Australia: Employee complaints may result in adverse action claims

In our article of 19 June 2013 (" Recent Adverse Action Decisions Prove Favourable for Employers"), we examined an adverse action decision which produced a narrow reading of the "General Protections" provisions of the Fair Work Act 2009 (Cth) (FW Act).

That decision was Harrison v In Control Pty Ltd [2013] FMCA 149, where the Federal Circuit Court held that in order for a complaint by an employee to be a "workplace right" capable of protection under the FW Act, the complaint must have a statutory or contractual basis which, if made to an external body, would give that body jurisdiction to investigate and seek compliance under a relevant workplace law or instrument.

To recap, section 341(1)(c)(ii) of the FW Act 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. An employer contravenes the FW Act if the employer takes "adverse action" against the employee (say, by dismissing the employee) because of the employee's workplace right.

However, in an apparent conflicting decision to Harrison, the Federal Circuit Court in Devonshire v Magellan Powertronics Pty Ltd & Ors [2013] FMCA held that a simple complaint by an employee to his or her employer can be a "workplace right".

In this case, from December 2011 to January 2012 the employee made a number of inquiries to her employer, Magellan Powertronics Pty Ltd, in relation to her remuneration. In various emails, the employee asserted that she was not being paid the agreed salary and car allowance.

In January 2012, Magellan terminated the employee's employment for reasons which included the refusal to wear a company uniform and the employee's purported lack of sales.

The employee then commenced a General Protections claim against Magellan alleging Magellan had taken adverse action against her because of her workplace right to make a complaint or inquiry in relation to her employment under section 341(1)(c)(ii) of the FW Act.

In considering whether the employee had jurisdiction to continue her claim, the Court held that the employee had a "workplace right" under the FW Act for two reasons:

  1. The employee was entitled to the benefit of a "workplace law" – in this case being section 323 of the FW Act which requires an employer to pay an employee amounts payable to the employee in relation to the performance of work in full and at least monthly; and
  2. The employee's complaint or inquiry directed to her employer (in relation to her pay) was a workplace right for the purposes of section 341(1)(c)(ii) of the FW Act.

Relevantly, the Court distinguished previous decisions which suggested that the relevant section of the FW Act required some formal mechanism or provision for a complaint or enquiry to be made. In considering the Explanatory Memorandum to the FW Act, the Court held that the ordinary meaning of the provision included the making of a complaint directly to an employer by an employee in relation to their employment.

It has been suggested that, when read with the Harrison decision, complaints or inquiries in relation to employment must at least concern matters which are personal to the employee (as opposed to management decisions which do not directly affect the employee) in order to be considered as protected workplace rights.

However, until the apparent conflict between these decisions is resolved, organisations should proceed on the basis that any complaints by employees may be capable of giving rise to an adverse action claim (even where such a complaint is not made pursuant to a formal mechanism or capable of being enforced by an external body). Accordingly employers must exercise caution in disciplining or dismissing employees who have made complaints in the past, and ensure decisions which affect such employees are not only clearly documented but cannot be linked to the exercise of workplace rights.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Kemp Strang has received acknowledgements for the quality of our work in the most recent editions of Chambers & Partners, Best Lawyers and IFLR1000.

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Nick Noonan
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