Placing employees on performance improvement plans: bullying in the workplace?

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Blagojevic v AGL Macquarie Pty Ltd; Mitchell Seears [2018] FWC 2906

Key Takeaways

In relation to performance of employees, employers should ensure:

  • that management actions are a genuine attempt to improve performance;
  • that expectations of employees are clearly communicated; and
  • that policies adequately set out an approach to be taken by supervisors in relation to underperforming staff, including by providing them with opportunities to improve prior to taking formal action.


This case involved an application for orders preventing workplace bullying by Mr Blagojevic, an experienced and long serving employee. For many years, the employee received high praise and consistently performed well in his annual reviews.  However, in 2017 his supervisor placed Mr Blagojevic on an initial and then a revised Performance Improvement Plan (PIP). This action had a devastating effect on Mr Blagojevic, who did not believe his behaviour to be deficient in a way that justified the decision to place him on a PIP. Moreover, he disputed the matters claimed to be within the scope of his duties, and contended that many of the work actions were impossible for a person in his role to execute. The continued imposition of the PIP on Mr Blagojevic also contributed to a decline in his mental health. For these reasons, Mr Blagojevic contended that the imposition of the initial and the revised PIP on him was not reasonable management action carried out in a reasonable manner, which constituted bullying at work under section 789FD of the Fair Work Act 2009 (Cth) (Act).


The Fair Work Commission (FWC) considered whether the decision to introduce the PIP or revise it lacked any evident and intelligible justification, and whether the introduction and implementation of the initial and revised PIP was carried out in a reasonable manner. Whilst the FWC noted the distressing effect of the PIP on Mr Blagojevic, they said that any unreasonableness in the management action carried out must arise from the actual management action in question, rather than from Mr Blagojevic's perception of it. 

The FWC determined there to be evident and intelligible justification of the decision to place Mr Blagojevic on a PIP. The FWC found it was reasonable for the employer to expect Mr Blagojevic to demonstrate leadership in his role by taking responsibility for the timely completion of work, including by influencing and placing pressure on others. Whilst his job description was couched in general terms, the FWC regarded the ability of an employer to direct where, when and how work is to be done as one of the indicia of employment. 

The FWC also noted that Mr Blagojevic's supervisor had complied with AGL policy by providing Mr Blagojevic informal coaching and an opportunity to improve prior to placing him on the PIP, and his action was consistent with an internal finding of AGL in relation to Mr Blagojevic's performance. Although the PIP had an adverse effect on Mr Blagojevic's mental health, his supervisor had offered his continued support to Mr Blagojevic after placing him on a PIP, and had showed genuine concern for his improved performance.  In these circumstances, the FWC was satisfied that placing Mr Blagojevic on a PIP was a genuine attempt to improve his performance and did not constitute bullying within the meaning of section 789FD of the Act.

It should be noted that an appeal of the decision by Mr Blagojevic was dismissed (see Blagojevic v AGL Macquarie Pty Ltd; Mitchell Seears [2018] FWCFB 4174). A Full Bench agreed with the approach taken by the Commission of first instance.  That is, it is not the role of the FWC to review an employee's performance and substitute its own assessment as to whether or not the performance is satisfactory in place of an employer's. Rather, the inquiry should be whether an employer's concerns are genuinely held and whether there is an evident and intelligible justification for any management actions.

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