My high school PE teacher (a cockney skinhead, bit mental, probably in his late 30s at the time) had heard that one of the boys was being bullied. He started the class by excusing the bullied kid and sending him to the library for the session. Then he got us all to sit on the floor in a line, backs against the wall. He picked up a hockey stick. He then explained, with bulging eyes and a reddening face, that he knew what was going on and wouldn't tolerate it. He said he didn't know who the bully was, but would give them a chance to show how tough they were by fighting him, in the gym, right there and then. He said he'd give them the hockey stick and the 'first swing'. He said it was all off the record and there'd be no consequences with the school.

Everyone shat themselves and stayed silent. Even though I was innocent my heart was racing, thinking he was about to snap.

He prowled around for a bit, getting angrier, then gave up. He said we were all soft as shit and whoever was the bully had just proven it. The he dismissed the class, with a threat that he'd do it again if he heard of any more bullying.

There was no more bullying.

TLDR; PE teacher dealt with a bullying incident by calling out an entire class for a fight.