(un)Reasonable management action - acting too soon

The recent decision of Department of Education and Child Development v Dolan should be of interest to employers and those conducting workplace investigations.

It takes a different – and more restrictive – approach to assessing whether conduct is reasonable management action taken in a reasonable manner than other recent decisions have (albeit in the context of a claim for compensation for a workplace injury).

Context of the case

Ms Dolan suffered a psychiatric injury as a result of management action following allegations of poor behaviour by her. She made a claim for workers compensation for that injury.

The relevant legislation excludes compensation for claims arising from what could broadly be described as reasonable management action undertaken in a reasonable manner.  

The only issue in the case was whether the Department’s conduct fell within the exception.

At trial, the Judge held that the Department’s conduct – however well intentioned – had been unreasonable, especially in light of Ms Dolan’s particular circumstances.

The Department appealed.

Background

The background to the litigation is – on any view – very sad.

Ms Dolan had been employed by the Department in various roles since 1970.

In January 2013, she successfully applied for a new role at the Para West Adult Campus.

In 2015, organisational changes took place at that workplace. The Para West Adult Campus became the North Adelaide Senior College and various roles – including Ms Dolan’s role – were affected by a restructure.

Among the changes that occurred was the creation of a new role which Ms Dolan assumed she would take up. In fact, Mr Williams was appointed to the new position.

In around October 2015, Mr Williams started in the new position. Ms Dolan found adapting  to the new structure and Mr Williams' appointment challenging. She and Mr Williams had a difficult relationship from the outset. Her behaviour towards Mr Williams was poor – she accused him of stealing her job, swore under hear breath towards him and repeatedly called him a “jerk”.

Mr Williams complained about Ms Dolan’s behaviour to her manager – Ms Abbott.

On 5 November 2015, Ms Abbott met with Ms Dolan about the issue.

On 11 November 2015, Ms Abbott provided Ms Dolan with a letter that summarised their discussion, reminded Ms Dolan of the Department’s Code of Ethics and warned her that disciplinary action could follow if her behaviour did not change.

On 3 December 2015, Ms Abbott had a further meeting with Ms Dolan during which Ms Dolan said she felt she was not being listened to or supported.

At Ms Abbott’s suggestion, Ms Dolan took some time off over Christmas. In that time, Ms Dolan said she felt worthless and useless.

It appears that Ms Dolan’s behaviour did not change after she returned from leave.

On 18 February 2016, Ms Abbott and Ms Dolan had a further meeting. At the meeting Ms Abbott handed Ms Dolan a letter outlining allegations that Ms Dolan had continued to behave inappropriately. The letter directed Ms Dolan to attend a meeting with Ms Abbott and member of the Department’s Performance and Incapacity Unit on 24  February 2016.

It was not disputed that the letter had a significant impact on Ms Dolan and that she had been unable to work since she received it.

Decision

The Judge at trial found that the Department had acted unreasonably in progressing to a formal disciplinary process in February 2016. The Full Bench said - 

"It can be inferred that the Judge took the view that, despite Ms Dolan not having responded satisfactorily to the discussion on 5 November 2015, or to the directions given in the letter of 11 November 2015, the extent and nature of her ongoing misconduct and lack of response had not reached the stage by February 2016 where the formal procedures which were invoked were warranted or reasonable having regard to all of the circumstances. It can be inferred that he considered that the invocation of formal procedures and documentation at that time should have been understood by a reasonable employer to be unnecessary and to be potentially counter-productive".

The Full Bench agreed with the approach taken by the Judge at trial that, in determining whether conduct is reasonable management action taken reasonably, consideration must be given to the circumstances of the particular employee affected. In this case, the Department’s action had to be assessed in light of -

"Ms Dolan’s employment and personal history, including events which were known to the Department to have negatively impacted on her ability to work with others, and which caused her to have negative feelings, a sense of job insecurity, and a lack of appreciation.”

Accordingly, the Full Bench found that -

"the factual findings made by the Judge as to the unreasonableness of the administrative action taken by the Department by reference to matters including the particular circumstances of Ms Dolan were findings which it was open to him to make in determining whether or not Ms Dolan had established that the disqualifying provisions did not apply."

Comment

The case is an example of the challenges employers face in addressing misconduct allegations.

If employers do not take action quickly enough, or do not set out allegations and potential consequences formally, then they run the risk of being criticised for not taking misconduct complaints seriously or not affording an employee procedural fairness.

Conversely, if employers move too quickly to engage a formal process, then they run the risk of being criticised for putting the health of the affected employee at risk.