What constitutes Reasonable Management Action?

By James Sanders, Lawyer, MST Lawyers

In a recent case, brought before the Fair Work Commission’s bullying panel, headed by Commissioner Hampton, a Manager asked the Commissioner for bullying orders to be made against a subordinate.

In June 2013, the employee was appointed to the position of Manager, which some of the employees ‘did not initially embrace’.

On 7 January 2014, a subordinate made allegations of bullying against the Manager. Without knowledge of this claim, the Manager sought a meeting with the HR department to discuss the subordinate’s conduct.  Upon being told of the bullying complaint, the Manager decided to make a bullying application to the FWC, rather than discuss the issue with the HR department.

The company engaged a law firm to investigate the competing claims.  The firm found the subordinate’s claims to be substantiated in part, but not the Managers.

The Manager claimed the bullying action against her included:

• two  separate complaints made against her;
• the company’s decision to investigate those complaints;
• the company’s failure, following an earlier complaint, to prevent similar conduct;
• ‘ongoing malicious rumours’ being spread about her in the workplace, caused by the employer failing to notify employees of the outcome of the complaints;
• daily harassment and badgering by the subordinate; and
• the subordinate taking notes of conversations between them.

The Commissioner determined that the Manager’s claim for unreasonableness only cited the subordinate, however, by implication included ‘the conduct of the HR staff and her direct manager’.  Commissioner Hampton decided that the company’s receipt of the complaints against the Manager was not unreasonable, and that it was in fact ‘the only reasonable and prudent response’.  The Commissioner also found no fault with the company engaging a law firm to conduct the investigations.

The Commissioner sated that in ‘hindsight’ the company should have provided more support to the Manager after the earlier complaint, but that this failure was not unreasonable.

The Commissioner went on to state that the ‘reasonable management action’ 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”.

This means that:

• management actions do not need to be perfect or ideal to be considered reasonable;
• a course of action may still be ‘reasonable’ even if particular steps are not;
• to be considered reasonable, the action must also be lawful and not be ‘irrational, absurd or ridiculous’;
• the ‘actual’ action needs to be considered, rather than the applicant’s perception of it; and
• it might be relevant to consider whether the action involved in a significant departure from established policies or procedures, and if so, whether the departure was reasonable in the circumstances.

If you have any concerns in relation to bullying, complaints made against the company, or how to conduct an investigation, contact our Workplace Relations Team on +61 3 8540 0200 or email the author of this article, James Sanders.