Australia: The real cost of workplace bullying

Last Updated: 20 June 2016
Article by Tiffany Campbell

The Federal Government introduced a new anti-bullying regime into the Fair Work Act 2009 (Cth) on 1 January 2014.

Both from client experience and anecdotally, we know that the Fair Work Commission (FWC) anti-bullying process can be time-consuming, costly, and have significantly detrimental effects on the employer-employee relationship.

However, this isn't the only regime available to employees to address allegations of bullying behaviour in the workplace. Whilst the Fair Work Act gives the FWC broad powers to make any order it considers appropriate to prevent a worker from being bullied at work, it cannot make an order requiring payment of a monetary amount.

As a consequence, we are starting to see:

  • increasingly significant orders for damages from common law negligence claims by employees against their employers; and
  • a focus on bullying in the work health and safety jurisdiction, and an increasingly successful number of prosecutions for failure to meet employer obligations which are resulting in convictions under work health and safety legislation, significant fines and costs orders.

The cost of unchecked bullying in the workplace

Negligence claims

In the recent case of Mathews v Winslow Constructors (Vic) Pty Ltd1, a former employee was awarded damages totalling in excess of $1.3 million following a finding that she was subjected to abuse, bullying and sexual harassment from colleagues and subcontractors of the business.

As a result of the repeated and unchecked abuse of her colleagues, the employee was diagnosed with anxiety, stress and depression, and had not worked since the final incident in July 2010.

It was accepted by the employer at the hearing that it was vicariously liable for the acts of its employees and subcontractors and that it was negligent in failing to provide the employee with a safe working environment.

The damages award included $380,000 for general damages, $283,942 for past economic loss, and $696,085 for loss of earning capacity, following evidence from the employee and her former supervisor was that she was a good, industrious worker, and would have 'moved up the ladder', either at the business or elsewhere in the construction industry.

Similarly, in the Queensland case of Eaton v TriCare (Country) Pty Ltd2, the Court of Appeal accepted that an employee had developed a psychiatric illness (depression and anxiety) as a result of her consistently excessive workload and the bullying conduct of her manager, and was awarded $435,583.98 in damages.

The bullying conduct included the manager speaking to the employee with a stern tone and pointing her finger at the employee, as well as belittling comments such as telling the employee to 'get over it' when she raised genuine work issues and saying to the employee 'I've never met anybody so stupid as you'.

Relevantly, the Court indicated that:

  • The legal responsibility of the employer was to take 'reasonable care' to avoid a risk of a psychiatric injury to its employee, in circumstances where the employee was exhibiting a particular vulnerability – in that regard, the Court accepted that the demeanour of the employee had changed markedly since the commencement of her supervision by the manager, including that the employee had developed a visible shake or tremor and was seen crying frequently in the workplace, particularly when dealing with the manager; and
  • Reasonable care required that the manager not behave towards the employee in a harassing or belittling fashion. This type of behaviour had a real likelihood of causing such stress to the employee, in her vulnerable condition, that she would develop a psychiatric illness.

Work Health and Safety

Last week, Worksafe Victoria issued a media release about its prosecution of a builder under the Occupational Health and Safety Act 2004 (Vic) for repeated bullying of an apprentice.

The builder was convicted of a criminal offence under the Victorian OHS Act and fined $12,500 for failing to provide a safe system of work, and the necessary information, instruction, training and supervision to employees in relation to workplace bullying.

Not only was it found that the builder personally bullied the apprentice, he was found to have encouraged other employees to participate in the bullying behaviour, which included numerous physical incidents such as being spat on by another employee and holding a rag doused in methylated spirits over the employee's mouth.

The Model Work Health and Safety Acts in place in most States places an obligation on employers to ensure, so far as is reasonably practicable, the health and safety of workers while they are at work. This includes requirements that:

  • an employer provide and maintain safe systems of work; and
  • the health of workers and conditions at the workplace are monitored for the purpose of preventing illness or injury of workers arising from the conduct of the business.

What can you do about it?

It is important to recognise that bullying and harassing behaviours can happen at any level – between colleagues, or between managers or supervisors and subordinate staff, and that as an employer, you must take steps to address it.

In the recent case of Caroll v Karingal Inc3, the Fair Work Commission upheld the dismissal of a manager who, after an external investigation, was found to have engaged in serious and sustained bullying, including micromanagement and aggressive and controlling behaviours, in breach of the employer's Code of Conduct and Work Health and Safety Policy.

There are a number of processes that you can implement in your business to help identify, and manage the risk of, bullying, such as:

  • Developing policies and procedures and/or codes of conduct for dealing with bullying and harassment in the workplace, a work health and safety policy, grievance resolution policy (including investigation processes), and disciplinary action policy;
  • Provide regular and refresher training in your policies and procedures and/or codes of conduct to enforce how central they are to your business, and clearly set out the consequences for failure to comply;
  • Appointing and training appropriate internal contact officers;
  • Conduct regular consultation with workers – the best procedure for consultation will change from workplace to workplace, but this could include things such as toolbox meetings, staff forums or committees, or conducting an anonymous survey;
  • Conducting exit interviews when employees leave the business;
  • Monitoring absenteeism, sick leave, staff turnover and records of informal or formal grievances;
  • Thoroughly investigate complaints or grievances about alleged bullying or harassing conduct; and
  • Implement a disciplinary process and take disciplinary action where appropriate and warranted.

Further information

If you would like the benefit of Holding Redlich's vast experience in order to:

  • ensure your business is compliant with its current obligations under the relevant work health and safety legislation and the Fair Work Act
  • prepare your business to manage bullying complaints, and
  • minimise the risks in this area for your business, your managers and directors,

Footnotes

1 [2015] VSC 728

2 [2016] QCA 139

3 [2016] FWC 3709

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Authors
Tiffany Campbell
 
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