't complain considering what she is doing.