Summary

The Federal Magistrates' Court (Burnett FM) has handed down the first substantive decision regarding section 341(1)(c)(ii)  of the Fair Work Act 2009 (Cth) (Act)1.   The section provides that an employee has a 'workplace  right' if the employee 'is able to make a complaint or inquiry... in relation to his or her employment'. The Act prohibits a person from taking 'adverse action' against another person because that person has a workplace right.

His Honour held that the phrase 'is able to make a complaint or inquiry' means that an employee must have the right to make a complaint or inquiry in relation to their employment which 'would engage the jurisdiction of a person or body with capacity under a workplace law to seek compliance'. The effect of this decision is to limit the kinds of complaints or inquiries in respect of 'workplace rights' that may give rise to general protections claim under s 341(1)(c)(ii).

Background

The applicant (Mr Harrison) and the director of the respondent  business (Mr Woodward) had been acquaintances  and partners in a business venture between 2002 and July 2004. The business installed "Nurse Call Systems" to hospitals. Following the closure of that business in 2004 the applicant joined the respondent  as an employee in another business owned and operated by Mr Woodward.

The applicant commenced employment in the position of a sales representative on 24 July 2004 until his employment  was terminated with effect from 1 April 2011.

During the course of his employment, the applicant had a number of concerns and criticisms about the way in which aspects of the business were being conducted and about the management style of Mr Woodward.  He voiced these concerns at a meeting on 13 August 2009. The applicant's employment  was terminated on that date. In a letter from Mr Woodward to the applicant, Mr Woodward stated:

"After a number of discussions  it has become clear that you are unhappy with my management and leaderships  skills and the direction in which In Control Pty Ltd is heading. I do not believe that either of us feels that this can be resolved and I believe that we have reached the point where we need to go our own ways. I'd like an orderly ending of your employment and would like to suggest that this be Friday, 18 September 2009."

Soon after, in an email to Mr Woodward, the applicant identified Mr Woodward's management  skills as the main source of his concerns by stating that:

"I believe that with my management  skills I have a lot to contribute but if all you want is a yes man I am sorry I am not able to fill that role."

This termination was subsequently revoked and the applicant was given a list of conditions against which he was required to improve. The list of conditions was given on the basis that if the applicant did not comply, the respondent would terminate his employment. The conditions included a direction that the applicant was not to get involved in the management of the company, was not to make meetings into a 'battleground'  and that Mr Woodward expected a more relaxed and productive working relationship. The relationship appeared  to improve for a time.

However, on 23 March 2011 the applicant requested a meeting under cover of concerns about the direction of the business. The applicant raised a number of matters in respect of the business. He submitted that in doing so he was not criticising Mr Woodward as a manager, but was concerned about the business as it was lacking direction.

The applicant identified, in a written agenda, a number of management issues to discuss at the meeting. These included:

  • Sourcing a new location for the office;
  • The bullying of staff in relation to working hours in the new office;
  • Purchasing of equipment such as PC'S and filing cabinets;
  • [Mr Woodward's] lack of recognition for staff, lack of understanding or empathy and inattention at meetings;
  • The lack of structure or direction within the business; and
  • Concerns about another staff member's dissatisfaction.

The meeting became acrimonious.  Mr Woodward ended the meeting after the applicant had aired some of the grievances contained in his agenda. A further meeting was arranged for 26 March 2011, at which Mr Woodward dismissed the applicant under the guidance of the Small Business Fair Dismissal Code.

Applicant's submissions

The applicant's case was that the respondent, in terminating his employment  two days after making complaints or inquiries in relation to his employment, had taken adverse action against him because he had exercised a 'workplace right' to do so. Under s 341(1)(c)(ii)  of the Act an employee has a workplace  right if they are 'able to make a complaint or inquiry - in relation to his or her employment'.

Respondent's submissions

There was no dispute that adverse action had been taken against the applicant. However, the respondent  denied that the applicant had exercised a workplace right within the meaning of s 341(1)(c)(ii)  of the Act. It argued that the applicant did not make a complaint or inquiry in relation to his employment  by virtue of a provision in a statute or industrial instrument. Therefore, he was not 'able' to make such a complaint or inquiry and did not exercise a 'workplace'  right by his conduct.

The respondent's alternative argument  was that the issues raised by the applicant at the meeting on 24 March 2011 were not in relation to the applicant's employment  but were complaints about the exercise of management prerogative  and style.

Key issues

The court identified the key issues in dispute to be:

  • whether the applicant's conduct at the material time was in respect of a "workplace right" or exercising  a "workplace right"; and
  • whether the adverse action was taken because the applicant was seeking to exercise a workplace right.

Decision

His Honour held that the complaints or inquiries that applicant made in the meeting of 24 March 2011 were not complaints or inquiries he was 'able' to make 'in relation to his employment'   and thus could not be said to form a 'workplace right' for the purposes of s341(1)(c)(ii).

Further, His Honour preferred the respondent's  view that the complaints made at the meeting on 24 March 2011 were directed to issues of management and management  style rather than to the applicant's employment.

His Honour therefore concluded  that the applicant had failed to establish that the adverse action had been taken for the reason that he had or had exercised a 'workplace right'.

Reverse Onus

His Honour noted that in the event that his analysis was wrong, that the applicant did have a workplace  right and that the complaints were made in relation to his employment  that in his view the respondent  had successfully  discharged  the reverse onus of proof established by s361 of the Act.

By this, His Honour found that the applicant was dismissed not because he made complaints or inquiries but because the relationship between he and Mr Woodward, through the applicant's insubordinate and rebellious attitude, had become untenable. His Honour noted that while a larger organisation might be able to abide some form of "industrial democracy", a small business requires at least a modicum of workplace harmony to operate effectively.

Reasoning

Whether the applicant's complaints established a workplace right

In deciding that the applicant's complaints or inquiries were not made in relation to his employment Burnett FM referred to the case of Nulty v Blue Star Group Pty Ltd [2011] 203 IR 1. In that case the Full Bench of Fair Work Australia noted in obiter that s 341(1)(c)(ii)  was not enlivened 'whenever an employee makes a complaint to a responsible senior manager as a mere incident of the employment relationship'. The Full Bench found that the phase 'is able' contemplates that the employee can only make the complaint by virtue of a statute or agreement.

His Honour went on to state that the context and structure of the section is such that the words 'is abie to make a complaint or inquiry...  in relation to his or her employment'  do not mean that a workplace right arises whenever employee can make a complaint or inquiry at large. Rather, he noted that the presence of the modifying phrase 'in relation to his or her employment' meant that the complaint must stem from or be an incident of the contractual arrangements or statutory framework surrounding  the employment.  

This narrow approach requires that subparagraphs  (c)(i) and (c)(ii), which are linked by the word 'or', should in fact be read together as if they were linked by the conjunctive 'and'. The effect of this interpretation is that the words in (c)(ii) 'in relation to his or her employment' actually mean 'is able to make a complaint or inquiry. .." " to a person or body having the capacity ..." " ... in relation to his or her employment'. His Honour stated that to have the subsections interpreted separately would render the words in (c)(ii) "is able to make a complaint or inquiry... in relation to his or her employment"  'so wide as to be almost meaningless'.

His Honour considered that the narrow interpretation squared with the view that the purpose of the relevant part of the Act is to protect workplace rights. This in turn requires there to be some form of authoritative body (whether by contract or statute) with jurisdiction to inteiVene and require compliance.

Whether the adverse action was taken because the applicant  was seeking to exercise a workplace right

His Honour found that the issues that were the subject of the applicant's complaints and inquiries during the meeting of 24 March 2011 were not made pursuant to a right arising from a contract or statutory framework. Rather they concerned a clash of personalities and the management of the company. That is, they were not complaints or inquiries the applicant was 'able to' make 'in relation to' his employment. Therefore the adverse action was not taken because the applicant had a workplace right.

Conclusion

This decision is the first considering  the scope of s 341(1)(c)(ii)  in substantive detail. It has, for the time being, narrowed the kinds of complaints or inquiries that will establish a 'workplace right' under that section. For this section to be enlivened, an applicant will need to show that:

  • their complaint was of a kind that is substantive in relation to their employment; and
  • they are able to make the complaint by virtue of their employment  contract or the statutory framework surrounding  their employment  e.g. an enterprise agreement, the Fair Work Act or a modern award, to a body having the capacity to enforce compliance  with a workplace law.

Key points for employers

Complaints by employees  about the management of a business, where the complaints concern the direction of the business and other management level decisions, will not be enough to establish that the complaint or inquiry establishes a workplace right.

However, as this is the first decision in respect of the relevant section employers should not assume that this point of law is fixed.

Therefore, employers  should ensure that they can prove that a decision which may have an adverse outcome for an employee  is not made because of complaints or inquiries made by that employee. That is, employees  must be able to lead credible evidence of another true reason for the decision.