In the modern Australian workplace, employees are increasingly challenging management decisions affecting their employment. One of the key tools allowing them to do so is an adverse action claim made under the general protections in Part 3-1 of the Fair Work Act 2009 (Cth).
More often than not, the “workplace right” alleged to have been exercised, thereby resulting in the dismissal or some other form of adverse action, is the making by the disgruntled employee of a “complaint or inquiry in relation to their employment”. There is no legislative definition for this particular type of workplace right and, as such, the ordinary meaning of the words applies.
The case law is still unsettled on the permissible scope of a complaint or inquiry considered to have been made “in relation to employment”, as opposed to other matters such as the exercise of genuine management prerogative. To date, no appellate decision provides guidance.
However, more recent case law trends involving single judge decisions indicate that an expansive interpretation of the relevant phrase will be likely adopted until such time as an appeal court says otherwise. Therefore, a cautionary approach is advisable when managing an employee in such circumstances. One such example is the 2018 decision of the Federal Circuit Court of Australia in Fatourous v Broadreach Services Pty Ltd1.
Fatourous v Broadreach
Mr Fatourous was employed in a senior project management role with an IT systems engineering provider called ELB.
Mr Fatourous was called upon by his employer to resolve delays in respect of a building project to supply the University of Melbourne with audio visual and digital media equipment to over 100 rooms. Notwithstanding his successful intervention, an important sub-contractor subsequently walked off the job, after ELB failed to pay its outstanding invoices.
Mr Fatourous then complained, by two emails, about the personal handling of the non-payment of the sub-contractor’s outstanding invoices by the Chief Executive Officer, Marie Kalivotis, both directly to the CEO, and to other executives in ELB’s parent company. Amongst other criticisms, Mr Fatourous alleged to the latter that the CEO was not “acting in the highest and best interests of the business”.
ELB shortly afterwards terminated Mr Fatourous’ employment. The termination letter specifically referred to the above complaint made by Mr Fatourous to ELB’s parent company (amongst other alleged performance concerns).
The adverse action claim commenced by Mr Fatourous alleged that he was protected from dismissal, for the reasons alleged, because the emails he sent to the CEO and ELB’s parent company were allegedly complaints made in relation to his employment.
ELB defended the claim on the basis that the subject matter of those complaints did not directly relate to matters concerning Mr Fatourous’ employment entitlements and the like, but rather commercial decisions made by the owners of the business.
On the question of the permissible scope of the workplace right, Judge McNab observed that whilst there were two differing lines of authority, he preferred adopting a wide interpretation. This meant that the subject matter of the “complaint of inquiry” could be either directly or indirectly related to the employment relationship.
Judge McNab upheld the adverse action claim because the subject matter of the email complaints was indirectly related to Mr Fatourous’ role as a project manager which involved, amongst other things, maintaining effective working relationships with the sub-contractors.
In addition to ordering ELB to pay to Mr Fatourous a civil penalty of $12,500.00, he was awarded compensation for eight months’ loss of salary and superannuation benefits along with interest on those amounts in the total sum of $144,570.48.
Employers more than ever need to be cognisant that a wide range of complaints and inquiries made by an employee may give rise to workplace rights and thereby statutory protection from disciplinary action. These risks can often be readily managed, if identified and properly accounted for, at an early stage.
Failure by an employer to be aware to its potential exposure may result in a costly lesson, including the imposition of onerous civil penalties (up to $63,000) and substantial compensation orders, as well as significant time, energy and resources in responding to any resultant litigation.