Australia: What is the difference between bullying and 'reasonable management action'?

In brief - Decision of Fair Work Commission provides welcome guidance to employers

Last month, the Fair Work Commission (FWC) handed down its first substantive ruling in its new bullying jurisdiction. The decision of Commissioner Hampton clarifies the "reasonable management action" provision of the Fair Work Act 2009 ("the Act") and provides welcome guidance to employers on the types of conduct that will amount to workplace bullying.

Application to Fair Work Commission for order to stop bullying

Following the introduction of the new section 789FD of the Act, workers who think they are being bullied at work can apply to the FWC requesting an order that workplace bullying cease. While the Commission does not have the jurisdiction to order compensation, it is able to make orders that bullying behaviours cease.

In the recent matter of Ms SB [2014] FWC 2104 (12 May 2014), the applicant manager applied for an order to stop bullying pursuant to section 789FD of the Act. The application alleged bullying conduct by another employee, Ms CC, a subordinate Delivery Support Team member (DSO), and others who are or were in her workplace.

Bullying complaints lodged with HR department

In August 2013 a former DSO, Ms NP, made a bullying complaint against the applicant. An investigation by the employer found the complaint to be unsubstantiated.

On 7 January 2014, CC made a complaint of bullying against the applicant to Human Resources (HR). Without knowing that CC had made a bullying complaint, the applicant sought to have a discussion with HR about CC. At the outset of those discussions, HR advised the applicant that CC had formally lodged a complaint of bullying against her.

The applicant considered her position and lodged an application seeking orders from the FWC directed at stopping the alleged conduct by CC, compliance by her employer and others with the bullying policies operating at the workplace, and the monitoring of workplace behaviour by the employer.

External investigator engaged to investigate bullying allegations

The employer subsequently engaged an external investigator to investigate the allegations of bullying made by both CC and the applicant. The investigation determined that the allegations against the applicant were substantiated (in part), while the applicant's claims were unsubstantiated.

In her application, the applicant alleged several incidents of unreasonable conduct, including:

  • the making and acceptance of two separate complaints of bullying against her from NP and CC
  • failure by her employer to take adequate action to prevent similar inappropriate conduct (following the conclusion that NP's complaint was unsubstantiated)
  • ongoing malicious rumours in the workplace and a lack of support from her employer
  • being harassed and badgered on a daily basis by CC

Conversely, the employer opposed the application on a number of grounds, including a contention that there was an absence of repeated unreasonable conduct and that any conduct by itself was reasonable management action taken in a reasonable manner.

What conduct will constitute bullying?

Section 789FD(1) of the Act sets out the circumstances in which a worker is deemed to have been bullied at work.

In reaching his decision, Commissioner Hampton considered the kinds of conduct that will amount to "bullying" (as defined by section 789DF(1)) and in doing so, he had particular regard to the Explanatory Memorandum (EM) to the Fair Work Amendment Bill 2013. The EM states that:

... a worker is bullied at work if, while the worker is engaged by a constitutionally-covered business, another individual, or group of individuals, repeatedly behaves unreasonably towards the worker, and that behaviour creates a risk to health and safety.

The EM concludes that the following three criteria are helpful in defining bullying behavior:

  • the behaviour has to be repeated
  • the behavior has to be unreasonable
  • the behaviour has to cause a risk to health and safety

What constitutes "unreasonable" behaviour?

In noting that unreasonable behaviour "...should be considered to be behaviour that a reasonable person, having regard to the circumstances, may consider to be unreasonable", the Commissioner concluded that the following conduct would be capable of being considered unreasonable conduct within the meaning of section 789FD(1):

  • the making of vexatious allegations against a worker
  • spreading rude and/or inaccurate rumours about an individual
  • conducting an investigation in a grossly unfair manner

The list is by no means exhaustive and the examples were qualified by the Commissioner, who noted that what will constitute unreasonable conduct will depend upon the nature of the actual conduct and the context in which it has occurred.

What will amount to reasonable management action?

In assessing whether there had been repeated unreasonable behavior, Commissioner Hampton also considered whether any of the conduct was reasonable management action taken in a reasonable manner.

Section 789FD(2) of the Act clarifies that reasonable management action, when carried out in a reasonable manner, will not result in a person being "bullied at work". The purpose of the section is a practical one that acknowledges that persons conducting a business or undertaking have rights and obligations to take appropriate management action and make appropriate management decisions.

Commissioner Hampton stated that Section 789FD(2) of the Act is not so much an "exclusion" but a qualification which reinforces that bullying conduct must of itself be unreasonable. He noted that:

In its application, the provision comprises three elements:
  • the behaviour (being relied upon as bullying conduct) must be management action;
  • it must be reasonable for the management action to have been taken; and
  • the management action must have been carried out in a manner that is reasonable.

Factors to be considered in assessing management action

According to Commissioner Hampton, factors to be considered in objectively assessing management action include:

  • the circumstances that led to and created the need for the management action to be taken
  • the circumstances while the management action was being taken
  • the consequences that flowed from the management action

In the present case, Commissioner Hampton concluded that the receipt of the two complaints by management and the conduct of investigations in response were not unreasonable: "Indeed, that course of action was the only reasonable and prudent response".

In light of this and in considering that he had not been persuaded that bullying (within the meaning of the Act) had occurred, the Commissioner found that there was no basis upon which to make the orders requested and the applicant's case was ultimately dismissed.

Other useful lessons from the Commission's decision

Some other elements of the Commissioner Hampton's decision are relevant and noteworthy.

  • The applicant bears the burden of establishing that repeated behaviour occurred and that the behaviour was unreasonable.
  • An employer should take sufficient steps to support employees and should be proactive in ensuring that such support is provided in an efficient and timely manner.
  • Behaviour that is "bordering upon unreasonable" is outside the scope of bullying as defined by the Act.
  • Anonymity can and will be ordered where appropriate.
  • In some circumstances, legal professional privilege over external investigation reports may be maintained.
  • Unreasonable behaviour must also create a risk to health and safety - i.e. there must be a causal link between the bullying behaviour and the risk to health and safety.
  • An accepted workers compensation claim does not necessarily prove a bullying claim.

What does this mean for employers?

Whether management action was taken in a reasonable manner will be assessed objectively and will depend upon the action taken, the facts and circumstances giving rise to the requirement for that action, how the action was carried out and the way in which the action taken affects a worker.

The test is whether the management action was reasonable, not whether it could have been undertaken in a manner that was "more reasonable" or "more acceptable".

According to Commissioner Hampton, this is:

...likely to mean that:
  • management actions do not need to be perfect or ideal to be considered reasonable;
  • a course of action may still be 'reasonable action' even if particular steps are not;
  • to be considered reasonable, the action must also be lawful and not be 'irrational, absurd or ridiculous';
  • any 'unreasonableness' must arise from the actual management action in question, rather than the applicant's perception of it; and
  • consideration may be given as to whether the management action involved a significant departure from established policies or procedures, and if so, whether the departure was reasonable in the circumstances.

Essentially, this decision indicates that it will be reasonable to take management action if, in the context of the circumstances, a reasonable person would have taken the same action.

Consequently, established and transparent policies dealing with workplace bullying and dispute resolution will provide an employer with a strong argument that action taken by it was "reasonable management action" in accordance with section 789FD(2) of the Act.

Steps you can take to reduce the risk of claims of workplace bullying

In order to minimise exposure to claims of workplace bullying under the Fair Work Act, we recommend that you take the following steps.

  • Conduct a review of your current workplace bullying policy to ensure that it is up to date.
  • Ensure that your workplace bullying policy contains a transparent internal complaint procedure.
  • Ensure that all of your staff are regularly trained on what does and does not constitute bullying behaviour and the need to adhere to the company's policies and procedures.
Kristen Lopes Greg McCann
Workplace relations
CBP Lawyers

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