Adverse action and workplace rights

Here is a very interesting extract from a recent decision of the Federal Circuit Court about the ambit of the general protections in relation to prospective employees, referred to by the trial judge as a “statutory fiction” (see sub-sec 341(3), Fair Work Act) together with an analysis of the doctrine of adverse action.

 

  1. “ Disposition
  2. As it happens, it is convenient to answer the second preliminary question first on the assumption that it is possible for the statutory fiction set out in s. 341(3) to apply to an inquiry which engages s. 341(1)(c)(ii) of the FW Act.
  3. First, and for my part, I doubt whether all of the alleged inquiries here were each an “inquiry” for the purposes of s. 341(1)(c)(ii).  The seeking of legal advice was certainly an “inquiry” (the first part of the Second Alleged Inquiries): see Murrihy v. Betezy.com.au Pty Ltd [2013] FCA 908; (2013) 238 I.R. 307 at [143] per Jessup J. But the request to have the applicant’s work station set up ergonomically (the second part of the Second Alleged Inquiries) was not directed to any investigation or examination made for the purpose of acquiring knowledge or information. It was rather a simple application made as part of the applicant’s negotiation of her work conditions. Nor was the applicant’s statement that she had received legal advice and wanted to make changes to the Proposed Contract an “inquiry” (the Third Alleged Inquiries). Again, what was said simply formed part of the negotiations between the parties. I otherwise accept that the question asked about the award or enterprise agreement was an “inquiry”, but doubt whether the same could be said in relation to the requests for amendments to the Proposed Contract and to the request for an ergonomic work station (all part of the Fourth Alleged Inquiries). Nonetheless, in what follows I have assumed, in accordance with the wishes of the parties, that each of the Second, Third and Fourth Inquiries constituted an “inquiry” as that word is used in s. 341(1)(c)(ii) of the FW Act.
  4. The next question for consideration is whether there existed some instrument or law which conferred on the applicant the capacity to make these inquiries.  This element of s. 341(1)(c)(ii) has been recently explained by the Full Court of this Court in PIA Mortgage Services.  In that case, it was held that the relevant employee had made two complaints in relation to his employment.  In broad terms, the first complaint was that the employer had breached or had threatened to breach the employment contract; the second complaint was that the employee had been misled into accepting employment with the employer (in contravention of s. 31 of the A.C.L.).  Both complaints followed the making of an offer by the relevant employer to terminate the employee’s employment upon payment of four months’ salary.  Both complaints were expressed in an email sent by the employee to an officer of the employer and in a letter of demand sent by the employee’s solicitors.
  5. Rangiah and Charlesworth JJ., at [14], said the following in amplification of the principle articulated by Dodds-Streeton J. in Shea:

On the understanding that s 341(1)(c)(ii) requires an entitlement or right to make a complaint in relation to the employee’s employment, there must be an identifiable source of that entitlement or right.  In Shea, Dodds–Streeton J did not suggest that the entitlement or right is limited to one arising under an instrument such as legislation, an industrial instrument, or a contract of employment.  In fact, her Honour was careful not to attempt any exhaustive description of the source of the right to make a complaint or inquiry.  Nor did her Honour suggest that the entitlement or right must be conferred expressly or directly by the source.

  1. Their Honours decided that each of the two complaints I have described above was able to be made, in the sense required by s. 341(1)(c)(ii) of the FW Act, by the common law of contract and by the A.C.L.  Their Honours reasoned at [19]-[20] as follows:

Under the general law, an employee has a right to sue his or her employer for an alleged breach of the contract of employment.  A suit may be regarded as the ultimate form of complaint.  Accordingly, in our opinion, an employee is “able to make a complaint” about his or her employer’s alleged breach of the contract of employment.  That ability is “underpinned by” (to use Streeton–Dodds J’s [sic] expression in Shea) the right to sue, and extends to making a verbal or written complaint to the employer about an alleged breach of the contract.

Further, an employee who alleges that his or her employer has contravened a statutory provision relating to the employment is “able to make a complaint” within s 341(1)(c)(ii) of the FW Act. That right or entitlement derives from the statutory provision alleged to have been contravened. The ability encompasses making a complaint to the employer or an appropriate authority about the alleged contravention, whether or not the statute directly provides a right to sue or make a complaint.

  1. I make two observations about the foregoing reasons.
  2. First, I do not read the reasons of Rangiah and Charlesworth JJ. to mean that any complaint made about a contract, or any complaint made about the contravention of a statute, must always constitute a complaint that is “able to be made” by reason of that contract or that statutory provision.  The reasons at [19]-[20] must be read in context.  At [16], their Honours observed that the legal sources for an ability to make a complaint could include legislative provisions that are not workplace laws, contractual terms “providing a right to make complaints” and the “general law” (or the common law of Australia, including in that expression the doctrines of equity).  Each category was then explained in more detail.
  3. In relation to legislative provisions which are not workplace laws, Rangiah and Charlesworth JJ. said at [17]:

In the first category, there are a number of legislative provisions of general application that encompass the making of complaints by employees in relation to their employment, but are not obviously identifiable as workplace laws.  Examples are s 36(1) of the Privacy Act 1988 (Cth) (complaints about breaches of privacy) and s 1317AA of the Corporations Act 2001 (Cth) (disclosures by whistleblowers). The Explanatory Memorandum for the Fair Work Bill 2008 gives an example of s 341(1)(c)(ii) of the FW Act applying where an employee’s hours are cut after writing a letter of complaint to the Australian Competition and Consumer Commission (ACCC) under a mistaken belief that it is able to investigate underpayments of wages.  The example demonstrates that s 341(1)(c)(ii) may be engaged even where there is no statutory provision expressly or directly conferring a right to complain or commence proceedings.  The example envisages that an entitlement to make a complaint arises from the allegation of underpayment, as well as the ACCC’s function of investigating possible breaches of relevant statutory provisions.

  1. The examples given in the foregoing paragraph are legislative provisions which confer an ability to make a complaint of some kind, such as the “whistleblower” provisions contained in Pt. 9.4AAA of the Corporations Act 2001 (Cth.).  Of course, as their Honours recognise, the conferral of an ability to make a complaint by statute does not always need to be done expressly or directly: at [26].  Thus, where a statute supplies a cause of action, and a demand is made to advance that cause, that demand may constitute a complaint made by reason of that statute.  In PIA Mortgage Services, the relevant statute was the A.C.L.
  2. In relation to “contractual terms providing a right to make complaints”, Rangiah and Charlesworth JJ. said at [18] as follows:

Section 341(1)(c)(ii) also extends to contracts of employment.  The distinction between a contract of employment, on the one hand, and, a workplace instrument or workplace law on the other, must be borne in mind.  The provisions of the latter will rarely be implied terms of the former: see Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 421–422, 452–453. Section 341(1)(c)(ii) must at least apply where a contract of employment confers a right upon an employee to raise a grievance or otherwise complain about his or her employment …

Again, their Honours are referring to a term in a contract which “confers a right upon an employee to raise a grievance or otherwise complain about his or her employment”.

  1. In relation to the making of a complaint under the common law of Australia, Rangiah and Charlesworth JJ. said at [19] what I have already reproduced above.  Their Honours were there referring to the common law right to sue for breach of contract which, with respect, their Honours quite rightly observe to be the “ultimate form of complaint”.
  2. Secondly, this is not a case about “complaints” but about “inquiries”.  For a person to be “able” to make an inquiry, that capacity must be anchored in a legal entitlement of some kind, whether it be statute, contract law, the common law of Australia, or some other instrument or thing that confers legal rights, in the sense described by Rangiah and Charlesworth JJ. in PIA Mortgage Services.
  3. I turn now to consider each of the alleged inquiries in accordance with the applicant’s categories:

(1)          First category of inquiries (the first part of the Second Alleged Inquiries and the Third Alleged Inquiries)

It was said that the source of the ability to seek legal advice and request drafting changes to the Proposed Contract was the Proposed Contract itself.  I respectfully disagree.  The Proposed Contract conferred no legal rights whatsoever.  Indeed, its contents were never agreed.

(2)          Second category of inquiries (the second part of the Second Alleged Inquiries and part of the Fourth Alleged Inquiries)

It was said that the source of the applicant’s ability to request her work station be set up ergonomically was s. 20 of the Equal Opportunity Act and ss. 5 and 15 of the Disability Discrimination Act.  I respectfully disagree.  Section 20 provides a legal regime which requires an employer to make reasonable adjustments for a person offered employment or an employee with a disability if requested to do so.  It sets out rules for determining how those adjustments are to be determined and when an employer may decline lawfully to provide them.  Nothing in the provision conferred on the applicant here any additional legal ability to make the request (called an inquiry) that she made.  She already, with respect, had an extant ability to do this (as to which see below).  Section 5 of the Disability Discrimination Act provides that a failure to make reasonable adjustments can constitute a form of prohibited discrimination.  Section 15 of that Act prohibits an employer from discriminating against a person on the ground of the other person’s disability.  Again, neither provision conferred on the applicant here an additional legal ability to make an inquiry about an ergonomic work station.

Before me it was contended that it was implicit that s. 20 of the Equal Opportunity Act conferred an ability to make this inquiry.  With respect, I disagree.  There is nothing about the terms of s. 20 that justifies such an implication when every prospective employee already has, to the fullest extent necessary, such an ability.  In reality, in this country, a prospective employee enjoys the liberty of making any inquiry he or she feels the need to make of his or her prospective employer.  Of course, the existence of such a lawful capacity says nothing about the willingness of a prospective employee to make such inquiries.

(3)          Third category of inquiries (part of the Fourth Alleged Inquiries)

It was said that the source of the applicant’s ability to ask questions about whether her employment would be covered by an award or enterprise agreement was the FW Act itself.  Again, I respectfully disagree.  Nothing in the FW Act added to her undoubted ability to ask the question she posed about the applicability of any award or enterprise agreement.  That conclusion also includes s. 341(1)(c)(ii) of the FW Act.  That provision conferred no legal ability to make a complaint or inquiry.  Rather, what it conferred was protection with respect to the making of such a complaint or inquiry.  If that were not so, every complaint or inquiry made about a person’s employment would be found to have a sufficient legal source of entitlement for the purposes of s. 341(1)(c)(ii) by reason of that very provision.  With respect, such reasoning is somewhat self‑fulfilling.  It is also inconsistent with the decision in PIA Mortgage Services where the majority of the Court made it clear that the scope of s. 341(1)(c)(ii) did not apply to all complaints or inquiries. Rangiah and Charlesworth JJ. thus observed at [10]-[11] as follows:

The objects of s 340 of the FW Act include providing an employee with protection against adverse action taken because he or she has exercised a workplace right. The provision evidently seeks to confer protection additional to any protection offered under the general law. Although the protection is broad in its scope, it has its limits, including by the definition in s 341 of “workplace right” …

It must be accepted that the phrase “is able to make a complaint or inquiry” in the definition of “workplace right” in s 341(1)(c)(ii) of the FW Act operates to limit the scope of the protection provided …

(Emphasis added.)

  1. This is otherwise not a case like PIA Mortgage Services where an applicant alleges a breach of contract or a breach of some statutory provision which confers a cause of action, which in each case constitutes a complaint.  This is a case about making inquiries.
  2. Does the statutory fiction created by s. 341(3) of the FW Act require any different answer?  I think not.  Strictly speaking, the fiction mandated by s. 341(3) is not that the prospective employee is taken to be employed; rather, the prospective employee “is taken to have the workplace rights” he or she would have “if she or he were employed”.  Thus here, one must determine what workplace rights the applicant would have had if she had been employed by the respondent.  The applicant is then deemed to have those workplace rights.  The statutory fiction, whether or not it is to be strictly construed, thus practically requires one to assume that the applicant was employed by the respondent when in fact she never was.  In my view, this requires one to determine the applicant’s workplace rights under s. 341(1) on that fictional basis.
  3. However, there is a problem insofar as the source of an ability to make a complaint or inquiry is said to arise from a contract of employment.  Whilst s. 341(3) practically requires one to assume that the applicant was employed, it is otherwise silent as to the terms of that employment.  That may not matter in a given case.  But, here, the parties were in disagreement about the content of the Proposed Contract, and could not agree about its final form.  I cannot assume that the contract which would have been entered into for the purposes of the statutory fiction would have taken the form of the Proposed Contract provided by the respondent.  That form of the contract of employment was never accepted by the applicant.  Nor can I assume that the contract which would have been entered into for the purposes of the statutory fiction would have assumed the form of the respondent’s Proposed Contract as amended by the applicant.  Those amendments were never accepted by the respondent.  If the parties had continued to negotiate the content of a contract of employment, I can only guess at the outcome of their bargaining; it would be speculation to know what clauses would have survived, what clauses would have been deleted, and what clauses would have been amended.
  4. On the fictional assumption that the applicant was employed by the respondent, I make the following conclusions:

(a)          the applicant has not shown that a term of a contract, which would have been entered into, conferred on her the legal capacity to seek legal advice and tell the respondent about that step (the first part of the Second Alleged Inquiries).  Indeed, there is an air of unreality about this aspect of the applicant’s case: the nature of her inquiry was about a draft contract of employment made, applying the statutory fiction, when she is taken to have already been employed;

(b)          my conclusion concerning the source of the ability to make the request for an ergonomic work station (the second part of the Second Alleged Inquiries and part of the Fourth Alleged Inquiries) does not change because one must assume that the applicant was employed by the respondent.  Again, because her request concerned future employment there exists the same degree of artificiality concerning this aspect of the applicant’s case;

(c)          the same foregoing conclusion applies to the Third Alleged Inquiries; and

(d)          I have already concluded that the FW Act conferred no legal ability to make an inquiry about the applicability of any award or enterprise agreement (part of the Fourth Alleged Inquiries).  That conclusion does not need to change because one must assume that the applicant was employed by the respondent.

  1. For these reasons, the answer to the second preliminary questions of law is “No”.
  2. It is otherwise unnecessary to address the submission made in relation to the first preliminary question, and presented by Mr Tracey of Counsel on behalf of the respondent, that the phrase “if the person is an employee” necessarily excludes the operation of s. 341(3) of the FW Act.  However, I observe, there is much to be said for the proposition.  That is because, for the foregoing reasons, there are real difficulties in applying s. 341(1)(c)(ii) to pre-contractual negotiations.  It is also because:

(a)          the general protection given to the making of complaints or inquiries is expressly limited to those made by employees.  It does not extend to complaints or inquiries made by employers or independent contractors.  On one view, Parliament intended to reserve to employees only the protection conferred by s. 341(1)(c)(ii).  That would suggest it was not intended to apply to prospective employees;

(b)          to the extent that there may be a conflict in the scope of ss. 341(3) and 341(1)(c)(ii), that conflict might need to be resolved by a reading down of one of the provisions.  In that respect, the Full Court of this Court observed in Handbury Holdings Pty Ltd v. Federal Commissioner of Taxation (2009) 179 F.C.R. 569 at 577 [31] as follows:

The problem of reconciling apparently conflicting parts of the statute is well-worn territory.  That process of reconciling such provisions will often require a court, as Lord Herschell explained in Institute of Patent Agents v Lockwood [1894] AC 347 at 360, “to determine which is the leading provision, and which must give way”. The High Court applied that dictum in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [70] and went on to say:

Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

Here, there is much to be said for the proposition that the “leading provision” is s. 341(1)(c)(ii) and it is thus s. 341(3) which “must give way” to its operation; and

(c)          finally, and in any event, each of what the parties called an inquiry concerned the applicant’s prospective employment and not any actual employment.  In such circumstances, it may be doubted whether such inquiries were made “in relation to” the applicant’s fictional employment as mandated by s. 341(3).

  1. As it may be the case that these potential difficulties could be overcome in a given case, it is not appropriate to say anything more about Mr Tracey’s argument.
  2. The answers to the questions of law should be:

(1)          “Not necessary to decide”; and

(2)          “No”.”

 

Maric v Ericsson Australia Pty Ltd [2020] FCA 452 (09 April 2020) (Steward J)