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Workplace bullying or reasonable management action - what injured workers or employees in Victoria need to know.

Workplace bullying or reasonable management action – what injured workers or employees in Victoria need to know.

Published on June 17, 2022 by Charles Harrison and Rachael Kelly

The negative effects of workplace bullying, stress and/or harassment on an injured worker can be traumatic, severe and permanent – often resulting in lifelong adverse mental health consequences. If you are or have been subject to bullying in your workplace, you may be entitled to monetary compensation.

It is important for an injured worker or employee who is bullied or subject to undue stress/harassment to be aware that there are legal defences available to employers/insurers in such claims. One of the most common defences relied upon by employers to defend a bullying claim is that the psychiatric/mental health injury is the result of ‘reasonable management action’,[1] a defence which is similarly available in other jurisdictions in Australia.

If an employer relies on this reasonable management action defence, it needs to prove that the action taken was ‘management action’ and that it was done on reasonable grounds, in a reasonable manner, or that the worker simply expected such action to be taken.

What is ‘management action’?

‘Management action’ refers to a broad range of supervisory activities normally taken out by employers. The following are examples of what would be considered ‘management action’ by an employer:[2]

  • Appraising the worker’s performance;
  • Counselling the worker;
  • Suspending or standing down the worker;
  • Disciplinary action in respect of the worker’s employment;
  • Transferring the worker;
  • Demotion, redeployment or retrenchment;
  • Promotion;
  • Reclassification of the worker’s position;
  • Provision of a leave of absence;
  • Provision of a benefit connected with the worker’s employment;
  • Training;
  • Investigating any alleged misconduct;
  • Communicating in respect of any of the above.

Was the management action undertaken on ‘reasonable grounds’[3] or in a ‘reasonable manner’[4]?

In determining whether the management action was taken on reasonable grounds or in a reasonable manner, a Court will objectively assess all the circumstances leading up to the management action and the manner in which it was taken – in a global context.

The management action should not be irrational, absurd or ridiculous, but rather moderate and fair. Although an employer is not held to a standard of perfection, if they lacked sophistication in addressing specific issues of bullying or made silly errors in implementing action plans, the reasonable management action defence may be overcome by an injured worker.

An example of the defence being overcome can be seen in the 2011 decision of the Victorian Magistrates Court in Krygsman-Yeates[5]. The employer had given the worker a three-page letter, with attachments, detailing issues with her teaching on her first day after returning from long-service leave without prior discussion of such criticisms. The employee then took three days of sick leave due to stress and anxiety as a consequence of this letter – on returning to work, there was a decision to formalise the criticisms. Furthermore, the instigator of the criticisms was then placed in a position to ‘mentor and monitor’ the worker, during which time there was little to no feedback. Cumulatively, the Court found that this conduct of the employer was not reasonable.

Did the worker expect reasonable management action to be taken?

The employer must prove that the worker subjectively expected reasonable management action to be taken. In this, it must be shown that there were facts known to both the employer and the worker which indicate that the worker had the relevant expectation. These facts will be assessed in the global context to determine if they were reasonable.

In the 2010 decision of the Victorian Supreme Court of Appeal in Department of Education v Unsworth[6], the worker was found to have expected to be dismissed due to the extensive review processes taking place over a number of years, inappropriately timed correspondence in relation to his diminishing mental health and multiple rejected lodgements for worker’s compensation. And that, due to the circumstances, such a dismissal was unreasonable.

Did the psychiatric injury arise ‘wholly or predominantly’ from the reasonable management action?

If reasonable management action is proved by the employer, the worker may still be able to prove that their psychiatric condition did not arise wholly or predominantly from reasonable management action. ‘Wholly’ indicates that the management action was the only cause of the injury while ‘predominantly’ means that the management action must exceed all other causes of the psychiatric injury together, in both power and influence. This requires an evaluation of the contribution of different causes made to the injury determined by applying common sense to the facts of a particular case.

In the 2018 decision of the Victorian Magistrates Court in Coates v State of Victoria[7] management action had been taken, however there was a variety of claims made by the worker, including stress, pressure, abuse, criticism, harassment, bullying and a lack of appropriate consultation. In weighing up the circumstances, it was found that management action had only been a catalyst to the subsequent treatment of the worker and therefore it did not wholly or predominantly cause the worker’s injury.

Have you been bullied at work in Victoria? Carroll & O’Dea Lawyers has a track record of assisting injured workers and employees who have developed psychiatric injuries or whose mental health has deteriorated as a result of workplace bullying, stress and/or harassment. For a free initial consultation, please contact Charles Harrison in our Melbourne office on (03) 9049 7101 /



[1] Workplace Injury Rehabilitation and Compensation Act 12013 (Vic) s 40(1) (‘WIRCA’).

[2] WIRCA, s 40(7).

[3] WIRCA, s 40(1)(a).

[4] WIRCA, s 40(1)(b).

[5] [2011] VMC 57.

[6] [2010] VSCA 77.

[7] [2018] VMC010.

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