As the number of strata-titled properties continue to grow across Australia, the risk of disputes arising within owners corporations such as between committee members and lot owners, along with disputes arising between owners corporations and external suppliers continue to increase.
Whilst there are differences across states, it is well known that strata managers and committee members generally have duties to act in an owners corporation’s best interest but the vague nature of these duties can often make them difficult to enforce except in the most egregious of cases.
There is, however, a trend towards bullying applications being made to the Fair Work Commission (Commission). Often, such disputes arise in the context of a dispute involving a caretaking service contractor (also referred to as building manager or facilities manager) and members of the committee of an owners corporation.
Many stakeholders in the strata industry were surprised when the Commission previously decided in the Application by Ms A [2018] FWC 4147 that a director of a caretaking company had standing to bring an application for stop bullying orders against an owners corporation due to the committee member sending emails too often and at unreasonable times; using derogatory language and making threats as to the caretaker’s remuneration without a legal basis.
Since this decision, there has been much posturing about the scope and extent of a caretaker’s ability to apply for these types of orders (or many other individuals) and how the anti-bullying legislation interacts with the proper performance of the committee member’s role in ensuring that the caretaker adheres to the terms of the caretaking agreement.
A recent decision has provided some clarity in relation to circumstances where a person will not have reasonable cause to bring such an application.
Chambers Russell Lawyers acted for the owners corporation in Liu v The Owners Corporation of SP75626 [2024] FWC 501 in defending an application brought by a director of the caretaking company. Smarter Communities has partnered with Chambers Russell Lawyers to discuss the implications of this case and the practices which can be put in place to prevent such applications being made.
The Fair Work Act 2009 (Cth) allows a worker who reasonably believes that he or she has been bullied at work to apply to the Commission for orders to stop bullying within a workplace. In order for the Commission to make such orders, the following needs to apply:
- The Applicant needs to be a worker. This is given a broad meaning (including a volunteer committee member).
- The Applicant needs to hold a reasonable belief that he or she has been bullied.
- The Applicant’s belief must be determined by:
- what the Applicant, in fact, genuinely held as a belief; and
- objectively speaking, whether that belief is reasonable in the circumstances.
- The bullying must be repeated behaviour towards the Applicant and must create a risk to health and safety of the Applicant.
In Liu, the Commission determined that the complaints made by Ms Liu did not articulate any allegation of conduct against her personally that could result in a risk to her own health and safety, and if anything, the application was merely an attempt to better the caretaker’s position in an ongoing contractual dispute. In arriving at this finding, the Commission seemed to have regard to the fact that genuine criticisms of services provided by the caretaker (and relayed constructively by members of the committee) would not be enough to amount to bullying.
Whilst Liu assists in narrowing the scope of potential liability, it is important that an owners corporation and its members conduct themselves appropriately, including by:
- Ensuring correspondence sent to any other person who is, or may be a worker, does not focus on personal slights but rather on the legal nature of the dispute.
- That emails generally be sent within working hours and that emails be used only as required.
- That any dispute resolution procedures either under the agreement or the by-laws / rules of the owners corporation be utilised as a first resort where possible.
- That correspondence being issued to another party be approved by the owners corporation or sent through the delegated authority of your strata manager to avoid individual members of the owners corporation becoming personally exposed.
In circumstances where an application has been made or defended without reasonable grounds, a party may be responsible to pay the other party’s costs. Accordingly, any person involved in the application needs to ensure they consider their position carefully or they may find themselves on the wrong end of a cost order.
Smarter Communities is your expert in dealing with relationships within strata and whilst the above focuses on discrete issues, such applications can nonetheless have significant consequences on the owners corporation including difficulties with obtaining insurance, disharmony within the owners corporation itself and personal exposure to members of the owners corporation.
Smarter Communities and Chambers Russell Lawyers are here to help owners corporations and their members through situations such as these. As can be seen from comparing the above cases, each matter will depend on its specific details and one size does not fit all.
Authors: James Nickless, Partner
Joel White, Senior Associate
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