Boardroom Bullying– there’s a claim for that!

A worker is a worker and a company director is a company director, and never the twain shall meet. Although according to a recent judgement of the Fair Work Commission, they occasionally do meet.

Legislative background

Generally, under the Fair Work Act 2009 (the “Act“) a worker is considered to have been bullied at work if an individual or group of individuals repeatedly behaves ‘unreasonably’ towards the worker and that behaviour creates a risk to health and safety. Although the Act does not define ‘unreasonable behaviour’, the Explanatory Memorandum states it would include victimising, humiliating, threatening or intimidating the applicant.

The Commission has held a range of behaviours, that if repeated, would likely constitute unreasonable behaviour. Such behaviours have included coercion, intimidation, shouting, sarcasm, verbal abuse, conspiracy to harm, isolation, ostracism and discrimination directed at an individual or group.

Recent Commission decision

In this case, it was alleged by the Chairperson that other directors refused to deal with him and disrespected his wishes, that they orchestrated events to avoid quorum and deliberately prevented him from exercising his powers as Chairperson.

The outcome of the matter resulted in the claim being dismissed. However, the important element of the decision is that the Commission has stated its jurisdiction to make a boardroom related stop-bullying order if the claim is established.

While ordinarily you might think a company director has no purpose in opening the Fair Work Act, not so! For the purposes of a stop-bullying claim the Commission has recently held the legislative definition of ‘worker’ is the same as the definition in the Work Health and Safety Act 2011. It is therefore broad enough to ensure health and safety protection is extended to all types of workers, and not just traditional employees.

The Commission held that activities undertaken by directors at board meetings may constitute ‘work’. Accordingly, for the purposes of the claim, a director was held to be a worker who was undertaking work and therefore could bring a workplace bullying complaint against other fellow directors.

Relevance to Accountants

Many firms are partnerships and many Accountants are on Boards as directors, treasurers and secretaries. Whether you are a board member or an adviser to the board, it is critical that company officers understand their roles and responsibilities. Yes, the Corporations Act and related legislation refers to acting with care, diligence and honesty, but there is more required than just those altruistically broad references.

We operate in a time where governance practice has never been more scrutinised by Courts and regulators. For example, the Centro Shopping Centre decision a couple of years ago, laid out very clearly that, amongst a range of duties, directors must read their board papers prior to board meetings.

Now the impact of this decision is to be considered.

Think List

The conduct of individuals within the confines of a boardroom might need to be vigorous, perhaps even animated at times, to bring about the best outcome for the company. However, board members cannot undertake a course of conduct that would constitute ‘bullying’ pursuant to the Act. If such behaviour does occur, there is now a clear path to seek redress.

As part of assessing the effectiveness of a board, assess the individual officers conduct. Do you need a Code of Conduct for the Board? What boardroom conduct is expected and acceptable to shareholders and expected by the employees? What boardroom conduct could end up in the media and cause reputational damage or have a detrimental effect on the performance of the company.

Conversely, an unhappy person with corporate psychopathic tendencies may attempt to use the jurisdiction merely to stop an event or cause damage. Make this issue part of a Boards general risk assessment.

It may ultimately be up to you to lead by example and direct the ship, change the course, or swing the stick.

Go hard people, but play fair.

 

Contact Workforce Guardian – The HR Experts

 

FREE HR HEALTH CHECK FOR KEY ADVISORS

Under section 550 of the Fair Work Act 2009, key business advisors such as accountants and bookkeepers can be held personally liable as an ‘accessory’ for their clients’ breaches of Australian employment law. Workforce Guardian’s FREE Fair Work Liability Check will confirm whether you’re exposed to potential penalties of up to $54,000 for each of your own and your clients’ breaches of Australian employment law. If you answer no/unsure to any of these questions, you should take urgent action to reduce your risk of accessorial and personal liability.

Click here to find out more

Sean Wilson

Sean Wilson

Chief Operating Officer at Workforce Guardian
Sean Wilson is the Chief Operating Officer at Workforce Guardian. With responsibility for general management, marketing, sales, customer care, IT and business administration. This includes leading product development of industry leading cloud HR solutions and managing a national partner program of over 300 major partners/resellers such as Telstra. Sean has also been the Deputy Managing Director since 2015.
Sean Wilson

Latest posts by Sean Wilson (see all)

People Practice Management

About Author

Sean Wilson

Sean Wilson is the Chief Operating Officer at Workforce Guardian. With responsibility for general management, marketing, sales, customer care, IT and business administration. This includes leading product development of industry leading cloud HR solutions and managing a national partner program of over 300 major partners/resellers such as Telstra. Sean has also been the Deputy Managing Director since 2015.