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.


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.


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.


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.


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


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.


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.

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