Australia: The new untouchables - does adverse action mean that some employees are immune from dismissal?

Recent case law suggests that an employee who makes a complaint about almost any issue in their workplace, can seek protection from dismissal under the "adverse action" provisions of the Fair Work Act 2009.

But some key lessons are emerging for employers as to how to manage the risks posed by these provisions. Most importantly, a well managed, robust decision making process, leading to a decision that is made for sound reasons, will withstand legal challenge.

BACKGROUND

Under the adverse action provisions in Part 3-1 of the Fair Work Act (FW Act), an employee may be protected from dismissal or for any other adverse action that they have suffered, such as a demotion or disciplinary warning, if they are able to successfully argue that a reason for the dismissal or other action was the exercise of a "workplace right"1. This does not have to be the main or only reason for a claim to succeed, it need only be one of the reasons2.

In addition, where the employee has established that they suffered some form of adverse action and they allege that a reason for this was the exercise of a workplace right, the onus rests on the employer to prove to a court that the exercise of that workplace right was not the reason, or one of the reasons, for the dismissal3.

This has raised many challenges for employers.

COMPLAINTS ABOUT EMPLOYMENT - WHAT DOES THIS INCLUDE?

One of the workplace rights that has the most potential for broad application is the right of an employee to "make a complaint or inquiry ... in relation to (their) employment" (section 341(1)(c)(ii)). This can mean that an employee who raises virtually any inquiry or complaint, that has some loose or vague connection to their employment, can argue that any action taken against them was because of the complaint or inquiry they had made.

The decision of the Federal Court of Australia in Walsh v Greater Metropolitan Cemeteries Trust (No. 2) [2014] FCA 456 (9 May 2014) illustrates this challenge very clearly.

Ms Walsh was dismissed from her employment as a Client Services Manager with the Greater Metropolitan Cemeteries Trust (GMCT) in Melbourne, during her probationary period. She alleged that she had made complaints in relation to her employment, and that these complaints were one or more of the reasons for her dismissal.

GMCT argued that they had dismissed Ms Walsh for reasons of poor performance. GMCT also argued that none of the complaints raised by Ms Walsh was a "complaint or inquiry in relation to employment".

Ms Walsh had complained that another manager's daughter worked for the Alsco company, which supplied linen to GMCT. She complained that as a matter of probity, it was not appropriate for that other manager to be dealing with her daughter in relation to the Alsco contract. This was clearly not a complaint about Ms Walsh's own terms and conditions of employment, or about her direct treatment in the workplace or anything as closely connected to her employment as that. It was loosely connected to her own employment.

However the Court took a broad view of the phrase "complaint or inquiry in relation to employment". Justice Bromberg commented that regardless of whether or not Ms Walsh had a duty under her contract to report the possible probity issue, her failure to report a suspected wrongdoing had the potential to reflect badly upon her and cause prejudice to her in her employment. Consequently the Alsco contract complaint ... "raised an issue with potential implications for her employment" and therefore it was a complaint "in relation to ...her employment"4. The Court found that the complaint did not need to be directly related to the employment; an indirect relationship was enough. Therefore it was found that Ms Walsh had exercised a workplace right (although it was also held that this was not among the reasons for her dismissal; see below).

A similar approach was taken in a 2012 decision: CFMEU v Pilbara Iron Company (No 3) [2012] FCA 697. In that case, the fact that the employee had raised concerns or complaints about safety issues within the workplace was found to be the exercise of workplace right. This was so even though some of the complaints were not about his own personal working conditions, safety or environment, but were complaints made out of concern for the safety of employees at that workplace generally.

In another recent decision, considered in Walsh v Greater Metropolitan Cemeteries Trust (No. 2), the Federal Court observed that an employee could make a complaint about misconduct that had an effect on another employee, but not on the employee making the complaint directly. That may be sufficient to demonstrate the exercise of a "workplace right"5 by that employee.

There have been other cases where a much narrower interpretation of workplace right has been taken (for example, Harrison v In Control Pty Ltd [2013] FMCA 149). But most decisions in recent times have favoured a broad interpretation of the concept of "workplace right" (see also CFMEU v State of Victoria [2013] FCA 445; Laing O'Rourke v CFMEU [2013] FCA 133).

Employers should note that this is likely to remain the prevalent approach, until the Full Federal Court or the High Court decide differently.

HOW COULD THIS APPROACH BE APPLIED IN OTHER CIRCUMSTANCES?

Any employee who complains about systems of work, inadequate equipment, or the conduct or work performance of other workers, could argue that this was a complaint in relation to their employment. Accordingly they could seek to invoke the protections under the adverse action provisions of the FW Act.

To illustrate, what if a courier employed by a courier company complains that the quality of the envelopes used by the courier company is poor and that there is a risk that documents will be damaged in transit? Arguably, if the courier was aware of this potential failing or deficiency in the equipment used, it would reflect badly on the courier if they had not reported that matter. Therefore the courier who raises a concern or complaint that the quality of envelopes is poor, and was then dismissed for some other conduct-related reason, could argue that they were dismissed because they exercised a workplace right. The employer would then bear the onus of proving that the reason for the dismissal was not the exercise of that workplace right.

The same argument could arise if a mining engineer complained that the software used by the employer was inadequate and outdated, or a lawyer complained that their colleagues were not working hard enough, and so on.

Clearly, the range of applications of the current approach to the concept of a workplace right is very broad indeed.

THE IMPORTANCE OF THE DECISION MAKING PROCESS

However, all is not lost for employers. Since the High Court decision in Board of Bendigo Regional TAFE v Barclay [2012] HCA 32, it has been clear that the subjective intent of the employer, established by evidence, is a central issue in adverse action cases.6 If the decision maker(s) for the employer give credible evidence that the decision was not made because of the exercise of a workplace right, then the employer will generally succeed in defending the case. These were critical considerations in Walsh v Greater Metropolitan Cemeteries Trust (No. 2).

Ms Walsh relied partly on the questions of timing. She participated in meetings on the 7th and 12th of March 2013. In the course of the meeting on 12 March, GMCT advised her that it was considering terminating her employment because of performance issues. In response, Ms Walsh raised the Alsco contract complaint and several similar matters, during the meeting.

GMCT adjourned the meeting, and promptly took steps to investigate and consider the Alsco contract complaint (and other similar complaints of that nature made by Ms Walsh). It decided that the complaints were of limited substance, and that they made no difference to the reasons for termination.

The decision was then taken to dismiss Ms Walsh, and subsequently communicated by letter. Ms Walsh claimed that the timing was more than coincidental and clearly that there was a link between her making the complaints and the decision to dismiss.

It was argued that Ms Walsh was just seen to be a "trouble maker", and this supported her claim that the dismissal was motivated by her exercise of a workplace right. But the decision maker for GMCT was clear that she did not have such a perception. The fact that she took seriously the complaints that had been raised and investigated them promptly showed that there was no such preconceived view of Ms Walsh.

GMCT provided detailed explanations from the decision maker as to the reasons for the dismissal. The evidence was found to be substantiated and credible. The Court was satisfied that various performance related issues were the only reasons for dismissal, not the exercise of the workplace right. The employer satisfied the onus in section 361 of the FW Act.

This shows how important it is for employers to carefully manage the process of decision making when employees are disciplined or dismissed.7

LESSONS FOR EMPLOYERS?

An employee can raise virtually any issue of concern that has some loose and indirect connection with their employment, and rely on that as a workplace right in an adverse action claim under Part 3-1 the FW Act.

However, this does not mean that an employer cannot appropriately and fairly manage employees' performance and conduct and make decisions to discipline or dismiss, when such complaints have arisen. The critical issue is being able to explain and defend the decision making process through clear evidence.

The employer should consider these issues:

  • What "paper trail" will exist about the reasons of the relevant decision makers, leading up to any decision to dismiss or discipline?
  • Are complaints properly investigated?
  • Who within the business will be involved in any decision?
  • Who makes the final decision?
  • Will they be available to give evidence?

A related issue that arises is whether you want the most senior people in the business to be directly involved in any decision making process. If they are involved, given the nature of the evidentiary burden on the employer, you may not be able to defend a claim well, without their evidence. Does the business want its CEO or Managing Director to be in the witness box? If not, then query whether they should be directly involved in any decision making process, and consider delegating the authority to make such decisions to others.

Finally, employers should note that the Coalition Government's 2013 Election "Policy to Improve the Fair Work Laws"8 made no commitment for any substantial changes to the adverse action provisions of the FW Act9. Therefore, the provisions are likely to stay in place for some time – and the potential for adverse action claims needs to be factored into management decision-making processes relating to discipline and dismissal of employees.

Footnotes

1Section 340, FW Act.

2Section 360, FW Act.

3Section 361, FW Act.

4Walsh v Greater Metropolitan Cemeteries Trust (No. 2) [2014] FCA 456 at [43].

5Shea v TRUenergy Services (No 6) (2014) FCA 271 at [631].

6See Corrs In Brief 'High Court re-establishes balance in adverse action cases'

7 See Corrs In Brief 'Discharging the onus in adverse action claims'

8See Liberal Party policy document 'Improving Fair Work Laws'; Corrs In Brief 'Coalition releases policy to improve Fair Work laws'; and Corrs In Brief 'Coalition government set to implement policy to improve Fair Work laws'.

9Apart from implementing a recommendation of the 2012 Fair Work Act Review Panel to give greater weight to the subjective intention of an employer in such cases, which arguably just reflects the position established by the High Court in Barclay.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions