Performance management is an important tool for managers to support employees meet business expectations, however, it can also be a pathway for the making of complaints of bullying and harassment. How an employer responds to such a complaint can determine the risk profile for employers in maintaining their reasonable management action.
Sunanda Soni v Berwick Waters Early Learning Centre  FWC 4149 (Soni) and Application by Katrina Hohn  FWC 5053 (Hohn), two recent decisions from different jurisdictions in the Fair Work Commission, provide guidance for employers who may be faced with allegations of bullying and harassment in the course of a performance management process. In particular, these decision reinforce that the law requires reasonableness, but not necessarily perfection from employers.
Hohn and Soni
In Hohn, Ms Hohn was employed by the Department of Human Services (Department) as Test Manager at a Delivery Centre.
Ms Hohn's manager observed a range of issues with her performance, including that she was:
- not completing her work or projects within the required timeframes;
- being identified as "away" on Skype for long periods of time;
- declining catch-up meetings and other meeting requests; and
- creating communication barriers to other employees needing to engage with her team.
Shortly before the scheduled performance review, Ms Hohn lodged an "incident report" alleging that she was being bullied by her manager. However, she did not respond to the Department's attempts to investigate it and later indicated that she did not wish to pursue it.
Ms Hohn's was given a low performance rating by her supervisor and placed on a performance review process referred to as Back On Track.
After receiving the low performance rating, Ms Hohn also took a significant amount of unplanned annual leave and personal leave, resulting in the Department being unable to assign her to project work.
The Department attempted to support Ms Hohn by providing her with coaching sessions. However, Ms Hohn refused to attend coaching sessions to improve her performance or communicate with her supervisor in person unless he put it in writing afterwards. Ms Hohn also refused to comply with reasonable directions from her manager, including completing work assigned to her and not including junior employees in management level emails.
After unsuccessfully seeking an internal review of her performance rating and making a claim for workers compensation, Ms Hohn made an application to the Fair Work Commission for an order to stop bullying. In her application, Ms Hohn sought for her previous performance review rating be reinstated and that she report to a different manager.
In Soni, Ms Soni was employed by Berwick Waters Early Learning Centre (Centre) as a Room Leader. The Centre had a range of concerns with her performance, including that she was:
- attending work late;
- not completing work tasks;
- not complying with health and safety requirements, including by sitting on a child's stool that was turned on its side;
- engaging in gossip; and
- not contributing to teamwork.
The Centre developed a performance improvement plan for Ms Soni and took steps to support her in this process, including by rostering programming time for her to complete the relevant work tasks.
Ms Soni stated that the Centre Director was bullying her by placing her on the performance improvement plan and stated she was taking indefinite stress leave.
The Centre responded promptly to ask Ms Soni for particulars of the alleged bullying and provided Ms Soni with information on what bullying is and is not. Ms Soni did not provide any particulars and the Centre advised Ms Soni that based on the information she provided, her manager's behaviour was not bullying and Ms Soni's issues only arose in the course of a performance management process, which was reasonable management action.
Ms Soni then resigned from her employment and made an unfair dismissal application to the Fair Work Commission, alleging that she was constructively dismissed because she was forced to resign as a result of bullying by placing her on the performance improvement plan.
Were Ms Soni and Ms Hohn bullied?
While the conduct of both Ms Soni and Ms Hohn extended the performance management processes and required intervention of the employers, both applications were unsuccessful with the Commission finding that:
- Ms Soni was not unfairly dismissed;
- their respective managers had not bullied Ms Soni or Ms Hohn;
- the managers' actions in relation to performance management were reasonable management actions, with Ms Hohn's supervisor described as showing "great restraint".
The Commission confirmed that managers do not need to performance manage employees in a perfect manner, but in a reasonable one. In Hohn, in considering whether management action was reasonable, Deputy President Asbury stated:
"The test to be applied is whether the management action was reasonable, not whether it could have been “more reasonable” or “more acceptable”. Management action does not need to be perfect. The assessment of ‘unreasonableness’ must arise from the management action itself, not the worker’s perception of it."
In both cases, the Commission was also critical of Ms Soni's and Ms Hohn's conduct, with both found to be not appropriately engaging with their managers in relation to their performance shortcomings. In particular, Ms Hohn was described as having "antipathy" for her supervisor which "coloured her conduct" and was "not constructive" and she " at times went out of her way to avoid engaging with" her supervisor and being "intent on denying responsibility for any areas in which it was asserted her performance was deficient."
Lessons for employers
It is important that employers support managers to develop the required skills to manage complex processes like performance management.
As Deputy President Hamilton commented in the Soni decision, it is "unfortunately easy" for employees to make unsubstantiated allegations of bullying in response to performance management or disciplinary proceedings. However, making allegations is not enough to demonstrate that that an employee has been bullied - the allegations still must be substantiated.
Performance management can give rise to multiple claims in relation to the same matters, which can run concurrently, including:
- internal complaints, grievances and reviews;
- anti-bullying applications;
- unfair dismissal applications; and
- workers compensation claims and/or common law claims.
If an employee makes bullying allegations during a performance management process, this does not mean that performance management should be abandoned, or necessarily paused depending on what the complaint may be. However, the allegations still need to be addressed including by:
- taking the complaint seriously;
- considering whether additional supervisors / human resources personnel manage the separation of the complaint;
- ensuring properly particulars of the allegations are provided;
- assessing whether the allegations, if proved, would meet the definition of workplace bullying;
- taking steps to consider whether the allegations are substantiated, including by ensuring procedural fairness is provided to the respondent employee and he/she is given an opportunity to respond;
- ensuring the process, communications and findings/outcomes are documented.
Also, when undertaking performance management with an employee, it is important to ensure that not only the decision to commence performance management is reasonable, but the performance management steps are also undertaken reasonably. This includes:
- ensuring performance deficiencies are clearly communicated to the employee;
- complying with any policy or procedure on performance management;
- providing the employee with an opportunity to respond to concerns about his/her performance;
- clearly communicating expectations and performance requirements that need to be met;
- planning and preparing for performance management meetings, including considering what questions you may receive from the employee;
- allowing the employee to bring an appropriate support person if the employee wishes to bring one;
- ensuring managers have a witness present, such as someone from Human Resources;
- documenting the steps and communications in the process; and
- involving Human Resources and/or taking legal advice early.