Chairperson Ordered to Stop Bullying Caretaker

July 31, 2018

We first wrote about bullying in strata more than two years ago.
We have been waiting for a while, but we finally have a decision from the Fair Work Commission (FWC) that gives some guidance about whether the sort of conduct we regularly see in terms of committee and resident manager communications constitutes bullying.

And if we are going to gloat just a little bit, it played out the way we predicted it would.
Every other day we deal with business relationship breakdowns in strata. Tit gets exchanged for tat. Petty email wars ensue. Mud gets thrown and names called.
A committee/management rights relationship is a special one. If you don’t like what we write, you simply unsubscribe. If we are acting for you and (heaven forbid) you don’t want us to act anymore, our services can be terminated with a single email and it is all over. In either situation, you never hear from us again.
That is not the case in management rights. The manager has normally spent a substantial part of their own life savings to buy their business and it means everything to them. The only way they can usually move on is by sale.

The body corporate committee is (for want of a better word) captive to the contractual relationship that it has with a manager in the management rights agreements. Those agreements are a contract that can only be changed with the consent of both parties, so no matter what the committee thinks about the agreements, and how they came into existence or have been varied over time, they are stuck with them.
If when the relationship breaks down, which is what happened here, it sort of becomes the irresistible force meeting the immovable object. When neither party is willing to move, what happens?
The parties remain anonymous but the essential facts are this:
• The management rights agreements had been in place for some time;
• Both parties agreed that the terms were not as clear as they could be (which is a common complaint); and
• There were competing interpretations over what the duties meant and what the payment of the caretaking remuneration extended to.
This resulted in significant frustration for everyone.
We have been waiting for a decision in this forum for a while and it covers some of the most regular issues we see in management rights disputes. So settle in while we walk you through the issues.

The first thing is that for a manager to have access to the FWC it needs to be a company. Managers who own management rights in their individual names cannot use the FWC for constitutional reasons because the Commonwealth Government’s legislative abilities in this context only extend to companies.

What is bullying?
The key terms of the legislation are that:
1. Someone behaves unreasonably towards a worker; and
2. That behaviour causes a risk to health and safety.
A manager is a worker for the purposes of the law even though they are not an actual employee of the body corporate.

The issues
There were numerous allegations in the claim by the manager which we have broken down into the following:
The phone call and the exclusive use areas
The chairperson made a ‘loud’ phone call. The manager logged this as a breach of the by-laws and reported it to the committee without further reference to the chairperson.
The chairperson retaliated to this by bringing up an argument about whether the manager was required to maintain exclusive use areas and started making assertions about reducing the remuneration paid to the manager if they didn’t maintain them. The chairperson later admitted that the manager did not have to maintain the areas.

The caretaking agreement (like almost every single caretaking agreement out there) required that the manager is reimbursed caretaking expenses such as petrol, gardening materials and telephone calls. There were arguments over what these should be and how to quantify them.
It didn’t help that the body corporate seemingly provided the caretaking equipment for the manager to use, but the manager was using that equipment for the maintenance of the exclusive use areas which it was at the same time alleging it didn’t have to maintain and could charge additional amounts for.

The chicken wire
There was an argument over whether the manager had to remove the chicken wire that had been put in place to stop bush turkeys scratching around.

By-law enforcement
Managers cannot enforce by-laws for the body corporate. They can as agent for landlords through tenancy agreements for properties they manage on instructions of those landlords. Otherwise, it is committees who must enforce by-laws. We first wrote about that here in 2011.
There was a long-running argument over what the manager’s role extended to with respect to by-law ‘enforcement’ or ‘policing’. It got down to stuff like pulling up kids riding bikes without helmets.

The common property toilet
There was an argument about whether the common property toilet was cleaned as per the caretaking schedule or whether it had to be clean at all times. We can guarantee you the correct position is the former, but that argument continued on email with to and fro until nearly midnight one day and finished with the chairperson copying other committee members saying the manager was not doing their job.

Spending by the committee
There are rules around committee spending which we covered here. The chairperson wanted to sign off on some spending without committee approval. The manager pulled him up on that and the chairperson’s response was to call the manager ‘stupid’.

The chairperson’s front yard
The chairperson complained that his front yard was not cleaned daily, but under cross-examination admitted that it might not have necessarily needed it. It was also never made clear whether this was common property or not (leading back to the argument above about whether the manager had to maintain it anyway).

Dealing with tenants
Tenants were allegedly complaining to the chairperson about the conduct of the manager. The chairperson engaged with the tenants and sent them material from the Residential Tenancies Authority (RTA).

Skilled trades
This old chestnut made its usual appearance. This management rights agreement had been varied many years back to arguably cover some tree lopping. There was lots of argument over what heights the manager had to work to, which we covered here.

Work orders
The manager suggested work should be done to the pool area, a deck and some plumbing. There was clearly a misunderstanding about these things between the parties in terms of whether the work was actually needed, and if so, what was needed. But the decision tellingly notes that the chairperson’s replies included gratuitous comments about the manager’s inability to understand what the chairperson was saying.

The pool gate
The latch on the pool gate broke. The manager responded by completely removing the pool gate, leaving open and unfettered access to the pool. The body corporate (appropriately) addressed this with the manager who responded aggressively and argued their position.

The manager was not blameless
It takes two to tango and clearly things descended into pettiness.
The Deputy President noted that the manager was not blameless in the matter and that the management services left much to be desired. The manager was not necessarily meeting their onsite residence or contract obligations. They should have dealt with the chicken wire. The straight out removal of the pool gate was inexcusable and the reaction to being called out on it was inappropriate.
Other than the exclusive use area maintenance argument (on which the chairperson conceded he was wrong), the chairperson was held to be largely right to raise the issues that he did with the manager.

What matters though is this…
What the Deputy President has found though is that the manner in which those issues were raised and the frequency of the raising of them was not appropriate.
The key paragraph in the decision for us is this:
‘… there are appropriate mechanisms and processes to resolve such disputes than a war engaged in by email. [The chairperson] of the body corporate committee has access to a strata management company and to other sources of information about how such disputes should be resolved. It is not reasonable for [him] to continue to send emails to [the manager] raising issues about why remuneration under the agreement is set at a particular level; what the remuneration covers; and whether it should be reduced. Such emails will not resolve the underlying issue and they are causing distress to [the manager].’
Yes, the manager’s conduct was clearly frustrating to the chairperson. He was right to address it – but not in the way he did.
As a simple example, there is no point in having an email argument about the cleanliness of a common property toilet until nearly midnight. It simply wasn’t urgent and it could have waited.
Sarcasm, derogatory or belittling language is also simply not on. Adding some snark is always easy to do when you are frustrated, but it never, ever, helps sort out stuff like this.
And yes, the manager seemingly engaged in the same sort of behaviour and provoked the chairperson. That did not make a difference. The manager does not have the same statutory obligations as a worker to the body corporate as the body corporate does to the manager as the engager of a worker. Like it or not, that’s the law.

Our takeaways
One of the first things we tell graduate lawyers that start at Hynes Legal is that every single email or letter you send at some stage may appear in evidence in front of a judge. Draft whatever it is you are writing in light of that.
The same lesson applied here would have led to a different outcome in this dispute.

Even though managers are not employees, we think the safest bet is for a committee to engage with them about matters of this nature as if they were. What the chairperson was complaining about was largely held to be appropriate – it is just the manner of the complaining that was not. You would not send emails to employees blowing up about things at 11 pm, and managers should be treated in the same way.
Both parties here were self-represented which led to some concessions and argument on both sides that were simply misguided (or wrong). Take the whole by-law argument for example. Everyone got hung up on the difference between ‘police’ and ‘enforce’ and what the caretaking agreement said, when if a reference was made to the BCCM Act, the argument was over.

Yes, lawyers cost money, but the right ones can cut to the chase a lot quicker and argue what matters (as opposed to everything – which seems to have happened here).
And keen readers will note what the manager wanted as an order was not granted, but what will happen going forward is phone conversations before email ones.
Play nicely. Be courteous and professional. And if you need help on anything like this – whether for a body corporate or manager – let us know.
The decision can be read here.

A few years back we ran a webinar on bullying in strata. If you are interested in watching it, click here.

This article was contributed by Frank Higginson, Partner - Hynes Legal.