Regulating Bullying behaviour in the Australian Workplace – New Laws

28 October 2013

By Lesley Maclou and Victoria Loveday (from Truman Hoyle)

Earlier this year, the former Labor Government of Australia passed the Fair Work Amendment Act 2013 (Cth) (“Amendment Act”). Under the Amendment Act, as of 1 January 2014,  all workers whose employment is covered by the Fair Work Act (Cth) 2009  who feel that they have been unlawfully bullied in the workplace, will have the opportunity to make an application directly to the Fair Work Commission (“Commission”) for an order that the unlawful workplace bullying cease. Further, the Commission will be granted broad discretionary powers to determine what remedial actions in the circumstances are appropriate.

Importantly, the right to make an application to the Commission is granted to ‘workers’ as opposed to just ‘employees’ and therefore includes contractors, apprentices, trainees, volunteers and students gaining work experience. 

Under the new laws, complaints will need to be dealt with by the Fair Work Commission within 14 days after the application is made. In the event that an employer does not comply with an order made by the Commission, the worker will be able to apply for enforcement. An employer’s contravention of an order may incur penalties of up to $10,200 for individuals and $51,000 for corporations.

Whilst the recent Federal elections in Australia have witnessed a change to a Coalition Government in Australia, all reports indicate that these changes will still proceed however, with some slight amendments.  It is anticipated that the new Government will retain the changes but restrict access to make a complaint to those workers who have first sought help, advice or assistance from a work health and safety regulator. Also, the scope of the new laws will be expanded to cover the conduct of union officials towards workers and employers.

Background

Unlawful bullying in the workplace has been a key issue that employers have had to grapple with in the last few years, particularly after the tragic suicide of a young Victorian employee arising from severe relentless bullying in 2006. This incident prompted the State Government of Victoria to criminalise unlawful bullying behaviour in Victoria (“Brodies Law”). Previously there had not been, (and still are not), any Federal laws or laws in other States or Territories of Australia that expressly prohibit bullying in the workplace. The legal risks and obligations for employers have traditionally arisen as part of the employers obligations under Australian work health and safety laws, to take all reasonable steps to protect the health (mental and physical) of its employees, provide a safe system of work and provide adequate information and training in relation to safety. In addition, bullying conduct is also considered when determining whether a dismissal is unlawful or unfair.  Accordingly, managing and addressing unlawful bullying in the workplace has been very challenging for employers and given rise to many misunderstandings.

What is Unlawful Bullying?

Unlawful bullying is generally defined as:

Repeated, unreasonable behaviour directed toward an employee or group of employees that creates a risk to health and safety.

Unreasonable behaviour is behaviour that a reasonable person, in the circumstances, would consider offensive, humiliating, intimidating, undermining or threatening. The motive of the person is irrelevant.

The type of behaviour that this definition includes is yelling, insults, undermining, practical jokes, isolation or exclusion of workers from training or social activities and belittling comments.

Costs to Australian Employers

In 2012 a report of the House of Representatives Standing Committee on Education and Employment, ‘Workplace Bullying - We just want it to stop’  addressed the costs associated with workplace bullying in Australia estimating that workplace bullying cost the Australian economy  between 6 billion and $36 billion every year. The average costs to employers in resolving a formal claim of bullying is between $17,000 and $24,000. This is mainly due to costs associated with staff turnover leading to additional recruitment costs, conducting investigations into, and responding to, allegations of workplace bullying, the decline in motivation and productivity, diminishment of workplace culture as well as the destruction of the company’s reputation. This includes increased workers compensation claims, management down time and out of court settlements, litigation and legal costs.

 To address such concerns, the report set out recommendations, including that an arrangement be put in place to allow bullied workers to seek remedies through an adjudicative process.   The new legislation was introduced in response to this report.

What does this mean for Employers

In essence, the new laws will afford protection to a worker if they can demonstrate to the Commission that an individual or group repeatedly behaves unreasonably towards that worker or a group of workers which the worker is a member and that behaviour creates a risk to health and safety.  Employers will need to have a structured approach to addressing bullying in the workplace and will be at risk of penalties if they do not take the action recommended by the Commission to address any unlawful bullying behaviour.

Importantly,  “reasonable management action carried out in a reasonable manner”  will not be unlawful bullying  however, it may take a while before employers obtain clarity about the scope of this phrase.

What do Employers need to do before 1 January 2014

To be suitably prepared for the new laws but also having regard to employers current obligations, it is critical for employers to have and develop a safe system of work (that addresses identification and minimising risks to unlawful bullying), clear procedures for dealing with and responding to bullying allegations and ensure that they appropriately inform and consult with its workforce. This includes ensuring that:

  • Employees are fully aware of their own obligations;
  • Appropriate polies and procedures are in place and such policies are applied consistently;
  • Relevant and regular training is implemented;
  • Management are aware of their obligations and lead by example;
  • Informal resolution is encouraged but matters are appropriately escalated and dealt with formally if necessary;
  • Consideration is given to due and fair investigation processes;
  • Timely (but not rushed) reaction is taken to complaints;
  • Processes are transparent; and
  • Support is provided.

Whilst many have criticised the introduction of the new laws, an alternate view is that Australian employers will now have an opportunity to properly understand and manage the grey area of unlawful bullying within defined parameters, with support of the regulators. Hopefully in time, this will reduce the incidence of unlawful workplace bullying and the significant related costs – being those unquantifiable costs on employers and employees, the negative impact on sustaining a harmonious and productive work environment, as well as the financial costs.

This article is part of the Asia Employment Law Newsletter for November 2013