The Federal Magistrates Court (now the Federal Circuit Court) has dismissed an employee’s adverse action claim, on the basis that the complaints he had made to his employer were not directly relevant to the terms of his employment and therefore he had not exercised a protected workplace right under the Fair Work Act 2009 (Cth) (FW Act).

Implications for employers

The Court’s narrow interpretation of the relevant provision in the FW Act is good news for employers, as it suggests a relatively confined range of employee complaints will constitute protected workplace rights. However, the decision appears not entirely congruent with other relevant authorities and the question of whether or not it would survive an appeal remains open. For now, employers considering taking action which might constitute “adverse action” should:

  • take particular care if the relevant employee has made complaints which relate to an underlying contractual and/or statutory obligation; but
  • also consider the potential relevance of any other type of complaint.

Background: legislation

Under the FW Act, an employer is prohibited from taking “adverse action” (terminating an employee, injuring them in their employment, altering the employee’s position to his or her prejudice, or discriminating between the employee and other employees) for a number of reasons.

Relevantly for present purposes, adverse action must not be taken if the reasons for the action include that the person:

341(1)

(c) is able to make a complaint or inquiry:

(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or

(ii) if the person is an employee — in relation to his or her employment (the Provision).

Background: facts

Mr Harrison was employed by In Control Pty Ltd (Respondent) as a business development manager. Mr Harrison and Mr Woodward, the managing director of the Respondent, were former business partners. Mr Woodward alleged that Mr Harrison would continuously tell him that he lacked management and leadership skills and he warned Mr Harrison not to “get involved in the management of the company”.

Nevertheless, Mr Harrison arranged a meeting with Mr Woodward at which he discussed a list of complaints regarding a range of matters, including:

  • Mr Woodward’s alleged lack of direction and empathy, and his failure to give positive feedback;
  • sourcing a new location for the office;
  • purchasing equipment; and
  • alleged bullying of staff (together, the Management Issues).

Mr Woodward alleged that he left the meeting after Mr Harrison verbally abused him about the Management Issues.

Mr Woodward subsequently terminated Mr Harrison’s employment on the basis that his behaviour had “crossed the line”.

Mr Harrison lodged an adverse action claim, alleging that the Respondent had terminated him because he had exercised a workplace right by making complaints in relation to his employment, being the complaints regarding the Management Issues.

Decision

Construction of the Provision

FM Burnett (now Judge Burnett) considered the construction of section 341(1)(c)(iii) at length, holding that:

  • the relevant Explanatory Memorandum (EM) indicates that an employee would have a workplace right if he/she made a complaint/inquiry to his/her employer, in relation to safety concerns regarding a ladder at the workplace. His Honour found that this illustration served to:

amplify the fact that the complaint must be sourced in an underlining contractual and/or statutory obligation governing the employer/employee relationship… [as] the employer’s implied contractual obligations and or statutory obligations concern those in respect of Workplace Health and Safety;

  • the use of the personal pronouns “his or her” in the phrase “his or her employment”:

confines the employee’s ability to “complain or inquire” in respect of matters personal to the employee, as governed by that persons [sic] contractual arrangements and or the statutory framework; and

  • the word “or” which appears between subparagraphs c(i) and (ii) of the Provision, imposes a “cumulative requirement”, so that a workplace right only arises where a complaint is able to be made to a “person or body” (even if it is in fact made to the employer); and
  • the alternative construction that “or” is “disjunctive”, such that the complaint/inquiry would not have to be able to be made to the relevant person or body, stating “that contention is so wide as to be almost meaningless”. A cumulative construction more “amply” achieves the objects set out in section 336 of the FW Act, on the basis that:

if complaints and or inquiries are to enliven rights they must be of the kind that would invite the intervention of bodies having the capacity to enforce compliance. Implicit in that, is not only the question of jurisdiction but also the substance of the subject matter of complaint.

Factual issue

Applying his construction of the Provision, FM Burnett found that the Management Issues and the matters discussed at the meeting did not:

identify one solitary point which could be said to be directly relevant to the applicant’s terms of employment as governed by either the contract between the parties or by statute.

Rather, “the agenda sought solely to address matters which were the prerogative of management”. On that basis, Mr Harrison’s complaints did not fall within the scope of the Provision and there was no protected workplace right.

Reverse onus

His Honour went on to state that even if this construction of the Provision was wrong and Mr Harrison did in fact have a protected workplace right, he was:

satisfied that the applicant was not dismissed because he was able to make a complaint [but]…because the personal relationship between he and Mr Woodward…had reached a point where in a small enterprise the clash of personalities could no longer be accommodated.

Quantum

Finally, FM Burnett commented that if a contravention had been established, which it had not, he would have assessed Mr Harrison’s notional entitlement to compensation at $35,125.00 (being $1,000 for non-economic loss and $34,125.00 for the loss of 5 months’ salary, on the basis that the Applicant would have had no more than five months’ income from the Respondent from the date of termination.)