Do Performance Improvement Plans constitute ‘Reasonable Management Action’?

Author: Ben Motro, Special Counsel

The recent decision of the Fair Work Commission in Blagojevic v AGL Macquarie Pty Ltd; Mitchell Seears [2018] FWC 2906 has shed further light on what constitutes “reasonable management action” in the context of performance management under section 789FD of the Fair Work Act 2009 (Cth).

Ben Motro, Special Counsel and Emily Setter, Law Clerk, discuss the Fair Work Commission's decision

The case involved an application by Mr Miroslav Blagojevic (“the Applicant”), an Asset Engineer, for an order to stop alleged bullying by his employer, AGL Macquarie Pty Ltd and Mr Seears, his supervisor. The Applicant contended that the actions of Mr Seears in placing him on a Performance Improvement Plan (PIP) in March 2017, and a revised PIP in June 2017, constituted bullying in accordance with section 789FD of the Fair Work Act.

Section 789FD provides that a worker is bullied at work if an individual or group of individuals repeatedly behaves unreasonably towards the worker and that behaviour creates a risk to health and safety. Importantly, the Fair Work Commission will not make an order under section 789FD, where such action is “reasonable management action carried out in a reasonable manner”.


The Applicant was placed on a Performance Improvement Plan which largely focussed on his alleged underperformance in addressing electrical and control issues in the plant which he was expected to manage. This included issues with meeting deadlines and revised deadlines, cost forecasting/budgeting inaccuracies and failure to exert pressure on workers within the plant so as to ensure deadlines were met.

The Applicant had demonstrated an outstanding work ethic and technical capabilities during his employment, and received “distinctly positive” performance reviews in the years before he was placed on the PIP.

The Applicant contended that, as a result of the alleged bullying by the Respondents in imposing the PIP and revised PIP, the risk to his health and safety materialised in the form of severe depression and anxiety. The Applicant had been absent from work since 30 October 2017 and had not returned to work at the time of the hearing before the Commission on 9 April 2018.

Read the entire article.