Earlier this month the Fair Work Commission released statistics which indicated that adverse action claims were on the increase, with the number of claims made in the March quarter marking a record high. Notwithstanding this, court decisions in this area continue to reinforce parameters around what will and will not amount to adverse action. Two recent cases are considered below.

CFMEU v Bengalla Mining Company Pty Ltd [2013] FCA 267

In this case, the employer, Bengalla Mining Company Pty Ltd (the Company) successfully defended a claim of adverse action by demonstrating that it had not acted for a prohibited reason when it issued a warning letter to an employee who failed to attend work due to attendance at a union meeting.

Mr Adam Dever was an electrical technician employed by the Company. He was also the CFMEU’s lodge president at the Company’s mine and a union representative on the Board of Management of the Northern District of the Mining and Energy Division of the CFMEU.

In June 2012, Mr Dever applied for unpaid leave to attend a union convention scheduled for October 2012, citing the reason for that absence as official union business. That leave was refused by the Company on the basis that Mr Dever had accrued annual leave and it was the Company’s policy that employees were required to exhaust paid leave entitlements before unpaid leave was granted.

In July 2012, Mr Dever made a further application for unpaid leave to attend the union’s Board of Management Meeting on 29 August 2012. This application was also denied by the Company. Importantly, in refusing Mr Dever’s applications, the Company made clear that it had no objection to the time off, provided that the leave was taken in accordance with the Company’s policy and was applied for as paid leave.

Mr Dever failed to amend his leave applications and asserted that he would attend the union meeting regardless of the Company’s decision. When Mr Dever failed to attend work on 29 August 2012, the Company issued Mr Dever with a warning letter which advised him that any further unauthorised absences would be subject to disciplinary action, up to and including the termination of his employment.

Following receipt of the warning letter, the CFMEU commenced proceedings against the Company, in which the union asserted that by issuing the warning letter, the Company had taken adverse action against Mr Dever for a prohibited reason, being his involvement in union activity.

When the matter came before Justice Katzmann in the Federal Court, this allegation was rejected. Her Honour found that the adverse action taken by the Company against Mr Dever was not because he was involved in union activity but that the Company had acted lawfully, and in accordance with its policies. Justice Katzmann also found that the union had sought preferential treatment, and that it had not commenced the proceedings because the Company had failed to take Mr Dever’s union status into account, but rather, that it had failed to afford him preferential treatment on that basis.

Harrison v In Control Pty Ltd [2013] FMCA 149

In this case, the employer, In Control Pty Ltd was also successful in defending a claim for adverse action, with the Court finding that it had not acted unlawfully in taking adverse action against an employee who made a series of complaints, because those complaints did not arise out of a workplace right.

Mr Harrison was an employee of Mr Woodward’s small business, In Control Pty Ltd. Mr Harrison and Mr Woodward had previously been business partners, until Mr Harrison became an employee of In Control Pty Ltd. Mr Harrison was the Business Development Manager. The men had a tense relationship and things came to a head on 24 March 2011 when Mr Harrison went to Mr Woodward to “make some inquiries about issues relating to sourcing a new location for the office and the purchasing of equipment such as PC’s and filing cabinets”. He was unhappy with the decision to purchase 2-drawer filing cabinets, and wished to retain his previous 3-drawer cabinet. He was also unhappy about the office accommodation in general, and prepared an agenda for the meeting.

The meeting went badly. Mr Harrison presented Mr Woodward with a list of complaints and “commenced to deal with issues which appeared irrelevant”. Mr Harrison eventually told his employer that Mr Woodward did not have “management or leadership skills”, at which point the meeting ended when Mr Woodward left. Mr Harrison’s employment was terminated on 1 April 2011 with one month’s pay in lieu of notice. Mr Woodward contended that he terminated Mr Harrison’s employment because he would not take direction and was “impossible to deal with”.

Mr Harrison’s conduct in the 24 March 2011 meeting was the final straw for Mr Woodward.

Mr Harrison commenced proceedings against In Control Pty Ltd, alleging that adverse action was taken for attempting to exercise a workplace right. The key issue was whether making complaints about management style or business direction constituted a workplace right.

Federal Magistrate Burnett held that the sort of complaints that Mr Harrison was making were not made in the course of exercising a workplace right. Section 341(1)(c)(ii) of the Fair Work Act 2009 (Cth) states that an employee has a workplace right if they are able to make a “complaint or inquiry … in relation to his or her employment”.

The Court said that the factual issue for Mr Harrison’s claim was whether his complaints were “concerning and confined to [his] employment or stood to matters concerning either the terms of the contractual relationship or, as otherwise governed by the statutory framework”.

Federal Magistrate Burnett held that for a complaint or inquiry to be the exercise of a workplace right, the issue being complained about must be personal to the employee as “governed by their contractual arrangements or statutory framework”. Federal Magistrate Burnett explained that for complaints and inquiries to become the exercise of a workplace right they must be “of the kind that would invite the intervention of bodies having capacity to enforce compliance”. This is because the wording of section 341(1) (c) is to be interpreted as requiring that the complaint is made to a “person or body having the capacity” under a workplace law to seek compliance. The ability to complain is not an ability “at large”.

The Court went on to question what body or organisation had jurisdiction to “tell the proprietors how to better run their business?” or whether there was an implied contract right that an “employer will only employ ‘nice’ people or organisationally cohesive people?”. Federal Magistrate Burnett explained that the objects of the general protections in the Fair Work Act are to protect workplace rights and provide relief in the event of a contravention. As there is no substantive relief that the Court or other body could realistically order to remedy problems concerning everyday workplace matters, the making of a complaint about day-to-day issues could not constitute the exercise of a workplace right for the purposes of the general protections.

Mr Harrison’s claim failed, with the Court holding that no adverse action was taken against him for exercising a workplace right, because there was no workplace right to exercise.

Lessons for Employers

In dealing with employee complaints, employers are advised to have regard to the nature of the complaint in question, and determine whether it relates to dissatisfaction with the commercial/management decisions related to the running of a business or whether it relates to statutory rights of employees in general. If unsure of whether a particular complaint can be characterised as a workplace right, employers are encouraged to seek legal advice to avoid the potential costly expense of adverse action proceedings.