BlandsLaw - Blog posts from compensation
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No compensation for reasonable management action

Often an aggrieved or distressed employee will claim to have suffered psychological injury as a result of an employer addressing performance issues or concerns with the employee. However, these claims will fail where it can be shown that the employer’s action was reasonable in the circumstances.

For example, under the Safety, Rehabilitation and Compensation Act (Cth), referred to in the High Court case below, reasonable management action includes:

 

  • Performance appraisal
  • Counselling
  • Suspension or standing down of duties
  • Disciplinary action
  • Anything done in connection with the employee's failure to obtain a promotion or transfer.

This definition is consistent with the courts’ interpretation of other legislation including the Fair Work Act 2009 and state-based workers compensation legislation.

But the question of what is ‘reasonable’ and what is not is often unclear. Courts accept that management actions don’t need to be ‘perfect’, and  will take into account a number of considerations including the facts and circumstances that led to the need for action, how the action was carried out and the consequences

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