General protections; when will a person have a workplace right?

A Full Bench of the Federal Court of Australia has today taken a refreshing look at what constitutes the exercise of a workplace right in an important appeal from a general protections’ decision of the Federal Circuit Court and gone some way to explaining the circumstances in which a workplace right will be exercised by the making of a complaint or inquiry in relation to an employee’s employment. must the complaint or inquiry be pursuant to a legal right, or will it suffice that it merely relates to the employment?

 

“Section 341 of the FW Act provides, relevantly:

Meaning of workplace right

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

(a)          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; or

(b)          is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or

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

(i)           to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or

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

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”. At issue in the present case is the extent of that limitation.

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. In Shea v TRUenergy Services Pty Ltd (No 6) (2014) 314 ALR 346; [2014] FCA 271, Dodds–Streeton J held (at [65]):

In my opinion, the requirement that the complaint be one that the employee ‘is able to make’ in relation to his or her employment suggests that there are complaints which the employee is not able to make in relation to his or her employment.  The ability to make a complaint does not arise simply because the complainant is an employee of the employer.  Rather, it must be underpinned by an entitlement or right.  The source of such entitlement would include, even if it is not limited to, an instrument, such as a contract of employment, award or legislation.

We respectfully agree with Dodds–Streeton J that s 341(1)(c)(ii) of the FW Act contemplates that not every complaint that an employee makes in relation to his or her employment is one the employee is “able to make” (for present purposes, it is unnecessary to address the ability to make an inquiry). The question then arises as to how the provision distinguishes complaints that come within its reach from those that do not.

Justice Dodds–Streeton considered that the word “able” refers to an entitlement or a right. We respectfully agree. However, her Honour’s statement that a complaint “must be underpinned by an entitlement or right” is ambiguous. On one view, it may indicate that the complaint “must be underpinned by an entitlement or right to make a complaint”. On another, it may indicate that the provision captures any complaint by an employee concerning an entitlement or right related to his or her employment. In our opinion, the former view is consistent with the succeeding sentence in the passage and with s 341(1) of the FW Act as a whole. The phrase “is able to” appears in both s 341(1)(b) and (c). In s 341(1)(b), the phrase indicates an entitlement or right to initiate, or participate in, a relevant process or proceeding. In s 341(1)(c)(i), the phrase indicates an entitlement or right to make a complaint or inquiry to a person or body. Consonantly, in s 341(1)(c)(ii), the phrase describes a right or entitlement to make a complaint or inquiry in relation to the employee’s employment. It may be observed, however, that whichever view is taken makes no difference to the outcome of this case.

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.

The expression “workplace right” in s 341(1) of the FW Act covers a broad range of rights. Under para (a), 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. Under para (b), a person has a workplace right if the person is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument. Under para (c)(i), a person has a workplace right if the person is able to make a complaint or inquiry to a person or body having the capacity under a workplace law to seek compliance with that law or any workplace instrument. The expression “workplace instrument” is defined in s 12 to mean an instrument that is made under, or recognised by, a workplace law and concerns the relationships between employers and employees. A “workplace law” is defined to include the FW Act and a law of the Commonwealth, State or Territory that regulates relationships between employers and employees. It was not argued that any law that touches upon relationships between employers and employees is necessarily a “workplace law”. Neither was it argued that the general law of contract is a “workplace law”. Those matters can be left aside for present purposes.

The “workplace rights” under paras (a), (b) and (c)(i) of s 341(1) are confined to rights, roles and responsibilities under, or arising from, workplace laws and workplace instruments. In contrast, s 341(1)(c)(ii) is not so confined, providing 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”. There are three obvious potential sources of an employee’s ability to make complaints which fall outside s 341(1)(a), (b) and (c)(i), but within (c)(ii). Those sources are legislative provisions that are not workplace laws, contractual terms providing a right to make complaints and the general law.

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.

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. However, the broad language used does not purport to confine the right to complain to one arising under a contract of employment, and, in our opinion, extends to a right to complain arising under the general law.

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 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.

These conclusions are supported not only by the broad language of s 341(1)(c)(ii) of the FW Act, but also by the statutory context.

Firstly, s 340(1) is protective of persons, including employees, who may be subjected to adverse action. That protective purpose suggests that an unduly narrow or restrictive view of the broadly-worded definition of “workplace right” in s 341(1)(c)(ii) should not be adopted.

Secondly, the Explanatory Memorandum for the Fair Work Bill suggests that s 341(1)(c)(ii) is intended to have a broad operation. It provides:

Subparagraph 341(1)(c)(ii) specifically protects an employee who makes any inquiry or complaint in relation to his or her employment.  Unlike existing paragraph 659(2)(e) of the WR Act, it is not a pre–requisite for the protection to apply that the employee has ‘recourse to a competent administrative authority’.  It would include situations where an employee makes an inquiry or complaint to his or her employer.

(Emphasis added.)

This passage, it must be recognised, overstates the width of the protection provided by s 341(1)(c)(ii), since the provision does not in fact protect an employee who makes “any… complaint”. However, the passage suggests that the legislative intent should not be understood as requiring a narrow interpretation of the provision.

Thirdly, the contrary construction would produce incongruous results that are inconsistent with the legislative purpose. There will be some conditions of employment that are both terms of an employment contract and prescribed under legislation or an industrial instrument, and some that are one but not the other. Section 340(1) of the FW Act, taken with s 341(1)(a), (b) and (c)(i), protects an employee who complains about a breach of conditions prescribed under legislation, an award or enterprise agreement. However, under the view taken by Snaden J, s 340(1) would only protect an employee who complained about the employer’s breach of a purely contractual term if the contract itself provided an entitlement to make a complaint or inquiry (perhaps subject to ss 542 and 543). That would leave the many employees whose employment contracts do not contain such an entitlement vulnerable to dismissal or other adverse action upon complaining about employers’ alleged breaches of the employment contract. The incongruity arises from employees being protected from adverse action upon complaining of an employer’s breach of some conditions of employment but not others. Having regard to the broad language of s 341(1)(c)(ii), it seems unlikely that the legislative intention is to protect only some complaints of breaches of conditions of employment, and to leave others unprotected.

Finally, a construction of s 341(1)(c)(ii) of the FW Act as encompassing an employee’s ability to complain under the general law of an employer’s breach of the contract of employment is consistent with the judgment of the Full Court in Whelan v Cigarette & Gift Warehouse Pty Ltd (2017) 275 IR 285. In that case, an employee was dismissed because he complained of the employer’s alleged breaches of the employment contract. In the course of holding that the employer had contravened s 340(1) of the FW Act, Collier J at first instance held at [34]:

As a general proposition, a complaint or inquiry to the employer by an employee in relation to his or her entitlement to an incentive bonus, or the failure of the employer to prepare an incentive bonus plan, where the terms of employment of that employee make provision for payment of such bonuses or the preparation of such plans, would fall within the scope of [s 341(1)(c)(ii)] of the FW Act.

On appeal, the Full Court at [28] described this passage as “unremarkable and correct”. The Full Court accepted that an employee’s complaint or inquiry to an employer about an alleged failure to comply with the contract of employment falls within s 341(1)(c)(ii) of the FW Act. The Full Court should be understood as reasoning that the source of an employee’s ability to complain is the general law of contract.

An employee is “able to complain” to his or her employer within s 341(1)(c)(ii) of the FW Act concerning the employer’s alleged breach of the contract of employment. The source of that ability is the general law governing contracts of employment. Further, an employee is “able to complain” to the employer or to a relevant authority of their employer’s alleged contravention of a statutory provision relating to the employment. That ability derives from at least the statutory provision alleged to have been contravened. The statute need not expressly or directly confer a right to bring proceedings or to complain to an authority. As Dodds-Streeton J held in Shea at [29], the complaint must be made genuinely, in good faith and for a proper purpose.

The variety of circumstances arising in employment law cases is notoriously wide. Nothing we have said is intended to foreclose argument as to other circumstances that may give rise to an ability to make a complaint. Nor is it intended to foreclose argument about any limitation as to whom a complaint may be made for the purposes of s 341(1)(c)(ii) of the FW Act.”

 

PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15 (24 February 2020) (Rangiah, Charlesworth and Snaden JJ)