Bullying a costly matter: $1.36 million damages for bullied worker

 In Law

Bullying increasingly is becoming a costly matter for business, with the 2014 introduction of the Fair Work Commission’s (Commission) anti-bullying laws, and recent significant damages orders for bullied employees. A Victorian employer was recently ordered to pay $1.36 million in damages to an employee bullied over a 2 week period. Bullying also costs Australian employers indirectly through lost time, absenteeism, lost productivity, reputational damage and increased workers’ compensation premiums, as well as directly through the cost of litigation. These significant costs  – direct and indirect – make it vital for employers to take steps to manage the risk of bullying in their workplace.

Bullying claims to the Commission

In the first 18 months of the Commission’s new anti-bullying powers (ending 30 June 2015), the Commission received 6300 telephone inquiries and 873 applications for anti-bullying orders[1]. Workers who reasonably believe they have been bullied at work can apply for an order to stop bullying. Claims can be brought against a worker’s employer, but also against their manager, co-workers, company directors, or other third parties, personally. Recently, the Commission confirmed that an onsite resort manager was able use these very broad anti-bullying laws to seek orders against other residents and the body corporates in a management rights situation. This was despite the fact that the body corporate was not the onsite manager’s employer, and had no contractual relationship with the resort manager personally.

$1.36 million in single damages order for bullying

In addition to the Fair Work Act’s anti-bullying laws, employers can find themselves on the receiving end of personal injuries claims caused by bullying. In December 2015, a Victorian employer was ordered to pay$1.36 million in damages to an employee whose complaints about workplace bullying were ignored.

Courts are increasing ordering significant damages against employers who have failed to act to stop bullying, or to properly investigate complaints of bullying. Recent examples include damages orders for:

  • $592,554.38, including $300,000 for pain and suffering to a sales assistant whose employer failed to act on her complaint of bullying;
  • $237,770 plus costs against a Cairns retail outlet after an 11 day period of bullying that was not investigated and dealt with, in breach of its own policies; and
  • $250,000 for a bullied police officer.

Other consequences

Employers whose workers are subjected to bullying, also expose themselves to prosecution for breaches of workplace health and safety legislation, as well as workers’ compensation claims.
Implications for employers

  • The $1.36 million damages order is a reminder to employers to take the right steps to manage workplace bullying. It is vital for employers to have in place policies and training to prevent bullying occurring, and to enforce these policies as issues arise. A clear complaints procedure is key.
  • Employers who do not act on complaints of bullying do so at significant risk. Even informally raised complaints must be properly investigated and appropriate steps taken.
  • Supervisors and managers should be aware of the risk of bullying claims, particularly when managing poor performance. Their conduct may be closely scrutinised in the future. Following and keeping records of careful and appropriate performance management processes is important.
  • In this age of digital media, policies and procedures dealing with bullying need to extend to out of hours conduct, such as bullying that might occur through Facebook and the like, in order to manage and prevent these risks.

[1] Fair Work Commission Annual report – https://www.fwc.gov.au/annual-report-2014-15/part-3-performance-reporting/determining-anti-bullying-applications.

This article was written by Denise O’Reilly, Director, and Jenny Willmott, Paralegal, O’Reilly Workplace Law
15 February 2016

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