Australia: Bullying in the Boardroom Can Now Go to the Fair Work Commission

Directors are 'workers' when it comes to anti-bullying laws and can get anti-bullying orders from the Fair Work Commission

By Saul Harben and Rory Moriarty © Clayton Utz May 30, 2017
LIKE SAVE PRINT
Reuse Permissions

​Robust discussions at the board level are a regular feature of Australian corporate life, so it might come as a surprise to directors to learn that they are covered by anti-bullying laws—but they are, following a landmark decision by the Fair Work Commission.

It has ruled that for the purposes of workplace bullying laws under the Fair Work Act 2009, company directors satisfy the definition of "worker" and can therefore apply for orders to stop bullying against themselves from anywhere in the organization, including around the boardroom table (In Application by Adamson [2017] FWC 1976).

Director Is a 'Worker' in a Limited Sense

Directors might not consider themselves as workers, but the definition of "worker" for the purposes of workplace bullying laws under the Fair Work Act 2009 is a broad one.

That's because it is based on the definition of worker in the Work Health and Safety Act 2011 (WHS Act), which is deliberately broad to ensure health and safety protection is extended to all types of workers, and not just employees.

The commission ruled that the proper interpretation of "worker"—from either a literal or contextual perspective—meant that activities undertaken by directors in performing their duties are work.

Accordingly, a director was held to be a worker who was undertaking work, and therefore could bring a workplace bullying complaint against either an employee of the company or a fellow director.

Ultimately in this case the claim of workplace bullying was dismissed because an order is granted to prevent future bullying; as the applicant was not re-elected to the board during the course of the case, the commission decided that there was no future risk of bullying.

What Might Form the Basis for a Bullying Claim at the Board Level?

Generally under the Fair Work Act, a worker is bullied at work if an individual or group of individuals repeatedly behaves unreasonably toward the worker and that behaviour creates a risk to health and safety. This an objective test.

The act does not however define "unreasonable behavior," although the explanatory memorandum states it would include victimizing, humiliating, threatening or intimidating the applicant.

What Are the Risks of Anti-Bullying Applications from Board Members (and How Do You Mitigate Them)?

Putting aside the reputational risk to a company and its directors on the receiving end of a workplace bullying application, there are some significant risks to good corporate governance.

Upon an application, the commission must deal with an application within 14 days and ultimately can make any order necessary to prevent a worker from being bullied. Those orders might simply prevent the alleged bullies from further bullying, but could go further and prevent them from being in proximity to the applicant. This, of course, would present some challenges to running board meetings.

Even if the application is dismissed, or the orders can be complied with easily, the period between application and the commission's decision could essentially paralyze the board.

The risks become more complex if the application is not in complete good faith—for example, if a disaffected board member who dissented on an important strategic decision used an application to continue the argument by other means. This could delay or jeopardize the deliberations of the board, particularly in relation to significant M&A decisions.

So How Can Boards Reduce Their Risks?

As a first step, read your company's code of conduct so you understand the standards you must uphold, and get training for board members on the effect and operation of workplace bullying laws.

Being on a board, however, has some unique differences to the shop floor, particularly as robust discussion and decision-making are integral features. That means there's more risk of behaviours that could be perceived as bullying.

You should therefore consider developing specific policies for board members, including on how board meetings are to be conducted. This includes ensuring that the chair and other senior members use their influence to keep meetings productive, comprehensive, but also civil.

Saul Harben is an attorney with Clayton Utz in Perth, Australia. Rory Moriarty is an attorney with Clayton Utz in Sydney. © 2017 Clayton Utz. All rights reserved. Reposted with permission of Lexology. 

LIKE SAVE PRINT
Reuse Permissions

SHRM WEBCASTS

Choose from dozens of free webcasts on the most timely HR topics.

Register Today

Job Finder

Find an HR Job Near You
Post a Job

SPONSOR OFFERS

Find the Right Vendor for Your HR Needs

SHRM’s HR Vendor Directory contains over 3,200 companies

Search & Connect