[2014] FWC 6988
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.789FC - Application for an order to stop bullying

G.C.
(AB2014/1231)

COMMISSIONER HAMPTON

ADELAIDE, 9 DECEMBER 2014

Application for an FWC order to stop bullying - senior management employee alleging Managing Director repeatedly behaved unreasonably so as to constitute bullying - all parties seeking decision to be issued without identifying parties - hearings conducted in private - request of parties accommodated - sale of applicant’s former business into larger undertaking and contract of employment formed - dispute about conduct - dispute as to whether contract document represented the terms of employment agreement - after hours work - changes in reporting arrangements - warning issued to applicant - lack of communication on certain matters - conversation at bar after work function - whether occurred at work - whether conduct represents repeatedly unreasonable behaviour - some behaviour not demonstrated on the evidence but certain unreasonable conduct found - not necessary to make finding as to whether conduct was at work and created relevant risk to health and safety - no basis to make orders due to expiry of fixed term employment contract - absence of any context in which future risk might arise - observations made about problematic nature of orders given the particular context - application dismissed.

1. The application

[1] G.C. (the applicant) has made an application for an order to stop bullying under s.789FD of the Fair Work Act 2009 (the FW Act). The application alleges bullying conduct by Mr E.S., who is the Managing Director of his employer, S.I. Pty Ltd (the employer).

[2] Section 789FC of the FW Act provides as follows:

[3] There is no contest that the applicant reasonably believes that he has been bullied at work 1 or that he is a worker as defined. There is a valid application before the Commission.

[4] The application was subject to a hearing, which was conducted in private as permitted by s.593(3)(a) of the FW Act. All proceedings conducted to that point were also undertaken in private. At the conclusion of the hearing, all parties supported a position advanced by the employer that the names of all involved should be de-identified from any public decision issued by the Commission. There is no presumption that this approach should be adopted in this jurisdiction and the principles of open justice and the scheme of the Act are strong considerations to be taken into account. Given the nature of some of the matters and circumstances discussed in this decision, I have accepted the joint request of the parties. I note also that the genuine public interest in the operation of the Act, and this jurisdiction in particular, is still satisfied by the publication of the decision in this form.

[5] The applicant was represented, with permission, 2 by a lawyer, and in the hearing, by counsel. The employer and the Managing Director in effect shared representation between themselves without external representation. Given these circumstances, it was appropriate to provide some latitude to the unrepresented parties and ensure that there was a common understanding of the relevant disputed matters. I also took steps during the examination of witnesses to ensure that the significance of evidence (or the lack thereof) on disputed matters was also understood.3 I must however determine the application based upon evidence that is before the Commission and each party ultimately bears responsibility for their own case.4

2. The general context

[6] Before dealing with the disputed facts and contentions, it is appropriate to set the general context for the application.

[7] The applicant began work for the employer after selling his own business to the employer.

[8] As a condition of the sale of the business, it was agreed that the applicant would be employed by the employer in a senior role. A written employment contract was drafted between the parties however it was not signed. A dispute arose during the course of the proceedings as to whether the version relied upon by the employer represented the agreed terms and conditions. In particular, there is a dispute as to whether the employment contract envisaged a fixed five year term, which would end on 30 November 2014.

[9] The employment of the applicant commenced on 1 December 2009, and the draft contract provided that the applicant would be employed in the position of General Manager - Managed Marketing and Sales. The applicant then accepted an additional role of Executive General Manager - Electric, which effectively made the applicant the head of the Electrical division within the employer’s group of operating divisions. The applicant’s starting remuneration package was in the order of $250,000 per annum, including superannuation.

[10] The employer has branches in a number of States including near Brisbane, Queensland, where the applicant was based. The Managing Director conducts the business, for the most part, from the Melbourne head office of the employer.

[11] Although there is some dispute about the events, which I will deal with shortly, it is evident that over the years of his employment there has been a decline in the degree of active involvement of the applicant in the management of the broader business of the employer. This has also operated to a lesser degree in that part of the employer’s operations that is predominantly made up of the business formerly owned by the applicant. This was probably inevitable with the sale of a business and its takeover by the broader group. That decline led to, and was exacerbated by, a change in reporting arrangements and this in turn led to a further decline in the working relationship between the applicant and the Managing Director. This sets some of the important context for a consideration of the alleged bullying behaviour.

[12] The applicant commenced a period of sick leave and has not attended work since 14 February 2014.

[13] On 4 March 2014, the Managing Director wrote to the applicant indicating that he was prepared to make changes to assist him, including by adjusting his role without making any reductions in this salary package and facilitating his progressive reintroduction into the workplace.

[14] Later on 4 March 2014, solicitors for the applicant wrote to the Managing Director setting out a series of allegations largely consistent with those made within this application. That correspondence also referred to the capacity to bring an anti-bullying application in this jurisdiction and noted that there was a dispute under clause 10.1 of the employment agreement between the applicant and the employer. 5

[15] In April 2014, the applicant’s treating psychologist diagnosed him as having an adjustment disorder with mixed anxiety and depressed mood of moderate to severe seriousness and indicated that a return to employment with the employer in any capacity was likely to cause “a worsening of his distress.” The relevant report 6 also indicated as follows:

3. The cases as presented by the parties

3.1 The applicant

[16] The applicant contends that over the past 18 months he has been the subject of repeated unreasonable behaviour from the Managing Director that has caused him to suffer from a significant amount of stress.

[17] In summary, the applicant contends that the following unreasonable behaviour occurred:

[18] The applicant further contends that an incident of unreasonable behaviour occurred in which the Managing Director abused and humiliated him in front of other Senior Managers. This was alleged to have taken place after a work meeting and dinner, in the lobby bar of a Perth Hotel and involved a disagreement between the applicant and the Managing Director as to the selection criteria for a ‘Representative of the Year’ award. Subsequently, via an email, the Managing Director raised concerns with the applicant and requested, through a text message, an early morning meeting with the applicant to discuss certain matters. It is alleged that the Managing Director then failed to attend that meeting.

[19] The applicant gave evidence in support of his application. He also relied upon the following witness evidence:

[20] The applicant contends that the unreasonable behaviour was not an isolated, one-off event but consists of a series of related events.

[21] The applicant further contends that there has not merely been a risk to health and safety but a risk that has been actualised and is demonstrated through the Psychologist report and other medical evidence.

[22] Furthermore, the applicant contends that there is a future risk of repetitious behaviour as the behaviour already presented is sustained and systematic, and it is this fact that provides a ‘powerful inference for drawing or satisfying the risk of repetition element.’

[23] In terms of the employment contract, the applicant contends that there was no fixed term contract and that it was always intended that his employment would continue beyond 30 November 2014. On that basis, in the absence of an Order from the Commission, there was a further risk of bullying conduct.

[24] The applicant sought on Order that the alleged bullying conduct stop, including that he not directly report to the Managing Director. 7

3.2 The employer and the Managing Director

[25] The employer and the Managing Director presented a joint case and each opposes the application on a number of grounds including that there was an absence of repeated unreasonable conduct by the Managing Director.

[26] The employer argues that the applicant has been the subject of reasonable performance management and therefore reasonable management action carried out in a reasonable manner. The employer contends that there were meetings and phone discussions between the employer and the applicant with a clear objective of assisting the applicant to improve his performance. Further, the applicant had been given the opportunity to discuss his concerns with the employer and did so in writing. The employer also contends that the applicant did not accept responsibility for his poor performance and in that context was given an “official warning”, which was not subsequently withdrawn as now contended by the applicant.

[27] The employer further contends that:

[28] The employer also contends that the applicant was employed on a fixed term employment contract that concludes on 30 November 2014, and that he has been advised that a further contract was not being offered. In that light, it argues that there was no further risk of bullying conduct at work and no basis for the Commission to consider any orders under this application.

[29] The employer relied upon evidence from the following Managers:

3.3 Observations on the evidence

[30] I will deal with the factual findings as part of my consideration of the matter. However, it is appropriate to make some observations about the witness evidence based upon my assessment having heard that evidence.

[31] In relation to the witness evidence I have some reservations with most, but not all, of that evidence. None of the witnesses are impartial, or (with the notable exception of Mr Johnston) objective about the issues.

[32] I found the evidence of the applicant to be inconsistent and unconvincing on certain matters. This included his knowledge of the written contract of employment - where I consider him to have been disingenuous, his alleged attitude to swearing and bad language, and his approach to his medical advisors seeking a medical clearance. I also consider that he attempted to downplay his role as a senior manager at times. I do however accept that he genuinely holds the belief about his treatment by the Managing Director in terms of his role within the business and that he has not attempted to mislead the Commission on those aspects.

[33] The evidence of Mr P.D. was clear and for the most part convincing. He confirmed that the Managing Director had resented reports of product faults and that there was some unhappiness in the South East Queensland (SEQ) operation of the employer. He also indicated that the Managing Director had treated him fairly and that the applicant, as head of the electrical division, would need to share responsibility for any problems in the SEQ operations.

[34] Mr G.B. was not well disposed to the Managing Director and this in my view impacted upon his evidence. In addition, most of his evidence relied upon what others had told him about the attitude and treatment of the applicant by the Managing Director.

[35] Mr S.M. was in some respects an unwilling witness, and importantly as a witness called by the applicant, he did not recall the applicant’s version of lobby bar incident. He did however confirm that there was a spirited discussion between the Managing Director and the applicant at that time.

[36] Mr D.H was not convincing on certain matters. The apparent clarity around the detail of the alleged lobby bar conversation did not sit well with the lack of clarity about other matters that he was directly involved in, or responsible for. However, he did make concessions where appropriate and I do accept the thrust of his evidence on direct facts.

[37] In terms of Mr Johnston, I accept his evidence without hesitation and note that he confirmed the applicant’s medical condition and potential causation but was not able to confirm the actual events. The report outlined earlier in this decision remains the view of Mr Johnston.

[38] Mr P.C. confirmed that there was a discussion about the sales award in the lobby bar. He had a very poor recall of what was said but denied that the words of the Managing Director as alleged by the applicant were actually used during that conversation. He did eventually confirm that the applicant was upset by whatever occurred at the lobby bar and not just by the email received later that night.

[39] In relation to Mr I.H., Mr K.O. and Mr F.M. their evidence was not challenged however it was general in nature and not particularly relevant to the factual disputes that require determination in this matter.

[40] I found that the Managing Director was not always convincing on certain matters and attempted to deflect comments about Mr G.B. and overstated the responsibility of the applicant when it suited his position. In terms of the key factual conflicts, I generally prefer the Managing Director’s evidence about his conduct where it conflicts with the applicant’s but not universally so.

[41] Mr M.H. was in my view an honest witness and although he was part of the employer’s case, I accept his evidence where it conflicts with any other evidence in relation to the facts and events that he directly undertook or observed.

4. What constitutes bullying behaviour under the Act?

[42] Section 789FD of the FW Act provides as follows:

[43] There is no contest that the employer is conducting a business or undertaking within the meaning of the Work Health and Safety Act 2011 (WHS Act) or that it is a constitutionally-covered business. There is a dispute about whether there was any bullying conduct and whether certain events relied upon by the applicant took place whilst he was at work. All of the conduct relied upon is alleged to have been undertaken by the Managing Director and directed at the applicant.

[44] Drawing upon various decisions 8 of the Commission referred to by both parties, the following approach to the consideration of contended bullying behaviour arises.

[45] The concept of individuals ‘repeatedly behaving’ unreasonably implies the existence of persistent unreasonable behaviour but might refer to a range of behaviours over time. There is no specific number of incidents required for the behaviour to represent ‘repeatedly’ behaving unreasonably (provided there is more than one occurrence), nor does it appear that the same specific behaviour has to be repeated. What is required is repeated unreasonable behaviour by the individual or individuals towards the applicant worker or a group of workers to which the applicant belongs.

[46] An applicant may rely upon conduct that took place prior to the commencement date of the new provisions, 9 to demonstrate bullying conduct.10

[47] ‘Unreasonable behaviour’ should be considered to be behaviour that a reasonable person, having regard to the circumstances, may consider to be unreasonable. That is, the assessment of the behaviour is an objective test having regard to all the relevant circumstances applying at the time.

[48] The behaviour must occur whilst the applicant is at work.

[49] The unreasonable behaviour must also create a risk to health and safety. Therefore there must be a causal link between the behaviour and the risk to health and safety. Cases on causation in other contexts suggest that the behaviour does not have to be the only cause of the risk, provided that it was a substantial cause of the risk viewed in a common sense and practical way. 11 This would seem to be equally applicable here.

[50] A risk to health and safety means the possibility of danger to health and safety, and is not confined to actual danger to health and safety. 12 The ordinary meaning of ‘risk’ is exposure to the chance of injury or loss.13 In the sense used in this provision, the risk must also be real and not simply conceptual.

[51] Behaviour will not be considered to be bullying conduct if it is reasonable management action carried out in a reasonable manner.

[52] Section 789FD(2) of the FW Act is not so much an “exclusion” but a qualification which reinforces that bullying conduct must of itself be unreasonable. It also emphasises the right of management to take reasonable management action in the workplace. In its application, the provision comprises three elements:

[53] The Explanatory Memorandum 14 refers to management decision and decisions about how work is to be carried out. This suggests that the term may be required to be given a wide meaning under s.789FD(2) and that the Legislature intended everyday actions to effectively direct and control the way work is carried out to be covered by the exclusion.

[54] Determining whether management action is reasonable requires an objective assessment of the action in the context of the circumstances and knowledge of those involved at the time. Without limiting that assessment, the considerations might include:

[55] The specific ‘attributes and circumstances’ of the situation including the emotional state and psychological health of the worker involved may also be relevant. 16

[56] The test is whether the management action was reasonable, not whether it could have been undertaken in a manner that was ‘more reasonable’ or ‘more acceptable’. 17 In general terms this is likely to mean that:

any ‘unreasonableness’ must arise from the actual management action in question, rather than the applicant’s perception of it; and

consideration may be given as to whether the management action involved a significant departure from established policies or procedures, and if so, whether the departure was reasonable in the circumstances. 19

[57] For the circumstances in s.789FD(2) of the FW Act to apply, the management action must also be carried out in a ‘reasonable manner’. Consistent with the approach above, what is ‘reasonable’ is a question of fact and the test is an objective one.

[58] Whether the management action was taken in a reasonable manner may depend on the action, the facts and circumstances giving rise to the requirement for action, the way in which the action impacts upon the worker and the circumstances in which the action was implemented and any other relevant matters. 20

[59] All of the requirements of s.789FD(1) must be read together. In terms of the issues in dispute in this case, this means that the Commission must consider whether an individual (the Managing Director) has repeatedly behaved unreasonably towards the applicant whilst the applicant was at work and whether that behaviour has created a risk to health and safety. A positive finding on each of these elements, and if appropriate, a finding that the circumstances contemplated in s.789FD(2) of the FW Act do not apply to the behaviour, must be made for the Commission to find that the applicant worker has been bullied at work.

5. What has been the conduct of the Managing Director towards the applicant based upon the evidence?

[60] It is appropriate to consider each of the events relied upon by the applicant in this matter. The following findings must however be considered in the broader context outlined earlier in this decision.

5.1 Out of normal business hours conference calls and communications

[61] I am satisfied that from time to time the Managing Director organised and conducted conference calls and communications with the applicant outside of normal business hours. This was, in part, a result of travel undertaken by the Managing Director and the nature of their respective positions.

[62] The evidence does not demonstrate the extent of the “out of normal hours” requirements and the reasonableness of such must be considered having regard to a range of considerations. In that regard, the nature of considerations outlined in s.62(3) of the FW Act, regarding the determination of whether hours above 38 per week are reasonable, are relevant here.

[63] Section 62(3) provides as follows:

[64] In this case, the considerations relevantly include the nature of the position occupied by the applicant - being a senior management role, his salary and conditions, the nature of those requirements, and the circumstances of the applicant and the business. The “draft” employment contract at one point refers to a “normal working week of 40 hours” 21 and later commits the applicant to devote as much time as is required to fulfil the job description and responsibilities and to perform such hours “as may from time to time reasonably be required” outside of the working hours without additional remuneration.22

[65] The lack of notice about at least some of the out of hours arrangements that might be implied from the nature of that activity, and the probable cancellation of some of these meetings by the Managing Director, are militating factors. However, the overwhelming balance of considerations would suggest that a moderate level of out of hours work was reasonable in the circumstances of the applicant.

[66] I am not satisfied that, at least in general terms, the “out of hours” meetings and work requirements were unreasonable in the circumstances of the applicant and his role at the employer.

6.2 The failure to keep the applicant informed about meetings with clients

[67] It would be evident from the findings made about the broader context that the working relationship between the applicant and the Managing Director became stained. This was the product of the applicant losing some practical control over, and engagement in, his division of the employer (being in effect his former business), and this led to a change in the behaviour of both men to some degree.

[68] I am satisfied that, in more recent times, the level of information provided to the applicant about the broader business interests of the employer may have declined. This would have reinforced the perception being formed by the applicant that he was increasingly being isolated from the broader business and was not involved to same degree that he would have hoped when his business was originally sold to the employer.

[69] There is also some evidence to support the notion that in relation to the electrical division, the applicant was not always in the loop about broader information that could impact upon the operations of that division

6.3 The change in reporting arrangements for Regional Managers and related matters

[70] The change was announced on 14 May 2013. It was announced in the following manner:

[71] This was a major change in the practical working and reporting arrangements and directly impacted upon the role of the applicant within the electrical division that he was responsible for, and within the employer more generally to some degree.

[72] The applicant did not lose any monetary benefits or entitlements as a result of that change.

[73] The change took place in the context of concerns about the operations and effectiveness of the electrical division including the performance of some Regional Managers. Although some of those concerns may have related to supply chain issues, I accept that there were objective grounds for the concerns.

[74] There is a dispute as to whether there were prior discussions between the Managing Director and the applicant about this change. There is certainly no documentation supporting any such discussions, however the Managing Director tended to operate more informally than one might expect for someone in his position and the absence of paperwork in not decisive in that context. More importantly however, the evidence about any such discussions was vague at best.

[75] Even if the applicant was notified about the change in advance, I find on balance that there was no meaningful consultation with him about that move. Given the significance of that change in terms of the applicant’s role in the company, and his standing in the division that he had earlier sold to the employer, the absence of meaningful consultation was unreasonable.

[76] The applicant also claimed that he was later, in January 2014, criticised by the Managing Director about the performance of the Regional Managers after he had lost responsibility for them. I will deal with this aspect under 6.6 below.

6.4 The performance management and intended dismissal of G.B.

[77] The critical issues here do not directly involve whether G.B. was treated fairly. Rather, the allegation is that the applicant was unreasonably required to implement a performance management plan and was directed to dismiss G.B. and then provide false information in relation to his workers compensation claim.

[78] I would accept that requiring a Manager to implement an unfair performance management plan or to do so in an unreasonable manner, or being forced to complete incorrect paperwork to defend an unfair process, is conceptually capable of being found to be unreasonable for present purposes.

[79] In my view both the applicant and the Managing Director underplayed their role in this matter.

[80] I am satisfied that there were genuine issues concerning the performance of G.B. in 2013. It is also evident to me that the applicant supported G.B., both as long term work colleague and on a personal basis. The applicant was, rightly, concerned about what amounted to a unilateral reduction in the position and salary arrangements of G.B. that had earlier been determined by the Managing Director. The applicant, when he was  G.B.’s manager, also had an important role in dealing with the under performance of the area under G.B.’s supervision, and he did not do so to the extent expected by the Managing Director.

[81] I also find on balance that the Managing Director has at times made some derogatory remarks to the applicant about G.B. and these were not appropriate. The decision to discipline, and finally to seek to dismiss G.B., which was fundamentally taken by the Managing Director, was not however based upon those remarks. I note that G.B. eventually “resigned” as part of an agreed outcome.

[82] However, it is also evident that whilst the applicant was uncomfortable about the events, he was involved in the decision making process to a more significant degree than he contended. This does not mean that he was not (rightly) concerned about the inaccuracies in the decision making rationale, including that only one warning had been given to G.B. (by the applicant) rather than multiple warnings, or with whether a fair process was being adopted. He was also concerned about the impact and fairness of the decision upon his colleague. However, I find that the applicant has understated the performance concerns with G.B. based in part upon his friendship with him.

[83] What is clear to me is that these events are a further illustration of the fact that over time, the applicant was losing influence and control over his division and former business, and this has significantly impacted upon his views about the matter. It is also relevant to note that although G.B. was part of the business managed by the applicant, he was not directly reporting to the applicant at the relevant time.

[84] There is very little material about the alleged misinformation in relation to the workers compensation claim but what is before the Commission is consistent with the above findings.

6.5 The change in the applicant’s annual bonus

[85] In October 2013, the Managing Director advised the applicant that he had made an adjustment to the calculation of the applicant’s annual (non-discretionary) bonus. An incentive scheme was set out in the document 23 that the employer suggests represents the contract of employment. Assuming for present purposes that Appendix 1 to that document represents the agreed incentive scheme, there are two elements to the bonus scheme.

[86] Firstly, a set share of net profit after tax for the division managed by the applicant (where the concepts were fixed) or a share of the net profit before tax of the employer as a whole (where the share operated at the employer’s discretion).

[87] The applicant’s complaint 24 about the change refers to a “change in the sales commission of 5% to 11.5%”. I understand that this related to the commission payments made to the sales staff. The change is described by the Managing Director as being to “the costs” to “reflect current operating costs, which is totally at my discretion”.25

[88] It is not possible to make definitive findings about this element based upon the evidence before the Commission. What can be said is that there was a change made to one of the cost inputs without prior advice or consultation with the applicant. However, the Managing Director indicated that he was prepared to discuss the matter. The change, which appears to have been to the basis upon which the profit was to be calculated, and was not a matter expressly covered by the bonus agreement, would have resulted in a reduction to the applicant’s income. Following a discussion about the matter, the issue was apparently resolved.

[89] It is also possible that the employer paid a bonus to the applicant beyond that strictly required by the contract, however no definitive finding can be made about that element given absence of direct evidence from the employer.

6.6 Criticisms of Mr G.C.’s presentation to the strategy meetings and the “official warning”

[90] Strategy meetings were conducted in January 2014. Prior to those events, the applicant raised some concerns by email about the overall performance and strategic planning within the business. This included a suggestion that more specific action plans for cost reductions and efficiency gains may be required. The applicant also sought a copy of “each individual overhead line detail that shows a variance against budget...” 26

[91] The following day, the Managing Director provided a comprehensive response setting out the broader strategy and inviting the applicant’s ongoing suggestions and recommended strategies. 27 The overhead budget figures were not supplied to the applicant by the Managing Director.

[92] Details of the budget figures for the applicant’s division were however provided to the applicant by M.H. ahead of the meetings. Whilst this did not include the broader budget figures for the employer as a whole, the applicant did not have a reasonable explanation as to why he did not pursue this with M.H., who would have been the obvious source given his role in the business.

[93] The strategy meetings involved presentations being made by senior managers, including the applicant. The Managing Director attended some of these presentations however he did leave the meetings from time to time to deal with other business. After at least one of the applicant’s presentations, the Managing Director presented an extra session dealing with the electrical division that was the responsibility of the applicant. This was designed by the Managing Director to add further substance that he considered had been lacking. At the conclusion of the meeting, the Managing Director thanked all presenters for their work, and although he had concerns about the applicant’s presentation, he did not publicly raise these. This was both reasonable and appropriate in the circumstances.

[94] After the meeting on 23 January 2014, the Managing Director sent the following by email to the applicant:

[95] On 24 January 2014, the applicant provided a comprehensive response to each of the criticisms in the earlier email. The response included:

[96] The Managing Director and the applicant subsequently met to discuss the issues and on 7 February 2014, the applicant sent the following response by email to the Managing Director:

[97] There is a dispute about whether the warning was “put behind them” (withdrawn) but I note that there is no evidence of any response to the email by the Managing Director. The explanation for not doing so given by the Managing Director (i.e. large volumes and not always reply to emails) was not realistic given the significance of the exchange.

6.7 The discussion at the lobby bar in Perth and the subsequent email and text from the Managing Director

[98] There was a discussion involving the applicant, the Managing Director, P.C., S.M. and D.H. in a lobby bar at a Perth Hotel on the evening of 12 February 2014. The discussion followed a two day regional conference of the employer’s senior employees and an informal dinner involving a group of 10 to 12 people.

[99] After the dinner, a smaller subset of that group, involving some of the managers decided to “kick on” and an informal voluntary gathering occurred. It is common ground that all involved had been drinking alcohol and the discussion was conducted informally whilst sharing further rounds of drinks.

[100] It is alleged by the applicant that in the course of discussing the selection criteria for an award to be given to sales representatives, which involved a trip to Hong Kong, each of the group were requested to give their thoughts. The applicant contends that he emphasised that the criteria and the activities as part of the award should reflect the fact that there were a number of women on the sales team and that the Managing Director did not support that notion. The applicant further contends that the Managing Director then said words to the effect of:

[101] The applicant alleges that he was extremely humiliated by this and attempted to conceal his reaction by responding, “My name’s ‘G’, not Pal”, before leaving the group.

[102] The Managing Director accepts that there was a discussion about the sales award as part of a broader discussion, but strongly denies that he said anything of the kind alleged. He also rejects any notion that this represented his views on the matter. The employer also contends that whatever occurred did not occur whilst the applicant was at work.

[103] There are difficulties in making findings about the detail of these events. I have some reservations about the detail of the evidence of D.H. and the applicant on this issue. In the case of the applicant, the degree of offence about the alleged language and nature of the discussion led by the Managing Director does not sit well with his own form of communication to others, at least by email, which included both swearing and derogatory terms involving those he was supervising. I also note that it is common ground that swearing at, and between, employees is a common feature of this industry and this workplace. The others attending the drinks in the lobby bar have denied that the events occurred in the manner contended by the applicant or do not recall something like that being said.

[104] The Managing Director denied making the alleged statements however he did not give convincing evidence about the detail of the discussions that he says took place at that time. Further, all of those involved had consumed at least moderate, if not substantial, amounts of alcohol prior to and during the discussion.

[105] What is clear is that there was a discussion about a sales award being offered to the sales staff and this award involved attending an event in Hong Kong along with other company representatives and potentially clients. The Managing Director sought the views of those who had stayed on after a company meeting and this included the applicant.

[106] It is likely that the applicant did express views about the need to have proper criteria for the prize that would be appropriate for all staff.

[107] I note that there were a number of female sales staff at the time and one of the two finalists was a woman and there is no indication that the Managing Director had any concerns about that outcome.

[108] On balance, I accept that there was some discussion about the nature of the prize and the “blokey” nature of the trips that had previously been undertaken. I do not however accept that the Managing Director referred to the trip being in effect a chance for the staff to go fu**ing in Hong Kong along with the clients. I do find that colourful language was being used and whatever remarks were being made about the award, at some point, the Managing Director was somewhat aggressive and very dismissive of the applicant’s suggestions. This offended the applicant given the presence of some of his staff and other senior managers at the drinks.

[109] At 12.44am on the following morning, the applicant received an email from the Managing Director raising concerns about the applicant’s presentation at the work event during the day before. This included the suggestion that eight topics had not been included as required and an indication that they would discuss the issues tomorrow (later that day). I note that the content of the email was shared at that time with some of the senior managers that were staying in adjacent rooms at the Hotel (P.C., D.H. and S.M.) and the applicant also forwarded a copy of the email to some of his colleagues. At 2.45am, the Managing Director sent a SMS to the applicant seeking to meet at 7.00am that morning.

[110] The applicant attended breakfast at 7.00am and expected to meet separately with the Managing Director. That did not occur as a result of the Managing Director speaking on the phone and another colleague joining them when the Managing Director was available.

[111] There was a group breakfast that morning also attended by the Managing Director and the applicant and I note that the applicant indirectly raised the issues of concern cited by the Managing Director in the earlier email with his colleagues and, in effect, sought their support.

[112] The applicant provided a response to the Managing Director by email later that day and indicated that the actions of the Managing Director were unreasonable and causing him real stress.

[113] On 4 February 2014, the applicant attended his General Practitioner and was diagnosed with severe anxiety and he was subsequently referred to Dr Johnston. He has not subsequently resumed work with the employer.

[114] There is no evidence to suggest that the Managing Director has “bullied” any other staff of the employer and indeed most witnesses, including those called by the applicant, did not contend otherwise.

6. Does the conduct as found constitute bullying behaviour under the Act?

[115] Given the approach arising from the definition of bullying behaviour in the Act set out earlier, it is necessary to consider whether:

[116] Further, as part of that assessment I need to consider whether any or all of the conduct was reasonable management action taken in a reasonable manner.

[117] The employer has contended that the lobby bar incident did not occur whilst the applicant was at work. By implication, this also raises the question as to whether the subsequent email and SMS (and potentially other “out of hours” communications) were at work for present purposes.

[118] In other circumstances I would have awaited the outcome of a matter 29 that is currently before the Full Bench of the Commission dealing with the meaning of the phrase “at work” in a similar context. However, because I have reached a conclusion about the capacity for the Commission to make an order in any event, I have not followed that course of action.

[119] As a result, the following assumes, without finding, that the conduct occurred whilst the applicant was at work. I note that should the lobby bar incident, in particular, be excluded from the relevant behaviour, it would be very difficult to persuade the Commission that there was repeated behaviour of such a nature as to cause a risk to health and safety.

[120] There is a consistent context, and in that sense a pattern of behaviour, that arises from the findings made. That is, there was a decline in the degree of involvement of the applicant in the management of the broader business of the employer and this also extended to division being managed by him. Importantly, that division included the former business sold by the applicant and it is clear that he retained a significant level of emotional commitment to that “business”. That decline led to, and was exacerbated by, a change in reporting arrangements and this in turn led to a further decline in the working relationship between the applicant and the Managing Director.

[121] The broader context is also particularly important in this case. This includes that the applicant was employed to perform a significant and highly-paid management function and that he had sold his business to the employer and each party had particular expectations as a result of that history.

[122] The particular behaviour that highlights the pattern referenced above is represented by the tendency over time to exclude the applicant from the broader operational management decisions, the change in reporting arrangements, and elements of the performance management of G.B.

[123] The criticisms of the applicant’s presentations to the strategy meetings and other events, and the warning that was issued, are also relevant in that context.

[124] The lobby bar incident was also consistent with these developments and ultimately critical in terms of the apparent impact of the events upon the applicant.

[125] The lobby bar incident and the subsequent follow-up was unreasonable. What occurred was, in effect, a put-down of the applicant in front of the other senior managers and this was damaging to the working relationships and unfair. Although sending an email and SMS at that time of the day concerned may not of itself be unreasonable, it was the Managing Director’s clear expectation that the applicant would read and be ready to discuss the contents later that morning. The failure to be more proactive in ensuring that he did then actually meet with the applicant was of itself also unreasonable as it had the impact of further devaluing the applicant.

[126] I accept that there were objective reasons for the change in reporting arrangements and for some criticism of the applicant’s meeting presentations. The relative performance of the business and the lack of engagement by the applicant at the time of the presentations were real issues. However, the absence of a genuine prior discussion with the applicant about the changes was unreasonable given his particular role in the business. Further, based upon the evidence before the Commission, the warning that was given, was handled in a poor and unfair manner.

[127] In the circumstances, it was unreasonable for the Managing Director to issue the warning without first having raised his specific concerns with the applicant and then considered any response he might make. As the applicant’s response reveals, he did have a genuine contrary perspective that should have been considered before making a decision to issue a warning to a senior manager in that manner.

[128] The lack of engagement of the applicant, which in my view contributed to the genuine concerns with his presentation, arose at least in part from his increasing isolation from the Managing Director and the business more generally. In that light, there are also elements of unreasonable conduct.

[129] The elements of unreasonableness that I have found may have been in the context of reasonable management action but were not carried out in a reasonable manner given the overall context and the circumstances of the parties.

[130] When considered as a whole, and subject to a finding about whether it occurred whilst the applicant was “at work”, some conduct has occurred that is capable of meeting the requirements of s.789FD of the Act.

[131] In terms of the risk to health and safety, the diagnosis of the applicant provided by Mr Johnston is relevant and indicative of risk. It is not however conclusive in its own right. This arises because Mr Johnston is dealing with the impact of a range of work and non-work factors upon the applicant and I need to assess the risk based upon findings of fact made in this matter.

[132] For reasons referred to above and discussed below, it is not necessary that I finally determine this issue. Given that I have not found substance in some of the complaints cited by the applicant, and the extent of unreasonableness and consequential risk is not significant in some cases, there is a real issue about whether the conduct as found was sufficient to meet this element of the statutory definition. In that regard, I would need to consider the particular circumstances of the applicant including the impact on him given his role and strong sense of emotional “ownership” for his former business. This would, in my view, tend to increase the potential that the conduct may have created the relevant risk.

7. The capacity to make orders

[133] Section 789FF of the FW Act provides as follows:

[134] The initial question to be determined here involves a consideration as to whether there is a risk of further bullying of the applicant at work by the Managing Director. This arises from s.789FF(b)(ii) and the requirement that there be a risk that the worker (the applicant) will continue to be bullied at work by the individual(s) concerned (the Managing Director). 30 This in turn requires consideration of the terms of the employment contract, and in particular, whether it will conclude (or now has concluded) on 30 November 2014 as claimed by the employer.

[135] The applicant accepts that the Commission needs to determine if the contract is a fixed term or continuing contract as part of determining whether the Commission has jurisdiction to make any orders.

[136] The employer contends that the employment relationship will be (and now is) at an end due to the expiry of the employment contract and its decision to given notice that a further contract would not be offered.

[137] The Applicant contends that it is common ground between the parties that there are contracts documents produced before the Commission that are unsigned. The Applicant further contends the following in relation to the employment contract:

[138] The applicant further contends that the evidence presented is too vague and uncertain and the Commission cannot be satisfied that there is a document before it that constitutes an employment contract. The applicant also contends that the Commission cannot be satisfied that there is an employment contract between the parties that contains a term limiting the contract to a 5 year term from 1 December 2009 to 30 November 2014.

[139] In relation to the purported notice provided by the employer, the applicant contends that the employer relied on clause 2.4 of the written document and made reference to a 5 year term. The applicant contends this is only valid if the employment contract is framed by the written document and therefore, the notice is ineffective as it cannot be given pursuant to a contract that does not exist.

[140] The applicant further contends that the notice is not effective because the applicant was not given reasonable notice of termination and in effect this is a breach of contract. The applicant submits that there are two possible constructions for the notice; firstly, the notice is ineffective, or secondly, the notice is effective to bring the relationship to an end in theoretical terms, but not as a matter of law because to give less than 3 months for a continuing contract is not a reasonable amount of time.

[141] In relation to the employment contract, the employer contends that the applicant is employed under a fixed term contract which will expire (and has now expired) on 30 November 2014.

[142] The employer submits that Clause 1.1 of the contract for sale of the businesses defines ‘conditions subsequent’ so as to include that the Purchaser (the employer) will enter into an employment contract with the applicant on terms that are acceptable to the parties.

[143] Further, the employer contends the following:

[144] The Employer contends that there is evidence to show that the applicant had a copy of the employment agreement in his possession on 15 May 2013 and at this time and subsequently, he had not indicated, until the hearing, that the agreement was not valid or that there was an objection to any of the terms.

[145] The employer rejects the allegation that an oral contract was entered into between the Managing Director and the applicant and not then subsequently developed into a comprehensive written contract. The employer further contends that at all times the written agreement was relied upon by both parties. The employment relationship between the applicant and the employer was created by and governed by the written employment agreement.

[146] The employer contends that it has given notice to the applicant, pursuant to the terms of the employment agreement, and this states that the employment contract will not be renewed beyond the effective termination date (1 December 2014). 31

[147] The employer therefore submits that there is no risk of the applicant being bullied in the future at work by the Managing Director and the Commission cannot be satisfied under s.789FF to make an order.

[148] The dispute about the terms of the contract arose during the course of proceedings. In the lead up to the application being lodged with the Commission, Solicitors for the applicant wrote to the employer setting out the applicant’s concerns. In the correspondence, it was contended in part that the parties had entered into a “General Manager Engagement Agreement” and that this agreement was “due to expire on 31 November 2014” (presumably 30 November). Further, the correspondence refers to particular clauses of the agreement (clauses 16.1 and 10.1) which are consistent with the written agreement relied upon by the employer. Further, what was being sought by the applicant at that time is stated in the following terms:

[149] I raised with the parties at various stages of the proceedings the question as to whether there was risk of further bullying, assuming that bullying was found, and in the lead up to the final day of hearing I expressly put the parties on notice about the likely need to resolve the dispute about the terms of the contract.

[150] As outlined earlier, I have real reservations about the evidence of the applicant on the issue of the contract document. The attempt to downplay knowledge of the written document, albeit unsigned, does him no credit. There is also some difficulty in determining this issue as the employer, in the absence of legal representation, did not present an extensive case on the matter. I note however that the Managing Director on the contract issue gave clear and reliable evidence about the events and made concessions where appropriate. The difficulty is that he was not directly involved in the subsequent drafting of the detail of the employment contract.

[151] The evidence about M.H.’s (small) involvement in the contract discussions and the discovery of an email apparently from the applicant containing a version of the contract document is credible and I accept it.

[152] Based upon the evidence before the Commission, the following findings can be made about the contract term dispute:

[153] On 9 September 2014, the employer wrote to the applicant in the following terms:

[154] On 8 October 2014, Solicitors for the applicant responded and rejected the notion that there was a fixed term contract and formally disputed the employment contract and the purported conclusion of the employment relationship. The letter concluded with the following:

[155] In considering these circumstances, I have applied the following general principles drawn partly from submissions helpfully supplied by Mr Fisher, counsel for the applicant:

Not all contracts are formally negotiated and terms may be implied in certain circumstances; 34

It is the objective intentions of the parties that form the contract; 35

Parties may reach the terms of their agreement and intend to be immediately bound to the performance of those terms but at the same time propose to have the terms restated in a form which will be fuller and more precise but not different in effect; 36

Pre-contractual conduct is only relevant on questions of construction if the contract is ambiguous and if that conduct casts light on the genesis of the contract, its objective aim or the meaning of a descriptive term. Surrounding circumstances are also relevant in this context but not so as to contradict the language of the contract itself;  37

Post-contractual conduct is relevant on the question of whether a contract was formed; 38

[156] In these circumstances I am satisfied that the contract document relied upon by the employer represents the agreement made between the applicant and the employer in relation to the term of the employment contract and related provisions.

[157] Although, based upon the evidence before the Commission, the contract was not signed and not formally executed or varied, I am satisfied that the terms of the contract as reflected in the documents before the Commission represents the agreement between the parties. The use of that document by both parties demonstrates that the written contract represents their agreement at least for all present purposes.

[158] In that light, the term of the contract is stated as being five years from 1 December 2009. Further, the termination provisions of the contract refer only to immediate termination in the context of misconduct, negligence or acts without due diligence and skill, or the inability to perform duties (except where that inability is caused by illness, accident or by the employer).

[159] Importantly, there is no general right for the employer to terminate the agreement on notice and the other basis where the employer might terminate the agreement is related to the sale of the whole or part of the business. In those circumstances, the employer is obliged to pay out the full balance of the value of the contract (the remaining term).

[160] The meaning of the phrase “.. a contract of employment for a specified period of time..” was considered in Andersen v Umbakumba Community Council 42 by Von Doussa J who decided that:

[161] I consider that this approach is apposite to the consideration of the nature and impact of the employment agreement in the present context.

[162] In my view, the terms of the contract when read as a whole and the agreement between the parties represent a fixed term agreement that ends by its own terms on 30 November 2014.

[163] The “notice” provided by the employer in that context is merely confirmation that no additional term is to be offered. This is consistent with the terms of the contract and no question as to its validity arises.

[164] On that basis, the applicant’s employment with the employer concluded on 30 November 2014.

[165] In Mitchell Shaw v Australia and New Zealand Banking Group Limited T/A ANZ Bank and Another, 43 Gostencnik DP was dealing with an anti-bullying application where an applicant, Ms Shaw, had been dismissed by the employer. The Deputy President found as follows:

[166] With respect, I agree with the Deputy President that the import of s.789FF(1)(b)(ii) is that for an order to be made, the Commission must be satisfied that there is a risk that the (applicant) worker will continue to be bullied at work by the individual or group (found to have bullied the applicant). For my part, where an applicant will no longer be at work with the relevant individual or group, and there is no reasonable prospect of that occurring in some capacity as a worker in the future, in almost all cases it will not be possible for an applicant to demonstrate the future risk requirement. This requires a consideration of the particular circumstances of the parties including the potential to return to the workplace in some capacity as a worker.

[167] In this case, there is no suggestion that continuing risk of bullying at work will relevantly arise in the absence of an ongoing employment relationship between the parties. That is, there is no basis, in the absence of a continuing employment relationship between the parties, for the applicant to be in the relevant workplace as a worker. As I am not satisfied that there is any such future risk, even if I had concluded that bullying behaviour had occurred within the statutory meaning, there is no basis under the Act to issue any orders arising from this particular application.

[168] I also observe that the power to make orders is relatively broad in that the Commission can made any orders that it consider appropriate (other than an order requiring the payment of a pecuniary amount) to prevent the workers from being bullied. In circumstances where an applicant worker is suffering from a medical condition that prevents a return to the workplace without some appropriate modifications, it is readily conceivable that the Commission would consider including such measures within an order.

[169] Orders to stop particular conduct would also readily form part of any such order.

[170] In this case, the applicant has medical advice that indicates real limits on his capacity to safely return to the workplace. The order proposed by the applicant was, in effect, that the applicant no longer report to, or have direct dealings, with the Managing Director. This picks up some of the concerns evident in Mr Johnston’s report and evidence. Given the seniority of the applicant’s position and the nature of the organisation, it would be difficult to conceive how an order of that kind could be made without establishing a role that was ineffective and/or significantly reduced in status. Although the remuneration could presumably be maintained, 44 the non-monetary impacts upon the applicant’s role and status in the organisation, which have in effect underpinned this application, have also been recognised by Mr Johnston as making any further employment with the employer problematic.

[171] I consistently raised these matters with the parties during the hearing and a satisfactory basis for an order to be made was not advanced by the applicant.

8. Conclusions

[172] I have found that certain conduct occurred that was capable of meeting the requirements of s.789FD of the Act. I have however not finally determined that issue given the need to further consider the question as to whether some of the conduct occurred whilst at work, and because I have ultimately found that there is no risk of future bullying conduct at work given the fixed term nature of the employment contract, which has expired.

[173] In these circumstances, there is no basis to make an order and this application must be dismissed. I so order.

Appearances:

S Fisher of counsel, with S Miotti of Romans and Romans Lawyers, both with permission for the applicant.

M. H. and the Managing Director on behalf of the Employer and the Managing Director.

Hearing details:

Brisbane

2014

October 2, 3 and 24.

 1   This was conceded by the employer without prejudice to its position on the merit of the application itself.

 2   S.597 of the FW Act. The grant of permission was not opposed.

 3   See Downes and Anor v Maxwell Richard Rhys & Co Pty Ltd [2014] VSCA 193.

 4   See also Minogue v HREOC (1999) 84 FCR 438.

 5   Attachment GJC 16 to exhibit C1.

 6   Exhibit C5 - attached to the witness statement of Mr Johnston. The individuals have been de-identified.

 7   Transcript PN3250.

 8   Ms SB [2014] FWC 2104; Applicant v Respondent [2014] FWC 6285.

 9   1 January 2014.

 10   McInnes [2014] FWCFB 1440.

 11   Newcastle Wallsend Coal Co Pty Ltd v Workcover Authority (NSW) (Inspector McMartin) [2006] NSWIRComm 339; 159 IR 121 at [301].

 12   Thiess Pty Ltd v Industrial Court of New South Wales (2010) 78 NSWLR 94 at [65]-[67]; Abigroup Contractors Pty Ltd v WorkCover Authority of New South Wales (2004) 135 IR 317 [58].

 13   Macquarie Concise Dictionary definition.

 14   At par 111 and 112.

 15   Georges and Telstra Corporation Limited [2009] AATA 731 at [23].

 16   Ibid.

 17   Bropho v Human Rights & Equal Opportunity Commission (2004) 135 FCR 105 at [79].

 18   See Von Stieglitz and Comcare [2010] AATA 263 at [67].

 19   See the discussion in Department of Education & Training v Sinclair [2005] NSWCA 465.

 20   Keen v Workers Rehabilitation & Compensation Corporation (1998) 71 SASR 42.

 21   Clause 10.

 22   Clause 5.1.

 23   Exhibit SI6.

 24   Attached to exhibit C1.

 25   GJC5 attached to exhibit C1.

 26   GJC6 attached to exhibit C1.

 27   GJC7 attached to exhibit C1.

 28   Exhibits C1 and C4.

 29   AB2014/1260, 1261 and 1266: Boweker, Coombe and Zwarts v DP World and The Maritime Union of Australia - heard before a Full Bench of the Commission on 20 November 2014 with a decision reserved.

 30   See Shaw v Australia and New Zealand Banking Group Limited t/a ANZ Bank and Anor [2014] FWC 3408; Dr Pushpa Ravi v Baker IDI Heart and Diabetes Institute Holdings Limited T/A Baker IDI Heart and Diabetes Institute; Dr Anne Reutens [2014] FWC 7507.

 31   Exhibit C12. I understand that the effective termination date in that context is a reference to the date where the contract ceased to be on foot.

 32   Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309; Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424.

 33   Alpine Hardwood (Aust) Pty Ltd v Hardys Pty Ltd [2001] FCA 1876.

 34   Ibid.

 35   Parkin v Pagliuca [2008] NSWSC 168 and Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989.

 36   Masters v Cameron [1954] 91 CLR 353.

 37   Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24. See also the discussion of the application of these concepts in The Australian Meat Industry Union v Golden Cockerel Pty Limited [2014] FWCFB 7447.

 38   Howard Smith & Co Ltd v Varawa [1907] HCA 38.

 39   Sudojo Consulting Pty Ltd v Africa Pacific Capital Pty Ltd [2008] NSWSC 353 at [20].

 40   Agricultural and Rural Finance Ltd v Gardiner (2008) 238 CLR 570 at 582; Ryan v Textile, Clothing and Footwear Union of Australia (1996) 66IR 258 and The Australian Workers’ Union v Pasminco Australia Ltd (2003) 131 IR 1. There is however some divergence in judicial opinion about this approach - see: supra at 607-8 per Kirby J and 625 per Haydon J and Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 316 per Kirby P (as he then was).

 41   The Australian Meat Industry Union v Golden Cockerel Pty Limited [2014] FWCFB 7447.

 42   (1994) 126 ALR 121.

 43   [2014] FWC 3408.

 44   This would depend upon whether any such element in an order was considered to be a pecuniary amount - excluded by s.789FF(1) of the FW Act

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