Boardroom tussles may end up in the Fair Work Commission

07 June 2017

Vigorous Board-level exchanges are part and parcel of the corporate environment, but a landmark decision of the Fair Work Commission indicates these Boardroom tussles may now result in anti-bullying orders.

The Fair Work Commission has found that Company Directors are “Workers” for the purpose of anti-bullying laws under the Fair Work Act 2009 (Cth) (FW Act), and can now apply for stop bullying orders, including around the boardroom table (Trevor Yawirki Adamson [2017] FWC 1976).

What happened?

Mr Trevor Adamson, then Chair of the Board of Anangu Pitjantjatjara Yankunytjatjara Inc (APY Inc), applied for a stop bullying order under the FW Act (Application).

Adamson alleged that the General Manager and Deputy Chair of the Board had engaged in a range of bullying conduct against him including, refusing to deal with him, interfering with his conduct of meetings, preventing the exercise of his powers, orchestrating events to prevent a quorum, withholding access to minutes and defamation.

It was contended by the Respondents that Adamson was not a “worker” within the meaning of the FW Act and was not eligible to bring the Application.

Who is a ‘worker’?

Directors have not traditionally been considered “workers”, however the definition of “worker” under the anti-bullying laws is a broad one, imported from the Work Health and Safety Act
2011 (Cth) (WHS Act).

The rationale behind this broader definition of “worker” is to ensure health and safety protections (and now anti-bullying protections) extend to all kinds of workers, not merely employees, and to capture the “changing nature of working relationships”.

In this case, the Fair Work Commission found that in determining whether Adamson was a “worker” under the WHS Act, the essential question was whether he, as Chair, was a person “carrying out work in any capacity” for APY Inc. The Fair Work Commission found that the proper interpretation of “worker” did include activities undertaken by Directors and Board members.

Establishing a ‘stop bullying order’ under the FW Act generally

The anti-bullying regime is designed to “establish a mechanism by which the bullying of workers at work may be stopped”.

The Fair Work Commission confirmed that (once satisfied that the Applicant is a “worker”) there are two prerequisites that must be satisfied before a stop-bullying order can be made:

  1. the worker has been bullied at work by an individual or a group of individuals; and
  2. there is a risk that the applicant worker will continue to be bullied at work by the individual or group concerned.

Ultimately, the Application was unsuccessful. Mr Adamson failed to be re-elected to the Board and as a result, Commissioner Hampton determined that there was no future risk the bullying would continue.

What does it mean?

Generally, behaviour which may constitute bullying includes repeated, unreasonable behaviours that create a risk to health and safety. Such behaviour could include victimising, humiliating, threatening or intimidating a person.

This framework poses additional risks at Board level, where disagreement and decision making all lead to a greater risk of conduct (either of an individual Board member or group) being perceived as bullying behaviour.

In addition to the obvious reputational issues of an anti-bullying application at Board-level, other governance risks may also arise.

It is not difficult to imagine the impact of an anti-bullying application on the ability of a Board to function effectively. This is particularly the case where relations may have deteriorated to an extent that the anti-bullying application is used as a collateral tool to achieve a desired outcome (for example, removal of certain Board members).

Further, orders open to the Fair Work Commission may include directives as to how, when and in what manner Board members may communicate, with obvious consequences for Board operations.

Good governance policies and procedures, together with an adequate understanding of the scope and operation of workplace laws are essential for all Board members to minimise risks.

Specific guidelines for the conduct of meetings may also play a role in minimising the risks of an application for a stop-bullying order.

This article was written by Sarah Sealy, Partner and Frances Spry, Solicitor.

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