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Bodies corporate potentially liable for bullying of contractors

A recent Fair Work Commission decision demonstrates how far the Fair Work Act 2009 bullying jurisdiction extends, which will have serious ramifications for bodies corporate, committee members and individual lot owners, according to James Nickless of ClarkeKann Lawyers.

In a recent case, the applicant was employed by a body corporate manager, XMR Ltd that had a contract to provide caretaking and letting services to bodies corporate. The applicant was employed by XMR as the on-site manager of a resort complex but was also a resident owner of one of the lots in the complex and a director of the company.

The applicant alleged that he was bullied by a number of individuals who were also residents and/or owners within the building complex. Some of the individuals were also members of the management committee of the bodies corporate.

The bullying conduct complained of involved:
• ongoing use of threatening, intimidating and derogatory language towards the applicant;
• shouting and otherwise abusive language; and
• threats of violence and other actions, including grabbing or snatching at the applicant’s property.

It is alleged that the above conduct occurred on more than one occasion, including during committee meetings of the relevant bodies corporate.

The applicant applied to the Fair Work Commission for a “stop bullying order”. The individuals who were alleged to be the instigators of the bullying conduct and the relevant bodies corporate were named as respondents to the application.

In order for the Fair Work Commission to make a stop bullying order, it must be satisfied of the following:
1. the applicant is a “worker”;
2. the alleged bullying behaviour must have taken place whilst the applicant was at work in a constitutionally covered business; and
3. there is a risk that the worker will continue to be bullied at work.

The two critical issues in this decision were whether the applicant was a “worker” and whether he was “at work” in a constitutionally covered business.

In the context of the Fair Work Act’s anti bullying laws, the definition of a worker is the same as the definition contained in the Work Health and Safety Act 2011, which includes an employee or contractor carrying out work for a person conducting a business or undertaking. In responding to the claim, the bodies corporate suggested that because they had a contract with XMR, it was XMR who was responsible for the applicant’s health and safety. The bodies corporate went further and suggested that they were not a PCBU and therefore the applicant was not a “worker” under the Fair Work Act.

The commission did not accept the bodies corporate’s arguments and found that because the applicant was an employee of XMR, and that XMR was a PCBU, then the applicant was a “worker” under the Fair Work Act. The commission also found that the applicant was at work in a constitutionally covered business.

The relevant point that the commission relied upon was that XMR, who employed the applicant, was the relevant constitutionally covered business (ie the bodies corporate did not need to be the relevant constitutionally covered business) and that the notion of being “at work” extends beyond the employer’s place of business.

In other words, because the applicant was performing his duties as part of his employment with XMR (a constitutionally covered business) while at the resort complex, the resort complex became the applicant’s workplace; and therefore he was entitled to protection from bullying while at that workplace.

While there was no contractual relationship between the applicant and the bodies corporate, or the individuals named, the commission found that the bodies corporate and the individuals were appropriate respondents to the application.

The commission relied on the intention of the Fair Work Act’s anti bullying laws, which is to protect workers from bullying conduct by any individuals in the workplace. The individuals engaging in the alleged bullying conduct do not need to be workers: for example they could be customers of the business, or in this case, residents of the complex where the applicant performed his duties.

The Fair Work Commission’s decision has serious ramifications for bodies corporate, committee members and individual lot owners because it means that they can be included as respondents to fair work proceedings where a worker seeks a stop bullying order (even where that worker is not themselves employed by the bodies corporate and/or has no contractual relationship with the parties accused of bullying conduct).

The commission can only make an order to prevent the bullying conduct from continuing, it cannot make an order that any monetary sum is paid so this should provide some relief to bodies corporate and lot owners. However, the bodies corporate and any individuals will still be required to devote time and expense in responding to such applications, and will need to comply with any orders made.

If a party doesn’t comply with a stop bullying order, they can then be ordered to pay penalties up to $10,800 for an individual or up to $54,000 for a body corporate for each breach of the orders.

The Fair Work Commission’s decision may have ramifications for the workplace health and safety issues that plague the strata industry, specifically whether bodies corporate are a PCBU. The commission touched upon some of the exclusions to a PCBU, which includes a strata title body corporate that is responsible for common areas used only for residential purposes, but, unfortunately, did not make an ultimate finding as to whether the bodies corporate fell under this exclusion.

Rosie Clarke

Rosie Clarke is managing editor at Multimedia Publishing.

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