Australia: FWC bullying jurisdiction – case update

HG Industrial and Employment Law Alert: 30 June 2014
Last Updated: 26 July 2014
Article by Andrew Tobin and Abigail Vipond

The Fair Work Commission's (FWC) bullying jurisdiction came into force on 1 January 2014. Some six months have passed, and we are now in a position to analyse some of the trends arising from the applications lodged.

Surprisingly, the number of applications has been largely underwhelming. The most recent FWC report told us that approximately 150 applications had been made over the first quarter of 2014. The number fell far short of the predicted 70 claims per week.

Our experience tells us that this jurisdiction may be a slow burner to begin with but will gather momentum as time passes and more employees become aware of their rights under the legislation.

In this Alert, Partner Andrew Tobin, Associate Abigail Vipond and Trainee Solicitor Adele Garnett summarise some of the recent bullying cases that have come before the FWC and the courts and highlight some key considerations for employers:

Does bullying behaviour have to be long standing?

The Fair Work Act 2009 (FWA) defines bullying as behaviour by a person in a workplace that is repeated, i.e. is not a one-off occurrence. But does it have to be long standing behaviour?

For practical purposes the answer is "no", although the most graphic demonstration of that point comes not from an application for a stop-bullying order but, rather, from a recent decision of the Queensland Supreme Court in a personal injuries claim litigated on common law principles.

In that case, the Court held that the plaintiff worker, Ms Keegan, who had returned to work following a period of maternity leave, was bullied by her new manager, Ms McMahon, (there had been a change of management during her leave period) over a period of just 11 days1.

The bullying behaviour included, amongst other things: undermining behaviour, unwarranted criticism about her work prior to maternity leave, making derogatory comments about Ms Keegan in front of store customers, withholding financial information about the store's budget and being left out of business management matters, ignoring her, belittling her handwriting and saying to her that she could reduce her hours if she wasn't coping.

The court held that the employer was put on notice of the bullying behaviour just four days after Ms Keegan's return to work when she made a complaint to her business manager, Ms Makarein. The employer failed to address the complaint and failed to comply with its own policy. The complaint was not taken seriously or investigated. Ms Makarein's initial response to Ms Keegan was to "put some lippy on and go home to your bub".

Ms Keegan was so affected by the bullying behaviour that she turned into a recluse. Her psychological injury was such that she could not look after her baby. At the time of the hearing she had showed some improvement but it was estimated that she would not be able to return to full time work for years.

It was held that Ms Keegan's injury was caused by the workplace bullying and by the lack of support she received from work colleagues and Ms Makarein. The company was ordered to pay Ms Keegan more than $300,000 in damages.

Can any worker make an application for a stop-bullying order?

No. One of the primary limitations is that the FWC jurisdiction applies only to workers employed by a "constitutionally covered business".

This will generally capture trading companies but not, for example, employees of some charities; employees of businesses that are not incorporated, such as sole traders and partnerships of individuals; and State government employees.

The issue can be a complex one.

In Ms Kathleen McInnes [2014] FWC 1395 (24 March 2014) an application was dismissed because the employer, a government funded not for profit provider of free services to vulnerable people, was found not to be a "constitutionally covered business" because, while it was incorporated, its activities were not sufficiently commercial to amount to trading activities.

As a further example, in Ms S.W.[2014] FWC 3288 (2 June 2014) an application for an order by a government school teacher was dismissed because the employer, a Western Australian public school, was not a constitutional corporation.

Another obvious threshold requirement is that only a "worker" is entitled to seek an order. In Arnold Balthazaar v Raelene McGuire; Department of Human Services (Commonwealth) [2014] FWC 2076 (2 April 2014) the applicant claimed to be a "worker" entitled to make an application against the Commonwealth, because he received a carer's benefit under Commonwealth social security legislation. His application was dismissed on the basis that, while his caring activities – for his daughter who suffered a mental illness – amounted to "work", it did not follow that he was working for the Commonwealth.

In the same case, Vice President Watson indicated that while the legislation was intended to cover a broad range of working arrangements, the provisions were not unlimited. He said that, for example, they were not intended to cover relationships such as students performing work for teachers, domestic work by family members, or relationships outside the context of paid or unpaid work in the commonly understood sense.

Can an applicant rely on incidents prior to 1 January 2014?

Yes. In Kathleen McInnes [2014] FWCFB 1440 (6 March 2014), the Full Bench of FWC was asked to consider whether bullying conduct that occurred prior to the commencement of the FWC's bullying jurisdiction on 1 January 2014 could be considered.

The respondent argued that the Applicant should not be allowed to rely on events that took place before the jurisdiction was introduced and to do so would give the legislation retrospective effect.

However, the Full Bench took a different view. Whilst emphasising that anti-bullying orders are to operate prospectively, past behaviour may be taken into account because the legislation is, "basing future action on past events" rather than changing past rights and obligations.

Can a worker obtain a "stop bullying order" after their employment has ended?

It is difficult to foresee a situation where that would occur.

In Shaw v Australia and New Zealand Banking Group Limited T/A ANZ Bank; Haines [2014] FWC 3408 (26 May 2014), an application for a stop-bullying order was dismissed when, after the proceedings had been commenced, the applicant was dismissed from their employment.

While the worker went on to dispute the legitimacy of his dismissal in separate proceedings seeking reinstatement, the fact of the dismissal meant that his application for a stop bullying order had no reasonable prospects of success. One of the threshold requirements for the making of an order is that the FWC must be satisfied that there is a risk that bullying behaviour "at work" would continue. In Shaw, the FWC said it could not be satisfied of such a risk when the applicant was no longer employed.

It made no difference that the applicant worker had commenced separate proceedings disputing the dismissal, in which one of the possible remedies was reinstatement. The FWC indicated that if, as a result of those proceedings the applicant was reinstated, a further application for a stop-bullying order could be made at that time.

However, workers who have been dismissed in the context of bullying allegations made by them, may be able to make other types of claims.

For example, the Federal Circuit Court decision in Dalglish v MDRN Pty Ltd [2014] FCCA 1138 (10 June 2014) involved a claim by a solicitor against her former employer in the general protections jurisdiction of the Court, alleging that she had been unlawfully dismissed as the result of having made complaints against some of her co-workers, including a bullying complaint against a legal secretary.

Can multiple applications be brought between the same parties?

Yes. See the decision in Shaw discussed above. In that case, Deputy President Gostencnik indicated that the fact that an application had been brought and dismissed – as occurred in that case – would not operate to prevent the making of a further application in future.

What will anti- bullying orders look like?

In Applicant v Respondent, PR548852 (21 March 2014) the FWC made its first, and so far only, substantive stop bullying order. The FWC may make any order it considers appropriate (other than an order requiring payment of money) to prevent the worker from being bullied at work by the individual or group.

In this case, the FWC ordered an employee accused of bullying to:

  • have no contact with the co-worker alone;
  • make no comment about the co-worker's clothes or appearance;
  • refrain from sending any emails or texts to the co-worker except in emergency situations;
  • "complete any exercise" at the employer's premise before 8.00am; and
  • raise no work-related issues without first notifying the employer's Chief Operating Officer or their subordinate.

Quite how the FWC envisaged this order being implemented by the employer is not clear and the practicalities of such were left to the employer's discretion. For example, would a breach of the order by the alleged bully allow the employer to take disciplinary action against the employee? Our view is, if managed properly, it would. The FWC Senior Deputy President gave the parties leave to have the case re-listed for a further conference if they experience any difficulties in implementing the orders.

It is important that employers manage the proper implementation of any orders issued as a contravention could lead to prosecution for civil penalties – up to $51,000 for a corporation and up to $10,200 for individuals involved in the contravention.

What is reasonable management action?

In Ms SB [2014] FWC 2104 (12 May 2014) the FWC fleshed out the concept of "reasonable management action" in rejecting a manager's claim that she had been subjected to repeated unreasonable treatment by her two subordinates. The FWA provides that the bullying provisions do not apply to reasonable management action carried out in a reasonable manner.

Commissioner Hampton provided guidance on what constitutes reasonable management action, stating that:

  • management actions do not need to be perfect or ideal to be considered reasonable;
  • a course of action may still be reasonable even if particular steps are not;
  • to be considered reasonable, the action must also be lawful and not "irrational, absurd or ridiculous";
  • the "actual" action needed to be considered, rather than the applicant's perception of it; and
  • it might be relevant to consider whether the action involved a significant departure from established policies or principles, and if so, whether the departure was reasonable in the circumstances.

It appears from this case that the parameters of what constitutes 'reasonable management action' are relatively wide and follow a common sense approach. This should give employers a degree of comfort and flexibility when they are managing their employees.

Subsequently, at least two further decisions of the FWC have been reported where claims have failed on the basis that the action taken by the employers in question constituted reasonable management action taken in a reasonable manner. See Tao Sun [2014] FWC 3839 (16 June 2014) and The Applicant v General Manager and Company C [2014] FWC 3940 (17 June 2014).

In Tao Sun the FWC warned potential employee claimants who believe they are being bullied that they are not immune from normal expectations that they comply with their employer's workplace policies and practices. In that case, the FWC found that an employer did not bully an IT worker when directing him to take on a project that was not referred to in his job description.

In The Applicant a training company manager failed to convince the FWC that she had been bullied by a manager over a period of two months, despite a finding that some of the manager's conduct, if repeated, could have resulted in a finding of bullying behaviour. However, the FWC determined that upon an assessment of the evidence as a whole, there was no repeated behaviour that was not reasonable management action carried out in a reasonable manner.

Key considerations for employers

  • Deal with bullying complaints as soon as you are made aware of them – this is when you are put on notice that there is a reasonably foreseeable risk of psychiatric injury to the employee. If a breach of the duty to provide a safe working environment subsequently occurs and is proven, in addition to a possible complaint arising under the FWA's bullying provisions, you may be liable for significant damages due to negligence.
  • Bullying does not need to be long-term to significantly affect the health and wellbeing of employees.
  • Having a policy on bullying and harassment is of no use unless it is followed. The way complaints are dealt with can be a significant stressor, and an inappropriate response to a complaint can heighten an employee's sense of isolation and vulnerability and increase the probability of a psychiatric injury.
  • Train your employees on your bullying and harassment policy and arrange for them to complete a test at the end which they must sign and date to ensure they acknowledge and understand the policy. Retain the test on the employee's personnel file so that you can produce evidence of the training, if required; and
  • The jurisdictions that an employee can use to address a problem if they feel bullied are varied, and can include a workers' compensation and/or negligence claim, a workplace health and safety complaint, a Fair Work stop bullying complaint or an adverse action complaint, and even a discrimination complaint in some circumstances. The complaint avenues and extent of liability, as well as the potential impact on valued employees, makes it essential that you have appropriate policies and procedures in place that treat bullying complaints seriously.

Safe Work Australia has recently released two new anti-bullying guides (one for workers and one for employers) and the FWC also launched a dedicated anti-bullying web page prior to Christmas 2013.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Andrew Tobin
Abigail Vipond
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