Senior lawyer Melissa Demarco and Partner Shae McCartney discuss reasonable management action versus bullying under the Fair Work Act, and recognising the difference.
The bullying and harassment jurisdiction of the Fair Work Act 2009 (Cth) expressly excludes action that is reasonable management action taken in a reasonable manner.
Sometimes, there can appear to be a fine line between what reasonable manager action is and what is not, and differing views can lead to a complaint or workers’ compensation claim.
It is therefore important for employers to understand what reasonable management action is while effectively and efficiently managing the workplace, particularly in industries such as mining which must comply with stringent workplace health and safety laws. This can be a challenging task for employers, particularly given that reactions to management action can vary from person to person and there may be other issues affecting an employee that may not be apparent at the time.
WHEN IS MANAGEMENT ACTION REASONABLE?
The Fair Work Act itself does not provide any examples of what is considered reasonable. Workers’ compensation decisions however, do provide guidance in considering the reasonableness of a particular action taken by management.
In SB  FWC 2104, Commissioner Hampton stated that considering when management action is reasonable requires an objective or impartial assessment of the action, in the context of the circumstances and the knowledge of those involved at the time. This may include the consideration of, for example:
- 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; and
- the consequences that flowed from the management action.
The test is whether the management action was reasonable, and not whether it could have been undertaken in a manner that was more reasonable or more acceptable. In other words, management action need not be perfect for it to be considered reasonable.
The reasonableness must arise from the actual management action in question, not the worker’s perception or expectation of what is reasonable.
Some examples of reasonable management action include:
- setting reasonable performance goals, standards and deadlines;
- rostering and allocating working hours where the requirements are reasonable;
- transferring a worker for operational reasons;
- deciding not to select a worker for promotion where a reasonable process is followed;
- informing a worker about unsatisfactory work performance in an honest, fair and constructive way;
- informing a worker about inappropriate behaviour in an objective and confidential way;
- implementing organisational changes or restructuring; and
- taking disciplinary action, including suspending or terminating employment.
The reasonableness of the management action is not the only issue. For the exception in section 789FD(2) of the Fair Work Act to apply, the management action must be carried out in a reasonable manner. There is however, no “one size fits all” approach. What may be reasonable in one industry may not be considered reasonable in another. In that regard, the approach to what is reasonable and what is not should be considered in context of the industry and occupation.
WHAT IS A REASONABLE MANNER?
As with management actions, what is a reasonable manner is a question of fact and requires an objective assessment. This may include considering matters such as:
- the individual’s particular circumstances;
- whether anything should have prompted an inquiry to uncover further circumstances;
- whether established policies or procedures were followed; and
- whether any investigations were carried out in a timely manner.
The effect on the employee cannot, by itself, establish whether or not the management action was carried out in a reasonable manner. When management exercises a legitimate degree of authority in a reasonable manner, employees may become upset, but this should not prevent or discourage employers from taking management action.
WHEN IS MANAGEMENT ACTION UNREASONABLE?
Unreasonable management action includes behaviour (whether intentional or unintentional) that a reasonable person, having considered the circumstances, would see as unreasonable, including behaviour that is humiliating, intimidating or threatening.
- deliberately excluding someone from workplace activities;
- withholding information that is vital for effective work performance;
- setting unreasonable timeframes; or
- abusive or offensive language or comments.
A one-off incident does not mean that bullying has occurred; several incidents together may be considered bullying and may potentially lead to a larger problem.
PRACTICAL STEPS TO ENSURE THAT MANAGEMENT ACTION IS REASONABLE
There will never be a flawless procedure or guideline for employers to follow to guarantee that management action will not face some form of criticism.
Despite this, proactive measures can and should be taken to ensure that, if a bullying complaint is made, particularly in response to management, the employer can confidently respond to and defend the complaint, such as:
- maintain adequate records in relation to any performance or disciplinary action taken;
- ensure strong workplace policies and procedures are in place;
- identify any specific risks in the workplace in consultation with workers;
- provide training to managers on workplace bullying;
- treat every complaint seriously; and
- comply with investigation policies and procedures.
“The effect on the employee cannot, by itself, establish whether or not the management action was carried out in a reasonable manner.”
Melissa Demarco is a Senior Lawyer at Clayton Utz. Melissa has extensive experience in advising large employers in highly unionised industries and has a record of delivering practical solutions in complex disputes. She has extensive experience advising employers on a variety of issues involving Work Health and Safety, discrimination and harassment, redundancy, performance management and workers’ compensation matters. In addition, she assists employers with issues arising from employment contracts, awards and industrial instruments and workplace policies.