Management action can land you in hot water if it’s not carried out in a reasonable manner.

While the term ‘reasonable’ may seem straightforward, the legal line between ‘reasonable management action’ and bullying can be very fine.

In this article we examine how you can prevent inadvertently crossing this line and avoid an expensive bullying claim.

What is management action?

Generally, ‘management action’ refers to a formal aspect of interaction between a manager or supervisor and a worker, such as:

• conducting performance appraisals;
• conducting meetings to address underperformance;
• giving fair and constructive feedback on a worker’s performance;
• investigating alleged misconduct;
• disciplining a worker for misconduct; and
• modifying a worker’s duties.

Management action does not include informal, day-to-day interaction.

Under the Fair Work Act, management action will not amount to bullying if it is:

• reasonable; and
• carried out in a reasonable manner.

What is reasonable management action?

Reasonable management action refers to performance management or a disciplinary process that is carried out in a fair, transparent and just manner.

Whether management action is reasonable depends on a range of factors, including:

• the circumstances that lead to and create the need for the management action;
• the manner in which the management action is taken;
• whether established policies or procedures are followed (if management action does involve a significant departure from these, the departure must be reasonable and lawful in the circumstances);
• whether any investigations undertaken are carried out in a timely manner; and
• the consequences of the management action.

Management action versus bullying

For a worker to prove that certain action constitutes bullying, they must be able to demonstrate that your decision to take the action lacked any evident and intelligible justification such that it would be considered by a reasonable person to be ‘unreasonable’ in all the circumstances.

A court will also consider the emotional state and psychological health of the worker to determine whether the management action is reasonable. However, the impact on the worker cannot by itself establish whether or not the management action was carried out in a reasonable manner. Some degree of humiliation may often be the consequence of a manager exercising their legitimate authority at work.

Be mindful that if a worker is adversely affected by management action, this can pose a risk to their health and safety, even if the management action was reasonable in the circumstances. It is important to remember that you have a duty to ensure that workers and others in the workplace are not exposed to health and safety risks.

How to ensure your management action is reasonable

To avoid a bullying claim, you must ensure that any management action you take is reasonable. To do this, keep the following things in mind:

1. As an employer, you have the right to take management action, including:

• giving fair and constructive feedback on a worker’s performance;
• taking disciplinary action if necessary; and
• making decisions to respond to poor performance.

2. The following factors are used to determine whether management action is reasonable and carried out in a reasonable manner:

• the circumstances that led to the management action being taken;
• the manner in which the management action was taken; and
• the consequences that followed the management action.

3. The decision of whether management action is reasonable will be made objectively, rather than being based on the worker’s perception of it.

4. Management action is more likely to be regarded as reasonable if established policies and procedures are followed. It is therefore best practice to ensure that your policies and procedures are kept up-to-date.

5. A court will look at the overall conduct surrounding the management action. This means that a course of action may still be ‘reasonable management action’ even if particular steps are not.

6. Management action does not need to be perfect to be considered reasonable, but it must be lawful and not irrational, absurd or ridiculous.

7. Be cautious that management action may create a risk to health and safety, and may therefore expose you to liability under health and safety legislation, even if the action is reasonable in the circumstances.