Posted: Sep 2, 2010  |  By: Andrew Douglas*
Topics: Business > Workers compensation

Taking the stress out of stress claims

Some time ago in a Clint Eastwood movie, I remember the character that he played saying: “I tried being reasonable - I didn’t like it.” How many managers, faced with the difficult worker who simply won’t do as they are directed or told, have felt the same as Clint Eastwood’s character? Despite perhaps feeling that way, our ‘Clint’ manager can’t be like the real Clint - he must learn to be reasonable. Why?

There are many reasons for an organisation’s management to be reasonable with their staff, especially if one of the workers is proving difficult and will not do as they are instructed. But the one central reason to be reasonable with them is that it aids in preventing stress claims from being raised to frustrate disciplinary action that could be leading up to termination of that worker.

How does a stress claim frustrate disciplinary action? Throughout Australia, a stress-related workers compensation claim will be compensable if it arises out of work related circumstances. In most states, that will prevent termination; and anywhere in Australia it will undermine the disciplinary process, because the worker’s ailment was brought about by the discipline.

‘Reasonable management action’

The law in Australia, sadly, has not kept pace with the growth of the many stress claim strategies of workers. Over the last few years, our parliaments have addressed the issue by making stress claims not compensable if the disciplinary process was carried out in a reasonable manner. For the purposes of this article, the term ‘discipline’ may include retrenchment, transfer, demotion, dismissal and performance management. There are a number of different formulations of this defence, but it is commonly referred to as ‘reasonable management action’.

Simply speaking, ‘reasonable management action’ means that a manager performing a ‘performance management’ or similar disciplinary process acts fairly, transparently and justly. At present, the defence of ‘reasonable management action’ is treated in different ways, depending on which state the action is being taken in.

  • In Victoria, ‘reasonable management action’ is a defence for all performance management action including discipline;
  • In Queensland, it is a defence for discipline and restructuring;
  • In New South Wales, it is a defence for all performance management action including discipline;
  • In South Australia, it is a defence for all performance management action including discipline;
  • In Tasmania, it is a defence for all performance management action including discipline;
  • In Western Australia, it is a defence for discipline;
  • In Northern Territory, it is a defence for discipline;
  • In the ACT, it is a defence for all performance management action including discipline; and
  • Under Commonwealth jurisdiction (ie, under Comcare), it is a defence for all performance management action including discipline (relevant to the federal government as a self-insurer).

In recent times, there has been a series of legal cases that have analysed what ‘reasonable management action’ actually is. These cases have examined circumstances such as:

  • A worker whose performance had deteriorated when performance managed, claiming being ‘decompensated’ into a mental illness as a result of bullying;
  • A worker who became aware of a possible restructure, and claimed being treated unfairly leading to an anxiety condition;
  • A worker complaining of undue delay in investigating complaints caused a stress disorder; and
  • A teacher, whose employment was terminated following discussions and/or warnings, suffered anxiety as a result of the termination.

Lessons to be learned

Some of these claims were successful in court, while others were not successful. But here are the lessons to be learnt by business managers from these cases:

  1. Be clear about what is acceptable behaviour and what is not acceptable behaviour. This should be recorded in writing in a ‘code of conduct’ document and a ‘workplace behaviour policy’ that includes specific procedures.
  2. Ensure that all workers are trained in the written processes and that, as new staff are inducted into the organisation, they too are trained in these written processes.
  3. Remember that your worst worker is also your greatest risk - ensure that you are doing everything right with them.
  4. Be strategic, not tactical. Make sure that you get everything involved in the matter correct before you act. All too often, an opportunity arises for a manager to deal with a difficult worker and they impulsively seize that opportunity, only to reflect later that their treatment of the worker was, in actual fact, ‘opportunistic’.
  5. Always listen carefully to what the worker has to say - it may indeed be the truth. It is possible that the manager who is pushing for the action is simply ‘sick of the worker’.
  6. Manage everyone regularly, openly and fairly. As management consultant and social ecologist, Professor Peter Drucker once famously said: “What gets measured, gets managed.”
  7. You must lead your staff by example; and that means acting fairly with the workers and being seen as being fair by the workers. In order to achieve this effectively, it takes considerable courage. If you want a strong, courageous and honest workforce, you must be a model of such behaviour for them. Napoleon Bonaparte correctly stated: “An army of lions commanded by a deer will never be an army of lions.”
  8. When taking action on disciplinary issues, you should endeavour to be scrupulous with the aspect of procedural fairness.
  9. Never criticise underperformance against an unreasonable direction or instruction. Take the advice of General Douglas MacArthur, who once said: “Never give an order that can’t be obeyed.”
  10. Try being reasonable. Ignore the freedom of being the ‘Clint Eastwood’ style of manager we described in the introduction of this article, and wear the yoke of management proudly.

If you follow all of the above advice, stress claims during performance management processes will be a thing of the past. You will indeed get leverage, consistency and performance from your work force.

* Andrew Douglas is the Principal Lawyer of Douglas LPT, a Melbourne-based specialist workplace safety and industrial relations legal practice.



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