General protections: wide meaning of workplace right

In the headnote to a recent Federal Circuit Court case, the case was described by the editor as being a claim for compensation for adverse action because a former employee has exercised a workplace right by the making of a “complaint made regarding proper management of projects which the applicant was required to oversee”.

I do not know how many times lawyers for an employer have argued in cases in which I have been involved at the conciliation phase in the Fair Work Commission that a complaint by an employee to the effect that he or she is not supported, or lacks the resources to undertake his or her duties cannot constitute the exercise of a workplace right and cannot be categorized as a complaint or enquiry in relation to his or her employment, the very definition of the expression in s.341 of the Act.  The argument normally put is that for the complaint or enquiry to constitute the exercise of a workplace right it must be underpinned by some legal entitlement to make it.

This I have always regarded as is nonsense and appears also to be the view of Judge McNab.

“ On the face of the letter, this indicates that one of the reasons for the termination of the applicants’ employment was the fact that he had sent the email on 11 August 2016. No evidence was given by or on behalf of the respondent that the reasons for the termination did not include the fact that the applicant had exercised a workplace right to make a complaint. I am satisfied that the sending of the emails by Mr Fatouros including sending an email to Mr Tiller and Mr Bolton dated 11 August 2016 was a substantial or operative and immediate reason for the termination of employment………..The applicant pleads by paragraph 5 of the statement of claim that the two emails being the email to Marie Kaliviotis dated 11 August 2016 at 7:16 AM (first complaint) and the email to Damian Bolton and Roger Tiller of 11 August 2006 at 7:28 AM (the second complaint) were complaints in relation to:

1. a)           the applicant’s employment; and
2. b)           a right which was a workplace right within the meaning of s.341of the Fair Work Act(“FW Act”).

It is alleged by paragraph 9 of the statement of claim that the termination of the applicant’s employment and a statement in the termination letter that the respondent will terminate the applicants employment unless the applicant provided an acceptable response were adverse action within the meaning of s.342 of the FW Act in contravention of s.340 of the FW Act.

The amended defence filed on behalf the respondent dated 31 March 2017 pleaded relevantly in relation to the claims of adverse action at paragraph 8:

“It denies the allegations in paragraph 8 and says further the applicant was dismissed because the applicant’s conduct in the course of his employment had been inappropriate in that he had failed to follow instructions from the respondent’s managing director.

Under particulars it is stated:

The conduct is set out in the termination letter.

The applicant also claimed that he has not been paid expenses incurred in the course of his employment those expenses being in the sum of $1,266.12. At trial the respondent did not dispute the applicant’s entitlement to be paid that sum.

The respondent gave evidence by its director Ms Marie Kaliviotis by an affidavit sworn 9 March 2018 in relation to the reason for termination in the following terms:

Poor performance of duties

1. On numerous occasions he failed to provide adequate notice of his absences from work.

15           Now produced and shown to be in marked ‘MK-8’ eight is a true copy of:

(a)          email correspondence between the Applicant and Matthew Griffiths dated 24 October 2013.

16           In 2016 the applicant was repeatedly reluctant or failed to follow the directions of executive staff of the respondent, particularly with regard to the reduction of the Respondent’s use casual staff. The Applicant also demonstrated his disagreement with and lack of confidence in my decisions as Director of the Respondent.

17           On 11 August 2016 the applicant wrote to Damian Bolton and Roger Tiller (Executive Advisors for the Respondent) expressing his disagreement as how I was carrying out my duties as a Director. I believe the Applicant had made similar comments in the past and that this was having the effect of undermining the confidence of the Respondent’s customers and causing uncertainty amongst the Respondent’s staff.

…

Dismissal

1. On 19 August 2016 I caused to be sent to the Applicant a letter giving notice of Termination of Employment (‘the Termination Letter’), explaining that was the company’s intention to terminate the Applicant’s employment at the close of business on Monday, 22 August 2016.
2. In the Termination Letter I provided the Applicant an opportunity to respond, and I was prepared to listen to any representation that he might wish to put forward as to why we should not terminate his employment. The Applicant was provided with five weeks’ salary in lieu of notice in accordance with the respondent’s obligations both under the Applicant’s contract of employment, and under the National Employment Standards and the Fair Work Act 2009.

The termination letter states that one of the reasons for the termination of employment was the fact that the applicant had sent an email to Damian Bolton and Roger Tiller of 11 August 2016 in which he suggested that I don’t believe Marie is acting in the highest and best interests of the business.

On the face of the letter, this indicates that one of the reasons for the termination of the applicants’ employment was the fact that he had sent the email on 11 August 2016. No evidence was given by or on behalf of the respondent that the reasons for the termination did not include the fact that the applicant had exercised a workplace right to make a complaint. I am satisfied that the sending of the emails by Mr Fatouros including sending an email to Mr Tiller and Mr Bolton dated 11 August 2016 was a substantial or operative and immediate reason for the termination of employment.^[6]

[6] See Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 at [62], [104] and [140]

A significant aspect of the respondent’s defence as conducted at hearing was whether the complaints contained in the first email of 11 August 2016 and the second email of 11 August 2016 are complaints or enquiries in relation to his employment the purposes of s.341(1)(c)(ii) of the FW Act. That section provides that:

(1)     A person has a workplace right if the person:

…

(c)          is able to make a complaint or inquiry:

…

(ii)     if the person is an employee–in relation to his or her employment.

The applicant relied upon the part of the decision of Dodds-Streeton J in the Shea v TRUenergy Services Pty Ltd (No.6)^[7] where her Honour said at [628]:

In my opinion, a complaint which an employee is able to make is limited to the relevant grievance or accusation which he or she is able, on some identifiable basis, to communicate as a complaint in relation to his or her employment. Once it be accepted that such entitlement is necessary, it governs the definition and extent of the complaint that the employee is able to make. Communications, grievances or accusations which are not themselves complaints that the employee is able to make would not, in my view, assume that character and invoke the statutory protection merely by virtue of being included in, or expressed contemporaneously with, a complaint within the meaning of s.341(1)(c)(ii).

[7] [2014] FCA 271; 314 ALR346; [2014] IR at 1 at 628

It was put that passage stands for the proposition that in order to be a complaint within the meaning of that section, the subject matter of the complaint must be underpinned by the entitlement or right.

The respondent gave the following example at [14] of its outline of argument (copied exactly):

1. …if an employer were to undertake an acquisition of another business in the pursuit of its commercial objectives, there is no capacity for an employee to make a complaint or enquiry about that decision and to thus enliven section 341(1)(c)(ii). Thus, the focus in the correct interpretation of the section is not upon a source of entitlement to make a complaint. Rather, it has an entitlement which, by reason of some conduct on the part of the employer, entitles the employee to make a complaint.
2. Taken to its logical conclusion, if such were the case any decision undertaken by an employer would leave itself open to an adverse action claim. Outside the rights, duties and obligations of the parties to the employment contract, the employer exists (in this instance) for the purpose of deriving a profit. It is a commercial enterprise and like any such enterprise, it is subject to the vagaries of the economy and in particular, of the market place within which it conducts its sphere of operations. Its directors are charged with the responsibility of making and giving effect to those decisions which enable the corporate employer to fulfil its commercial objectives. In the ordinary course of events, an employee has no entitlement to take issue with those decisions which are directed towards the pursuit of that commercial objective.
3. In the present instance, the rights of the applicant are underpinned by his contract of employment and the legislation. Those sources of entitlement create protections for the employee which he may rely upon and enforce. They extend to matters such as salary entitlements, leave entitlements and so on. They do not however extend to entitling commentary or criticism of the direction of which the owners of the business choose to take the business.

In my view, there is no basis in the legislation or in the decision of Shea to circumscribe the operation of s.341(1)(c) of the Act in the way submitted by the respondent. Consider for example, a person, who in the course of their employment had as part of their duties a responsibility to ensure that the business of the employer honour its covenants to it bankers. If that employee raised a complaint with a superior within the workplace (whether that person be a Director or otherwise) that the company, by entering into a transaction was risking trading whilst insolvent or placing itself in breach of covenants with the bank that would be in my view our complaint in relation to his employment as the subject matter of the complaint arises directly from the work that person performs in his or her employment. In this case the management of the projects at Melbourne University were part of the applicant’s duties arising from his employment and his raising of issues regarding the timely payment of subcontractors in each of the relevant emails was something that arose directly out of the performance of his work and impacted on him as an employee.

At [626] of Shea Dodds-Streeton J held that a complaint could be treated as having been made if the:

…relevant communication, whatever its precise form, would be reasonably understood in context as an expression of grievance or a finding of fault which seeks, whether expressly or implicitly, that the employer or other relevant party at least take notice of and consider the complaint.

I also have had regard to Walsh v Greater Metropolitan Cemeteries Trust (No.2) [2014] FCA 456: 243 IR 468 where Bromberg J stated at [41] – [44] as follows:

1. The words “in relation to” are words of wide import. The use of that phrase in s341(1)(c)(ii) identifies that a relationship between the subject matter of the complaint and the complainant’s employment is required. The nature of that relationship need not be direct and may be indirect: Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 3)[2012] FCA 697 at [61]– [64](Katzmann J); Shea v TRUenergy Services Pty Ltd (No 6)[2014] FCA 271 at [631] (Dodds-Streeton J). I respectfully agree with Katzmann J’s observation in Pilbara at [64] that if some limit on the broad language utilised in the phrase “in relation to his or her employment” is to be imposed, it needs to be “found in the nature and purpose of the legislation, which includes the protection of workplace rights”.
2. Where the subject matter of the complaint raises an issue with potential implications for the complainant’s employment, it is likely that the requisite nexus will be satisfied: Pilbaraat [69].
3. In this case, Ms Walsh raised a probity issue in relation to a contract with a supplier who supplied services including to an operation which Ms Walsh managed in the course of her employment. Whether or not Ms Walsh was under a contractual duty to report the possible misdeed of others (see the discussion in Irving, The Contract of Employment (LexisNexis Butterworths, 2012) at [7.21]), her failure to report suspected wrong-doing had the potential to reflect badly upon her and cause prejudice to her in her employment. By reason of either of those two factors, the Alsco contract complaint made by Ms Walsh raised an issue with potential implications for Ms Walsh’s employment and was “in relation to…her employment” within the meaning of s.341(c)(ii) of the FW Act.
4. In determining the construction issue raised here, I have considered but have not been persuaded by GMCT’s reliance upon Rowland v Alfred Health[2014] FCA 2. In that case, Marshall ACJ determined that a complaint made by a doctor about the competency of another doctor with whom he worked was not a complaint in relation to the complainant’s employment. Whether the clinical competence of the doctor complained about had potential implications for the employment of the complainant is not a matter that appears to have been raised before or addressed by Marshall ACJ. His Honour does not appear to have been referred to Pilbara and did not have the benefit of Shea.

A contention that an indirect nexus would be sufficient does not appear to have been relied upon by the applicant in that case. Further, his Honour’s conclusion seems to turn on a factual dispute as to whether the relevant complaint related to the complainant’s employment because it also included a complaint that the doctor concerned had taken a patient from the complainant: see Rowland at [29]-[38].

For these reasons, I am satisfied that the emails were complaints and enquiries within the meaning of subsection 341(1)(c)(ii) of the FW Act. It follows that I find that there has been a breach of section 340 of the FW Act, that being a civil remedy  provision of the Act.”

Fatouros V Broadreach Services Pty Ltd (2018) FCCA 769 delivered 29 March 2018 per McNab J