Bullying and Liability - an IR Update


It is rare for employees to be ordered to pay costs after losing unfair dismissal cases. If it weren’t rare, the expression ‘go away money’ might not have been coined. But it is even rarer still for an employee to be required to stump up a security before trial, but that has happened in the Fair Work Commission.  

When employers realised the Fair Work Act’s anti-bullying regime had no monetary compensation attached, there was a collective sigh of relief. But a recent Victorian Supreme Court case highlights the prospect of vicarious liability where an employer knows, or ought to know, that bullying can cause psychological injury to an employee. 

WHS statutes emphasise employers’ obligations to provide safe workplaces – and that means a safe system of work. Taking that one step further, it has been held to mean that employees must be competent to support a safe work system. And a competent employee does not bully, harass, demean, abuse, intimidate or humiliate their colleagues. 

The court discussed this in the context of an employer’s liability for damages. The pathway is clear: there is a bully; the employer knows this; there is a bullied colleague; the employer knows this; the bullied colleague is at risk of developing a recognisable psychiatric injury; the employer knows, or ought to know, this; ergo, the employer can be vicariously liable and that means the employer pays. 

To end up at this point the injured employee would need to show that there had been a pattern of behaviour which met the criteria of bullying. While not a defined legal term, it has been accepted to mean repeated, unreasonable behaviour directed towards an employee that creates a risk to health and safety. The expression “unreasonable behaviour” means behaviour a reasonable person would expect to victimise, undermine, humiliate or threaten.  

The duty the employer owes is to each employee. If there were evident signs of distress in the employee’s behaviour, the court could find any subsequent psychological injury was ‘reasonably foreseeable’.  

Bullying has become something of cause célèbre, and possibly over-stated in terms of incidence, which may prompt some to take it all with a grain of salt. But it is an insidious and vitality sapping experience and, even from enlightened self-interest, employers ought to call it out wherever it occurs. To not do so can have debilitating effects on both the employee involved and the employer’s bottom line. 

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