The Federal Court has confirmed that, for the purposes of the “workplace rights” provisions in Part 3-1 of the Fair Work Act (FW Act), a “workplace instrument” is one that is given legal significance by a particular workplace law.  As a result, an employee cannot make a claim for breach of the workplace rights provisions where that claim relates to the employee’s common law contract of employment (CL Contract).  This is because a CL Contract derives its force not from legislation, but from the common law.

Implications for employers

Employers can be confident that employees cannot make certain claims of breaches of workplace rights where the alleged entitlement arises from a CL Contract.  For example, an employee cannot claim that the employer has taken adverse action because the employee had an entitlement to the benefit of, or holding of a role or responsibility under, a workplace instrument, or an entitlement to participate a process or proceedings arising under a workplace instrument, if that alleged entitlement derives from a CL Contract.

However, employers should keep in mind that employees covered only by a CL Contract may still be able to make a “workplace rights” claim where they have made a complaint or inquiry (to the employer or an enforcement body) in relation to their employment.

Background

The FW Act permits an employee to make a claim that the employer has breached the employee’s workplace rights in a number of circumstances.  Such claims are increasingly common, particularly in situations where the employee’s employment is terminated and the employee is unable to make an unfair dismissal claim.  In particular, claims can be made where the employee has an entitlement:

  • to the benefit of, or holds a role or responsibility under, a workplace instrument; and/or
  • to participate a process or proceedings arising under a workplace instrument; and/or
  • to make a complaint or inquiry to an enforcement body seeking compliance with a workplace law or workplace instrument; and/or
  • to make a complaint or inquiry to the employer in relation to their employment.

A claim may be made where the employer has taken adverse action against the employee - for example, terminating the employee’s employment.

A “workplace instrument” is defined under the FW Act to include an instrument that is made under, or recognised by, a “workplace law” and which concerns the relationship between employers and employees.  A “workplace law” relevantly includes the FW Act and other laws which regulate the relationship between employers and employees.

Mr Barnett’s claim

Mr Barnett was employed between 31 May and 10 August 2010 as the Territory Insurance Office’s (TIO) Manager, Claims Operations - Property.  He claimed that his employment was terminated because he had a workplace right, being the right to exercise his role or responsibility under his common law contract of employment to manage TIO’s staff.  Mr Barnett argued that his common law contract was a “workplace instrument” within the meaning of the FW Act, and so his termination constituted adverse action in breach of the “workplace rights” provisions of the FW Act.

The TIO did not agree that the contract constituted a “workplace instrument”.

The initial question of whether Mr Barnett’s contract constituted a “workplace instrument” was referred to Mansfield J of the Federal Court for determination, prior to the matter progressing further.

The Federal Court’s decision

Mansfield J found that the contract was not a “workplace instrument” and so Mr Barnett’s claim was dismissed.  He reached the following conclusions:

  • “workplace instruments” under the FW Act are those which are made under or recognised by - that is given legal significance by - a particular workplace law (including the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth));
  • common law contracts create the relationship of employer and employee to which the FW Act applies and underpin the legislative structures (awards, agreements and the NES).  While the FW Act arguably contemplates regulation of the employment relationship by way of common law contract, the FW Act does not itself enliven the contractual rights of the parties under a common law contract.  That is the function of the common law itself;
  • there is no indication that Parliament intended for the common law contract to be a “workplace instrument” and various provisions in the FW Act, for example the transfer of business provisions set out at Part 2.8, suggest otherwise; and
  • it is possible that, in any case, an instrument that deals only with the relationship between an employer and employee, rather than employers and employees (plural) may not fall within the definition of “workplace instrument” (although this point was not decided). 

Barnett v Territory Insurance Office [2011] FCA 968