Key points for employers
- Since the introduction of the Fair Work Act 2009 (Cth), the number of general protections claims has steadily increased every year. Most of these claims are brought by employees (and sometimes independent contractors) following dismissal.
- In our experience, many of these claims rely on an employee asserting that he or she exercised a workplace right by making a 'complaint or inquiry' prior to his or her dismissal.
- In its recent draft report in relation to Australia's workplace relations framework, the Productivity Commission recognised that the uncertainty surrounding the meaning of 'complaint or inquiry' in the general protections provisions allows workers to pursue baseless and vexatious claims. It recommended a number of changes to address this problem, but it remains to be seen whether they will be adopted by the Federal Government or passed by Parliament.
- We recommend employers take a number of steps to help them successfully defend (and limit the risk of facing) general protections claims based on workplace complaints and inquiries (further discussed below).
On 4 August 2015, the Federal Government's Productivity Commission (PC) released its draft report in relation to Australia's workplace relations framework (available here).
In its report, the PC proposes the following three key improvements to the general protections provisions of the Fair Work Act 2009 (FW Act):
- The ambiguous workplace right to make a 'complaint or inquiry' needs to be better defined.
- The Fair Work Commission and Courts need to limit employers' exposure to sweeping discovery, which can be a significant burden (particularly due to the reverse onus of proof in general protections claims).
- Like unfair dismissal claims, there should be a cap on compensation in general protections claims (it is currently unlimited).
This update focuses on the first of the PC's proposed improvements, which we believe would have the most significant impact on general protections claims.
Making a 'complaint or inquiry'
Under the general protections provisions, a person will exercise a workplace right if he or she makes a "complaint or inquiry":
- to or a person or body who can deal with the complaint or inquiry under a workplace law (applicable to both employees and independent contractors); Or
- in relation to his or her employment (applicable only to employees).
Where an employee has made a complaint or inquiry 'in relation to his or her employment' prior to dismissal, he or she will often allege the dismissal was motivated by the complaint or inquiry. Because this wording is so broad, almost any complaint or inquiry an employee has made will provide legal standing to bring a general protections claim.
The complaint or inquiry can arise in relation to matters that are not contractual, regulatory or statutory. It could be enough for an employee to question their entitlements, mention something that has an indirect nexus with their terms and conditions or raise concerns about conduct that has implications for their employment. Independent contractors are somewhat more restricted and can only bring a claim if their complaint or inquiry was addressed to a person or body who can deal with it under a workplace law (e.g. the Fair Work Commission or Fair Work Ombudsman).
Uncertainty for employers
More so than any other part of the general protections provisions, this workplace right has created uncertainty for employers.
Our employer clients frequently experience general protections claims based on alleged complaints. Further, these claims are commonly used by workers to challenge their dismissal in circumstances where they cannot bring an unfair dismissal claim, for example:
- Employees who have been terminated during their probationary period
- Employees who earn more than the high income threshold, and
- Independent contractors who are aggrieved that their services have been discontinued.
In our view, this reflects a growing understanding among workers (and their representatives) that general protections claims based on complaints are not difficult to make.
What can employers do?
There are a number of steps employers can take to help them successfully defend (and potentially limit the risk of facing) general protections claims:
- Always ensure that any 'complaints or inquiries' are properly addressed in accordance with any workplace policy or usual way of dealing with such issues.
- When a decision is made that could amount to adverse action against an employee, always be clear about the lawful reason for the decision. The stronger the lawful reason for the decision, the better the employer's defence will be to a claim that the decision was motivated by a 'complaint or inquiry'.
- Ensure that any internal documentation relating to the adverse action (e.g. emails to or from the final decision maker or minutes of meetings) clearly sets out the reason for the adverse action. A lack of adequate evidence supporting the lawful reason will count against the employer.
- Communicate the lawful basis for a dismissal to the employee (or contractor) both verbally and in writing, even if the individual is not covered by unfair dismissal laws. Not providing a reason may create an adverse inference against the employer.