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What is reasonable management action and how can I use this in my business?

No matter what industry your business is in, it is important that there is a management structure and managers in place that can make sound decisions for the effective running of your operations.

It is also important that managers conduct themselves in a way that is fair to workers, which is why there is legislation to protect employees from bullying and harassment including the Fair Work Act and the Sex Discrimination Act.

This legislation exists to protect workers, but the term “reasonable management action” is also included in this legislation to protect managers and allow them to make the decisions they need to make without fear of a claim being made against them.

Reasonable management action doesn’t mean you can act inappropriately

There are going to be difficult situations that need to be addressed in any industry and reasonable management action effectively allows managers to make tough decisions without the threat of action being taken against them by an employee.

Bullying and harassment are clearly not examples of reasonable management action. Actions and decisions that managers can carry out that are considered reasonable include:

  • Reasonable actions that involve an employee including counselling, transferring them to another department or location, discipline, retrenching or dismissing them.
  • Decisions to not award promotions, transfers or benefits that are based on reasonable grounds.
  • Introducing compulsory performance management systems as well as any appropriate performance reviews
  • Allocating duties and tasks to employees and managing how these are carried out
  • Any reasonable administrative actions or actions under the Act that may impact employee(s).
  • Modifying an employee’s duties, including transferring or redeployment
  • Managing work-related interpersonal conflicts and differences of opinion under Grievance Resolution and other company policies
  • Informing a worker about unsatisfactory work performance or inappropriate work behaviour and providing fair and constructive feedback on a worker’s performance
  • Setting workplace standards and reasonable workplace goals and expecting employees to perform to these standards and achieve these goals
  • Investigations into bona fide complaints lodged by employees
  • Participation in dispute resolution processes

Actions that are not considered reasonable management

It is important to understand the difference between what is reasonable and what is not. Whilst managers are protected from claims made against them when they have displayed reasonable management action, anything that is not reasonable can lead to complaints and claims being against managers and the employer. Examples of these kinds of non-reasonable actions include:

  • Undue or extreme disciplinary procedures that are either too severe or targeted at certain individual employees and not others
  • Excessive supervision where a manager stands over an employee to monitor their work for unnecessarily long periods of time
  • Embarrassing, berating, threatening or belittling a worker for any reason
  • Publishing the poor performance and / or disciplinary action taken out against an employee to the rest of the workforce.

Understanding reasonable management action and ensuring your workforce is trained to understand it as well will ensure you have a happier, cohesive and more productive workforce where claims and workplace investigations are kept to a minimum.


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