Reasonable Management Action

Our workplace training courses teach managers how to interact appropriately with their staff. Managers are entitled to provide feedback to, or take disciplinary action against, their staff, as long as such managerial action is undertaken in a reasonable way.

Reasonable Management Action refers to feedback or disciplinary action provided in an appropriate way, with the intention of improving work performance. Management Action undertaken reasonably is not considered bullying; rather, managers are simply undertaking their role by responding to poor staff performance or misconduct.

On the flip side, Management Action which is deemed to have been unreasonable or unreasonably delivered, unwarranted, or an abuse of power, or which was intended to humiliate, demean or threaten an employee is properly described as Bullying.

Bullying claims are often brought with respect to the way in which management action is undertaken, and at times the line between Bullying and Reasonable Management Action can be difficult to draw.

Reasonable Management Action is justified feedback or disciplinary action that is carried out in a reasonable manner. Management action is considered reasonable if it is fair, transparent, and consistent with approved policies and procedures.

Determining whether management action is reasonable involves an objective assessment of the action in the context of the circumstances and the people involved, including consideration of:

This approach accounts for the circumstances specific to the situation as well as the impact on the psychological health of the worker involved.

Importantly, the nature of this assessment considers whether the management action was reasonable, not whether it could have been undertaken in a more reasonable manner.

It follows that:

Examples of Reasonable Management Action would generally include:

Importantly, any of the above behaviours could be classified as bullying if not conducted in a reasonable manner (i.e. if unjustified, aggressive, or undertaken with malicious intent).

The following are examples of cases in which an employee brought a claim of bullying which was subsequently determined by the courts to be reasonable management action:

Devasahayam and Comcare [2010] AATA 785.
A worker claimed psychological injury from issues relating to performance appraisals, failure to be promoted, and being humiliated in front of others. The employer refused the compensation claim on the basis that her experience was the result of reasonable administrative action undertaken in a reasonable manner. This decision was upheld by the Administrative Appeals Tribunal, as they found that all relevant policies and guidelines had been followed.

Ferguson and Commonwealth Bank of Australia [2012] AATA 718.
An employee claimed compensation for a major depressive disorder allegedly brought on my bullying and harassment at work. The employer had appointed a new manager to an underperforming branch. The manager had one-on-one meetings with the employee regarding their performance, and the employee found the manager’s manner to be rude and belittling. The employer refused the compensation claim because her condition was the result of reasonable administrative action taken in a reasonable manner. This decision was affirmed by the Administrative Appeals Tribunal.

The following are examples of cases in which the actions of management were determined to be unreasonable and constitute bullying behaviour:

National Australia Bank Ltd v KRDV [2012] 204 FCR 436.
The employer conducted weekly meetings to assess workloads for planning purposes. At one of these meetings, a worker was publicly criticised for her poor work performance. She submitted a claim for worker’s compensation, alleging psychological injury after being ‘picked on and singled out’ by her manager and subjected to personal criticism in front of others. The employer denied the claim, arguing that her condition resulted from reasonable management action. The court held that the management action was unreasonable because the meeting at which it took place was not arranged for the purpose of discussing the worker’s performance.

Yu and Comcare [2010] 121 ALD 583; [2010] AATA 960.
A high school teacher claimed psychological injury due to the implementation of certain performance management processes. This claim was refused by her workplace on the basis that her condition was the result of reasonable management action. The employer’s decision was overruled by the Administrative Appeals Tribunal, who noted that the employer had failed to comply with its own policy provisions. In addition, the court found that the worker was denied any procedural fairness and no documentation evidencing the worker’s alleged under-performance could be produced. The Tribunal held that the management action was unreasonable, but also noted that inadequate record keeping may have adversely affected the employer’s case.

Bullying is considered repeated and unreasonable behaviour that creates a risk to health and safety, with deliberate intent to cause physical or psychological distress. This includes, but is not exclusive to, behaviour that victimises, humiliates, intimidates or threatens the worker. No specific number of incidents is required for the behavior to be considered repeated, nor does the same specific behavior have to be repeated.

Examples of bullying behaviour include:

Examples of behaviour which the court deemed to be bullying and awarded compensation are set out in the following case studies:

Ferguson v Strautman Australia Pty Ltd [2009] VCC 184.
A worker sought leave to recover from psychological injury caused by alleged bullying by two senior work colleagues. The bullying involved inappropriate remarks and insults, racist name calling, increased workload, failure to respond to requests for assistance, and rejection of requests for protective safety equipment. The employers’ approach to the resolution of performance-related issues and health and safety compliance was considered inappropriate, and the court found that the victim should be compensated for the psychiatric injury caused.

Goldman Sachs JBWere Services Pty Ltd v Nickolich [2007] 163 FCR 63
A private investment advisor complained to his employer that he was subject to malicious personal attacks, verbal abuse and insults by his immediate supervisor. After returning from sick leave he was advised that his employment was terminated. The court accepted that employer delayed too long in responding to the complaints of bullying, and that there was a breach of contract with regard to the employer’s stated policies and procedures regarding harassment, integrity, safety and grievance.

In any event, if Reasonable Management Action results in a bullying complaint, it is important to address these claims seriously and proactively.

In many respects, understanding what constitutes bullying behaviour is intuitive. However, when emotions run high, and defense mechanisms are engaged, it is easy for managers to misrepresent themselves and/or for employees to feel victimised. The case law leaves no doubt that employers will be held financially responsible for the unreasonable actions of its managers, and as such, managers should be acutely aware of the distinctions between bullying and reasonable management action. Furthermore, employers should seriously assess and proactively address any accusations of unreasonable management action made by staff.

Our Bullying & Harassment Awareness course can assist your staff and managers to better understand how to approach management action in an appropriate way, what constitutes bullying behaviour, what to do in case of bullying, and how to respond appropriately and actively to complaints.