When performance management is mistaken for bullying: A critical Fair Work Commission decision for employers

Martyn
Mar 31
3 min read

Updated: Apr 2

A recent decision of the Australian Fair Work Commission, in Heidel [2026] FWC 893, provides a timely and important clarification for organisations navigating the increasingly complex intersection of psychosocial safety, performance management, and workplace behaviour.

At its core, the case reinforces a fundamental principle: not all uncomfortable or challenging management action constitutes bullying.

The case in brief

A Program Manager at the University of Notre Dame Australia sought stop bullying orders against her acting line manager, citing;

Being questioned about incomplete tasks without defined deadlines
Alleged mischaracterisation of her conduct in emails
Escalating performance concerns, including potential placement on a Performance Improvement Plan (PIP)
A proposal to review her remote working arrangement.

Shortly after formal performance concerns were raised, the worker lodged a bullying application and later sought to avoid further one-on-one meetings due to “psychosocial risks.”

The Commission’s findings

Commissioner Stephen Crawford dismissed the application, concluding;

The Manager’s conduct was reasonable management action, carried out in a reasonable manner
Communications were professional, respectful, and appropriately framed
Raising concerns about performance, engagement, and accountability was entirely legitimate
Revisiting remote work arrangements in response to performance concerns was not unreasonable
The worker could not avoid scrutiny of performance by characterising it as bullying.

Importantly, the Commission acknowledged some process concerns, particularly;

The disclosure by HR of the workers complaint enquiry to the Manager, which could undermine trust in internal processes.
However, this did not amount to bullying.

Why this decision matters

This decision sits at the frontline of a growing workplace operational tension.

The expansion of psychosocial safety obligations versus the preservation of legitimate managerial authority.

For Boards, Executives, and all leaders, this is not only a legal technicality, but also a WHS governance and risk issue.

Key lessons for organisations

Reinforces the definition of Bullying v Management Action

Under Australian WHS and industrial frameworks;

Bullying = repeated, unreasonable behaviour creating a risk to health and safety
Not bullying = reasonable management action carried out reasonably.

This distinction must be clearly understood across the organisation, particularly by frontline leaders.

Performance management is a WHS control, not a risk (unless done badly!)

Avoiding performance conversations due to fear of complaints can;

Increase workload inequity
Drive psychosocial risk across teams
Undermine organisational justice.

Poor performance unmanaged is itself a psychosocial hazard.

Documentation and professional conduct are critical

The Manager’s success in this case rested heavily on;

Clear, evidence based communication
Professional tone
Opportunity for the worker to respond
Framing concerns in terms of support and improvement.

This is textbook defensibility.

Remote work is not an untouchable right

The Commission was explicit;

Employers are entitled to revisit flexible work arrangements where performance expectations are not being met.

This is particularly relevant as organisations recalibrate post-COVID operating models.

HR process integrity is a hidden risk

The only substantive concern identified was;

Breach of perceived confidentiality when HR disclosed the worker’s enquiry to their Manager.

This highlights a critical governance issue;

If workers lose trust in reporting pathways, risk escalates.

6. Psychosocial safety must be balanced, not weaponised

There is an emerging pattern in some workplaces;

Psychosocial risk frameworks being used defensively to resist accountability

This decision reinforces that;

Psychosocial safety obligations do not displace the right and obligation to manage performance.

Implications for Boards and Executives

From a due diligence perspective, this case signals the need to ensure;

Leaders are trained and confident in lawful performance management
they are trained and supported to have difficult conversations in a professional and respectful manner
Psychosocial risk frameworks are not interpreted in a way that suppresses accountability
HR processes are trusted, consistent, and procedurally fair
There is clear organisational guidance on the intersection of WHS and performance management.