Australia: Managers: How one of your greatest assets can become a big liability

Last Updated: 10 July 2016
Article by Tiffany Campbell
Most Read Contributor in Australia, September 2017

Strong managers are a fundamental component of business success – as the old adage goes, employees leave managers, not companies. Managers are your front-line for reinforcing company values and culture, managing staff and driving results.

In a recent spate of workers' compensation decisions, however, we have seen the consequences on businesses when managers fail to act reasonably when managing employees.

In a recent article we considered the case of Eaton v TriCare (Country) Pty Ltd1, where an employer was found to be vicariously liable for the bullying conduct of one of its managers, and was ordered to pay its former employee over $430,000 in damages.

The Court found that an employer's obligation to take reasonable care, in this case, 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.

This case is not only an example of the cost of bullying, but also the consequences of a failure to appropriately train managers – one of the former worker's allegations against the employer was that it had failed to implement and reinforce a procedure for training and education in relation to bullying in the workplace.

Similarly, in the case of Clarisse and Comcare (Compensation)2, a workers' compensation claim was accepted by the Administrative Appeals Tribunal, on the basis that management action which had been taken by the worker's managers was not undertaken in a reasonable manner.

The worker had suffered a serious non-work related injury to her finger whilst on a period of leave and returned to work under a series of medical certificates which provided that the worker should perform limited suitable duties.

The managers became increasingly frustrated by the worker's slow recovery from her physical injury, and treated her differently to other staff. In particular:

  • her direct line manager denied a request for leave (the worker wanted to undertake an advanced motorcycle riding course) on the basis that the worker had not provided a medical certificate stating she was fit to undertake that activity. The manager gave evidence that she was concerned that it may cause the worker further injury which could impede her recovery and return to work. The Tribunal found that this was not usual practice, was without foundation and was not reasonable; and
  • both managers declined to provide the worker with certain suitable duties involving unpacking boxes (which she had requested), on the basis that they considered her medical certificates were vague and lacked detail, and they did not want to give her work beyond her restrictions. The Tribunal found that this was not reasonable in the circumstances, because, for example, the managers could have sought further detail from the worker's doctor on whether she could undertake this work.

Overall, the evidence indicated that the managers displayed "a degree of frustration" with the worker's recovery. The Tribunal critically noted that both "were surprised at how long her injury was taking to resolve despite neither having any medical qualifications and dispute continuing medical certificates restricting her duties." In the circumstances, the Tribunal found that this conduct aggravated a pre-existing psychological injury.

Why does it go wrong?

Conflict between managers and staff can result from a number of things.

More often than not, we see high-performing employees promoted to managerial positions without the necessary training in being a manager, such as grievance resolution, how to deal with underperforming employees, and how human resources policies must be actioned and reinforced in the business.

For example, all Modern Awards contain a dispute resolution clause which provides that if an employee has a dispute, in the first instance, they must try to resolve the matter at the workplace by discussions with their relevant supervisor.

Would your managers know how best to resolve such a dispute, to avoid the cost, time and damage to the employment relationship that occurs when disputes escalate to the Fair Work Commission?

If not, it's time to go back to the drawing board and provide your managers with the necessary further support and training.

What can you do about it?

There are a number of training programmes that we recommend businesses provide to new managers, as well as refresher training in some important areas for current managers:

  • Dispute resolution, including how to have difficult conversations with employees
  • Resilience training: it is not always easy being a manager, and small conflicts may disproportionately grow if your managers do not have good resilience skills
  • Performance management: many managers put underperforming employees in the 'too hard basket' and fail to adequately address (or address at all) poor performance issues. This failure then significantly affects a business's ability to address the underperformance issues by way of disciplinary action down the track, if that becomes necessary
  • Legal compliance: it is important that your managers understand the great number of employment-related Acts which govern the employment relationship, including the Fair Work Act 2009 (Cth), anti-discrimination legislation and workers' compensation legislation
  • Harassment, discrimination and bullying: employers have an obligation to take all reasonable steps to prevent an employee from engaging in harassment and discrimination – managers are an integral part of reinforcing appropriate behaviours in the workplace, and may be able to assist the business in delivering this training to lower-level employees

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

  • ensure your managers have appropriate training; and
  • minimise the risks in this area for your business and your managers,


1 Clarisse and Comcare (Compensation) [2016] AATA 404.

2 Eaton v TriCare (Country) Pty Ltd [2016] QCA 139.

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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Tiffany Campbell
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