Australia: Workplace rights update: lessons in vigilance for employers

Last Updated: 27 January 2014
Article by Peter Doughman

A number of recent decisions have illustrated the scope of what constitutes a 'workplace right' under the Fair Work Act and have reaffirmed that employers must be vigilant to identify facts and circumstances that can give rise to workplace rights for employees.

These decisions highlight that employers must be particularly careful in their dealings with an employee in circumstances of contention or dispute with the employee, particularly where the situation could give rise to new or additional protections for the employee.

Background — what are the General Protections provisions?

Since the introduction of the Fair Work Act in 2009, the General Protections provisions found at Part 3-1 of the Act have been one of the major areas of consideration by employer associations, business groups, and workplace lawyers.

The introduction of these provisions expanded employee protections beyond the scope of both the established Unfair Dismissal regime and the various discrimination provisions underpinning the titled 'Unlawful Termination' regime. The General Protections provisions make it unlawful for employers (as well as principals in relation to contractors) to engage in 'adverse action' against employees and workers on a number of grounds, the most important new one being where an employee has, can, or proposes to, exercise a 'workplace right'.

Section 341(1) of the Fair Work Act 2009 ('the FW Act') provides that a person has a 'workplace right' if the person:

  • is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument, or order made by an industrial body;
  • is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
  • is able to make a complaint or inquiry:
    1. to a person or body having the capacity under a workplace law to seek compliance with that law or workplace instrument; or
    2. if the person is an employee, in relation to an employee's employment.

The FW Act does not seek to define or restrict what constitutes a 'complaint or inquiry in relation to an employee's employment'. Despite the first paragraphs of section 341(1), the employee's 'complaint or inquiry' need not be made under a workplace law, or to a person or body empowered by a workplace law. The Explanatory Memorandum of the FW Act makes clear that a complaint or inquiry may be made internally to a manager, colleague or the employer's Human Resources (HR) department.

This section needs also to be read in conjunction with Section 340, which prohibits 'adverse action' not only by reason of a person having a 'workplace right' but also by reason of a person having, or not having, exercised such a right, or proposing, or not proposing, to exercise such a right, or in order to prevent a person exercising such a right.

To these wide provisions is coupled Section 361, which imposes a 'reverse onus' on the employer/principal contractor to establish, if adverse action is taken, that it was NOT taken for a prohibited reason.

Protection arising from the employee's express intention to obtain legal advice

In the decision of Murrihy v [2013] FCA 908, the employer was found to have engaged in adverse action against an employee by reason of a workplace right after threatening the employee with dismissal during a dispute about unpaid commissions. The employee alleged that the threats were made by the employer's Chief Executive after the employee informed the employer that she would be seeking legal advice about the unpaid commissions.

In finding for the employee, Justice Jessop of the Federal Court ruled that the provision should not be limited to a complaint or inquiry to the employer, nor should it only operate to extend protection to employees who are union members. The very fact that the employee expressed an intention or desire to conduct her own external inquiries in relation to her employment constituted a workplace right protecting her from adverse action by reason of that right.

Although most employers would be unlikely to threaten to or dismiss an employee simply due to the employee's desire to seek legal advice, it is not unknown that an employee might allege such behaviour by the employer when an employment dispute is already on foot, or when an employee perceives their employment to be under threat. Employers must therefore ensure that any action taken that is prejudicial to an employee's interests cannot be regarded or found to have been taken due to the employee obtaining independent legal advice in relation to the dispute. Such risks can be minimised by expressly inviting an employee to seek legal advice, providing the employee with sufficient time to seek legal advice and provided any representative's response, and ensuring that policies are enforced consistently and without regard to external factors.

Refusal to follow unreasonable or unlawful direction

By contrast, the recent decision Daw v Schneider Electric (Australia) Pty Ltd [2013] FCCA 1341, confirmed that an employee's refusal to follow an unreasonable or unlawful direction does not entitle the employee to any protection against adverse action by reason of that refusal.

In this case, the employee was dismissed following his refusal to follow instructions that would have resulted in a breach of a Queensland law relating to the provision of professional engineering services. In this case, Justice Jarrett of the Federal Circuit Court accepted that the employer's direction constituted an unlawful direction, but rejected the argument that the employee's refusal constituted the exercise of a workplace right for the purpose of the FW Act, as the QLD law concerned was not a 'workplace law' for the purpose of section 341(1)(a). Nor could the refusal be reasonably seen to constitute a complaint or inquiry in relation to the employee's employment. The employee did make a separate complaint to the employer about his supervisor, but the Court found that this complaint did not contribute to the employee's dismissal, and in fact the employer demonstrated that it intended to properly investigate the allegations.

In ruling for the employer, Justice Jarrett nevertheless made it clear that the decision did not modify the long-established contractual principle that an employee must obey the directions and instructions of the employer, provided that those directions are lawful and reasonable, and fall within the scope of the contract of service. That observation by his Honour suggests that the employee may well have had a remedy against the employer for breach of contract, even though he had no claim in respect of the adverse action.

Protection arising as a consequence of the anti-bullying jurisdiction

Employers should also be aware that the protections against adverse action by reason of a workplace right may be of particular significance when the Fair Work Commission's anti-bullying jurisdiction introduced by the Fair Work Amendment Act 2013 commences on 1 January 2014. Under this new regime, the Fair Work Commission is empowered to investigate allegations of bullying made by a worker (which includes employees, subcontractors, apprentices and volunteers), make findings that a person or persons have engaged in bullying, and make orders directing the person or persons to stop the bullying. However, the Commission has no power to order reinstatement in employment or award compensation for such bullying.

The amended FW Act defines bullying as 'the repeated unreasonable behaviour directed towards a worker or group of workers... that creates a risk to their health and safety'. In possible anticipation of the likely volume of applications arising out of disciplinary action and performance management, bullying is defined to exclude 'reasonable management action carried out in a reasonable manner'. However, the amended FW Act does not define 'reasonable management action', and an aggrieved employee will not need to prove that management action was unreasonable as a precondition to lodging an application.

It is clear from a reading of section 341(1) of the FW Act that the lodging of an application under the new anti-bullying regime would constitute the initiation of a process or proceeding under a workplace law, and thus amount to the exercise of a workplace right. Furthermore, any threat by a worker that s/he intends to lodge such an application would also constitute the exercise of a workplace right. As a consequence of section 340, it is not necessary for the worker to actually exercise the right – he or she would be protected from adverse action simply by virtue of the fact that he or she can, or proposes to, initiate or participate in a process under a workplace law. Of particular concern is the fact that an application filed pursuant to the FW Act anti-bullying provisions need not be successful or even have any reasonable prospects of success - the application is sufficient to give rise to additional rights and protections for the worker.

As it is likely that many bullying applications under these provisions will be initiated as a result of disciplinary action taken against a worker, any application lodged by the worker may have the potential to stymie or complicate the employer's ability to maintain a disciplinary process, even in circumstances where the employer's actions are ultimately found to be reasonable. Employers will have to be cognisant of the reverse onus applicable to General Protections applications and ensure that any disciplinary action taken against a worker following the filing of a bullying application cannot be seen to be referable to the application itself.

Vigilance will be required

Given the generality of what constitutes a 'workplace right', employers will need to be vigilant as to the various workplace rights enjoyed or exercisable by employees and workers.

Employers will also need to be aware of the circumstances that may give rise to new and additional protections against adverse action, particularly when disputes emerge over terms and conditions or the reasonableness of performance management and disciplinary action. They should seek to minimise the risk of General Protections claims by instituting and adhering to appropriately drafted policies and procedures, and keeping detailed file notes of meetings and disciplinary action plans. Employers should also ensure that any employee complaints and inquiries are dealt with promptly independent of any ongoing workplace dispute.

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.

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