Bullying or Reasonable Management Action – the Stop Bullying Jurisdiction

A recent decision from the Fair Work Commission’s Stop Bullying jurisdiction has highlighted the challenges employers face when managing underperforming employees. In this case, Commissioner Yilmaz dismissed the application, finding that the employer’s actions constituted reasonable management action rather than bullying. View the case here.

This decision prompted a deeper analysis: how often are orders actually made to ‘stop’ bullying? The findings were unexpected.

In the 2023–24 financial year, 883 Stop Bullying applications were filed with the Fair Work Commission. However, only 56 decisions were recorded during the same period – less than 10% of the total applications. Notably, approximately 73% of those decisions resulted in the dismissal of applications, often because the applicant was no longer employed by the respondent. The most striking statistic is that out of the 16 applications heard, only one Stop Bullying Order was made throughout the entire financial year.

This raises important questions: Do employees fully understand what constitutes workplace bullying? Has the term ‘bullying’ become so commonly used that its meaning has been diluted? Or, as some may suggest, is it simply an easy allegation to make?

The Impact on Employers

The case in question serves as an example of the burdens placed on employers. The employer had followed a structured and appropriate process: informal management, formal performance management, implementation of a performance improvement plan, written expectations, a meeting with notice, and ultimately, a written warning. Objectively, these steps were reasonable and necessary.

In response, the employee went on personal leave, lodged a workers’ compensation claim, and submitted a Stop Bullying application. Medical certificates indicated severe anxiety, depression, and stress attributed to the employer’s conduct, even though the conduct was ultimately deemed reasonable by the Commission.

While the employer successfully defended the application, it no doubt came at a significant cost in terms of time, legal expenses, and workplace disruption. Moreover, the issue remains unresolved, as the applicant continues to be employed.

What Happens Next?

For employers, the next logical step may be termination of employment. However, if the employee is on workers’ compensation, termination may be prohibited for a period, as the legislative framework aims to facilitate a return to work. Additionally, under the Fair Work Act 2009 (Cth), protections exist for terminating the employment of employees with a temporary illness. Even if an employer can navigate around these matters, an employee may still bring a general protections claim, alleging that the termination was for an unlawful reason, or perhaps an unfair dismissal claim, creating yet another complex and costly legal challenge for employers.

Broader Legislative Changes

The NSW Treasurer, Daniel Mookhey, recently announced a review of the state’s workers’ compensation system. Among the proposed reforms is the introduction of a state-based jurisdiction for handling bullying and harassment claims before a compensation claim is made. At present, a Fair Work Commission decision is not necessarily addressed as part of a workers’ compensation claim assessment, leading to further uncertainty and inefficiencies in the system.

Key Takeaways

• The Fair Work Commission rarely issues Stop Bullying Orders, with only one such order made in FY24.
• Many applications are dismissed, often due to the applicant’s employment status.
• Employers face significant costs and disruptions in defending these claims, even when their management actions are and are subsequently deemed reasonable.
• Legislative changes in NSW may introduce a new framework for assessing bullying claims before they escalate into workers’ compensation matters, it’s unlikely that this will negate access to the Fair Work Commission jurisdiction and employers may end up with two proceedings on the same matter.

Given the complexities involved, employers and HR professionals should ensure robust management processes are in place in assessing employee performance and aware of the potential challenges.

If you would like to discuss a workplace bullying claim or performance management issue, please contact Melini Pillay, Principal within the McCabes Employment group.