The ultimate cost of workplace bullying

The decision yesterday by the Victorian Magistrates' Court to issue a total of $355,000 in fines arising from workplace behaviour that resulted in a waitress committing suicide, highlights the significant risks associated with bullying and harassment in the workplace.

The owner of Café Vamp in Hawthorn was one of four workers to plead guilty to failing to take reasonable care for the health and safety of persons.

The owner and his one-man company also pleaded guilty to failing to provide and maintain a safe working environment. The company was fined $220,000 - although the Magistrate said he would have doubled the penalties had the defendants not pleaded guilty to what he described as "the most serious
case of bullying".

The decision demonstrates one of the many costs associated with failing to appropriately manage bullying and harassment in the workplace. According to a recent draft report released by the Productivity Commission, "psychosocial hazards" such as bullying and harassment in the workplace tend to be more costly on average than claims for less serious physical injuries, both in relation to direct costs and time taken off work. The report indicates that an estimated 2.5 million Australians experience some form of bullying over the course of their working lives.

It is reported that a high prevalence of stress (including by reason of bullying) in Australian workplaces translates into direct costs to employers in Australia of approximately $10.1bn per year, and costs to the economy of approximately $14.8bn per year.

Research reveals that these costs are due to increased absenteeism, and the loss of productivity that occurs when employees are present at work but not fully functioning. These figures do not include hidden costs associated with increased turnover of staff and the associated recruitment and retraining costs, the costs of management dealing with internal complaints, and intangible costs associated with decreased trust, loyalty and staff morale.

Workplace bullying and harassment is not given the same attention in Occupational Health & Safety (OH&S) legislation as managing other physical hazards, such as manual handling, working at heights and dangerous substances, and that this has led to additional uncertainty being placed on businesses about the extent of their duty of care and how to address such hazards.

Eliminating workplace bullying and harassment is an integral part of any employer's organisational OH&S commitments. The Café Vamp decision sends a clear message to employers, company directors and employees that allowing or participating in workplace bullying can lead to tragic results and criminal charges with significant penalties.

About the author
Penny Stevens is partner, occupational health and safety, at Hall & Wilcox Lawyers

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