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Employment Update – July 2018 – Workplace bullying, performance management, and dismissals being effected “in person”

This month we examine a case which considered the definition of bullying and also commented on what constitutes reasonable performance management.

We also briefly look at a case where an employer dismissed an employee by email.

What constitutes bullying under the Fair Work Act 2009

The Fair Work Commission recently dismissed an anti-bullying order sought by an employee due to the presence of a blurred employee/friend relationship between the employee and her manager.

In this case, the Managing Director of a company made comments to the Sales Manager (an employee) stating that she preferred the Sales Manager’s “natural look” when it came to the use of make-up.

The specific circumstances of this case allowed the Commission to be satisfied that the Managing Director and Sales Manager fostered a level of familiarity between them in their working relationship, such that it blurred the lines between employees and acquaintances/friends.

Deputy President Beaumont further recognised that s789FD(1)(a) of the Fair Work Act 2009 (Cth) (‘Act’) requires that an employee is subjected to “repeated” unreasonable behaviour in order to establish workplace bullying.

In this case, the Commission could only find one instance of the potential unreasonable behaviour (being the ‘natural look’ comment) and so this one incident (on its own) could not satisfy the requirements of the Act.

Deputy President Beaumont noted that this does not in any way excuse inappropriate comments in the workplace, but does provide context for the Managing Director’s comment – that she preferred a ‘natural look’ – which the Managing Director evidently considered was a compliment to the Sale Manager.

On the evidence presented the Commission was not satisfied that the comments directed to the Sales Manager concerning her appearance were such that they were considered unreasonable (and as such ‘bullying’).

Lessons for employers:

Although the lines of friend and employee can be blurred in some interactions in the workplace, caution must be exercised when making comments to employees, and in particular that such comments cannot be interpreted as being unreasonable so as to constitute bullying.

Employers should also be aware that they have obligations under the Work Health and Safety Act 2011 to ensure, so far as is reasonably practicable, the health and safety of all workers at work. This includes a worker’s physical and psychological health. Always remember that reasonable management action taken in a reasonable way against an employee by an employer does not constitute workplace bullying.

Under the Fair Work Act 2009, a ‘worker’ who reasonably believes that he or she has been bullied at work may apply to the Fair Work Commission for a ‘stop bullying’ order.   Note that an applicant under these anti-bullying provisions cannot seek an order for compensation.

To reduce the risk of a bullying related claim, Employers should implement workplace policies and procedures to deal with workplace issues such as discrimination, workplace bullying, sexual harassment and workplace health & safety (among others).

Properly drafted policies, and appropriate training on them,  will help to prevent workplace bullying, discrimination and harassment in the workplace (and subsequent claims).  Employers should ensure their policies are properly drafted, have an effective complaint handling mechanism and that the processes outlined in those policies are followed.

Performance management or belittling conduct?

Also in this case, an allegation of bullying was raised by the Sales Manager, over interactions with the Managing Director concerning an event to be organised by her.

As part of her duties, the Sales Manager was asked to arrange a ‘Winemakers’ Event’ for the business. The Sales Manager failed to order wine, arrange a menu or confirm attendees with the Owner of the allocated restaurant hosting the event.  Luckily some last-minute arrangements were able to be put in place.

That evening, the Managing Director made comments to the Sales Manager (in front of others) that she owed a colleague flowers for sourcing wine which the Sales Manager was supposed to have ordered. During the anti-bullying proceedings, the employer argued that the failure of the Sales Manager to properly organise the Winemakers’ Event demonstrated the Sales Manager’s underperformance in her role.

However, when attendees were seated for a meal, the Managing Director further made a comment directed at the Sales Manager to the effect, “I’ve ordered some starters because you probably haven’t done that”.

On this issue, Deputy President Beaumont stated “[o]ne can appreciate why [the Managing Director] was dissatisfied with performance when it came to arranging the Winemakers’ Event.”

However, the Deputy President went on to find that the Managing Director’s conduct in:

  • indicating to others that the Sales Manager had not aranged the wine; and
  • Suggesting in front of others that she buy the colleague flowers,

was an inappropriate approach to performance management, and did not accept the Managing Director’s response was reasonable management action. The comment made while seated for a meal was also found to be unreasonable, as it was made in a public setting.

The Commission found that the content of the comments made, and the setting in which the words were said, meant the conduct of the Managing Director was belittling.

The Commission was satisfied that the Managing Director’s conduct in this circumstance was unreasonable, but did not make a finding of bullying due to the absence of ‘repeated’ unreasonable behaviour by the Managing Director.  The Winemakers event was found to be an isolated incident of unreasonable behaviour.

Other instances relied upon by the employee in these proceedings as evidence of the Managing Director’s unreasonable behaviour were dismissed by Deputy President Beaumont. He noted that in these separate circumstances, “[t]he test is whether the management action was reasonable, not whether it could have been undertaken in a manner that was ‘more reasonable’ or ‘more acceptable’”.

Deputy President Beaumont stated that “management actions do not need to be perfect or ideal to be considered reasonable and a course of action may still be ‘reasonable action’ even if particular steps are not.”

Lessons for employers:

In brief, performance management is the process of explaining to an employee that you are not satisfied with their performance, and placing the employee on notice that their performance must improve.   A performance management process should be implemented with an employee in a one-on-one setting, and not (as the Managing Director did) in a public setting.

Employers who are uncertain as to how to conduct a proper performance management process (including providing necessary warnings to an underperforming employee) should seek legal advice before commencing the performance management process.

Dismissal of employees should be effected “in person”:

Recently, the Fair Work Commission upheld a termination of an employee that was communicated via email and where the termination was undertaken in accordance with the Small Business Fair Dismissal Code.

The Small Business Fair Dismissal Code provides “[i]t is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal.”

In a recent decision, Commissioner Chris Simpson criticised employers generally for terminating employees via email and without reasonable explanation for taking such a course.

In this recent decision,  the employer terminated an employee via email, noting the reason for termination as a restructure, when in fact the termination was due to serious misconduct by the employee. The employee brought an Application within the Fair Work Commission for an unfair dismissal remedy.

Commissioner Simpson stated that the course taken by the employer in terminating the employee via email “made the whole situation worse”.

Commissioner Simpson stated “[i]f an employee is to be dismissed for serious misconduct it should be done in person, and the reasons clearly explained in the absence of some extenuating circumstances to prevent that from happening”.

Commissioner Simpson also found that if the employer had put the allegations to the employee and given the employee a chance to respond, it may well have prevented the employee bringing the unfair dismissal application. Ultimately though, the Application for unfair dismissal remedy in this case was dismissed, with Commissioner Simpson finding:

“Despite the clear flaw in how the dismissal was handled by [the employer], I have considered all of the evidence and I am satisfied that [the Employer] did believe that the conduct of [the employee] … was serious, justified immediate dismissal and was based on reasonable grounds given the evidence concerning [the employee’s] prior conduct. The dismissal was therefore consistent with the Small Business Fair Dismissal Code, and as such the jurisdictional objection is upheld.”

Lessons for employers:

This case serves as a further reminder of the importance of meeting with an employee in person when termination of employment is being considered.  It is an inherent requirement of a ‘fair process’ that an employee be provided with the opportunity to respond to the issues that may result in termination of their employment.  Whilst the employer was successful in its jurisdictional objection, despite terminating the employee by email, it was only because of the employer’s clear belief that serious misconduct had occurred.  Other case law in this area suggests that this case is the exception and not the norm, and employers should exhaust all avenues to meet with the employee in person, before terminating an employee by email, text message or even phone call.

Lisa Aitken

Managing Director

+61 7 5413 4000