Bullying can be financially painful

Bullying is on the rise and employers who turn a blind eye to bullying risk fines, higher WorkCover claims, lower productivity and higher absenteeism. By PETER VITALE.

By Peter Vitale of VECCI

Last week a victim of a schoolyard bully in New South Wales was awarded almost $1 million in damages because the state education system failed in its duty to protect him from the bullying behaviour. The decision is a salient warning for employers.

Bullying claims are on the rise. Victorian workers compensation claims for bullying rose from 483 in 2000-01 to 739 in 2005-06. And when bullying graduates from the schoolyard to the workplace, employers can get into big trouble.

Bullying is an occupational health and safety issue, identified as serious by state OHS authorities. A Victorian court convicted and fined an employer $50,000 for the bullying behaviour of one of its employees in 2004. A radio station in Ballarat, Victoria was convicted because it failed to prevent one of its announcers from verbally abusing staff on at least 10 occasions over a two year period. The announcer was also personally fined $10,000.

In other bullying cases, individual employees have been convicted and fined.

Bullying is repeated, unreasonable behaviour directed toward an employee, or group of employees, that creates a risk to health and safety, according to the Victorian authority WorkSafe guidebook. “Unreasonable behaviour” means behaviour that a reasonable person, having regard to all the circumstances, would expect to victimise, humiliate, undermine or threaten. It can be physical or verbal.

It can be obvious and it can be subtle, including making jokes or questionable comments about an employee, yelling unnecessarily at someone, spreading rumours or criticizing a worker in front of their peers. And there’s the reverse form that can be just as serious but much harder to gauge – bosses who simply ignore a chosen employee altogether.

Employers who bully or allow it to take place not only risk fines, but escalating WorkCover claims and premiums, falling employee productivity, absences and illnesses.

In at least one case, the WorkCover Authority has successfully recovered some of the compensation it paid a bullied employee from the workplace bully. There is no reason in principle why the authority couldn’t recover potentially significant payments from directors of employer companies implicated in the breach.

The risks for employers don’t end with occupational health and safety considerations. Federal and state anti-discrimination laws make it unlawful to harass people, generally but a large proportion of cases occur in the workplace, on the basis of sex, age, disability or race.

In 2006, an employee in New South Wales won more than $2 million in damages from his employer and another company implicated in bullying behaviour over a sustained period of time, which the court found essentially destroyed his prospects of working again. Mr Naidu was a security guard employed by Group 4 Securitas.

Under a contract between Group and News Ltd, Mr Naidu, who was born in Fiji provided security services at one of News’ Sydney sites. Over a period of 4 years, the News Security manager responsible for supervising Mr Naidu subjected him to a constant stream of racial, verbal and physical abuse. The Court found that Group 4 as Mr Naidu’s employer should have acted to prevent the abuse. News was also found liable for the behaviour of its employee.

Later in 2006 the Federal Court awarded more than $500,000 in damages to an employee of a merchant bank. The court found that the bank had breached its contract of employment by failing to properly observe its own policies designed to prevent bullying.

These cases make plain enough the significant problem that bullying can present for employers, but what should they do?

The first step is to ensure that a detailed policy is in place, which makes clear the type of behaviour that will be considered bullying. The websites of state occupational health and safety authorities can help employers identify what information is useful to include in a policy. The NSW WorkCover Authority has published a guide: Preventing and dealing with workplace bullying: A guide for workers and employers.

Second, employees must be educated regularly that bullying will be met with “zero tolerance”. Any company policies should clearly spell out the disciplinary consequences of a breach of the policy. As with any disciplinary matter, the gravity of the offence could lead to sanctions ranging from warnings to sacking.

Third, the company should have an established procedure for investigating complaints, including bullying complaints and endeavouring to resolve them before they get out of hand. SMEs that don’t have the infrastructure should contact their industry associations or other advisers, who generally have people with the experience and skills to handle these matters.

Fourth, the policy must apply to everyone in the organisation from the top down. Most complaints of bullying are made against employees more senior than the complainant.

Finally and most importantly: enforce the policy. If there is bullying going on in your workplace, stop it.

Peter Vitale is a solicitor, the General Manager of Workplace Relations Services at VECCI and a principal at CCI Victoria Legal.

See more articles by Peter Vitale here.