The management of employee performance is a key component for every successful organisation. However, performance management by its very nature, is difficult and can often lead to a range of legal risks for businesses.
One particularly difficult scenario is where an employee alleges the performance management process, or the way in which performance management is carried out, is workplace bullying. Such allegations often arise where an employee refuses to accept the negative feedback they are being given on their performance or where a manager is ill-equipped to handle the process and have uncomfortable conversations.
In this article, we consider how to distinguish between performance management and bullying behaviour and provide a range of practical tips to ensure that performance management processes will be viewed as reasonable if ever subject to scrutiny.
The Fair Work Act 2009 (Cth) defines workplace bullying as repeated unreasonable behaviour by an individual, or a group of individuals, towards a worker or group of workers that creates a risk to health and safety.
In the performance management context, bullying could be said to occur where a manager gives feedback in an aggressive or intimidating manner or provides negative feedback in front of an employee’s colleagues as a form of public shaming. It could also occur where an employee is given an impossible task or put under unreasonable time pressure to complete a piece of work as part of a Performance Improvement Plan (PIP).
Importantly, the definition of workplace bullying excludes “reasonable management action conducted in a reasonable manner”. While an employee has the right not to be bullied at work, an employer has the authority to direct and control an employee’s work and to ensure they are performing in line with the organisation’s goals. Effective performance management processes will constitute reasonable management action.
In considering whether reasonable management action taken in a reasonable manner has occurred, the Fair Work Commission has enunciated the following principles:
The decision in Blagojevic v AGL Macquarie Pty Ltd; Mitchell Seears  FWC 2906 provides some useful guidance on what will constitute reasonable management action in practice.
Mr Blagojevic had been employed by AGL Macquarie as an Asset Engineer since 2006. He was said to have outstanding work ethic and technical capability and had received “distinctly positive performance reviews” throughout his employment.
However, in December 2016, Mr Blagojevic’s supervisor became concerned about his management of electrical and control issues at a plant he was responsible for, his ability to manage budgets, his failure to meet deadlines, and failure to manage his direct reports. There were numerous informal discussions about these issues, escalating to Mr Blagojevic being placed on a PIP in March 2017 and a revised PIP in June 2017 when his performance did not improve.
Mr Blagojevic made a stop-bullying application against AGL and his supervisor, claiming that placing him on a PIP and then a revised PIP was not reasonable management action carried out in a reasonable way. Mr Blagojevic said that the areas of his alleged underperformance identified in the two PIPs were “either made up completely, or based on facts but intentionally distorted”. He had opposed his performance management at every step of the process prior to making the bullying application.
Commissioner Saunders held that the supervisor’s actions in placing Mr Blagojevic on a PIP was reasonable management action. The Commissioner held that:
“It was reasonable for [the supervisor] and AGL to expect [the employee] to demonstrate leadership in his role as an Asset Engineer by taking responsibility for the timely completion of work in connection with the assets assigned to [him], including by expecting and requiring [him] to influence and, where necessary, place pressure on others to complete work in the time required. Mr Seears complied with AGL policy in providing Mr Blagojevic with informal coaching and an opportunity to improve before placing him on the PIP and thereafter, provided him with a range of measures of support in an attempt to assist him to improve his performance.”
The Commissioner also focused on the reasonableness of the steps AGL took during the performance management process. For example, the supervisor had the PIP reviewed by his superior who assessed it as reasonable and achievable, and the PIP was amended following feedback received from Mr Blagojevic that one of the duties listed was not his responsibility. The supervisor also granted Mr Blagojevic an extended period of leave when requested during the process.
The Commission found that the employee was not bullied and rejected his application. AGL had an evident and justifiable reason for the performance management and had acted reasonably at all times. The fact that Mr Blagojevic disagreed with his supervisor’s views and was aggrieved by being placed on two PIPs did not render the management action objectively unreasonable. The decision was subsequently upheld on appeal.
In order to ensure that performance management does not cross the line into bullying behaviour, we recommend employers consider the following practical tips:
Gadens Employment Advisory team regularly presents to our clients on the key issues in performance management and workplace bullying. This dynamic field of law often calls for annual updates to both human resources and legal professionals in businesses, so please contact one of our partners listed above to arrange a presentation for your team.
Brett Feltham, Partner
Emma Moran, Senior Associate