A complaint by an employee will be enough to attract the protection against adverse action in the Fair Work Act, even where there are no formal complaint mechanisms or processes for the complaint or inquiry.

A recent decision of the Federal Magistrates Court, as it then was, found that an employee, who complained to her employer about being incorrectly paid was "able to" make or had made complaints or inquiries in relation to her employment and was therefore protected against adverse action (Devonshire v Magellan Powertronics Pty Ltd [2013] FMCA 207).

Federal Magistrate Lucev, as he then was, took a broad view of the circumstances in which an employee exercises a workplace right by making a complaint or inquiry in relation to his or her employment, clarifying the application of section 341 of the Fair Work Act 2009 (Cth).

Facts

Melinda Devonshire, the applicant, was employed by Magellan Powertronics, the first respondent, as a Business Development Manager on a salary package which included:

  • $67,000 annual base salary;
  • $14,000 annual car allowance;
  • a mobile phone allowance of $140 per month; and
  • a 2% commission on all goods sold through her employment.

Although Ms Devonshire requested a written contract, one was not provided to her.

Ms Devonshire sent two emails to Mark Williams, the National Sales Manager, in December 2011 shortly after she commenced employment. In the emails she indicated that she had been paid incorrectly. She highlighted that the error was that her salary was noted on her payslip as $65,000 per annum, but was in "the system" as $67,000 per annum.

Ms Devonshire says that she sent at least four more emails before going on annual leave at Christmas concerning payment of her salary and the car allowance, which she indicated needed to be paid because she was out of pocket.

Upon her return to work in January she had still not received her correct salary, car allowance or mobile phone allowance, and sent emails asking for this to be rectified. Ms Devonshire says that she sent an email to payroll on 27 January 2012 and that this email was sent to the third respondent, Jolleh Abshar, the General Manager , who told her that the second respondent, Masoud Abshar, Director and Company Secretary, wanted to see her regarding her pay.

Ms Devonshire said that she went to see Masoud Abshar who told her she was not "worth the money" and that he was "not happy" to pay her the correct salary. He said he worked on Saturdays and Sundays and that she was paid a very similar salary to his and that she should be working in excess of 80 hours per week, like him. He also complained that she was not wearing the company polo shirt.

That same day, Ms Devonshire went home early as she was feeling unwell and, soon after, her employment was terminated. In an email to Ms Devonshire, Jolleh Abshar stated:

"Following your discussion with Masoud today, the fact you left the office following this, your refusal to wear the company uniform, and your lack of sales to date we have decided to end your employment with Magellan, as you are still within the 3 month probation."

Adverse action application

Ms Devonshire made an application to the Court alleging a termination by the first respondent of her employment in contravention of the general protection provisions of the Act, specifically that she was terminated because she exercised a workplace right.

The respondents filed an application seeking to have the Court make a determination on three questions:

  • whether the applicant had a workplace right or rights;
  • whether the Court had jurisdiction; and
  • whether the second and third respondents should have been removed as parties.

The respondents submitted that Ms Devonshire was not "able to make a complaint or inquiry" for the purposes of section 341(1)(c) of the Act because that provision was limited to formal or specified mechanisms of complaint or inquiry, and these fell outside the terms of section 341(1)(a) or (b).

The respondents asserted that, amongst other things:

  • the right or rights identified by Ms Devonshire were not a workplace right or rights within the meaning of the Act;
  • Ms Devonshire had not made a complaint or an inquiry and could not do so;
  • the alleged entitlements that Ms Devonshire sought under her contract of employment are not workplace rights; and
  • Ms Devonshire's employment was subject to a period of three months' probation and even if her employment had not been terminated on 27 January 2012 it would have come to an end, or could have been lawfully terminated, on 21 February 2012, at the end of the probationary period.

Decision

On the question of whether Ms Devonshire had a workplace right, Lucev FM found in the affirmative as Ms Devonshire was entitled to the benefit of a workplace law, namely section 323(1)(a) of the Act, which requires an employer to pay an employee, in full, amounts payable in relation to the performance of work.

By making a complaint that she had not been paid her motor vehicle allowance and the correct salary which she says she was contractually entitled to at the time it was due, Lucev FM found that Ms Devonshire exercised a workplace right as she was entitled to the benefit of a workplace law, was able to make a complaint or inquiry as an employee in relation to her employment and did made an inquiry or complaint on a number of occasions.

Lucev FM rejected the assertion that the Full Bench decision in Nulty v Blue Star Group Pty Ltd (2011) 203 IR 1 is an authority for the proposition that section 341(1)(c)(ii) of the Act requires some formal mechanism or provision for a complaint or inquiry. He noted that although the Full Bench of Fair Work Australia, as it then was, noted that it was "inclined to think that… s 341(1)(c)(ii) contemplates that the employee is "able" to make the complaint by virtue of some provision in a statute or in an instrument", the matter was not argued before the Full Bench, and the Full Bench expressly noted that they did not express a concluded view on the issue.

He also noted that the Explanatory Memorandum to the Fair Work Bill 2008 (Cth) contains a number of "[i]llustrative examples" including the following:

"Freddy works part-time at a petrol station. He believes he is not being paid the correct award rate for a console operator. He writes a letter of complaint to the Australian Competition and Consumer Commission (ACCC) as he mistakenly believes that it is able to investigate wage underpayments. Freddy tells his manager about the letter. Following this, his hours for the next fortnight are cut in half. While the complaint would not be covered by paragraph 341(1)(c)(i) as the ACCC does not have capacity under a workplace law to seek compliance with the applicable award, Freddy would still have exercised a workplace right because he has made a complaint regarding his employment (subparagraph 341(1)(c)(ii))."

Lucev FM found that the example:

"demonstrates that the Parliament's intention was that a complaint can be made to a body without capacity to seek compliance, and that that complaint can be mentioned to the employer, which then constitutes the exercise of a workplace right because of the making of a complaint regarding employment under s.341(1)(c)(ii) of the FW Act. That confirms that the ordinary meaning of "is able to" for the purposes of s.341(1)(c) of the FW Act includes the making of a complaint directly by an employee to an employer in relation to their employment."

Accordingly, Lucev FM found that Ms Devonshire had a workplace right in relation to her entitlement to, and her complaints or inquiries about, her salary package and payments.

Accessorial liability

Section 550 of the Act provides for accessorial liability for a breach of civil remedy provisions. Under it, involvement in a contravention of the Act shall be treated in the same way as an actual contravention.

Ms Devonshire joined Masoud Abshar and Jolleh Abshar as respondents. They admitted to being involved in communications with Ms Devonshire about the terms and conditions of her employment, the payment of salary and allowances, and in the termination of Ms Devonshire's employment. However, the respondents sought to remove Masoud Abshar and Jolleh Abshar from the proceedings as it was asserted that that they have been improperly or unnecessarily joined as parties to the application.

Lucev FM outlined the principle that:

"to be liable a putative accessory must intentionally participate in a contravention, and that to form the requisite intent the putative accessory must have knowledge of the essential matters going to make up the contravention, whether or not the putative accessory knows that those matters amount to a contravention."

He also noted that provisions in relation to accessorial liability are designed to ensure that persons involved in contravening conduct are held liable for their conduct insofar as it resulted in a contravention of the relevant legislation. Indeed, action may be taken against accessories without taking action against the principal.

Lucev FM found that the application to remove the second and third respondents, in this case, was "extraordinary" as the submission that they are not liable because they are not a "person" for the purposes of section 340 of the Act, and not the "employer" for the purposes of s 352 of the Act "misses the point" and "completely ignores" section 550 of the Act. He highlighted that, in line with the authorities, section 550 seeks to impose liability on a person found to be an accessory separate to the "person" or "employer" who is alleged to have contravened the relevant legislative provisions.

Implications

The decision of Lucev FM is authority for the proposition that a complaint by an employee will be enough to attract the protection against adverse action, even in circumstances where there are no formal complaint mechanisms or processes for the complaint or inquiry. In practice, this is potentially a substantial broadening of the circumstances in which the adverse action provisions will apply.

His findings serve as a reminder that action taken against an employee during the "minimum employment period" under the Act in the first six months of employment (or 12 months in the case of a small business) will be subject to the general protection provisions of the Act, even though the employee will not have protection against unfair dismissal during that period.

This decision also makes the important point that individuals, such as directors or very senior employees of corporations, may be held liable for their conduct insofar as it results in a contravention of the Act. Accessorial liability is separate to the liability of the employer, and senior employees should be aware of the potential to be found personally liable for their involvement in the contravening conduct.