Boardroom bullies, beware!

Commercial Directions

In a recent decision, the Fair Work Commission (Commission) highlighted the broad application of the anti-bullying jurisdiction under the Fair Work Act 2009 (Cth) (FW Act) by confirming that a member of a Board of Directors had standing to make an anti-bullying.

In Trevor Yawirki Adamson [2017] FWC 1976, Mr Trevor Yawirki Adamson – Chairperson of the Executive Board of the Anangu Pitjantjatjara Yankunytjatjara Inc (APY Inc) – made an application for a stop bullying order under the FW Act.

Mr Adamson alleged that two other APY Inc Board members were bullying him by refusing to deal with him and disrespecting his wishes, preventing him from accessing Board minutes, and interfering with his conduct of Executive Board meetings, among other things.

The respondents claimed Mr Adamson was not a ‘worker’ within the meaning of the FW Act, and as a result, he had no standing to bring the anti-bullying application in the Commission.

Who is a ‘worker’?

Commissioner Hampton’s consideration of this issue formed the essence of his decision and has significant ramifications for the management and conduct of Boardrooms in general.

The FW Act defers to the broad definition of the term ‘worker’ as set out under the Work Health and Safety Act 2011 (Cth) (WHS Act).

In light of this, Commissioner Hampton noted that, in general terms, the WHS Act confirms a worker is a person who carries out work in any capacity for a person conducting a business or undertaking (PCBU), other than a person volunteering with a wholly ‘volunteer association’.

Turning to the facts, Commissioner Hampton found that APY Inc was a PCBU, Mr Adamson was not a volunteer, and Mr Adamson performed a range of duties in his role as Chairperson in respect of which he was paid significant remuneration.

Having regard to the objects of both the FW Act and the WHS Act and Explanatory Memorandum, Commissioner Hampton noted that although Mr Adamson’s role as Chairperson was not expressly referred to in the WHS Act and did not fit ‘neatly into any of the categories listed in s.7 of the WHS Act’, this issue was not of itself decisive. Importantly, this was because:

… a very wide approach to the definition of a worker has been adopted given that the essential element to determining who is a worker is the undertaking of work for a PCBU. Further, a broad approach to the definition recognises that WHS hazards and risks do not discriminate based on legal relationships or whether a person is paid.

Although a final determination of this anti-bullying application was not ultimately necessary (as Mr Adamson had ceased being a Board member by the time of the decision, which meant there was no future or ongoing risk of bullying), Commissioner Hampton confirmed in his decision that ‘Mr Adamson was a worker for present purposes and eligible to bring this application.’

What does this mean?

Consistent with the broad interpretation of the term ‘worker’ under WHS legislation, the significance of this decision is far-reaching.

It confirms that Board members may seek orders from the Commission to stop fellow Board members from engaging in bullying behaviour. This should alert Board members and their respective companies to the need to implement training and policies with respect to appropriate Boardroom behaviour.

The decision also gives rise to a number of practical issues for Boards to consider, including the following:

  • These types of claims can be particularly difficult to defend in the context of Board members who are not acting in their capacity as employees, as the defence of reasonable management action is unlikely to apply (as was the case in this matter).
  • Boardroom politics could come under increased scrutiny following this decision. Given that Boardroom meetings often necessarily involve robust discussions regarding confidential matters which directly affect the management and profitability of the business, the risk of an anti-bullying claim in the Commission needs to be carefully managed.
  • Under the FW Act, the Commission has the power to issue any orders it sees fit to prevent bullying from continuing. This broad power means that if a Board becomes subject to anti-bullying orders from the Commission, it must be prepared to implement measures to comply with those orders while still maintaining the efficient management of Board matters, which could be extremely challenging from a practical perspective.

It is also important to keep in mind that although the Commission cannot issue fines or penalties or award compensation in this jurisdiction, failure to comply with an order of the Commission constitutes a breach of the FW Act and may result in the imposition of penalties.

What next?

Boards of Directors and their respective companies should consider implementing a Code of Conduct or similar policy regarding acceptable Boardroom behaviour and the processes and options available to Board members to resolve issues (for example, by way of an informal mediation process). Regular training should be provided to ensure compliance on an ongoing basis.

This should complement existing Board member training with respect to obligations under WHS legislation regarding officers’ duties of due diligence, and such training and standards of conduct should be regularly reviewed and refreshed where necessary.

Moray & Agnew’s Workplace team can assist with developing policies and training for Board members and management executives, and we regularly deliver such workplace training programs tailored for individual businesses and teams.

Authored by Elizabeth Radley, Partner, Newcastle.

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