Australia: Failure of employer to act on bullying complaint results in $600,000 damages award

• The case is an illustration of a trend where damages are being pursued for bullying claims, alleging 'serious injuries' under workers' compensation laws, and using the tort of negligence to allege that the employer failed to take reasonable care for an employee’s safety.
• It also highlights that employers must take a broad perspective on risk, and not rely on an employee’s assertion that they can cope with the behaviour and that the employer should just ‘sit on it at this stage and take the comments on notice’.
• When coupled with the passing of amendments to the Fair Work Act to introduce an ‘anti-bullying’ jurisdiction from 1 January 2014, recent decisions in the space put employers on notice to act when instances or allegations of workplace bullying arise.
• Employers should also take into account codes of practice and guidelines regarding workplace bullying which exist under federal and state workplace health and safety laws when managing issues of bullying in the workplace.

Swan v Monash Law Book Co-operative (trading as Legibook)¹ 

Facts

From 2002 to 2008, Ms Swan worked for Legibook as a part time sales assistant.

Ms Swan alleged that throughout her employment her manager engaged in bullying, harassing and intimidating conduct and that Legibook had failed in its duty as an employer to take reasonable care for her safety.

Ms Swan stated she first reported to the Legibook Board a ‘conflict’ she was experiencing with her manager in 2003. This included ‘sarcasm, hostility, rudeness, and violent behaviour, [and] threat of termination’. At the time she told the Board to ‘sit on it at this stage and take the comments on notice’.

The Board considered the issue, and had noted in its minutes the risk the manager’s behaviour, if substantiated, posed for the Board and for Ms Swan’s wellbeing.

The Board resolved that Ms Swan ‘did not have to put up with this conduct’, but did not  implement measures it had identified to assist Ms Swan. This included implementing position descriptions, employment contracts and workplace behaviour policies.

The behaviour from her manager continued, and Ms Swan raised them again to the Board’s  attention in 2005 and 2007. She ceased employment with Legibook in 2007.

Evidence was led that the conduct caused Ms Swan to go from a ‘bubbly and lively’ person, to suffering from a moderate to severe major depressive disorder and generalised anxiety disorder, and being continuously unfit for work from 2007 and into the foreseeable future.

Decision

Dixon J found that Legibook had failed in its duty of care to Ms Swan by not responding adequately to Ms Swan’s 2003 complaint.

In particular ‘it was inappropriate for [Legibook], purporting to act as a reasonable employer, to rely on choices made by its employee as to the employer’s proper response to the employee’s complaint….Seeking assurances from [Ms Swan] that she was happy with the Board’s handling of her complaint in the circumstances constituted an inappropriate response’.

In finding this, the court acknowledged that the Board’s composition, being mostly volunteers without expert knowledge, likely contributed to the approach that was adopted.

The court found that this approach meant the Board did not act reasonably, and fell short of the expected standard of an employer, including by:

• failing to define the roles of its employees, which lead to an exacerbation of workplace issues
• failing to introduce complaint procedures
• giving no direction to Ms Swan's manager as to his dealings with her, leading to him developing ‘some rather arbitrary and brusque work practices in his dealings with her’, and
• failing to directly investigate what was occurring and intervene appropriately.

Whilst Legibook did eventually appoint an independent investigator to look into Ms Swan’s concerns, by then it was too late.

Ms Swan was awarded $292,554.38 for loss of past and future earnings. She was also awarded $300,000 for damages for pain and suffering and loss of enjoyment of life.

Codes of practice and guidelines dealing with workplace bullying

In the course of making his findings on liability, Dixon J acknowledged the relationship between workplace bullying and the risk to health and safety, and referred to WorkSafe Victoria’s guidance note on this issue.

The safety regulators in both Victoria and Western Australia have produced guidelines dealing with bullying which employers in those jurisdictions should consider in managing bullying issues in their workplaces. ²

For the other states and territories covered by the model Work Health and Safety Act, Safe Work Australia has produced an amended draft code of practice for employers (and draft guide for employees) which is currently available for public comment. ³

Implications for employers

• This decision is one of a trend in claims which have sought damages arising from a breach of an employer’s duty of care⁴.
• It is likely more cases of this kind will be brought against employers, especially with the introduction of the Fair Work Commission’s anti-bullying jurisdiction⁵. Although damages cannot be awarded in the FWC's anti-bullying jurisdiction, its introduction will bring even greater prominence to bullying concerns in the workplace.
• The case also highlights some ‘classic’ employer errors when dealing with employee concerns of this type. In particular, failing to act to investigate a complaint because the employee says (at that point in time) they can ‘cope’, and not implementing recommendations. In this case, this exposed the employer to a $600,000 damages bill.

This article was written by Lisa Croxford, Special Counsel, Melbourne  and Susan Duc, Solicitor, Sydney.

Endnotes

1. [2013] VSC 326
2. Workplace bullying – prevention and response; Violence, aggression and bullying at work
3. Public comment now open - draft model Work Health and Safety Code of Practice for Preventing and Responding to Workplace Bullying
4. Others include Brown v Maurice Blackburn Cashman [2013] VSCA 122 and Willett v Victoria [2013] VSCA 76
5. Fair Work Amendment Act 2013: Summary of Amendments.