October 2004

Bullying in the workplace: worker's compensation & health and safety issues - a Bartier Perry paper

As workplace bullying receives increasing attention Bartier Perry examines the difficult area of determining what is bullying and what exposure an employer faces by choosing to ignore bullying rather than tackle it head on.

What is bullying in the workplace?

There is no statutory definition of what is “bullying” in Australia.

Some suggested definitions include:

  • “Repeated, unreasonable behaviour directed towards an employee or group of employees that creates a risk to health and safety.” (WorkCover Victoria)

  • “Unreasonable and inappropriate workplace behaviour includes bullying, which comprises behaviour that intimidates, offends, degrades, insults or humiliates a worker, possibly in front of co-workers, clients or customers and which includes physical or psychological behaviour.” (Law Society Council)

Examples of bullying in the workplace:

  • threats to make someone’s life difficult;

  • rude, belittling or sarcastic comments and publicly belittling someone’s opinions, abilities or performance;

  • abusive, belittling or intimidating comments, phone calls, emails, etc;

  • imposing unreasonable or unrealistic work targets or deadlines;

  • unfair and excessive criticism and work scrutiny;

  • deliberate and unreasonable exclusion of person(s) from work discussions, communication and activities;

  • unreasonable blocking of training and promotion opportunities.

Prevalence:

  • employees usually bullied by more senior staff (power);

  • often behind closed doors (no witnesses);

  • tolerated – culture of silence.

What is not bullying:

  • reasonable supervisory practices;

  • reasonable work performance assessments, counselling and disciplinary action;

  • setting achievable performance targets and facilitating good performance through training, resources and supervision.

Costs of bullying to an organisation - never underestimate them

Research indicates with regard to workplace bullying:

  • Somewhere between 25% and 50% of employees will experience some bullying in their working lives and 4% to 20% of employees have been bullied in the past 6 to 12 months;

  • Of those bullied a significant proportion took time of work and estimates indicate that workplace bullying costs Australian employers between $6 to $13 billion dollars every year. (Queensland Government Workforce Bullying Taskforce);

  • NSW Labour Council survey 2004: 56% of workers believed there was a culture of bullying at their workplace.

Generally recognised effects of bullying:

  • Increased sick leave and lost time;

  • Increased workers compensation premiums;

  • Lower staff morale and motivation;

  • Decreased productivity;

  • Lack of trust;

  • Higher labour turnover;

  • Higher recruitment and training costs (estimated $10,000 in advertising and recruitment costs to replace a good employee in Australia: Drake Personnel 2004).

And then there are the legal claims:

  • Workers compensation claims;

  • Unfair dismissal claims;

  • Unfair contract claims;

  • Criminal charges under the Occupational Health & Safety Act 2000;

  • Discrimination claims under Anti-Discrimination Act 1977 and other legislation.

Workers compensation implications

Prevention strategies:

  • Bullying, harassment and discrimination policy;

  • Documented performance management and disciplinary process;

  • Investigate and respond to complaints – communicate expected standards of behaviour and performance.

Performance management:

  • Implement the process and follow it through;

  • Finite period;

  • HR manager leading role;

  • Set expectations and goals, regularly monitor performance, assist worker to succeed and communicate assessments of progress;

  • Keep written records of all outcomes and communications.

Stress claimants:

  • A psychological profile.

Maintain a paper trail:

  • Supervisors/managers – must make file notes.

Typical circumstances leading to stress claims:

  • Performance management, discipline, demotion, dismissal;

  • Raises potential section 11A defences.

How workers’ solicitors can destroy your potential section 11A defence – a case study:

  • Background facts;

  • Directions or subpoenas for bullying and harassment policies and performance management policies and supervisors’ personnel files;

  • No documented policies – employer’s actions arguably not reasonable;

  • Section 11A defence compromised.

Denial of access to training and appropriate performance review process – a case study:

  • Jacobson v Telstra Corporation Ltd AAT 952/2004;

  • Background facts;

  • Decision;

  • Aggravation of pre-existing psychological condition claims are not difficult for workers to win if the right circumstances exist.

Occupational health & safety obligations - the penalties

The primary obligation of employers is set out in section 8(1) of the Occupational Health &Safety Act 2000:

“An employer must ensure the health, safety and welfare at work of all the employees of the employer”

The penalty for a breach of section 8(1) can be $550,000 or up to $825,000 for a second offence.

The Occupational Health and Safety Regulation 2001 requires an employer to have in place risk management practices. An employer must identify hazards, assess the risk arising from the hazard, eliminate or control the risk and review those risk management measures. Within this framework, regulation 9 of the OHS Regulation, prescribes “workplace violence” as a specific workplace hazard.

The penalty for a breach of the regulations can be up to $27,500.

Some real cases:

  • Inspector Maddaford v Coleman Joinery (NSW) Pty Ltd & Or [2004]: the “initiation” of a sixteen year old apprentice by fellow workers. Wrapped in cling wrap, threatened with violence and had sawdust and glue forced into his mouth. Management did nothing to prevent the initiation. Fine $24,000 for the company, $1,000 for each director.

  • WorkSafe Victoria v Ballarat Radio Pty Ltd (Victorian Magistrate’s Court, August 2004): employee verbally abused by manager on a number of occasions over a period of a year. Manager fined $10,000. Company fined $25,000.

“A purpose of the Occupational Health and Safety Act is to eliminate risk to health and safety at the workplace. What occurred that day is often described as an initiation. It is a polite term for bullying. A bullying culture has been known to exist in some workplaces, often seen as a bit of fun ….. It is a culture that needs to be stamped out. Bullying has no place in the workplace.” (G A Miller, Chief Industrial Magistrate, Insp. Maddaford v Coleman Joinery (NSW) Pty Ltd & Ors, 5 May 2004)

Employment claims - an employer's exposure

There is an implied term of trust and confidence in every contract of employment. An employer who ignores workplace bullying could be breaching its obligation of trust and confidence owed to its employee.

Unfair dismissal claim under s.84 of Industrial Relations Act 1996 (NSW) or s.170CE of Workplace Relations Act 1996 (Cth):

  • Allow an employee to claim relief, including reinstatement and/or 6 months remuneration for a dismissal that is “harsh, unjust or unreasonable”.

  • Employees confronted with bullying often resign.

  • Employees can allege that their resignation was as a result of the bullying conduct or “constructive dismissal”. It was the employer’s conduct that was the real initiator of the termination of the employee (see Atkinson v BegaValley Council (1995) 63IR68). The bullying was so overwhelming that the employee had no choice but to resign.

Unfair contracts claim under s.106 of Industrial Relations Act 1996:

  • The NSW Industrial Relations Commission is empowered to rewrite an employment contract that is unfair in its terms or operation and award compensation which it considers to be “just” in the circumstances (section 106 of Industrial Relations Act 1996).

  • An employee could argue that their employment contract was unfair because it did not contain a term that the employer would provide a workplace free of bullying and harassment.

  • The Commission can award compensation for unfairness resulting in “stress and suffering” (see State of NSW v Banas [2004] NSWIRComm 255).

Claims of discrimination:

  • Some forms of bullying are outlawed by state anti-discrimination legislation.

  • If bullying occurs because of one of the grounds of discrimination set out in the Anti-Discrimination Act 1977, such as race, sex, martial status, sexual orientation, disability, and responsibilities as a carer, an employee may be able to approach the ADB or HREOC for relief.

  • Awards of compensation may be made by a tribunal in respect of bullying conduct which occurs because the employee has a particular characteristic.

Tips for employers

Employers can no longer ignore bullying in the workplace. To do so risks prosecution under occupational health & safety legislation, claims under employment legislation and workers compensation legislation. Even if you are lucky enough to avoid prosecution and claims, your demoralised workers will vote with their feet and bullying will probably cost your workplace tens of thousands of dollars a year in increased absenteeism and staff turnover and decreased productivity.

  • Employers should develop a coordinated and consistent workplace policy addressing workplace bullying, harassment and discrimination (i.e. all forms of unacceptable and inappropriate behaviour);

  • Employers should consult with staff about the development of the policy and communicate the policy to all staff;

  • The policy should be circulated and accessible and routinely given to new staff;

  • Employers should train staff about the behaviours that will not be accepted and why they are unacceptable;

  • Train supervisors and managers in effective communication and management skills (remembering that these people are the main offenders!);

  • Routinely assess any risks in the workplace from violence, both internal and external to the organisation;

  • Employers should encourage reporting of bullying and harassment through user-friendly and confidential grievance procedures;

  • Upon receiving a complaint of bullying or unacceptable behaviour an employer should promptly investigate the complaint;

  • Deal with the complaint on a behavioural level and avoid adopting and using labels, such as “bully”, where the evidence is conflicting or does not clearly substantiate the allegation of bullying (to avoid potential claims from alleged bullies).

  • If a complaint is substantiated the employer should respond whether it be by way of discipline, counselling or further education. For serious or recurring breaches, advice should be obtained about dismissal of the offender;

  • Identify bad practices or traditions where bullying and harassment can exist and change them.