New Workplace Bullying Laws and Recoveries under s151Z

by Rachael Sutton, Partner – Holman Webb Lawyers

Laws concerning bullying in the workplace proposed to commence on 1 July 2013, which were introduced to Federal Parliament last month, are yet to be finalised, and a number of issues are still to be addressed in amendments to the bill.

At present, there is a lack of detail in the proposed amendments as to who will be parties to a bullying dispute if the alleged bully is not the employer, which could occur, for example, in situations involving subcontractors or other external parties.  It is unclear whether, in those circumstances, an employer will be able to make submissions as an interested or affected party, particularly, if orders made by the Fair Work Commission (FWC) will impact on the way in which the employer deals with workers.

What is clear, however, is the new rule that bullying will be brought expressly within the jurisdiction of the industrial umpire. Previously, bullying could only be raised as an example of conduct that may breach adverse action provisions within the Fair Work Act or unfair dismissal laws.

The Bill, if passed, will include a codified definition of workplace bullying describing a situation where an individual or group of individuals exhibit at work ‘repeated, unreasonable behaviour directed towards a worker or a group of workers that creates a risk to health and safety’.

Obviously, the requirement for repeated behaviour means that a worker will not be considered to have been bullied in circumstances where the conduct has only occurred once.  However, single instances of unreasonable behaviour may give rise to other rights (such as rights under the general protections provisions of the FW Act), depending upon the reason for the conduct.

The proposed definition of ‘workplace bullying’ does not include reasonable management practices such as reasonable performance management. However, it is not clear who will need to prove that the management activities were unreasonable – the employer or the complainant?

It is clear, however, that the FWC will need to decide the issue of whether a complaint of bullying is substantiated, or whether the complaint arises from reasonable performance management or management of misconduct.  And this will be a potential hurdle for employers in terms of complaints made by their employees directly.

The definition of worker in these provisions however goes much further than “an employee” it is the same as the definition in the model Work Health Safety Act, 2011 which defines a worker as “any person who carries out work in any capacity for a person conducting a business or undertaking”.  This will include employees, contractors and subcontractors, volunteers, apprentices, trainees and work experience students.

If the FWC considers bullying has occurred, the FWC will be empowered to make any order it considers appropriate to prevent the bullying other than the payment of money.

However, the real sting in the tail is in the contravention of an anti-bullying order, carrying a maximum penalty of $51,000 for a corporation and $10,200 for an individual.

The Bill follows a report by the House of Representatives Standing Committee on Education and Employment into workplace bullying, which was tabled in October last year. The report2 recommended that arrangements be put in place for individuals to seek remedies, through a legal dispute resolution process, if they believe they have been subjected to workplace bullying. The Federal Government’s response to the Report, tabled in February this year, supported this recommendation and foreshadowed the amendments introduced in the Bill.

It’s difficult to be certain about exactly how much bullying does occur in workplaces. Still, news from a report released by Worksafe Australia1 , in December last year, would appear to indicate that the levels of bullying in Australia are substantially higher than in comparison with other workplaces around the world.

But, what are we to make of the lack of detail in the proposed amendments as to who will be parties to a bullying dispute, if the alleged bully is not the employer?

Many cases of bullying at work result in psychological and in some cases physical injuries to workers.  In NSW workers can claim compensation in the form of weekly payment, medical expenses and non-economic loss for such injuries under the statutory scheme provided for in the Workers Compensation Act, 1987 (WC Act).  It is a no fault scheme.

In NSW an employer who pays statutory benefits is entitled to recover them from a stranger whose fault has caused the worker’s injury, subject to any liability of the employer that may jointly contribute to the matter.

Recoveries can be made in two ways. Firstly, if a worker does not bring an action against the party responsible for his injury, the employer is entitled to bring their own proceedings to recover the statutory payments made. That action is founded upon the entitlement under the WC Act and the employer can be indemnified if the injury for which compensation is payable was caused under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury.

Here, the following provisions have effect. If the worker has recovered compensation under the WC Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages). It should immediately be noted that the entitlement to indemnity under the relevant sections of the WC Act subsists until the worker has recovered damages from the other party.

It is necessary, in an action seeking recovery, to prove that the worker’s injury for which compensation was paid was caused under circumstances creating a liability in the defendant, what the quantum of damages is that the worker would have been entitled to recover had he, or she, brought proceedings against the defendant, and, the amount of statutory benefits paid and the dates on which those payments were made.

The first of these three elements requires little explanation. The cause of action sued upon will be a cause of action which would have been available to the worker and will generally be in negligence. In some cases, subsidiary causes of action may arise including statutory counts (particularly under Work/Occupational Health and Safety Legislation), contractual counts or an action under a statutory regime such as the Competition and Consumer Protection Act. It is critical that the employer be able to prove liability and it must put themselves in the position of the worker for the purpose of doing so.

If the proposed amendments to the FW Act are passed and the FWC makes an order against a third party this (and any breach of the order) may create further counts or a further evidentiary basis creating a liability in a defendant entitling an employer to recover statutory benefits paid to an injured worker whose injury was the result of bullying by that defendant or its employees.

If the Bill becomes law, it will be even more important for employers to document a range of performance and conduct discussions and decisions – not just in relation to formal warnings and termination of employment.  Additionally, employers should appropriately address complaints, particularly complaints of bullying, when they are made by employees and other workers.

As present, the Bill has been referred to committees in the House and Senate, and reports are due in the middle of May. There are limited opportunities for the Government to get the Bill through the parliament, the last of these will expire on the last sitting week of June 27 and, beyond that date, the Bill will lapse.

Footnotes:

  1. The Australian Workplace Barometer: Report on psychosocial safety climate and worker health in Australia Prepared by Prof Maureen Dollard, Tessa Bailey, Dr Sarven McLinton, Penelope Richards, Wes McTernan, Assoc. Prof Anne Taylor and Stephanie Bond University of South Australia December Centre for Applied Psychological Research 2012.
  2. Workplace Bullying: We just want it to stop House of Representatives Standing Committee on Education and Employment October 2012.