Employers' performance management and disciplinary processes are being more heavily scrutinised, with a lawyer stressing HR has a crucial role in ensuring leaders follow established procedures.

A recent workers' compensation decision involving Westpac is a good example of this, Ashurst counsel Shannon Chapman told HR Daily ahead of her upcoming webinar on HR's role in preventing psych claims.

In that case, an employee sought compensation for a psychological injury she claimed resulted from being micromanaged and "picked on" by her superior in 2017.

Specifically, she referred to having her emails monitored and scrutinised, and to a meeting where one email in particular was projected onto a screen and she was questioned about its contents.

Westpac sought to rely on the 'reasonable management' exclusion in denying liability for the injury, saying it was acting on complaints that the employee's work performance had declined (she had previously been rated as "high achieving", but had moved in recent years to "needs development"). It claimed the meeting wasn't a formal performance-based meeting but rather a "performance appraisal".

NSW Workers Compensation Commission arbitrator John Isaksen relied on precedent in finding Westpac's meetings with the employee didn't amount to a performance appraisal but were a "vague, continuing, informal process".

Further, Westpac hadn't given the employee any guidelines as to what she could expect from the process, meaning the action wasn't "reasonable".

"[Westpac] is entitled to expect competent and efficient work from its staff," he said. "However, that must be weighed against the rights of the [employee], who should reasonably expect a proper process to be put in place if she were to be the subject of performance appraisal."

HR's crucial role

The takeaway from this case is that in current times, courts and commissions will more closely scrutinise performance management and disciplinary processes, Chapman says.

"Where an employer has an existing policy or procedure in place and [fails] to follow it, it can have a number of consequences across a number of different areas," she says, noting workers' compensation is just one of those.

If, for example, an employer has a formal performance management process that sets out steps managers need to follow, but these aren't adhered to, it can be difficult for that employer to argue their process is reasonable management action, she says.

This is because "you basically have to justify why... you've decided not to follow your own policies and procedures, which one would expect are there for those particular circumstances".

It's up to HR professionals to ensure leaders are aware of what processes exist, and to educate them about what those processes require. "It's one thing to know there's a process there or a procedure there, it's another thing to actually know how to follow it."

It's also important for HR to ensure policies and procedures are regularly reviewed so they accurately reflect the current state of applicable laws and new issues that have arisen in case law, she says.

Register for our upcoming webinar to hear Shannon discuss where HR has the greatest ability to prevent psych claims, referencing case law involving grievance management and workplace investigations, and more.

Dinning v Westpac Banking Corporation [2019] NSWWCC 49 (25 January 2019)