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Workplace bullying or reasonable management action – what injured workers or employees in Victoria need to know. – Health & Safety

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The negative effects of workplace bullying, stress and/or
harassment on an injured worker can be traumatic, severe and
permanent – often resulting in lifelong adverse mental health
consequences. If you are or have been subject to bullying in your
workplace, you may be entitled to monetary compensation.

It is important for an injured worker or employee who is bullied
or subject to undue stress/harassment to be aware that there are
legal defences available to employers/insurers in such claims. One
of the most common defences relied upon by employers to defend a
bullying claim is that the psychiatric/mental health injury is the
result of ‘reasonable management
,1 a defence which is similarly
available in other jurisdictions in Australia.

If an employer relies on this reasonable management action
defence, it needs to prove that the action taken was
‘management action’ and that it was done on reasonable
grounds, in a reasonable manner, or that the worker simply expected
such action to be taken.

What is ‘management action’?

‘Management action’ refers to a broad range of
supervisory activities normally taken out by employers. The
following are examples of what would be considered ‘management
action’ by an employer:2

  • Appraising the worker’s performance;

  • Counselling the worker;

  • Suspending or standing down the worker;

  • Disciplinary action in respect of the worker’s

  • Transferring the worker;

  • Demotion, redeployment or retrenchment;

  • Promotion;

  • Reclassification of the worker’s position;

  • Provision of a leave of absence;

  • Provision of a benefit connected with the worker’s

  • Training;

  • Investigating any alleged misconduct;

  • Communicating in respect of any of the above.

Was the management action undertaken on ‘reasonable
grounds’3 or in a ‘reasonable

In determining whether the management action was taken on
reasonable grounds or in a reasonable manner, a Court will
objectively assess all the circumstances leading up to the
management action and the manner in which it was taken – in a
global context.

The management action should not be irrational, absurd or
ridiculous, but rather moderate and fair. Although an employer is
not held to a standard of perfection, if they lacked sophistication
in addressing specific issues of bullying or made silly errors in
implementing action plans, the reasonable management action defence
may be overcome by an injured worker.

An example of the defence being overcome can be seen in the 2011
decision of the Victorian Magistrates Court in
Krygsman-Yeates5. The employer had given the
worker a three-page letter, with attachments, detailing issues with
her teaching on her first day after returning from long-service
leave without prior discussion of such criticisms. The employee
then took three days of sick leave due to stress and anxiety as a
consequence of this letter – on returning to work, there was
a decision to formalise the criticisms. Furthermore, the instigator
of the criticisms was then placed in a position to ‘mentor and
monitor’ the worker, during which time there was little to no
feedback. Cumulatively, the Court found that this conduct of the
employer was not reasonable.

Did the worker expect reasonable management action to be

The employer must prove that the worker subjectively expected
reasonable management action to be taken. In this, it must be shown
that there were facts known to both the employer and the worker
which indicate that the worker had the relevant expectation. These
facts will be assessed in the global context to determine if they
were reasonable.

In the 2010 decision of the Victorian Supreme Court of Appeal in
Department of Education v Unsworth6, the worker
was found to have expected to be dismissed due to the extensive
review processes taking place over a number of years,
inappropriately timed correspondence in relation to his diminishing
mental health and multiple rejected lodgements for worker’s
compensation. And that, due to the circumstances, such a dismissal
was unreasonable.

Did the psychiatric injury arise ‘wholly or
predominantly’ from the reasonable management

If reasonable management action is proved by the employer, the
worker may still be able to prove that their psychiatric condition
did not arise wholly or predominantly from reasonable management
action. ‘Wholly’ indicates that the management action was
the only cause of the injury while ‘predominantly’ means
that the management action must exceed all other causes of the
psychiatric injury together, in both power and influence. This
requires an evaluation of the contribution of different causes made
to the injury determined by applying common sense to the facts of a
particular case.

In the 2018 decision of the Victorian Magistrates Court in
Coates v State of Victoria7 management action
had been taken, however there was a variety of claims made by the
worker, including stress, pressure, abuse, criticism, harassment,
bullying and a lack of appropriate consultation. In weighing up the
circumstances, it was found that management action had only been a
catalyst to the subsequent treatment of the worker and therefore it
did not wholly or predominantly cause the worker’s injury.


1 Workplace Injury Rehabilitation and
Compensation Act 12013
(Vic) s 40(1)

2WIRCA, s 40(7).

3 WIRCA, s 40(1)(a).

4 WIRCA, s 40(1)(b).

5 [2011] VMC 57.

6 [2010] VSCA 77.

7 [2018] VMC010.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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