Lessons learnt in FWC’s “reasonable management action” decision

20 May 2014

The Fair Work Commission’s decision last week to dismiss an application where the actions of the employer were deemed reasonable, contains several important lessons for employers.

Part of the applicant’s case concerned the employer receiving complaints against her and deciding to investigate these using an external workplace investigations provider.

Commissioner Peter Hampton found that the employer’s decision to investigate was reasonable, describing it as “prudent” and further found that the approach of the external provider engaged to conduct the investigation was also not unreasonable.

Importantly, the Commissioner went on to explain that, regarding “reasonable management action”, 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'”.

This meant that:

  • management actions do not need to be perfect or ideal to be considered reasonable;
  • a course of action may still be ‘reasonable’ even if particular steps are not;
  • to be considered reasonable, the action must also be lawful and not be ‘irrational, absurd or ridiculous’;
  • the “actual” action needed to be considered, rather than the applicant’s perception of it; and
  • it might be relevant to consider whether the action involved a significant departure from established policies or procedures, and if so, whether the departure was reasonable in the circumstances.

Workplace

This provides further clarification for employers and employees on the meaning and intent of the legislation and how it may be applied.

It is also of interest that Commissioner Hampton did not find the complaint to be vexatious but rather was not satisfied that the application met the requirements of the legislation to be considered bullying and for an order to be issued. However, he noted:

“I do not consider that the application was made without any foundation. There are also some cultural, communication and management issues in this workplace that should be addressed by senior management.”

This case illuminates the importance for employers to learn from complaints raised by employees and from any resultant workplace investigations. The Commissioner’s comments about the issues in this workplace are telling, even complaints which are not upheld may have some basis for the employer to be concerned.

Therefore it is important that workplace investigations are conducted in a thorough manner and seek to provide relevant insight and potential recommendations on which the organisation can take action.

iHR Australia provides independent workplace investigation services conducted by experienced investigators. Investigation reports are clear and comprehensive and can provide observations and recommendations to assist employers in addressing any matters contributing to inappropriate behaviour in the workplace.  

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