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Standing Committee on Education and Employment
18/07/2012
Workplace bullying

HARMER, Mr Michael, Harmers Workplace Lawyers

Committee met at 09 : 06

CHAIR ( Ms Rishworth ): I declare open the fifth public hearing of the House of Representatives Standing Committee on Education and Employment inquiry into workplace bullying. The inquiry was announced by the Prime Minister and Minister for Employment and Workplace Relations and referred to the committee in May. The minister has asked us to complement work currently underway to develop the Code of Practice Preventing and Responding to Workplace Bullying and initiatives by state and territory governments.

The committee continues to receive a strong response to its call for written submissions. Submissions have come from organisations and experts in the field as well as many who have experienced bullying in the workplace. As well as the formal public program which is broadcast and will be authorised for publication, the committee has set aside time to hear from individuals about their experiences of bullying in the workplace. To encourage maximum participation by individuals, and for those who may be reluctant to publicly be identified, the media will not be permitted to report these individual impact statements, and none of the statements provided to the committee will be published. Only those wishing to make statements or to observe proceedings will be allowed to be present in the room. If there are individuals who are present who would like to make a statement about bullying in the workplace and what may have occurred to them, please make yourself known to the secretary so we are able to allocate an appropriate amount of time for each statement.

In order to allow the media to film the fully public parts of the proceedings of this inquiry, I now ask a member to move that the committee approve televising of the public proceedings of the workplace bullying inquiry unless otherwise provided.

Mrs ANDREWS: I move that.

CHAIR: Thanks, Karen. I also ask a member to move that submissions circulated in the list be accepted as evidence authorised for publication.

Mrs ANDREWS: I move that.

CHAIR: I now welcome representatives from Harmers Workplace Lawyers to today's hearing. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament. It therefore has the same standing as proceedings of the respective houses. Thank you for your submission. I invite you to make an opening statement to that submission, and then we can proceed to questions.

Mr Harmer : Thank you for the opportunity to address the committee and for the valuable work you are doing in this important area. In terms of our firm and the reason we have made the complaint, we are, rightly or wrongly, a much awarded employment law firm in Australia. We act for all sides of the fence—employers, employees and unions. In the June quarter we had in excess of 350 people come through our door complaining of various aspects of workplace treatment. Some of those you would be familiar with, such as James Ashby or Kathy Jackson. Many others you would not be. But 75 per cent of those matters involved aspects of workplace bullying as an issue. We tend to deal with extreme cases. Some of them do involve suicide or attempted suicide and many of them certainly involve psychological devastation. We see it in all aspects of the workplace—be they major employers, unions or our own business. I can see it in myself. We are certainly not here purporting to be perfect. We are here to assist with what I think is a problem for the entire Australian community. I will just make a few general comments and then move to some specifics that are more related to our work.

First—and this may not be a great help to the committee, but I will put it forward anyway—bullying is an issue for the entire Australian community. It is a cultural problem that we face as a country. It is prevalent in our schools, in our clubs and in people in Australia from a very young age. Treatment of it in the workplace has to start at education in schools, in families and at various levels beyond perhaps what this committee will deal with. I commend to the committee the work of the Australian Institute of Employment Rights, which, through the WorkRight program, has coordinated integration into the school syllabus of education on workplace rights and bullying.

Second, in Australia we have a problem with our business culture. Australian business leadership fails in international surveys to reach important benchmark standards on the treatment of people and that, in turn, leads to workplace cultures that are conducive to bullying. That is an area that we need to help all Australian management with, and I am one of them. We certainly need, in my view, a system of accreditation of Australian business to genuine standards, because our management are highly educated—they know what to do, but they just do not achieve it. It is that gap between knowing and doing that needs to be bridged if we are going to have any real sort of turnaround of this problem in the country.

In terms of specific issues, whilst it would be good to focus on prevention and constructive steps, a lot of our work is reactive, so I do want to talk about the reactive side of it. For those severe cases that I mentioned, the problem at the moment is that there is a major gap in the regulatory framework in Australia. You get a person come in, often with members of their family, and they are devastated. Often you cannot even take instructions because they are not in a sound state to make decisions on their future, and you try to find a course of action and a way forward for them and you end up limbo dancing through a number of different avenues because there is nothing that precisely says 'bullying'. So you might look at unfair dismissal if that has been the outcome. You might look at discrimination if you can find a discriminatory angle. You might look at general protections if you can find a workplace right that has been adversely treated, if you like, but there is nothing specific and neat that fits workplace bullying in a statutory sense. You can look to the common law, but common law contract and tort has been capped in this country to protect our insurance industry since the collapse of HIH and takes out of reach any fair outcome for the victim. So each time you really do have to reconstruct an avenue that is unsuited and take it forward in the best way that you can. We are strongly of the view that a specific remedy, a right to fair treatment and dignity in the workplace, and an avenue for redress for breaches of that right is important. We think it could fall within the general protections of the Fair Work legislation. Obviously it is stressed through safety and other legislation, but that gives rise to penal steps, not just civil steps or redress for individuals.

In terms of specific remedy I also want to talk about the need for a real deterrent—and you will forgive me again, I am getting into extremes at this point, but I assume you will have most other bases covered. You may or may not be aware we ran the case for Kristy Fraser-Kirk against David Jones. The impact of that case on corporate Australia caused greater reform in the area of awareness and improvement of risk management in sexual harassment across the country than any initiative I have seen for many decades. It was sad that it took a redress to punitive damages to bring that about. The $37 million related not to compensatory damages for Kristy—it related all to punitive damages for the allegation that the CEO of a business was able to engage in serial conduct without redress because he brought in big dollars for that business. I cannot address the case in any detail, but I want to take a hypothetical example.

Just say you have got someone who is high up in management and who runs a particular floor of a business. He is a star in the industry; he brings in literally tens of millions of dollars per annum, but he runs his floor through management by fear and there is a constant turnover of staff. The business finds him so valuable it has got restraints in place to keep him—it does not want to lose him. When someone comes up totally devastated at having to lose their job, and often their career and their health, over his conduct, the business says: 'Here is a deed, it is confidential: it is paved away. Get on your way. You, victim, leave and we will pay for the pleasure of this person devastating more lives. Why? Because he makes megadollars for us, and we are not prepared as a part of our business to stop him.' Because that person makes money, the business as part of its business plan will not take a stand and is actively wasting the lives of people.

Punitive damages law at the level of our High Court would say: 'Tort shouldn't pay, just as crime shouldn't pay.' If you are going to turn that around there has got to be a sting. If you hit people with a little penalty, even if it is the maximum penalty under safety legislation in Australia, and that person is making them $50 million a year, they are going to turn around and say: 'Hah. We can pay that and still profit.' But the reality is that our court system is so expensive no individual can take a stand anyway—unless they are supported by a legal firm that will act for no charge. There are such barriers to justice that there will never be redress, and that will just go on and on and on. This is happening a great deal.

I have had people in the BRW Rich List Top 200 come across my desk; they pay for the pleasure and they get away with it. The only deterrent would be something that attacks the profits of that organisation at a level commensurate to the money they are making out of proliferating that conduct. That means big penalties. If the same organisation misled, or fixed prices, it could be penalised $20 or $30 million, if that was the profit it had made. If an organisation profits by proliferating bullying in this country, there is virtually no penalty and no redress. They profit from it, and that is a big part of the problem. That is why you will have the lip-service, you will have the policies, but on the ground you will not actually have any alignment with what would eliminate bullying. It is a major problem. I just raise that and, whilst I acknowledge it is an extreme, it is a huge problem that we see too much of. The rest of our comments are in our submissions; I will not take up more of your time.

CHAIR: We might ask some questions, if that is all right. One of the things that has come up is the lack of redress, depending on where you live. We have asked about this, and in a lot of jurisdictions there has never been a prosecution under occupational health and safety law. Do you know of any cases that have used the general protection provision to particularly address bullying in the workplace?

Mr Harmer : There are a large number of cases currently underway, because those general protection provisions came in in July 2009, in effect. One example—and again I cannot say much about it, but you will see it much reported—would be the case brought by Sally Berkeley against Pacific Brands, where the allegation is that there has been serial conduct by a group general manager which has wasted many people of that business over many years, allegedly at general manager and other senior levels but ranging all the way down to secretaries. As I said before, the general protections are not a neat fit, and so you are cobbling them together, combined with other causes of action.

There is another case before the courts relating to Optus which is similar in terms of attempting to address purportedly a renowned bully who ran an entire and most significant division of that business. And yes, I could point to many other cases before the courts, but I could not point to any one where there has been a decision. I am aware of safety prosecutions relating to bullying, but they are rare and they normally relate to the more extreme cases, because it is difficult for the inspectors to detect and protect against that area.

CHAIR: I do not know if you are aware of this, but what are clients seeking when they pursue the general protection? Are they seeking to get back into the workplace? Are they seeking a compensatory amount? What do they seek to achieve by pursuing the general protection?

Mr Harmer : Reinstatement is available but is rarely sought in the aftermath of bullying because often there is a closing of ranks around the bully, particularly if it is a senior manager and is a manifestation of the culture of the business. Normally, the individual, having tried an exhaustive range of avenues inside the business before being forced to discuss or mediate the matter from outside, is eventually be forced to take legal action. In that case, yes, they will seek recompense, but they will often also seek reform orders. You would be quite amazed at the number of people we get who are victims of this serial type of conduct who say: 'Look, I'm done for. I'm going to take a stand. I was a senior female in this business'—for example—'and I'm not going to tolerate happening to others what has happened to me,' et cetera. So often reform orders and things of that nature are sought. Those are also available under discrimination legislation.

CHAIR: We have heard a number of advocates and lawyers during this inquiry say that if they have a bullying case they desperately look for something under equal opportunity or anti-discrimination legislation because there is at least a process there through which they can redress the issue. In your experience, have you looked through the anti-discrimination legislation to try and redress bullying and, if so, has that been successful? Have you had cases where the real issue is general bullying and not based on an attribute so it has fallen through and you have not been able to get recourse for the individual?

Mr Harmer : The majority of cases would fall into that latter category, where general bullying conduct and attitude has brought about the injury matter needing redress. With the general protections, which also cover discrimination, you might find areas where a person has tried to take a stand to assert a right and, as a result, been victimised or experienced an increased level of attention. In the discrimination field, it is often difficult to find direct discrimination. There are many cases pending around testing indirect discrimination, particularly disability discrimination.

By way of example, if you have a culture which is extremely harsh and bullying and people break down under that culture and get to point where they develop a mental condition, a psychological injury, they enter a category of people who are less able to sustain the common culture that everyone is, if you like, meant to grin and bear. So indirect discrimination starts to take on a real role—everyone is treated the same but they are just in a category which cannot sustain that sort of treatment. Structuring a case that way is quite common. But, again, it is about structuring and trying to fit the case to an inapt piece of legislation, because there is nothing that hits the matter on the head.

There is a tort of intentional infliction of emotional, psychological or physical harm. That is a tort that we would regularly include but, because of the caps on torts around the country, outside of punitive damages it is not something that you normally would, or perhaps realistically should, pursue.

CHAIR: I have a question about the Workers Compensation Insurance Scheme. My understanding—and I am not an expert on this—is that it differs as to what point people can get compensation outside of the workers compensation scheme. It varies from state to state. Is that correct? For example, we heard in New South Wales that, if you have had 15 per cent permanent injury, there are different thresholds for pursuing damages.

Mr Harmer : Yes. There is a great deal of difference around the country. Unlike the attempt to come up with uniform health and safety, which is itself floundering at the moment, there is certainly not a uniform system of workers compensation around the country. Hopefully that will come in due course. It is essentially a no-fault scheme. People who are subject to the most egregious cases get the same base level as everyone else. For many people, that is so far short of their income and, often, their level of commitments that they would otherwise have, that all too often it is an extremely limited foundation. Yet it brings with it caps on what you can otherwise do to recover. For the most severe intentional cases of bullying it is a very poor system of recompense. You need to do something more proactive in the legal side, and again there is that gap.

CHAIR: Through this inquiry, and you mentioned it in your submission, you obviously are seeing people who are very damaged by the time they get to you. We have heard a lot of different ideas about how to do more early intervention. Some of them have included, obviously, managers and supervisors being supportive and addressing it at the workplace. Some witnesses have felt that there is a need, if that does not work, for an early, easily accessed conciliation process with someone independent. That is of course because litigation in a whole range of workers compensation and occupational health and safety matters take a very long time. While it is beneficial to send the message and to get all the evidence, it is not beneficial for the individual that is experiencing the bullying. How do you see some sort of conciliation working—and I am not necessarily suggesting through Fair Work—with an independent party working for clients at an earlier stage, where they present to you before they get to a more damaging situation?

Mr Harmer : Forgive me if I take a longer run-up to the pitch, but obviously prevention starts with every aspect of the management of the business making it part of the lifeblood of their business, and having genuine alignment with all the systems within the business to prevent adverse treatment. That is the thing that is most needed. On the reactive side, though, within businesses, obviously it is very important to have good processes, grievance procedures, means of intervention and hotline mechanisms so people can bypass their immediate reports and get genuine independent redress without recrimination or victimisation. If it becomes more overt, there is no question early mediation or intervention for reconciliation can well and truly help, although some of the worst bullies are notoriously manipulative. You might put them into coaching with just a normal psychologist and that psychologist will often come out saying, 'My goodness, you poor bully,' if you like, because they are so able to put forward their own case. That is what they do. They thrive in organisations. Equally, mediations, because there is no real power around the outcome, can often become a source of further problems. But it is a worthwhile step if you reach that point.

Mrs ANDREWS: Thank you for your submissions. We have heard a lot of evidence over a number of days about the more common type of bullying, or the category, where it is an employee who was allegedly being bullied by their employer. But we have also heard that that is not the only bullying that takes place. It can happen between co-workers and there can, of course, be what has been categorised as upwards bullying as well, where you can have an employee or groups of employees bullying a supervisor or a manager. Could you tell us a little bit about your experience with the other classes of bullying as well too?

Mr Harmer : Yes, you are right. The most common form we come across is that top-down power imbalance being utilised as a foundation for the bullying. Mobbing across a group of workers against another individual is extremely common, and one of the safety prosecutions I mentioned related to an initiation process at a particular factory where the conduct towards the individual was quite disgusting. Of course, in factories and other areas there might be a significant migrant population or people who might not fit the culture entirely, and that it becomes a foundation for that sort of treatment at the shop floor level amongst otherwise peers.

In terms of ganging up against not only managers but even owners of businesses, that certainly occurs. Indeed there are some people—and some of them, unfortunately, are in the union movement—who can be quite intimidating in terms of their treatment of employers and managers. So it works in all directions. But there is no doubt that power imbalance facilitates it, and that is why the greatest number of cases tend to come from that direction, if you like, from the top down.

Mrs ANDREWS: What is your experience with vexatious claims?

Mr Harmer : We have obligations as lawyers to heavily test the claims that come before us. Sometimes before we will do anything we will insist on taking the statement under oath and things of that nature. It is sometimes difficult to test out fully the person before you—some of whom are themselves the bully, as it turns out; they do get removed from time to time and they will often try and use the law as another mechanism to leverage an outcome. It does happen. I must say that in my experience it is a very small percentage, we find. But they do exist, and you need to be on guard against it.

Certainly any employer needs to be very careful in the way that it investigates these sorts of incidents. There is a whole raft of procedure and law around how you go about fairly investigating these matters, but you have to be fair to the complainant, also to the alleged bully and to everyone else around in going about the conduct. It does arise. In workplaces it is regularly used to attack people. Often the complainants of bullying are the bullies themselves.

Mrs ANDREWS: There are just a couple of points that I want to pick up. I will start with what you indicated about ensuring fairness to the complainant and to the alleged bully. During the investigation process—and, I guess, through the litigation process—how do you actually ensure that there is fairness to both parties?

Mr Harmer : In terms of the workplace investigation—and this is assuming that other processes of discussion and internal mediation or attempts to manage the situation have failed—if you get to the point of a formal complaint and investigation, procedural fairness has to apply. There will be immediate issues of what you put in place in the interim while the investigation is continuing. Can the people continue to work together? You cannot manage that in a way that besmirches anyone's reputation. It should not necessarily be the victim moved; it should not necessarily be the alleged bully. One has to come up with a fair outcome. Often there will be a lot of consultation around that. It might be that someone agrees to take some paid leave because it has been a stressful process, or is going to be, for them. That is managed on a case-by-case basis.

You have to ensure that there is no pre-emption, that the matter is properly and, hopefully, independently assessed. Because some bullying is very serious, there are some rights of the bully, including going all the way to rights against self-incrimination, that need to be respected, and there are tribunal decisions going back many years around how that sort of process would have to be fairly conducted.

It is not easy to implement, but there is a lot of guidance out there. The reality is that you are trying to get to the truth and then come to fair outcomes, which themselves should be the subject of consultation and a fair hearing, around mitigating circumstances. To be honest, there but for the grace go any of us when it comes to bullying. If I was working long hours in a stressful situation, I certainly would have done things that, if I had kept them up, would have amounted to bullying. It is the same for any manager and anyone in business. It is a difficult area, but the fair processes are there and fairness towards the alleged bullies is a very important part of it.

Mrs ANDREWS: We have already covered investigations in the inquiry. A number of issues have come out in relation to investigation and the requirement for the independence of the investigator as well. In your view, should the investigation be conducted internally or with an externally appointed investigator?

Mr Harmer : In my view, it needs to be on a case-by-case approach. It is similar to what a lot of businesses do with other aspects of their workplace health. They have a grid mechanism which calibrates severity of the issue. At certain levels it is best to handle it inside, because an external investigation can blow up beyond all proportion and even ruin the lives of both people, regardless of who is right or wrong.

There is a level of seriousness, particularly in proximity to the alleged bully, to management of the business whereby a fair investigation seen to be fair arguably cannot be undertaken by that management, nor should it be undertaken by a legal firm advising that management both on the investigation and the outcome. So total independence is important to ensure a genuine process which is not only fair but is seen to be fair and which can engender confidence and reasonable morale in the residual workforce in the way it is managed. I will not go into it but there are quite complex calibration mechanisms that are well known in industry.

Mrs ANDREWS: Within an organisation, where would that, in your view, leave the human resources department in conducting an investigation of alleged bullying at the workplace?

Mr Harmer : Human resource departments are a much vexed area in their role, and conflicts in their role. At the end of the day, their future and progress in the organisation is dependent upon the management that is reigning. Whilst many HR departments purport to be there as a help mechanism to employees, they also have obligations to the corporation they serve to ultimately serve its interests. They get in a situation of conflict and that is why all too often they seem to be turning around and, sometimes against their will as a professional, towing a party line as opposed to achieving justice. There are levels of alleged complaint where a HR management that is wise should disqualify itself from the process in the interests of achieving something that is genuinely fair while avoiding conflict and the undermining of confidence in that very HR management.

CHAIR: One of the areas of public interest in this is what is colloquially known as Brodie's law. Do you think that the introduction of that law in Victoria has been useful? In what ways do you believe it has been useful or unuseful in the area of bullying?

Mr Harmer : I think it has been useful—similar to the David Jones punitive damages claim—in raising awareness of the potential severity of penalties that can attach to that conduct as opposed to actual prosecutions under it. Brodie's case was a devastating example. We have had actual suicides and we have had many attempted. The number of times you end up with your client in hospital is quite shocking. I think in raising awareness it is important to emphasise that this conduct can and should be treated as being criminal. There was, around the introduction of that law, a spate of education in corporations across Australia reinforcing the importance and the alignment of genuine systems of management to the achievement of the prevention of bullying. I think its main role through its mere presence—and hopefully it will continue to be—is deterrence. One would hope that there are not too many cases that get to that severity of being actually prosecuted.

CHAIR: Thank you very much. We appreciate you presenting to the committee at today. If there is anything extra you would like to present, feel free to forward that through to the secretariat. We are hoping to report to parliament at the end of November.