Determining whether management action is reasonable requires an objective assessment of the action in the context of the circumstances and knowledge of those involved at the time. The test is whether the management action was reasonable, not whether it could have been undertaken in a manner that was 'more reasonable' or 'more acceptable'.

The assessment of whether action taken was reasonable management action carried out in a reasonable manner must be objective and consider whether the management action was reasonable (not whether it could have been undertaken more reasonably), whether it was lawful and not irrational or absurd, and whether there was significant departure from established policies.

In assessing whether conduct constitutes unreasonable management action, an employee must be able to demonstrate that the decision to take management action lacked any evident and intelligible justification such that it would be considered by a reasonable person to be unreasonable in all the circumstances.

For the s.789FD(2) exception to apply, the management action must be 'carried out in a reasonable manner'. Whether the management action was taken in a reasonable manner depends on the action itself, the facts and circumstances giving rise to the requirement for action, the way in which the action impacts on the worker, the circumstances in which the action was implemented, and any other relevant matters.

Section 789FD(2) of the FW Act is not so much an 'exclusion' but a qualification which reinforces that bullying conduct must of itself be unreasonable. It also emphasises the right of management to take reasonable management action in the workplace. In its application, the provision comprises three elements: the behaviour (being relied upon as bullying conduct) must be management action; it must be reasonable for the management action to have been taken; and the management action must have been carried out in a manner that is reasonable.

Determining whether management action is reasonable requires an objective assessment of the action in the context of the circumstances and knowledge of those involved at the time. Without limiting that assessment, the considerations might include: the circumstances that led to and created the need for the management action to be taken; the circumstances while the management action was being taken; and the consequences that flowed from the management action.

The test is whether the management action was reasonable, not whether it could have been undertaken in a manner that was 'more reasonable' or 'more acceptable'. In general terms this is likely to mean that: management actions do not need to be perfect or ideal to be considered reasonable; a course of action may still be 'reasonable action' even if particular steps are not; to be considered reasonable, the action must also be lawful and not be 'irrational, absurd or ridiculous'; any 'unreasonableness' must arise from the actual management action in question, rather than the applicant's perception of it; and consideration may be given as to whether the management action involved a significant departure from established policies or procedures, and if so, whether the departure was reasonable in the circumstances.

Whether the management action was taken in a reasonable manner may depend on the action, the facts and circumstances giving rise to the requirement for action, the way in which the action impacts upon the worker and the circumstances in which the action was implemented and any other relevant matters.

Taking administrative action 'in a reasonable manner' in relation to an individual employee requires objective consideration of circumstances both leading to and creating reasons for the action and circumstances flowing from it; particular circumstances of the individual known to the employer and circumstances that could have become known by simple inquiry should be considered; the assessment standard remains objective.

Behaviour will not constitute bullying conduct if it is reasonable management action carried out in a reasonable manner. The provision comprises three elements: (1) the behaviour must be management action; (2) it must be reasonable for the management action to have been taken; and (3) the management action must have been carried out in a manner that is reasonable.

Determining whether management action is reasonable requires an objective assessment in context of circumstances and knowledge at the time. Considerations include: the circumstances that led to the need for action, circumstances while action was being taken, and consequences that flowed. Management actions do not need to be perfect or ideal to be considered reasonable; a course of action may be reasonable even if particular steps are not; the action must be lawful and not irrational, absurd or ridiculous.

The expression 'in respect of the employee's employment' in s 5A(1) SRC Act refers to action directed to conditions in which the employee works, terms of engagement, and duties—not action forming part of everyday duties or tasks performed in the employment or 'part and parcel' of the employment. The action must be specific administrative action directed to the person's employment itself.