Workplace Bullying: Not Only Harmful, But Costly, Too.

Workplace Bullying as an issue is not new, however it remains very prevalent in Australian workplaces. In fact, in research conducted by the Australian Workplace Barometer at the University of Adelaide in 2021, Australia ranked third worst in bullying rates compared to 34 countries in Europe. In research conducted by the same organisation in 2019, it found that two thirds of employees suffered from bullying at work.

Bullying in the workplace is very bad for business. Not only can it result in significant legal claims, but more often than not, it translates into lost revenue as a result of personal leave days, absenteeism, lack of motivation and productivity and poor morale and turnover of employees.

What is Workplace Bullying?

The Fair Work Act 2009 (Cth) (“the Act”) defines ‘bullying’ as behaviour towards another person which is repeated and unreasonable and which creates a risk to health and safety. Harassment, including sexual harassment may also constitute bullying where the behaviour is repeated or continuous.

Without being exhaustive, workplace bullying may include the following behaviours:

• Aggressive behaviour towards an employee;
• Intimidation;
• Abusive or offensive language;
• Humiliating or mocking behaviour; and
• Initiation ceremonies or hazing.

In certain circumstances, bullying is characterised by the context of the behaviour. This means that the following behaviour may also constitute bullying:

• Teasing;
• Subjecting the individual to practical jokes;
• Making changes to the workload of the person, such as reducing or unreasonably increasing workload;
• Directing the person to perform work that is below or above their skill level; and
• Failing to provide the employee with enough information or direction to perform their work.

Recently, in a landmark financial payout totaling $2.8 million, Hawkesbury Race Club, through its CEO, Greg Rudolph was found to have taken adverse action against its Sponsorship and Marketing Manager, Vivienne Leggett, in breach of the general protection provisions of the Act. In Leggett v Hawkesbury Race Club Limited (No 3) [2021] FCA 1658 (“Hawkesbury Race Club Case”), the Court found that Greg Rudolph bullied Ms Leggett from the moment he commenced in the role as CEO through to her resignation, to such an extent that it effectively ‘destroyed her life’. Prior to that, Ms Leggett was successful in a case before the Workers Compensation Commission of NSW (“WCC”) with respect to the same circumstances and was awarded $120,000.

From the outset of his arrival in May 2016, Mr Rudolph micromanaged Ms Leggett and questioned every decision she made to the extent that her job was effectively taken from her. He publicly belittled her and took offence to the fact that she was effectively earning the same remuneration as him. As such, he subjected her to unreasonable deadlines and disputed and withheld payments owed to her, such as commissions for events she had organised.

Months of this treatment culminated in an email sent from Ms Leggett to the CEO setting out a complaint regarding his behaviour and requesting it be escalated to the board of directors. In response to her complaint, she received an email from the CEO inviting her to meet to discuss ‘work performance’. Following the meeting, Ms Leggett took a week’s sick leave and provided a supporting medical certificate. The CEO then forwarded this email to his father-in-law and suggested she was ‘dropping like flies’.

This unrelenting bullying and unchecked behaviour of the CEO, and his subsequent adverse action as a result of her complaints left the employer ultimately paying Ms Leggett $2.8 million in compensation. It not only irreparably harmed Ms Leggett but severely impacted the financial viability of the Hawkesbury Race Club.

What is Not Workplace Bullying?

Not all adverse action will constitute bullying. Reasonable ‘management action’, that is carried out in a reasonable way is permissible and in fact encouraged. Appropriate management action may include taking action with respect to poor performance, disciplinary action, or directing the way work is performed. If this is done in a considered and respectful manner such that the employee is able to ameliorate their shortcomings, it will assist in preventing instances of bullying or the suggestion that such action is bullying behaviour.

In Amie Mac v Bank of Queensland Limited and Others [2015] FWC 774, Ms Mac made an application to stop bullying at work. She alleged that, in being placed on a performance improvement plan (“PIP”), that she was being bullied. The Fair Work Commission (“the Commission”) disagreed and found that placing the employee on a PIP, as well as the way in which this was done was reasonable. This was because the employee’s underperformance had previously been identified through regular performance assessment mechanisms that provided for the implementation of a PIP in circumstances where performance was unsatisfactory. In order for the PIP to have been unreasonable, the employee would needed to have demonstrated that the PIP was unjustified in some way.

However, if management action, such as performance management is undertaken legitimately, it may still be considered bullying if the way in which the performance management takes place is unreasonable.

For example, in National Australia Bank Ltd v KRDV [2012] 204 FCR 436, it was found that, in calling a weekly meeting for the purpose of assessing workload, publicly criticising the performance of an employee in front of her peers was unreasonable, albeit management action.

Who is Protected?

Protection from bullying is not confined to employees. Contractors, subcontractors, apprentices, trainees, interns, work experience participants and some volunteers are also protected from being bullied in the workplace.

In circumstances where an employee is not covered by the Act, there is always the possibility that they may bring a claim under Work Health and Safety (“WHS”) laws and these laws apply more broadly to workplace participants.

Duties Owed Under Work Health and Safety Law

Employers owe a duty of care under WHS law to provide a safe place of work. This duty comprises the obligation to actively identify and eliminate or manage risks that have the potential to cause harm, whether physical or psychological. This means that the business is responsible for identifying risks that relate to bullying and must take allegations of bullying seriously as workers may be harmed as a result.

The duty is not just to employees, but to all workplace participants, including volunteers, contractors, visitors, and others entering the workplace.

If an employee sustains a workplace injury as a result of bullying, such as PTSD, anxiety, depression, or other psychological injury, (or even a physical injury) then the employer may have breached their duty of care and may be liable. The business and contributing individuals may also be subject to penalties as described below.

Businesses’ Legal Risks Arising From Workplace Bullying

Workplace bullying has real consequences for businesses. Aside from the obvious impact on health, productivity and morale, there are several legal claims that can be brought against an employer for bullying.

Breaching a duty of care under WHS laws is negligence. Where an employee is psychologically injured in the workplace as a result of bullying, that employee may be able to apply for workers’ compensation. In certain circumstances, an employee may also bring a claim for ‘work injury damages’, which are modified common law damages, as was the case with Ms Leggett of the Hawkesbury Race Club Case, who was awarded $120,000 by the WCC.

As WHS duties are enshrined in common law and legislation, there are also penalties for failure to comply with the Work Health and Safety Act. Financial penalties range from $500,000 to $3 million for corporations. Officers (such as director and managers) may also be personally liable and penalties range from $100,000 to $600,000 or up to 5 years’ imprisonment.

Bullying may also give rise to a general protections or unfair dismissal claim, where an employer takes action against an employee for a proscribed purpose (such as bullying in retaliation for exercising a workplace right) or where an employee feels ‘forced’ to resign as a result of the bullying. Depending on the subject of the bullying, it may also give rise to a discrimination claim.

‘Stop Bullying’ Order

An employee may make an application to the Commission to stop the bullying. An order can only be made in circumstances where there is a risk that the bullying will continue. In this connection, an employee can only make a ‘stop bullying’ application if they are still employed.

Where an application is made, it will proceed to conciliation. If a resolution is not reached, then the matter will proceed to a Commission Member for conference or formal hearing. In some circumstances, a matter may proceed directly before a Commission Member without conciliation. Commission members have broad powers to issue orders regarding the management of the bullying conduct that could have significant practical impacts for the business.

Changes to Model WHS Laws

The importance of protecting employees from psycho-social risks and hazards, such as bullying has been formally reinforced through new changes to the Model Work Health and Safety Laws (“Model Laws”). These new Model Laws have recently been adopted by Victoria, with other States and Territories likely to follow suit. In this regard, it is likely employers will need to give specific consideration to the prevalence of psycho-social risks and hazards in their workplace.

How to Minimise the Risk of Psycho-social Hazards Including Bullying

Taking a proactive and preventative approach to bullying is not only preferable to dealing with an existing issue, but it is also required under WHS law. This duty requires employers to actively assess the workplace for risks and hazards and to take steps to remove or mitigate these risks. Despite the impending introduction of specific obligations with respect to psycho-social risks, there is a wider, existing duty that imposes an obligation to provide a safe place of work.

In taking proactive steps we recommend employers do the following:

1. Implement a WHS policy or update existing policies to reflect the impending duty to take steps to reduce the risk of psycho-social harm;
2. Implement a Discrimination, Bullying and Harassment Policy (which includes a process for dispute resolution with respect to bullying and harassment);
3. Provide training to employees regarding appropriate workplace conduct, communicating a no-tolerance approach to bullying and harassment;
4. Establish a risk register, which is regularly updated and used to identify hazards and risks in the workplace;
5. Promote open channels of communication with employees;
6. Consider engaging an Employee Assistance Provider to facilitate confidential psychological support for employees; and
7. Facilitate regular employee catchups where feedback about the workplace environment and staff relationships can be confidentially sought.

We regularly advise our clients as to how to meet their work health and safety obligations, including with respect to preventing and managing bullying and inappropriate workplace conduct.

If you require any assistance or information in relation to this client alert, please do not hesitate to contact us.

This alert is not intended to constitute and should not be treated as legal advice.