Australia: Recent developments in the bullying jurisdiction of the Fair Work Commission

HG Industrial and Employment Law Alert: 28 March 2014
Last Updated: 3 April 2014
Article by Andrew Tobin and Claire Tuffield

Employers and those concerned with HR and IR issues will know that from 1 January 2014 the Fair Work Commission (FWC) has had jurisdiction to make "stop" orders relating to bullying.

In this Alert, Partner Andrew Tobin and Solicitor Claire Tuffield report on recent decisions from the Commission, showcasing the scope and practical application of the jurisdiction, as well as further important developments that are pending.

Key points

  • The Fair Work Commission has now decided that it can consider bullying behaviour which occurred prior to the commencement of the new jurisdiction this year, in deciding applications for stop-bullying orders.
  • The jurisdiction is not available to workers who work for businesses that are not "constitutionally covered". For some employers their status as such an employer may well be an issue.
  • The rate at which applications have been made since 1 January 2014 is slower than was predicted. The Commission will shortly decide whether unions can make an application for a stop bullying order in favour of one or more workers. If unions are recognised as legitimate applicants, that may well prove to be seminal in the extent to which the jurisdiction will be used.
  • Employers subjected to orders, or who employ one or more workers subjected to orders in favour of another worker, may face some very difficult practical and legal issues. Orders must be complied with, at the risk of exposure to substantial civil penalties.
  • In the current regulatory environment, bullying (and the issues stemming from it) is probably one of the most significant and under-estimated risks in modern workplaces. It is not an area that employers can afford to manage reactively.
  • Employers need to ensure that they act quickly and proactively to prevent or stop alleged bullying in the first place. This will allow employers to be best placed to avoid all the adverse consequences which flow from a worker feeling bullied and, among a range of other potential options, commencing an application in the FWC to stop the bullying from continuing.

Background

The new bullying laws, which commenced operation on 1 January 2014, allow workers to bring an application in the FWC to obtain an order to prevent future bullying.

These new laws are contained in the Fair Work Act 2009 (Cth) (FW Act) in Part 6-4B: Workers bullied at work.

There are three general requirements which must be established for the FWC to hear an application by a worker:

  • a worker must reasonably believe they have been bullied at work;
  • the FWC must be satisfied that the worker has been bullied at work by an individual or group; and
  • the FWC must be satisfied that there is risk that the worker will continue to be bullied at work by an individual or group.

The FWC can then make any orders it considers appropriate (other than an order requiring payment of a monetary amount) to prevent the worker from being bullied at work. The significance of any orders made is that a contravention of them could lead to prosecution for civil penalties; up to $51,000 for corporations and up to $10,200 for individuals.

For further reading, see the FWC's Anti-bullying website (click here) and the related benchbook (click here).

The jurisdiction will potentially create some very difficult issues for employers.

How, for example, will an order made by the FWC directing one employee to "stop bullying" another employee affect the practical operation of your business?

Or, does the fact that an order is made amount to a finding that there has been a breach of workplace health and safety law, exposing the employer to prosecution for criminal penalties?

One employer, as discussed below, now finds themselves with the dubious honour of being the first to consider these questions, as the result of an order made in the Commission on 21 March 2014.

Incidents prior to commencement of the jurisdiction

In early March 2014 a full bench of the Fair Work Commission decided that it can consider past bullying behaviour, which occurred prior to the commencement of the new jurisdiction this year, in deciding stop bullying applications.

In an Application by Kathleen McInnes [2014] FWCFB 1440 (6 March 2014), the full bench considered the question: "Can the FWC hear and determine an application alleging bulling behaviour which occurred only prior to 1 January 2014?" The short answer is "yes".

Ms McInnes commenced her application in the FWC on 9 January 2014, alleging that she had been subjected to bullying from 2007 to May 2013, after which she commenced a period of extended sick leave. As such, none of the bullying alleged by Ms McInnes occurred after 1 January 2014, when the new bullying laws commenced.

Ms McInnes' employer, Peninsula Support Services (PSS), and the Ai Group (who also made submissions in the case) argued that the FWC had no jurisdiction to hear and determine an application alleging bullying which occurred prior to 1 January 2014 (ie that the new laws should not have retrospective application).

PSS also relied upon the use of present tense in the terms "bullied at work...while the worker is at work" to allege that a worker can only be bullied for the purpose of the new laws from the time that these terms had legal significance (ie after 1 January 2014).

The full bench (President Justice Iain Ross, Vice President Adam Hatcher and Commissioner Peter Hampton) rejected these arguments, and stated that the reference "is at work" contained in the FW Act:

"...simply provides the context in which the bullying behaviour has taken place. The alleged bullying behaviour must take place prior to the making of an application for an order...Only a worker who reasonably believes that he or she 'has been bullied at work' can apply for an order."

Therefore, the FWC held that the laws require a past event, but this does not mean that the laws retrospectively apply to those past events. The past bullying simply provides the basis for the prospective order to stop future bullying conduct.

In practical terms, the decision means that:

  • workers can bring a FWC stop bullying application solely based on behaviours which occurred prior to 1 January 2014; or
  • events that occurred prior to that date, as well as after it, can be relied upon to support an application for a stop bullying order.

However, in both cases, to obtain an order the worker will still have to prove that there is a risk that the bullying will continue.

The constitutional point

Ultimately, Ms McInnes's application was dismissed because her employer, PSS, was found by the FWC not to be a "constitutionally-covered business".

The requirement that an applicant for a stop bullying order "work in a constitutionally-covered business" is a reflection of the limits upon the law making power of the Commonwealth Parliament. Among other things, Part 6-4B of the FW Act is based on the Commonwealth Parliament's powers to make laws with respect to trading corporations.

PSS argued that, while it was a corporation (one incorporated under Victorian legislation applicable to not-for-profit organisations), it was not a "trading corporation". It argued that, as a not-for-profit provider of free services to vulnerable people through government-funded programs, its activities could not be described as "trading" activities. Ms McInnes argued otherwise, relying upon the fact that PSS did engage in some trading.

The FWC found that, while PSS did engage in some trading activities, these were not significant. The result was that the FWC had no jurisdiction to hear the application.

The first substantive order

We now have a report of the first substantial order made, by Senior Deputy President Drake, on 21 March 2014 (Applicant v Respondent PR548852, Sydney, 21 March 2014).

The names of the parties to the proceedings have not been published and there are no reported details of the background facts; merely a report of the orders made, by consent, following a preliminary conference between the parties.

Those orders provide an indication of the flexibility available to the FWC in tailoring relief to specific situations, and a glimpse of how a stop bullying order could have real and disruptive impacts on workplaces. The orders were that the employee the subject of the application – the alleged bully:

  • Shall complete any exercise at the employer's premises before 8.00am.
  • Shall have no contact with the applicant alone.
  • Shall make no comment about the applicant's clothes or appearance.
  • Shall not send any emails or texts to the applicant except in emergency circumstances.
  • Shall not raise any work issues without notifying the Chief Operating Officer of the respondent, or his subordinate, beforehand.

Further, the applicant was ordered not to arrive at work before 8.15am each day.

As mentioned above, the significance of the orders is that a contravention of them could lead to prosecution for substantial civil penalties.

The parties were granted leave to have the matter relisted for a further conference in the event of any difficulty with the implementation of the orders.

Can unions apply for stop bullying orders on behalf of workers?

The question of whether unions can apply for stop bullying orders on behalf of workers will be answered following a full bench hearing commencing in the week of 31 March 2014.

The legislation provides that applications may be made by "a worker". There is no express provision allowing representative applications, and the usual rules apply about representation by lawyers and paid agents of parties in matters before the FWC (ie subject to certain exceptions). A party to an application for a bullying order will require permission from the FWC to be represented. Such permission is not necessarily straight forward to obtain.

One of the exceptions to the general rule is that a person will not be taken to be represented by a lawyer or paid agent if the representative appearing is an employee or officer of a union representing the person.

The practical result of all this is that, as with some other types of proceedings in the FWC, self-representation may be required of people seeking stop-bullying orders. However, if the FWC decides that unions can make representative applications, members of unions will be able to secure representation via their union without having to run the gauntlet of seeking permission from the FWC to be represented.

This may lead to a significant increase in the use of the jurisdiction (via union sponsored applications) than would otherwise have occurred. For most people, running their own legal case of whatever kind is a daunting prospect, and many potential applicants for stop-bullying orders may be put off bringing an application simply because they consider that the process will be too difficult.

These considerations might explain the slower-than-anticipated start to the use of the jurisdiction. Prior to commencement on 1 January this year, the FWC was preparing for 3500 bullying applications annually, or 67 per week on average.

However, to the end of March 2014 only 150 applications in total nationally have been received, or an average of 50 per month. So, for now, the anticipated avalanche of claims has not eventuated.

That might change if unions secure the right to make representative applications.

The test case on the subject is an application for orders made by the National Union of Workers for a group of unidentified labour hire workers employed by Hoban Recruitment Pty Ltd, engaged in Melbourne by Caterpillar of Australia Pty Ltd.

Both Hoban and Caterpillar dispute the union's right to file the applications, on the basis that the union is not a "worker". The President of the FWC has invited submissions on the application from the ACTU, AiG, ACCI and the Commonwealth Department of Employment.

So what do employers do?

The new bullying jurisdiction of the FWC is not the only consideration employers need to take into account in managing their workplaces regarding the subject. The risk of bullying also raises important occupational health and safety issues and attracts the further risk of criminal prosecution (and has done for many years).

Whether or not the new jurisdiction raises the stakes for employers remains to be seen, but there is no reason to think that we will not hear a lot more about bullying as the basis for a range of litigious claims by workers and, possibly by unions representing workers for the foreseeable future.

Safe Work Australia has recently released two new anti-bullying guides (one for workers and one for employers) and the Fair Work Commission also launched a dedicated anti-bullying web-page prior to Christmas 2013. As a result, the topic is receiving a very healthy level of air-play.

In the current regulatory environment, bullying (and the issues stemming from it) is probably one of the most significant and under-estimated risks in modern workplaces. It is not an area that employers can afford to manage reactively. Employers need to ensure that they are prepared to (and do) act quickly and proactively to prevent or stop alleged bullying in the first place.

This will allow them to be best placed to avoid all the adverse consequences which flow from a worker feeling bullied and (among a range of other potential options) commencing an application in the FWC to stop the bullying from continuing.

Learn more - Seminars being held in Brisbane and Perth

In order to cover this topic in more depth, we are running a seminar for employers and HR practitioners in late May.

For more details and to register, please follow the links below:

Brisbane Seminar - click here.

Perth Seminar - click here.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

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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