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Australia – “Reasonable Management Action”: The Intersection Of The New Anti-Bullying Provisions And Workers’ Compensation Laws.

25 February, 2014

 

Legal News & Analysis – Asia Pacific – Australia – Labour & Employment

 

On 1 January 2014, the amendments to the Fair Work Act 2009 introducing a new anti-bullying regime commenced. A worker who believes he or she has been bullied at work can now apply to the Fair Work Commission for an order to stop the bullying. Under the new provisions bullying does not include “reasonable management action carried out in a reasonable manner”.


While similar concepts have existed in workers’ compensation laws for decades, there are important differences between those schemes and the regime under the Act.


What Is “Reasonable Management Action Carried Out In A Reasonable Manner”?


There are three requirements for reasonable management action to be excluded from “bullying”:


  • the conduct must be management action;
  • it must be reasonable for the management action to be taken; and
  • the management action must be carried out in a reasonable manner.

Examples of management action include conducting performance management and appraisal processes, disciplining a worker for misconduct, and rostering working hours.


The FWC’s anti-bullying benchbook suggests that determining whether management action is reasonable will require an objective assessment of the action, taking into account the circumstances of the case. Any unreasonableness must arise from the action in question rather than the worker’s perception of it.

 

The Explanatory Memorandum appears to suggest that the subjective feelings of the worker will be relevant, noting that certain actions by an employer “are not considered to be bullying if they are carried out in a reasonable manner that takes into account the circumstances of the case and do not leave the individual feeling (for example) victimised or humiliated”. However, the FWC will consider all of the specific attributes and circumstances of the situation. It remains to be seen the extent to which a worker’s subjective perception of, and reaction to, his or her employer’s management actions will impact on the FWC’s assessment of the reasonableness of those actions. This could vary with different circumstances.


The FWC’s benchbook also suggests that determining whether management action is carried out in a reasonable manner will be an objective test, which will depend on, amongst other things, whether relevant policies and procedures were followed.


In practical terms, an employer will need to be able to demonstrate to the FWC that its actions were reasonable management actions, carried out in a reasonable manner.

 

The Concept Under Workers’ Compensation Laws


Similar concepts to the reasonable management action exclusion in the Act have been used for many years in workers’ compensation legislation in all jurisdictions to limit the injuries that are compensable under those regimes.


Although the wording varies slightly in each jurisdiction, for a claim for workers’ compensation based on a psychological injury to be accepted, the injury must not result from reasonable management or administrative action.


While the body of law on reasonable management action in the workers’ compensation sphere is likely to be a source of reference for the FWC, there are some key differences.


Some workers’ compensation laws qualify the reasonable management action exclusion to actions taken “in connection with the employee’s employment”, or set out non-exhaustive lists of examples of management or administrative actions. The fact that the concept is undefined in the Act may mean that it is given a less restrictive meaning under the anti-bullying provisions.


This raises the possibility that a claim could be decided differently under the two regimes. A workers’ compensation claim for psychological injury could succeed if the injury has not resulted from reasonable management action, under the potentially more restrictive meaning given to the concept under workers’ compensation laws. A parallel bullying claim, however, may not be made out if the alleged bullying conduct is captured by the broader concept of reasonable management action under the Act.


In circumstances where an employee could potentially bring claims under both regimes, employers will need to carefully consider how any attempt to rely on the reasonable management action exclusion will translate between the two regimes.

 

Managing The Risks


In assessing whether particular actions fall within the undefined “reasonable management action” exclusion under the new anti-bullying provisions, ordinary performance management and disciplinary processes undertaken by employers are likely to come under greater scrutiny.


Employers should ensure that relevant policies and procedures are up-to-date and followed, that management personnel have been appropriately trained in handling performance management and disciplinary issues, and that management personnel have guidance and support in cases where there is a risk of bullying allegations being made.

 

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For further information, please contact:

 

Marie-Claire Foley, Partner, Ashurst
marie-claire.foley@ashurst.com


Shae Francis, Ashurst

shae.francis@ashurst.com

 

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