23 October 2008

PAPER - "What about the worker?!"

What about the worker?!

The move toward establishing a system of rights for employees.

Joellen Riley

Professor, Law Faculty
University of New South Wales

JCA Colloquium 2008

Sunday 12 October 2008
Surfers Paradise, Queensland


This paper will consider whether a system based on private contracting by individuals has the capacity to develop a right to fair treatment at work; the extent to which common law principles are able to contribute to that development; some of the inadequacies of enforcement under the common law; and the need for additional support from other non-legal forms of ‘soft’ regulation. In particular, the paper will conclude with some observations on a current project of the Australian Institute of Employment Rights to develop a system of accreditation for employers who comply with a proposed Charter of Employment Rights. My subject is the establishment of a new system of rights for employees, or more accurately still, the establishment of a new approach to framing and recognising workers’ rights.

A new approach to workers’ rights

When I first accepted the invitation to address this Colloquium on the topic, ‘What about the worker? The move toward establishing a system of rights for employees’, I should probably have proposed a modification to my headline. After all, it would not be true to say that workers have enjoyed no rights in Australia to date. Many on the far right would probably complain that at times workers have enjoyed too many rights, to the detriment of Australia’s fulfilment of optimum economic advancement. My subject is the establishment of a new system of rights for employees, or more accurately still, the establishment of a new approach to framing and recognising workers’ rights.

Traditionally, the Australian industrial relations system has focussed on the establishment of workers’ rights through collective means – generally by tribunals making industry-wide awards to settle claims brought by trade unions. Today, however, union membership is in decline, and a new approach to industrial relations is in the ascendancy. In the universities, ‘industrial relations’ departments are being re-badged as ‘organisational management’ schools. The new social science of Human Resources Management (HRM) is displacing ‘IR’. HRM de-emphasises industrial relations as the terrain for the negotiation of the inherently conflicting interests of capital and labour, and asserts instead a ‘unitarist’ conception of the management of work relations as a cooperative endeavour.[1] And HRM’s preferred regulatory tool is private ordering, through contract.
This paper will consider whether a system based on private contracting by individuals has the capacity to develop a right to fair treatment at work; the extent to which common law principles are able to contribute to that development; some of the inadequacies of enforcement under the common law; and the need for additional support from other non-legal forms of ‘soft’ regulation. In particular, the paper will conclude with some observations on a current project of the Australian Institute of Employment Rights to develop a system of accreditation for employers who comply with a proposed Charter of Employment Rights.[2]

Political background

At around this time last year,[3] we were in the last weeks of a federal election campaign in which the Australian Council of Trade Unions (ACTU) ran series of media advertisements under the slogan, ‘Your Rights as Work’. The ACTU campaign attacked the Howard government’s WorkChoices laws,[4] and it certainly appears that attack was effective. According to Roy Morgan polls conducted ahead of the election, the WorkChoices laws were the most significant factor in voters’ support of a change of government.[5]

WorkChoices brought radical change to Australia’s industrial relations system in a number of respects, many of which are outside my particular brief here.[6] The aspect of interest to me is the ideological agenda clearly driving many of the WorkChoices reforms. WorkChoices demonstrated a commitment to an individualistic, contract-based model for establishing employees’ rights. In this respect, WorkChoices’ rhetoric adopted the ascendant HRM approach to workplace relations, and the legislation followed a globally-recognised trend, called (in many respects inappropriately[7]) ‘deregulation’.
Deregulation is the label given to the ‘widespread displacement of collectively-based regulatory strategies in favour of individual mechanisms of worker and employer redress’.[8] It is tempting to view this agenda cynically, as driven entirely by the power of ‘Global Capital’ seeking to improve the share of productivity gains going to profits at the expense of the share for Labour’s wages. And indeed, National Accounts data released on 3 September 2008, showed the ‘profits share’ of the Australian economy reached ‘a record high of 27.8 per cent in trend terms, the greatest share going to profits since the ABS began collecting the data in the September quarter of 1959’ while at the same time the wages share ‘fell to 52.7 per cent’, the lowest level since 1965.[9] Nevertheless, there is also a view that some of the pressure comes from an emergent individualism among the citizens of western democracies. Hepple and Morris have identified a rising ‘rights-based’ individualism as the cause of considerable pressure on western industrial relations systems, as workers demand enforcement of these rights.[10] So it is perhaps not surprising that the ‘Your Rights at Work’ campaign resonated with the electorate – even those who were not affiliated with trade unions.
A year on, those of us with a particular interest in industrial relations law and policy are eagerly awaiting the tabling of new laws which promise more changes to Australia’s industrial relations system.[11] Indications from the new government’s press statements suggest that the new laws will not simply reinstate the old industrial relations model. It is already clear that some of the new ‘Forward with Fairness’ measures will accommodate options for individual bargaining of working conditions, notwithstanding the abolition of Australian Workplace Agreements (AWAs) by the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 (Cth).[12] For example, the Award Modernisation Decision[13] sets out a ‘model award flexibility clause’ which contemplates individual agreements. An individual employee may agree with an employer to vary the application of an otherwise binding modern federal award, so long as certain protections of both a procedural and substantive nature are observed. Procedurally, the agreement must be in writing, and must be ‘genuinely made’, without coercion or duress. Substantively, the agreement may not ‘disadvantage the individual employee in relation to the individual employee’s term and conditions of employment’.[14]
There is also a suggestion in the Forward with Fairness Policy Implementation Plan[15] that the new rules will allow an exemption from award coverage for employees on incomes over $100,000, on the assumption that these ‘high income earners’ should be liberated to make their own deals about working hours and other employment conditions. Clearly, the proposed new laws anticipate a role for private contracting in the regulation of working conditions, and many applaud this approach, as a means of ensuring that individuals’ special needs can be met in their working arrangements.

Private ordering and public regulation

This brings us to an essential question: can a system of workplace regulation based on private contracting deliver effective recognition and enforcement of the kinds of rights that workers are now asserting? Labour law orthodoxy would probably answer a resounding ‘no’. Shae McCrystal has undertaken some informal surveying of young Australian law students about what rights they believe they enjoy under the common law (absent any special statutory rules) when they accept employment:
‘Students are generally surprised to find that none of the controls that they assumed they would find around hours, wage rates, location of work, workloads . . . exist at common law. Instead, the principle of managerial prerogative and the right to terminate upon giving notice accords to employers an extremely high degree of control over their employees, with few if any restrictions around how they exercise that control.’[16]

This is all entirely true. Minimum rates of pay, controls on working hours, protection of job security – all these and many more benefits[17] that employees customarily enjoy in Australia flow from their entitlement to the benefits of legislated standards and arbitrated industrial awards. There will always be a need for public regulation to maintain a safety net of basic working conditions, because there will always be a large class of workers who do not enjoy sufficient bargaining power to secure decent conditions for themselves in a completely unregulated labour market. [18]
Likewise, there is ample evidence that collective bargaining generally produces better outcomes for workers than individual bargaining.[19] So statutory support for the enforcement of trade union-negotiated collective bargains[20] has been, and will continue to be, vital to the protection of those workplace rights taken for granted by many in the community. Indeed, the rights to freedom of association and collective bargaining which are recognised under International Labour Organisation Conventions C87 Freedom of Association and Protection of the Right to Organise 1948 and C154 Collective Bargaining Convention 1981, are fundamentally important in the maintenance of labour standards. Any system of workplace rights must necessarily recognise those collective rights, if it is to claim that it produces just outcomes.[21]
This is all by way of an important disclaimer from the discussion that now follows about the potential for the development of principles that recognise rights at work under the common law. My work in Employee Protection at Common Law[22] has often been criticised for failing to make this disclaimer sufficiently robustly. So I repeat it again here: there will always be a need for statutory intervention in workplace regulation.[23] Nevertheless, it seems equally clear that statutory protections will be limited to a very basic safety net of wages and conditions. Any claim to benefits above that safety net must now generally be pursued by negotiation and enforcement of workplace bargains. Increasingly, those bargains are individual contracts.
If individual agreement-making is to be encouraged as a principal tool for establishing workplace rights, those individual agreements will sometimes require enforcement. We have generally looked to the principles of the common law of contract when it comes to upholding private bargains, although in some areas, those rules and principles have been modified or complemented by statute. To what extent does the common law presently recognise any ‘rights at work’? And, just as important, how effective is common law enforcement of any such rights?

‘Fair dealing’ and employment contracts

Some of the television advertisements in the ACTU’s pre-election campaign focused on WorkChoices’ withdrawal of statutory unfair dismissal protection for many workers.[24] These advertisements appealed to a community expectation that people should enjoy a right to a certain level of job security: people ought not be subjected to capricious and arbitrary treatment at work, and ought not to be sacked unceremoniously without a valid reason. This ‘right’ has certainly been claimed in a number of termination of employment cases brought under the common law in recent times. These cases allow us some insight into whether the common law is evolving principles which regard a right to fair dealing at work.

A claim to fair dealing is generally framed in terms of the employer’s obligation not to act in a way calculated to destroy the relationship of mutual trust and confidence between the employer and employee, although in the United Kingdom it has been expressed as a duty of ‘fair dealing’ for some time now.[25] In the United Kingdom, the ‘rapid evolution’ of this principle has been the subject of ‘very extensive and significant case law development’. [26] Even there, however, ‘[t]he nature, content and scope of this principle are not fully defined; indeed, in some respects they are keenly controversial.’[27]
This is a huge topic, and could well be the subject of a complete book. For the purposes of this paper, I would make just a few brief observations on Australian developments.

1. There is a duty of mutual trust and confidence, or good faith and fair dealing in employment relationships.

Firstly, notwithstanding frequent assertions that this duty is not established under Australian law and has yet to be affirmed by an appellate court,[28] it is clear that the courts in many jurisdictions are assuming the existence of duty. Most recently it has been applied in the Supreme Court of South Australia in McDonald v State of South Australia,[29] and by the Supreme Court of New South Wales in Downe v Sydney West Area Health Service (No 2).[30] The New South Wales Supreme Court was prepared to concede its existence in Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney.[31] The duty was clearly assumed by the High Court of Australia in Koehler v Cerebos (Australia) Ltd,[32] in the statement (at paragraph [24] of the judgment:

‘it is only when the contractual position between the parties (including the implied duty of trust and confidence between them) "is explored fully along with the relevant statutory framework" that it would be possible to give appropriate content to the duty of reasonable care . . .’ [my emphasis].

In my view, it is no longer useful to debate the existence of a duty not to destroy mutual trust and confidence. What requires attention now is its scope. What kind of conduct does observance of the duty require on the part of the employer? In what circumstances will the duty be breached? Case law is now beginning to develop particular examples and instances of the duty and its breach, however in Australia – as in the United Kingdom – this is still contested terrain.

2. This duty alone does not restrict the freedom of an employer to terminate the employment contract with proper notice.

The second observation flows from the question concerning the scope of the duty. Clearly, the duty of mutual trust and confidence or fair dealing does not require that an employer engage the worker perpetually. Under the common law, an employer is still entitled to terminate an employment contract by giving the required period of notice under the employment contract, and is not obliged to offer any particular kind of reason for the decision to terminate. Those cases which have found that the employer is only entitled to terminate the contract for cause are cases where the employment contract included an obligation not to dismiss without reasons. In Balsdon v Murray Irrigation Ltd,[33] for example, Ashford J in the District Court of New South Wales held that Mr Balsdon’s dismissal was in breach of the employer’s obligation not to dismiss on ‘harsh, unjust and unreasonable’ grounds. This obligation had been incorporated as a term of the employment contract from an enterprise bargain. This finding was confirmed on appeal by Bryson JA (with whom Handley and Ipp JA agreed).[34] Sometimes, an obligation not to dismiss without conducting a proper enquiry and establishing a good reason will be incorporated into the employment contract from a human resources policy.[35] It is still the case, however, that absent such a contractual term, employers enjoy a common law right to terminate employment contracts for any reason or no reason at all, so long as they observe the terms of those contracts.

3. The good faith obligation assists in the construction of the terms of an employment contract.

A third point flows from this, and that is that in many cases the most important questions to be resolved in a case relate to construction of the contract. If the employer is obliged to give proper notice in order to terminate, then a fundamental issue to be resolved will be the period of notice required. This, I believe, is where the mutual trust or fair dealing obligation is doing some important work, albeit invisibly.
The full federal court decision in Walker v Citigroup Global Markets Australia Pty Limited[36] is a good illustration of this point. In that case, the court was faced with some conflicting evidence as to the terms of the employment contract. On the one hand there was correspondence which indicated that the parties expected the engagement to last for at least a year: there was a guaranteed bonus for the first year, and a commitment to promote the employee, or at least confer a more illustrious title on him, after the end of the first year of engagement. On the other hand, there was a set of standard term ‘conditions of employment’ attached to his ultimate letter of offer which stipulated that the engagement could be terminated with one month’s notice.
At first instance, it was held that the standard term conditions prevailed. The other promises about longer term employment were held to be representations only. As misleading and deceptive representations, they were held to sound in a claim for compensation for breach of section 52 of the Trade Practices Act 1974 (Cth). On appeal, however, the full court held that the commitments evidenced in the correspondence between the parties during negotiations were contractual. The court was guided by the general principle of contract construction that ‘[w]here there are clauses in a contract specially framed with the individual circumstances in mind, together with standard form clauses, it will normally be appropriate to give greater weight to the specially negotiated clauses’.[37] The circumstances of the recruitment assisted the court to this conclusion. It was held that ‘the purpose and object of the transaction, namely the recruiting of a high level and high profile employee then in other employment’ made it a ‘practical absurdity’ that the parties would have agreed to a clause allowing termination on only one month’s notice, and a consequent avoidance of any obligation to pay the promised guaranteed bonus.[38]
In my humble view, this is evidence of an approach to contract construction that assumes good faith and fair dealing between the parties. The court looked to the ‘purpose and object’ of the contract, and the expectations of ‘business people active in the financial world’, and assumed that they were committed to cooperating in allowing the other the benefit of the deal they had made. They were not permitted to rely opportunistically on the written terms of a form attached to their contract.
Of course, the court did not expressly describe this as a ‘good faith’ obligation. In fact, Kenny J at first instance held that the court should not imply a duty of good faith in employment contracts, and the full bench said that it was not necessary to determine whether there was such an obligation to resolve the appeal. I would argue however, that the process of construing a contract on the basis that the parties must be assumed to be committed to performing the contract according to the reasonable expectations of prudent business people negotiating such transactions is to apply a good faith standard. This is all that good faith implies. Good faith does not oblige a contracting party to volunteer new benefits to a counterparty. It requires only faithful observance of the agreement made. It requires respect for the spirit of the agreement, and disallows opportunistic manipulation of some technical flaw in its form. [39]

  1. Damages are assessed according to the loss flowing from early termination of the contract.

The third point above shows that the good faith obligation is a principle of construction of employment contracts. The obligation not to destroy mutual trust and confidence is not a ‘stand alone’ term of the contract, so breach does not give rise to damages independent of any entitlement to be compensated for losses caused by early termination. Generally, breach of mutual trust and confidence by the employer allows the employee to treat him or herself as constructively dismissed, and then to claim expectation-based damages on the assumption that they would have remained employed until the employer could legitimately have terminated the employment. The quantum of damages will therefore be largely determined by what the employee would have earned during a reasonable period of notice. In some cases, employees may also be able to substantiate a claim for ‘loss of chance’ damages, based on the fact that premature dismissal has caused them to lose other opportunities, for example, promotion.[40]
There is one contested exception to the principle that damages are based only on what would have been earned during the proper period of notice, and that is the increasingly common claim for some kind of general damages based on mental suffering.
The treatment of claims for psychiatric harm tends to divide the English and the Australian decisions. English cases have been prepared to allow recovery of damages under contract for breach of the mutual trust and confidence obligation when the damage sounds in some kind of medically treated mental illness,[41] but only so long as the mental suffering was due to conduct occurring during employment, and did not arise only as a consequence of the fact of early termination.[42] Australian cases have tended to treat these kinds of claims as damages flowing not from a breach of mutual trust and confidence, but from breach of a duty to provide a safe workplace (a duty which arises concurrently in tort and contract).[43] However the duty is described, Australian cases have awarded damages to compensate for serious mental illness, so long as the employee has been able to establish that the harm was the foreseeable consequence of a breach of the employer’s duty of care.[44]

The problem of enforcement

The principles outlined above suggest that in recent times the common law of employment contracts has evolved to develop some principles of fair dealing. Australian development may not have kept pace with developments in the United Kingdom,[45] however there have been advances in recent years. Some badly treated employees have been able to secure substantial damages awards based on the courts’ willingness to find that the employer’s breach of a duty of mutual trust and confidence or a duty of care has caused a premature termination of the employment relationship, causing compensable harm. The damages awards in some of these cases have been considerably more generous than awards in statutory unfair dismissal cases, where there is a cap on compensation. And if anecdotal reports from law firms practising in this field are reliable, the litigated cases are the tip of an iceberg of cases being negotiated and settled in the shadow of these important court decisions. It is tempting to conclude, therefore, that a system of private contracting can support recognition of a worker’s right to fair dealing at work, at least in so far as that claim protects the worker from a capricious and arbitrary summary dismissal.
The problem, however, is that many aggrieved employees cannot afford even preliminary legal advice about their claims, let alone legal representation in court.[46]
Court processes are notoriously expensive, time-consuming, and one wonders if the court process itself is not a significant contributor to the mental distress suffered by employees who find themselves in the odious position of having to litigate to vindicate their claims to recognition of their rights.
In other fields we have established specialist tribunals to deal quickly, inexpensively and informally with disputes involving small claims brought by certain classes of vulnerable persons, for example, the Residential Tenancies Tribunals in each State. For some reason, the former government in its Work Choices laws chose to limit the jurisdiction of State and federal industrial relations tribunals to deal with individual grievances according to their customarily more informal processes. Instead, employees claiming recognition of a workplace right under the Workplace Relations Act are presently faced with a choice: litigate before the Federal Magistrates Court, or opt to follow the model dispute resolution procedure set out in the Workplace Relations Act Part 13. This model procedure leads the complainant to an ‘alternative dispute resolution’ (ADR) process.
The first step in the Model procedure set out in the Workplace Relations Act is that the parties must attempt to resolve the matter at the workplace level.[47] If that proves futile the parties can refer the matter to a private ADR provider, or may resort to private ADR services provided by the Australian Industrial Relations Commission (AIRC), however the AIRC will not have the power to compel any person to do anything, and will only have the power to arbitrate the dispute if the parties agree to arbitration.[48] Essentially, this leaves the resolution of the dispute in the hands of the parties themselves.
Here we see the HRM agenda at work: the model dispute resolution process assumes that the parties themselves, as robust individuals capable of negotiating their own mutually satisfactory terms, should be free to determine their own rights. This assumption ignores the conventional complaint about the inherent inequality of bargaining power between the individual worker and the employer.[49]
The model process applies even in a dispute over the application of a legislated minimum working condition in the Australian Fair Pay and Conditions Standard.[50] The model process tolerates the idea that even those standards fixed by apparently mandatory public regulation should be able to be negotiated away by private contract at the point of resolution of a dispute. Certainly, parties maintain their right to litigate, but for many impecunious workers without recourse to legal assistance, this is an illusory benefit.

An alternative, non-legal model?

The picture painted above is the usual bleak picture of inadequate access to justice for the weaker members of our community. We could seek to improve access to informal tribunals for the vindication of workplace rights (and it remains to be seen whether the new ALP government chooses to confer such a jurisdiction on a new judicial arm of the promised Fair Work Australia body). Or we could try an entirely different approach. The Australian Institute of Employment Rights (AIER) is presently working on a project which seeks to do just that.
The AIER is an independent body funded and governed entirely under the terms set out in its rules of association. Its current patron is former Australian Prime Minister, the Hon Robert J L Hawke, and it is inspired by the same tripartite philosophy that underpinned the Accord promoted by his government in its day.[51] One of the AIER’s major projects has been the formulation and dissemination of a proposed Charter of Employment Rights.[52] This Charter identified ten workplace rights, many of which are expressed as reciprocal rights (i.e. rights to be enjoyed by both workers and employers). The ten rights or principles are:

  • Good faith performance of work contracts
  • Work with dignity
  • Freedom from discrimination and harassment
  • A safe and healthy workplace
  • Workplace democracy
  • Union membership and representation
  • Protection from unfair dismissal
  • Fair minimum standards
  • Fairness and balance in industrial bargaining
  • Effective dispute resolution.

A second phase in the AIER’s mission is to promote voluntary adoption of these principles in Australian workplaces. It is presently working on an accreditation scheme, whereby employers would apply for accreditation as a Charter-compliant employer. The benefit to the employer would be an ability to claim itself a ‘best practice’ ‘employer of choice’, and so compete favourably in the market for skills and talent. The process of accreditation would involve an assessment of the employer’s practices, through means including surveys of staff. The process of conducting the surveys would itself be a means of disseminating the aspirations of the Charter throughout workplaces.
The AIER’s Charter of Employment Rights and proposed accreditation scheme appeals to the ‘rights-discourse’ of our present times, and also to the noblest versions of the HRM literature, which argue that there is a business case for respecting workers’ rights and thereby earning their cooperation and support for business goals. As a form of regulation (in the broadest sense of the word) this is ‘soft law’. Parties are persuaded to sign up to voluntary codes of conduct, and to commit to compliance. Sanctions are persuasive rather than coercive: the shame of withdrawal of accredited status is likely to be the most serious ‘penalty’ the AIER would be able to impose. Nevertheless, good publicity is generally seen as a great benefit in fostering business success. Consumers of a firm’s goods and services are also audiences to news of a firm’s conduct in respect of its staff.
Perhaps if this accreditation scheme were to be widely adopted we might one day see arguments in court cases that the Charter has been incorporated by reference or implied by custom and practice or a course of dealing into an employment contract. That, however, is not the goal of the project. If successful, the great value of this kind of scheme is that it intends to be preventative. Reading the facts of cases such as Naidu,[53] Nikolich[54] and McDonald,[55] is deeply frustrating. Great harm can follow from capricious disregard and abusive treatment of workers. It is not only their working lives that suffer. These workers also suffered serious dislocation to their family lives and their personal health. No amount of monetary compensation mends that harm. Prevention of this kind of harm, through the education of employers and their managerial and supervisory staff is certainly a worthy goal of workplace regulation. If that can be achieved by voluntary ‘soft’ forms of regulation, all to the better.
If the accreditation scheme is successful in persuading firms to observe the kinds of principles set out in the Charter of Employment Rights, the kind of employer conduct causing the grievances in the ‘mutual trust and confidence’ case law may be prevented. Charter compliant employers would, for instance, ensure that supervisors did not abuse their staff (Naidu). They would institute fair and reasonable performance review systems (McDonald); they would prudently investigate any allegations of impropriety against employees before acting precipitately (Gogay, Russell), and they would respectfully follow up repeated complaints from employees (Nikolich, McDonald). They would certainly not trump up malicious complaints against their staff (Eastwood v Magnox). And so a great deal of personal grief, and an enormous amount of business time, finances and resources, would be saved.


In remaking Australian workplace relations laws to regulate for ‘fair work’, the new the federal government faces particular challenges. Allowing individual arrangements for the kinds of flexibility claimed by employers and many employees is likely to require some kind of individual contracting over working conditions. How much supervision of private bargaining is to be provided, and whether new avenues for recognition and enforcement of rights are to be created, remain to be seen.
Although the common law in Australia has begun to recognise rights to fair dealing at work through the gradual evolution of a reciprocal duty of mutual trust and confidence in employment relationships, reliance on the common law as the sole means for enforcement of workers’ rights is unsatisfactory. The very fact that an employer’s counsel can sometimes vigorously argue the absence of any duty to an employee, even in the face of the most compelling evidence of appalling behaviour and serious harm, is testimony itself to the unsatisfactory service provided by the common law in this field.
Perhaps we should now be grasping the present opportunity to re-regulate Australian workplace relations, to engage in some serious rethinking about how workplace rights should be developed and recognised. I for one will be watching the development of the AIER Charter of Employment Rights and accompanying accreditation project with great interest. It may provide the opportunity for some close study of whether the HRM theories of organisational behaviour upon which much of the recent rhetoric about workplace law reform has been built can indeed be harnessed to develop fairer and safer working environments, and to establish clearly articulated and reliably recognised rights for Australian workers.

[1] S Deery et al Industrial Relations: A Contemporary Analysis, 2nd ed, 2001, Irwin/McGrawHill, Sydney, at p 37. HRM comes in ‘soft’ but also ‘hard’ versions. The more benign ‘soft’ version was not adopted in any of the Howard Government’s industrial relations reforms, according to S Deery and J Walsh ‘The character of Individualised Employment Arrangements in Australia: A model of “Hard” HRM’ in S Deery and R Mitchell (eds) Employment Relations: Individualisation and Union Exclusion, An International Study, 1999, Federation Press, Sydney.
[2] See M Bromberg and M Irving (eds) Australian Charter of Employment Rights (2007) Australian Institute of Employment Rights, Hardie Grant Books, Melbourne.
[3] Australians voted in a new ALP Federal Government on 24 November 2008.
[4] Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (WorkChoices)
[5] See ‘IR Reforms Still Driving Labour Support: Liberal Voters Afraid of Union Dominance’, June 18, 2007, at http://www.roymorgan.com/news/polls/2007/4179 last checked 14 May 2008.
[6] See for example the challenge to federalism raised by the use of the corporations power in the Constitution s 51(xx) to override State industrial regulation: G Craven, ‘Industrial Relations, the Constitution and Federalism: Facing the Avalanche’ (2006) 29(1) UNSW Law Journal 203.
[7] See H Collins ‘Regulating the Employment Relation for Competitiveness’ (2001) 30 Industrial Law Journal 17 for the view that resort to contract is a different form of regulation, not an absence of regulation. See too A Stewart ‘Procedural Flexibility, Enterprise Bargaining and the Future of Arbitral Regulation’ (1992) 5 Australian Journal of Labour Law 101 at 101.
[8] J Conaghan, ‘Labour Law and “New Economy” Discourse’ (2003) 16 Australian Journal of Labour Law 9 at 19.
[9] ‘Profit share of economy hits 50 year high’, Workplace Express, 3 September 2008, http://www.workplaceexpress.com.su/nav?id=37569&no=703592232, last checked 5 September 2008.
[10] B Hepple and G Morris (2002) ‘The Employment Act 2002 and the Crisis of Individual Employment Rights’ (2002) 31 Industrial Law Journal 245 at 247.
[11] No Bill was available at the time of writing (10 September 2008).
[12] This legislation took effect from 28 March 2008.
[13] AIRC, PR062008, 20 June 2008; [2008] AIRCFB 550, at par [187].
[14] Ibid.
[15] K Rudd and J Gillard, Forward with Fairness: Policy Implementation Plan, Australian Labor Party, Canberra, August 2007
[16] S McCrystal ‘Re-imagining the Role of Trade Unions After WorkChoices’ (2008) 18(2) Economic and Labour Relations Review 63 at 64.
[17] For example, freedom from discrimination on the grounds of sex, race, disability, etc.
[18] See K W Wedderburn The Worker and the Law (1986) Penguin, England, at p.5: ‘. . . the individual worker brings no equality of bargaining power to the labour market and to this transaction central to his life whereby the employer buys his labour power’. See also R Johnstone and R Mitchell, ‘Regulating Work’ in C Parker et al Regulating Law, (2004) OUP, Oxford, at p 119.
[19] For example, figures released by the Office of the Employment Advocate (OEA)(which is now renamed the Workplace Authority) in May 2006 showed that from a sample of 250 AWAs, every one removed at least one ‘protected award condition’ and 16 per cent removed all such conditions: P McIlwain Evidence to Estimates Hearing, Senate Committee on Employment, Workplace Relations and Education, Parliament of Australia, Canberra, 29 May 2006. Data allegedly leaked from the OEA also revealed that 44 per cent of a sample of 998 AWAs removed all protected award conditions; 76 per cent removed shift loadings, 70 per cent removed incentive payments and bonuses and 59 per cent removed annual leave loading: see M Davis ‘Revealed: How AWAs Strip Work Rights’, Sydney Morning Herald, 17 April 2007; M Davis, and M Schubert, ‘Workers’ Rights Lost with AWAs’, The Age, 17 April 2007, noted in C Sutherland and J Riley ‘Industrial Legislation in 2007’ (2008) 50(3) Journal of Industrial Relations 417 at 419.
[20] For an analysis of the weaknesses of the common law in enabling collective bargaining see A Stewart and J Riley ‘Working Around Work Choices: Collective Bargaining and the Common Law’ (2007) 31(3) Melbourne University Law Review 903 at 920-927.
[21] See M Irving ‘Union Membership and Representation’ in M Bromberg and M Irving (eds) Australian Charter of Employment Rights (2007) Australian Institute of Employment Rights, Hardie Grant Books, Melbourne.
[22] J Riley Employee Protection at Common Law (2005) Federation Press, Sydney.
[23] Ibid at p.2. See particularly fn 1 which reads: ‘This work is by no means a manifesto supporting the destruction of all forms of collective regulation. This work should never be cited as an apology for the neo-liberal agenda.’
[24] In particular, the so-called ‘small business’ exemption for employers with fewer than 101 employees by s 643(10) removed protection for many workers. According the AIRC’s Annual Report for the Year ended 30 June 2007, unfair dismissal hearings fell from 6707 in the year ended June 2005 (the last full year before the introduction of WorkChoices on 27 March 2006) to 5758 in the year ended June 2007. Given that WorkChoices also abolished access to State unfair dismissal schemes for employees of private sector employees, it is surprising that the numbers of cases before the AIRC did not rise over this period.
[25] See D Brodie ‘A Fair Deal At Work’ (1999) 19 Oxford Journal of Legal Studies 83.
[26] M Freedland The Personal Employment Contract (2003) Oxford University Press, Oxford, at p.154.
[27] Ibid.
[28] See for example Heptonstall v Gaskin (No 2) [2005] NSWSC 30 per Hoeben J at [23].
[29] [2008] SASC 134.
[30] [2008] NSW 159.
[31] [2008] NSWCA 217 per Basten JA at [33] and Campbell JA at [73].
[32] [2005] HCA 15; (2005) 222 CLR 44.
[33] Unreported, DC159/2004, 19 September 2005.
[34] Murray Irrigation Ltd v Balsdon [2006] NSWCA 253 at [25].
[35] See for example Rispoli v Merke Sharpe & Dohme (Australia) Pty Ltd [2003] FMCA 160.
[36] [2006] FCAFC 101 (23 june 2006).
[37] At [77].
[38] At [76].
[39] See J W Carter, E Peden and G J Tolhurst Contract Law in Australia, 5th ed, (2007) Lexis Nexis Butterworths, Sydney at pp 26-27 for an authoritative view that good faith means ‘not acting arbitrarily or capriciously; not acting with an intention to cause harm; and acting with due respect for the intent of the bargain as a matter of substance, not form’.
[40] See Walker v Citigroup, above n.36 and McDonald v South Australia, above n.29.
[41] See Gogay v Hertfordshire County Council [2000] IRLR 703.
[42] This awkward distinction was confirmed by the House of Lords in Eastwood v Magnox Electrix plc [2004] UKHL 35; [2004] 3 WLR 322.
[43] See for example Naidu v Group 4 Securitas Pty Ltd [2006] NSWSC 144, and Goldman Sachs J B Were Services Pty Ltd v Nikolich [2007] FCAFC 120.
[44] See for example Patrick Stevedores (No 1) Pty Ltd v Vaughan [2002] NSWCA 422, and State of NSW v Seedsman (2000) 217 ALR 583.
[45] See for example BG plc v O’Brien [2001] IRLR 496, where it was held that the duty obliged the employer to be even-handed between employees in conferring redundancy entitlements.
[46] Mr McDonald was ultimately self-represented in his action before the Supreme Court of South Australia.
[47] See Workplace Relations Act 1996 (Cth) s 695.
[48] Ibid, s 701.
[49] See Wedderburn, above n.18.
[50] Ibid, ss 699(1)(a); 694(2) note (a) and 175.
[51] See R J L Hawke’s Foreword in Bromberg and Irving, above n.2, at xi.
[52] See Bromberg and Irving above n.2.
[53] Naidu v Group 4 Securitas Pty Ltd [2006] NSWSC 144.
[54] Goldman Sachs J B Were Services Pty Ltd v Nikolich [2007] FCAFC 120.
[55] [2008] SASC 134.

20 October 2008

LEGAL - Bullying and harassment at work - UK

The legal perspective - UK

Ruth Pott discusses harassment and bullying in the workplace.

In 2006, the Department of Trade and Industry (now the Department for Business, Enterprise and Regulatory Reform) published the Fair Treatment at Work Survey following a survey of 4000 employees. The survey found that 3.8% of employees had experienced bullying or harassment at work in the previous 2 years, with women being nearly twice as likely to be bullied as men. Foreign workers and disabled workers fared worst of all with bullying rates of 5% and 10.6% respectively.

Harassment, in relation to employment law, has a legal definition, but bullying does not. Bullying is defined by ACAS as behaviour that is offensive, intimidating, malicious or insulting, or an abuse or misuse of power through means intended to undermine, humiliate, denigrate or injure the individual. Harassment can include unwanted conduct affecting the dignity in the workplace. It may be related to age, sex, sexual orientation, race, disability, religion, nationality or any personal characteristic of the individual. The important issue is that the actions or comments are considered demeaning and unacceptable to the individual. However, behaviour that is considered bullying by one person may be considered firm management by another, or accepted as the “norm” or part of the workplace culture. Bullying and harassment can range from ignoring and excluding someone to extreme physical violence. It can be persistent behaviour over a period of time or a one-off incident. Such behaviour can include: spreading malicious rumours; insulting, ridiculing or demeaning someone; exclusion or victimisation; unfair treatment; overbearing supervision or other misuse of power or position; unwelcome sexual advances, such as touching, standing too close or displaying offensive materials; making threats or comments about job security without foundation; deliberately undermining a competent worker by overloading and persistent criticism; preventing individuals progressing by intentionally blocking promotion or training opportunities; or shouting at staff. Employers are responsible for taking reasonable steps to prevent such behaviour.

The implications

Bullying and harassment are unacceptable on moral grounds and may, if ignored or handled incorrectly, create serious problems for a business, as well as lead to employment tribunal or other civil claims and large awards in compensation. Bullying and harassment can also result in poor performance, low staff morale, poor employee relations, loss of respect for management, an increase in absence, higher staff turnover and damage to business reputation.

The potential legal implications of harassment in the workplace can be: unlawful discrimination on the grounds of race, sex, marital status, gender reassignment, disability, religion/belief, sexual orientation or age; or a breach of contract, ie a breach of one of the implied terms of any employment contract, such as the duty to provide a safe working environment or to maintain trust and confidence in the employer. An employer is liable for the actions of its employees unless reasonable steps have been taken to prevent bullying or harassment. Employers could also be held liable for harassment if they fail to prevent a third party, eg a customer, repeatedly harassing an employee. Action can potentially be taken against an employer after the employee has left.

Making a complaint

People being bullied or harassed often appear to overreact to something that seems relatively trivial, but this may be the “last straw” following a series of incidents. There is often fear of retribution if a complaint is made, or a belief that such behaviour is being condoned by the employer and is an acceptable part of the workplace culture. Colleagues may be reluctant to come forward as witnesses, as they too may fear the consequences and that they may be subject to bullying themselves. If a line manager is involved in bullying, it can take a lot of courage for someone to make a complaint.

It is not possible to make a direct complaint to an employment tribunal about bullying. However, victims have a much wider range of remedies available to them than ever before as much discrimination legislation now includes protection from harassment. Legislation includes the Protection from Harassment Act 1997, which includes civil and criminal harassment, and the Health and Safety at Work, etc Act 1974, which provides psychological protection as well as health and safety protection. The Management of Health and Safety at Work Regulations 1992 offer protection and redress from bullying. Employers have a “duty of care” to all their employees and it is possible for constructive dismissal claims to be made if the mutual trust and confidence between employer and employee has broken down due to bullying and harassment. Employees may be able to bring complaints under laws covering discrimination. Additionally, failure to deal with such complaints properly could lead to stress at work, which could be a health and safety issue as well as grounds for constructive dismissal.

Employer’s bullying policy

Employers should have a policy on bullying and harassment so that employees know how they can deal with a problem or complaint. A policy should include: examples of unacceptable behaviour; what the employer will do to prevent such behaviour; how an individual can raise such an issue; and what the employer will do if there are complaints of such behaviour. The employer should state that it will undertake to keep matters confidential and have a grievance procedure for complaints and a disciplinary procedure for those found to have been behaving inappropriately.

If a complaint is received, it must be dealt with promptly, confidentially and thoroughly. The grievance procedure will normally be used, so the individual concerned will have the right to be accompanied when discussing the situation. Employees need to be confident their complaint will be taken seriously. If it is not necessary to use a grievance procedure, the situation may be dealt with informally. A quiet word advising someone that their behaviour is causing offence or is unwelcome may be all that is required. Where an informal resolution is not possible, the employer may decide that the matter is a disciplinary issue that needs to be dealt with formally at the appropriate level. As with any disciplinary problem it is important to follow a fair procedure. In the case of a complaint of bullying or harassment there must be fairness to both the complainant and the person accused. Depending upon the circumstances it may be appropriate to consider training, counselling or mediation with an independent third party for the individual whose behaviour has been found to be unacceptable.

If the complaint involves serious misconduct it may be appropriate to consider suspending the alleged perpetrator. Written warnings or dismissal may be appropriate if serious harassment or bullying is proven. Employers need to be aware that unfounded allegations can be made for malicious reasons, which in turn can develop into “witch hunts”. These need full and thorough investigation too, and should be dealt with under the disciplinary procedure. If the subject of the complaint is the individual’s line manager, the employer should get another or more senior manager or director to investigate. Where claims of bullying and harassment have been made and investigated, and action(s) taken where appropriate, it can be difficult to rebuild working relationships and move forward. Consideration may need to be given to using external parties to mediate.


11 October 2008

LEGAL - Sexual harassment preventative strategies: Compliance obligations do not end on induction

Key Points:
To a large extent, a compliance program's robustness depends on the quality of content and delivery of relevant policies and procedures, staff training and follow up on compliance behaviour and benchmarking.

What are "reasonable steps"?

In the Australian environment there is no prescriptive formula or prescribed steps which an employer must take to discharge its obligations to prevent sexual harassment in the workplace. Anti-discrimination laws simply provide that for an employer to escape vicarious liability for sexual harassment, an employer must have taken all reasonable steps or precautions to have prevented the harassment from occurring.

Various case authorities have however examined what is required to discharge the onus to take all reasonable steps or precautions. In this regard, courts have examined what are reasonable steps or precautions on a case by case basis. From this, some common themes have emerged:

  • Employers should have a clearly articulated policy on sexual harassment which identifies what is appropriate and what is not appropriate conduct.
  • Importantly, the policy must be actively enforced rather than being a mere "paper policy". Accordingly, there should be a grievance procedure by which staff with concerns can raise issues and when raised these should be addressed appropriately.
  • In addition to any policies and procedures, employers should provide appropriate training to its staff to make clear the expectations and consequence of any failure to comply with those expectations.

The case authorities also suggest that what lengths a larger employer might have to go to, to satisfy having taken ‘reasonable steps’ is not the same as that for a smaller employer.

For example, in a decision of Federal Magistrate Driver of the Federal Magistrates Court in Johanson v Blackledge [2001] FMCA 6 it was held that the size of the employer is relevant to determining whether the particular steps taken by an employer are reasonable in the circumstances. In this respect Driver FM stated:

"(I)t would be unrealistic to expect all employers, regardless of size, to adhere to a common standard of preventative measures. This defence has been interpreted in Australia as requiring the employer or principal to take some steps, the precise nature of which will be different according to the circumstances of the employer".

In another decision of the Federal Court, Justice Wilcox, in Gilroy v Angelov [2000] FCA 1775 stated that while the law does not distinguish between small and large employers, small employers should at least adopt a process of preparing a "brief document pointing out the nature of sexual harassment, the sanctions that attach to it and the course that ought to be followed by any employee who feels sexually harassed" and that it be provided to staff on commencement of employment and routinely.

Justice Wilcox also suggested that larger employers have a higher onus to discharge observing that they have the benefit of "skilled human resources personnel and formal training procedures".

Is greater precision needed?

In light of the case authorities, when can an employer be comfortably satisfied that it has met its obligations to prevent sexual harassment and, therefore, discharged the onus to take "reasonable steps". Certainly, just having a policy will not be enough – especially if the content of the policy is deficient. Neither will once-off training which takes place at induction but is never delivered again. Ultimately, the test in all practical terms is to what extent an employer’s program delivers on compliance behaviour. This comes down to getting the content right, ensuring that the delivery of the message is provided with requisite seriousness, monitoring ongoing compliance and reinforcing expectations routinely.

Interestingly, in the United States, and in particular, in the state of California, there has been sufficient interest to regulate how compliance training is in fact developed, delivered and benchmarked. In an unusual development, expected new regulations will set out strict requirements regarding the nature and content of such training.

California's expected regulations will apply to businesses with 50 or more employees which carry on business in California. These businesses will be required to train all supervisors who are resident in California in accordance with the following guidelines:

  • Training must be interactive - employees must be asked questions to assess their understanding of content learned, and they must be able to ask questions and receive replies within 48 hours. This training can be internet or computer based.
  • Trainers must be experienced lawyers, HR professionals or university instructors. In the case of internet training, trainers must both develop the content of the training program, and promptly respond to any questions from employees.
  • Training must take at least two hours to complete.
  • Training compliance records must be retained for at least two years
  • Each supervisor must receive training every two years, and new supervisors must be trained within six months of becoming a supervisor.

Training must also examine the following content:

  • defining sexual harassment and other types of harassment
  • assessing the effect of harassment on victims
  • analysing sexual harassment prevention strategies, avenues for investigating complaints and remedies, using practical examples.

The future?

While Australia is still some way off the Californian model, the developments in the United States does pose some interesting questions for the Australian legal framework and how compliance training is approached here at home.

Nowadays, most large employers at least have a policy dealing with sexual harassment (if not anti-discrimination and appropriate workplace conduct). Most large employers also provide for staff training on such policies.

In the absence of a prescribed "suite" of steps which an employer must take to satisfy that it has taken "reasonable steps or precautions", however, employers should audit their diversity compliance programs to ensure that they provide the best make-up to prevent and resist vicarious liability for legal claims. To a large extent, whether a compliance program is adequately robust will depend on the quality of content and delivery of relevant policies and procedures, staff training (to general staff, managers and senior management) and follow up on compliance behaviour and benchmarking.


10 October 2008

OPINION - Tackling a bullying complaint requires consistency: Harmers

It is best to treat bullying as part of a wider concern about inappropriate workplace behaviour by including it in a code of conduct or as part of an OHS policy, says Harmers managing partner Joydeep Hor.

"My message is be consistent," Hor told a told a Syd employment seminar on Aug 5. "A defence for employers under civil law is they took all reasonable steps to deal with the behaviour." Managing a bullying complaint needed to be "clinical, focused and at arm's length", he said.

Harmers senior assoc Bronwyn Maynard gave the example of a company that employed an HR consultant to investigate a sexual harassment complaint. The consultant, who was a friend of the MD, told the complainant she was "very attractive" and "we give the wrong impression with messages we send". A court found the company acted inappropriately in appointing an inexperienced person to investigate the complaint.

Maynard said companies needed to act promptly when faced with a bullying complaint. They should ascertain early in the piece whether the alleged perpetrator should be suspended during an investigation, or whether interim changes to the work environment were needed to separate the parties. She cited the case of Velagapudi v Symbion Pharmacy Services (formerly Faulding HealthCare), which was heard in the NSW Administrative Decisions Tribunal. The company was ordered to pay $10,000 for "inappropriate and unreasonable handling" of a complaint. The tribunal found the company "prolonged the worker's distress, humiliation and its adverse impact on her enjoyment of life and work".

Maynard said employers must inform a worker accused of bullying about the allegation, preferably in writing. "Particulars" of complaints should be provided and the accused workers were entitled to support people. They "must have a reasonable opportunity to respond to the outcome of the investigation before a final decision is made"," Maynard said.

Hor said a NSW Supreme Court decision that awarded a security guard $2m for a psychological condition brought on by repeated workplace bullying set a new benchmark (HRR#409). Hor said companies should do a "culture audit" to ascertain whether bullying standards were applied from the top down, or whether standards differed between managers and non-managers. If policies weren't inclusive, companies could be accused of paying lip-service to their bullying policy, he said. Attitudes to alcohol, banter, language and humour in the workplace needed to be covered, as well as what was acceptable in workplace email and internet forums, such as Facebook and MySpace. Employers should adopt an "eternal vigilance" approach as opposed to simply "ticking off the boxes", Hor said.

Other discussion points


Employers face positive EEO duty
Employers are likely to face new duties in EEO/discrimination jurisdictions, with action happening on at least four fronts and Vic facing the most change.

First, last week's Standing Cttee of Attorneys General (SCAG) told the Anti-Discrimination Law Harmonisation Working Group to identify "short, medium and longer term" harmonisation options. Non-legislative complaints procedural matters were to be top of list.

Second, Sex Discrimination Cmr Elizabeth Broderick has commissioned a national survey to track the extent of sexual harassment in Aust's workplaces.

It will form the basis of an educational strategy to attack work-based harassment and is one of the first steps on her "roadmap towards gender equality". Broderick recently declared "progress towards gender equality has stalled".

The Gender equality: what matters to Australian women and men, The Listening Tour Community Report details five key areas that need attention.

They include increasing the number of women in leadership roles; balancing paid work and family; driving down sexual harassment; reducing the gender gap in retirement savings; and strengthening the laws to tackle sex bias and promote gender equality.

Major changes to Vic EO laws
Third, the Vic Govt has foreshadowed major changes to the state Equal Opportunity Act, after a review found a list of "key failings".

Deputy Premier and Attorney-Gen Rob Hulls said the review, by ex-Public Advocate Julian Gardner, recommended creating a duty not to discriminate, even in the absence of a complaint, and to specifically require people to make reasonable adjustments for those with disabilities.

Hulls said other changes were needed to tackle systemic bias. He highlighted failings, such as the jurisdiction's reliance on individual complaints, the "limited powers" of the Vic Equal Opportunity and Human Rights Cmn (VEOHRC), and the legislation's "complex complaint-based processes".

Positive for 'all' organisations

At the same time, the Harnessing Diversityreport by the VEOHRC and the Vic Multicultural Cmn recommends creating a positive duty on all organisations. It recommends giving more powers to the VEOHRC to overcome continuing race bias.

VEOHRC CEO Helen Szoke said racial discrimination "is so systemic and entrenched that it can be difficult to identify and address".

The report recommended a raft of reforms, including enabling the cmn to run inquiries under its own motion, issue compliance notices, require action plans and seek orders through Vic Compensation and Administrative Tribunal.

TAUNTS - ‘Wog‘ taunts are bullying: AIRC
In a case that examines the difference between bullying and friendly banter, remarks such as "you Muslims are bomb-makers and trouble-makers", "camel fxxxer" and "wog" have been held to fall into the former category. The taunts breached Coles Group Supply Chain Pty Ltd's equal opportunity policy and code of conduct and could not be excused on the basis they were part of a culture of friendly banter, AIRC Cmr Helen Cargill said. "Regardless of these policies, the comments are not appropriate in any workplace culture," she said. "The remarks were insulting and disparaging on the grounds of race and religion."

Cmr Cargill upheld the sacking of storeman Poasa Fatialofa, who made the remarks. But she spared storeman Brian Brown, who allegedly once walked like a monkey and often laughed while derogatory remarks were being made. The laughing condoned the behaviour and "was in itself harassment", Cmr Cargill said. But the termination was harsh because it was disproportionate to the gravity of Brown's misconduct, she said.

Coles Group Supply Chain sacked the two storemen at its Eastern Creek Distribution Centre in western Syd after co-worker Zac Zuhair complained they were physically and mentally abusing him on the night shift. Zuhair alleged between Oct and Dec 2007, Fatialofa regularly made comments such as "hairy arms", made threatening facial expressions, poked him in the stomach on three different occasions and used his size to intimidate him. After a bomb scare, Zuhair said Fatialofa accused him of being a Muslim and said: "You're from the desert camel fxxxxr" and "you're like Saddam Hussein". Zuhair responded he was a Catholic. He said he felt embarrassed, intimidated, excluded, humiliated and "ganged up on" as a result of the behaviour.

Fatialofa and Brown denied all Zuhair's claims.

Coles Group Supply Chain suspended the storemen on full pay pending an investigation into Zuhair's claims. Zuhair was sent home on paid leave for a week.

Cmr Cargill held Fatialofa's behaviour was not just a one-off and wasn't "just the use of swear words in a joking manner, which I accept is common practice in the particular workplace, at least on the night shift". She ruled his sacking was not harsh, unjust or unreasonable. (Brown v Coles Group Supply Chain Pty Ltd, Fatialofa v Coles Group Supply Chain Pty Ltd, PR982461, 24/7/08)

Workers were ‘appropriately trained‘
In a message about the effectiveness of workplace training, Cmr Cargill said Fatialofa and Brown (see 'Wog' taunts are bullying: AIRC) were appropriately trained about the relevant policies.

"This was not an employer merely handing a document to a new employee and telling them to read it," she said. "If the training didn't sink in, as suggested, it is not because of insufficient efforts by [Coles Group Supply Chain]."


03 October 2008

RESEARCH - Stress-induced immune dysfunction: implications for health

FIGURE 1 Stress-associated modulation of the hormone response by the central nervous system.

Experiencing a stressful situation, as perceived by the brain, results in the stimulation of the hypothalamic–pituitary–adrenal (HPA) axis and the sympathetic–adrenal–medullary (SAM) axis. The production of adrenocorticotropic hormone by the pituitary gland results in the production of glucocorticoid hormones. The SAM axis can be activated by stimulation of the adrenal medulla to produce the catecholamines adrenaline and noradrenaline, as well as by 'hard-wiring', through sympathetic-nervous-system innervation of lymphoid organs.

Leukocytes have receptors for stress hormones that are produced by the pituitary and adrenal glands and can be modulated by the binding of these hormones to their respective receptors. In addition, noradrenaline produced at nerve endings can also modulate immune-cell function by binding its receptor at the surface of cells within lymphoid organs. These interactions are bidirectional in that cytokines produced by immune cells can modulate the activity of the hypothalamus. APC, antigen-presenting cell; IL-1, interleukin-1; NK, natural killer.

source: Nature Reviews
Stress-induced immune dysfunction: implications for health
Ronald Glaser and Janice K. Kiecolt-Glaser
Nature Reviews Immunology 5, 243-251 (March 2005)

02 October 2008

HEALTH - Psychological Stress in the Healthy Human Brain

In 2005 - For the first time ever scientists visualized the effects of everyday psychological stress in the healthy human brain.

Researchers at the University of Pennsylvania School of Medicine used fMRI - functional magnetic resonance imaging - to image brain activity in their subjects. The researchers induced stress on healthy subjects by asking them to quickly perform challenging mental tasks while being monitored for performance.

During the tasks, the subjects' emotional responses - such as stress, anxiety, and frustration, were measured - as well as changes in stress hormones and heart rate. Many subjects described themselves as being "flustered, distracted, rushed and upset" during the task.

During the "stress test," results showed increased blood-flow to the right prefrontal cortex of the brain - an area long associated with anxiety and depression. The increased blood-flow continued even after the task was complete.

These results suggest a strong link between psychological stress and negative emotions.

Or, since the prefrontal cortex is also associated with the ability to perform executive functions, such as working memory and goal oriented behavior, this result could be highlighting that action.

"How the brain reacts under psychological stress is an untouched subject for cognitive neuroscientists, but it is certainly a critical piece of the puzzle in understanding the health effects of stress," said study leader Jiongjiong Wang. "Our findings should help significantly advance our understanding of this process."

This research - Perfusion functional MRI reveals cerebral blood flow pattern under psychological stress - is detailed in the Nov. 21 2005 online edition of the Proceedings of the National Academy of Sciences.