The Risks Of Not Controlling Workplace Bullying

The issue of bullying in the workplace is now being addressed by most State Governments and the Federal Government. Workplace bullying is not simply a human resources issue. It goes to the core of your organisation’s corporate governance practices. Workplace bullying can occur in any organisation.

The ultimate responsibly lies with business owners and CEOs who cannot delegate their duty of care.

The effects of workplace bullying shouldn’t be downplayed. The consequences of not taking appropriate, preventative action could well financially damage a small business, and tarnish the reputation of an employer.

A major concern is that without appropriate, updated procedures and protocols, businesses may not even recognise that it is happening.

You may have a manager who is passing his or her financial targets every quarter, giving the business a short-term gain but who may be doing long term damage to the organisation because of a command/bullying management style – leading to increased absenteeism and slumping morale in that section.

Defining workplace bullying

Don’t get confused. Bullying is separate and distinct from assault, discrimination or sexual harassment.

Some incidents of bullying may be subtle, others more obvious. Bullying can take on many different forms, including repeated incidents of behaviour such as the following:

• Yelling, screaming or abuse;
  
• Offensive and/or threatening language;
  
• Insults or teasing;
  
• Inappropriate comments about staff appearance, personal life or lifestyle;
  
• Spreading gossip or slandering employees or their family;
  
• Belittling opinions or constant criticism of work;
  
• Isolating employees from normal work interaction, activities, training and development or career opportunities;
  
• Constantly looking over employees’ shoulders while they work;
  
• Undermining work performance by, for example, deliberately withholding work-related information or resources, or supplying incorrect information;
  
• Subjecting people to unexplained job changes, meaningless tasks, tasks beyond their skills, failure to give credit where due, or threats of dismissal;
  
• Tampering with personal effects or work equipment;
  
• Teasing or regularly making staff the brunt of pranks/practical jokes;
  
• Humiliating employees in front of other workers;
  
• Displaying written or pictorial material which degrades or offends;
  
• Unreasonable “administration sanctions”, for example, undue delay in processing applications for training, leave or payment of wages;
  
• Overwork, unnecessary pressure, impossible deadlines, unreasonable overtime demands, demands to forego overtime payments;
  
• Under work, creating a feeling of uselessness;
  
• Unreasonably expecting staff to be available after hours via mobile phone or email.

It needs to be made clear that such behaviour would need to be repeated rather than being one-off incidents in assessing whether bullying is occurring.

Consequences of bulling

Workplace bullying can affect your employees and your business. A multitude of things can go wrong. Bullying may cause:

• Disruption to the regular workflow in the workplace;
  
• Increased absentee levels;
  
• Stress, depression and other mental or physical ill health claims;
  
• Increased staff turnover and lower staff morale;
  
• Increased legal costs of defending unfair dismissal claims, workers’ compensation claims and penalties levied as a result of occupational health and safety prosecutions;
  
• Erosion of workforce loyalty and commitment;
  
• Lower profitability all round.

Bullying can lead to staff walking off the job, as happened with the Commonwealth Mint in Victoria in 2003, when there were two days stoppage because of allegations of workers being bullied in the workplace. Who knows what the cost was?

The Queensland Beyond Bullying Association recently found that one third of bullying victims took an average of 50 days off per annum each. That’s a significant amount of downtime for your business.

An analysis by the UK Manchester School of Management in 1998 found that in every case where the employer had no formal anti-bullying procedures, the employer lost.

There are also serious adverse impacts on your brand name from bullying. In some hospitals, for example, it has reached the point where nobody wants to work because of the bullying culture.

Not knowing about a bullying problem doesn’t mean that you do not have one. It could just mean that you do not have a clear reporting process and you won’t know that you have a problem until you receive a letter from the victim’s lawyer. Then the problems start including legal costs, sick leave costs, recruitment, rehiring and so forth.

Risk of prosecution

Who takes the blame when quality protocols and procedures are not in place? Invariably it is the chief executive. Fines have to be paid and there are likely to be increased workers’ compensation premiums.

Then, of course, there are the costs of rehiring and retraining.

In Dillon -v- Arnotts Biscuits. Dillon was bullied to the point of tears by her team leader and placed at a workstation by herself facing a blank wall. Dillon couldn’t take it anymore, eventually resigned and then alleged unfair dismissal. It was found that Dillon was constructively dismissed and reinstatement was ordered together with the reimbursement of lost income, including shift allowances.

The tribunal attributed fault to the team leader and also to the managers and HR manager for turning a blind eye to the team leader’s actions. The lesson is that CEOs cannot avoid their responsibilities by ‘turning a blind eye’.

Two recent prosecutions are of interest. In the first case in Victoria (the Ballarat Radio Case) in 2004 the Radio announcer Mowat was successfully prosecuted and convicted for repeated verbal abuse and threats of violence to the radio station’s employees including an assault on one employee. He was fined $10,000 and the radio station fined $25,000 for failing to provide instruction, training and supervision and a further $25,000 for failing to provide a safe workplace. There were also $5,000 in court costs awarded against the station.

In the second case in May 2004 a New South Wales company was fined over an incident involving serious bullying of a 16 year old apprentice as part of an initiation process. The company was fined $24,000 and each director fined $1,000 with the fine for the directors being increased on appeal respectively to $9,000 and $12,000 for each of the directors.

These two cases clearly indicate that the courts are viewing workplace bullying as a very serious breach of Occupational Health and Safety standards. Neither of these prosecutions of course involve claims of civil liability. Civil damages of course would be an additional burden and could be substantial should claims be brought.

Costs of workplace bullying

It is hard to place an accurate estimate on the costs, although they are substantial and rising. The Australian Institute of Management has estimated for a hypothetical company with 100 employees, the cost of unmanaged workplace harassment per annum was $600,000.

The Queensland Task Force report into bullying has estimated the cost of workplace bullying to be somewhere between 6 and 13 billion dollars per annum.

Job Watch recently indicated that its records showed the number of reported incident of workplace bullying had risen 138% from the 1999-2000 financial year to the end of 2002 financial year. It received 718 complaints in 2002.

Several Victorian plaintiff law firms have indicated that they are receiving a steady and increasing stream of complaints of workplace bullying. The Melbourne Age reported on 6 October 2003 that a quarter of Victorian workers had seen colleagues bullied by managers or supervisors in the past six months.

An article in the Australian Financial Review “Bully boss is said to be a health risk to workers” published in July 2004, reported that 85% of employees have either personally experienced bullying or seen others bullied at work, according to one survey. 56% said either themselves or a colleague has taken sick leave as a result of bullying.

In a recent case, the costs were in excess of $400,000.

Assessing the risk

There are a range of penalties for failing to act against bullying and a number of ways in which victims can take legal action to remedy their situation.

In certain States, for example New South Wales, the Anti-Discrimination Act prohibits discrimination on the basis of any unlawful ground, including harassment and victimisation.

Actions can also be taken under workers’ compensation laws in all states. Victims also have access to unfair dismissal laws. As an employer, you probably also have an obligation to dismiss the perpetrators of the bullying and harassment. The damages against you will be larger the longer you let the bullying continue.

Personal injury law for negligence is another possible legal redress for victims as well as breach of contract, including unfair contract claims and civil claims for damages.

In certain circumstances, the bullying may amount to a criminal offence.

The Victorian Occupational Health and Safety Act 1985 obligates an employer with a duty to provide and maintain for employees, as far as practicable, a working environment that is safe without risk to health. This includes providing a safe system of work, information, training and supervision. Victoria now has a code of practice “prevention of bullying and violence in the workplace”.

In Queensland under the Workplace Health and Safety Act there is an obligation to provide a safe system of work including a safe psychological system of work as well as a safe physical system. The Queensland government under the Workplace Health and Safety Act introduced the Prevention of Workplace Harassment Advisory Standard on the 1st June 2004 which makes it mandatory for employers to do what the standard says or adopt and follow another way that manages exposure to the risk to health created by workplace harassment (bullying). There are significant penalties for a breach.

Under existing laws, you do not have the option of doing nothing. In the same way that you are required to fence and guard your dangerous machinery to protect your employees’ physical health, so too are you required to look after your employees’ mental health.

It will be too late once litigation commences against your business to establish protocols, procedures, updating and training. This needs to be done now.

Action to tackle bullying

There are a number of steps you need to take to develop an effective anti-bullying policy:

• Implement effective anti-bullying procedures in your workplace;
  
• Put transparent complaints procedures in place;
  
• Train all owners, managers and staff in your protocols;
  
• Have written records to evidence all of the above; and
  
• Ensure that policies, procedures and training are continuously updated to take account of changes in the law and its interpretation.

In short, put some legal risk management steps in place and, most importantly, keep them updated. Don’t be caught looking for evidence after the event. Don’t have to ask yourself “what evidence have we got to defend ourselves?” only to be told by your lawyers that what you have put together is insufficient protection or not current, and that you had better take your cheque book along to the tribunal.

Finally, if your business has branches in different States, you will need to monitor rhe different State legislative requirements because, presently, whilst there are many similarities, there is no uniform approach.

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