Australia: That's not reasonable! So what is? Managing misconduct under the microscope

Workplace Relations Update
Last Updated: 11 October 2011
Article by Tegen Tvede and John-Anthony Hodgens

A recent decision of the Administrative Appeals Tribunal is a timely reminder of the importance of acting reasonably in managing employee misconduct. In the case, the tribunal emphasised that managers should not blindly follow a policy or procedure but must turn their minds to the particular circumstances to determine what is reasonable.

What happened?

A manager had received several complaints about an employee who was accused of making uncomplimentary remarks about other staff and making comments which undermined management. Although the complaints were potentially serious, the manager was unwilling to activate formal disciplinary processes because the employee did not respond well to counselling or criticism. Instead, the employee was asked to meet with a supervisor for an 'informal chat'.

Because the manager did not work in the same city as the employee, she arranged to be joined to the meeting by telephone. She also arranged for the supervisor to be present to ensure the employee was alright.

The manager gave evidence that the complaints were put to the employee during the meeting and the employee was given the opportunity to respond. At the conclusion of the meeting, the manager was satisfied with the responses and decided not to progress the matter.

No record of the discussion was entered onto the employee's personnel file.

The next day, the employee concerned emailed the manager and advised that she was surprised and upset by the complaints which she believed were unfounded. The employee asked for a follow up meeting to get to the bottom of the complaints. The manager declined the invitation because she regarded the matter as closed and thought it best to 'move on'.

The employee claimed that she had developed a psychiatric condition as a result of these events and applied for workers' compensation under the Safety Rehabilitation and Compensation Act 1988 (Cth).

In particular, the employee criticised the process on the basis that:

  • she was not told the manager would be joining the meeting
  • she was not told about the complaints before the meeting to enable her to prepare a response
  • she was not given the opportunity to bring a support person to the meeting
  • she was not told that the discussion was part of an informal process rather than a formal process
  • the meeting did not comply with the employer's misconduct policy
  • the manager was unwilling to look further into the complaints.

What did the tribunal find?

The tribunal held that the actions of the employee's manager constituted 'reasonable administrative action'. As a result, notwithstanding that the events contributed to the onset of the employee's psychiatric condition, the employee's claim for compensation failed.

In reaching this decision, the tribunal found that:

  • the process was not inconsistent with the employer's misconduct policy as the policy required the manager to consider whether there were any other options to commencing a formal misconduct process
  • it was not unreasonable that the employee was not provided with an agenda or given the opportunity to have a support person in light of the limited objectives of the meeting
  • it was not unreasonable for the meeting to be conducted by telephone because 'that is the way modern organisations work' and there was no need for the manager to fly in for the meeting given the gravity of the allegations
  • it was not unreasonable for the manager to decline the follow up meeting because the manager believed that 'there was nothing to be gained from opening that particular can of worms'.

The tribunal also concluded that the manager proceeded 'fairly and with considerable sensitivity in the circumstances' and noted that 'a reflexive resort to the more elaborate formal processes in the misconduct policy would have been so disproportionate that it might have been unreasonable to adopt that course.'

Key lessons for employers

This case is a reminder that managers 'are not excused from their obligations to act reasonably just because they follow a procedure laid down by their supervisors. Conversely, their behaviour must not be condemned merely because they do not follow such a policy if their conduct was still, in the circumstances, reasonable.' In short, management action need not be perfect but must be reasonable when considering all of the circumstances.

To ensure that employee misconduct is managed reasonably and effectively, employers should implement a best practice policy which provides for both informal and formal disciplinary processes depending on the circumstances. Employers should also train senior staff in how to apply the policy and make decisions that are proportionate and appropriate having regard to all the circumstances. A failure to provide adequate training may result in the policy being either ignored or applied in a manner that not reasonable.

Employers also need to be familiar with the protections provided to employees by the adverse action provisions of the Fair Work Act 2009 (Cth).

Lastly, if an informal performance management process is used and the problem is not resolved, a formal process must be commenced before any further action can be taken against the employee to minimise the risk of successful claims.


Mark Sant

t (02) 9931 4744


Stephanie Nicol

t (02) 9931 4855



Ian Dixon

t (03) 9252 2553


Steven Troeth

t (03) 9612 8421



John-Anthony Hodgens

t (07) 3231 1568



Nicholas Linke

t (08) 8233 0628


This report does not comprise legal advice and neither Gadens Lawyers nor the authors accept any responsibility for it.

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