General protections update: complaints and inquires

22 May 2020
It is unlawful for an employer to take adverse action against an employee because they have made a complaint or inquiry in relation to their employment. But what kind of complaints and inquiries are protected?

The recent Full Court of the Federal Court’s decision in PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15 (PIA) sheds light on the question. The answer? It is still not completely clear, however it should be not be unreasonably fettered and a complaint that gives the employee a right to sue is protected. 

The statutory scheme

Section 340 of the Fair Work Act 2009 (Cth) (s 340 and FW Act) protects workplace rights. It relevantly provides that an employer must not take adverse action against another person because the other person has a workplace right. Workplace rights include employees’ rights to make complaints or inquiries in relation to their employment.

For example, an employer who dismisses an employee for complaining about being underpaid will breach s 340 and may be required to reinstate the employee, pay compensation, damages, and, pecuniary penalties. 

The controversy: what is a complaint or inquiry in relation to employment?

For years, it remained unclear if a complaint must be ‘underpinned by an entitlement or right’[1], or, if it is enough that a complaint raises an ‘issue with potential implications for [the employee’s] employment’.[2] A recent Full Court held that a complaint ‘must be founded on a source of entitlement, whether instrumental or otherwise’ to be protected.[3]

Clearly, questions remained. For example, what does it mean for a right to be founded in a source of entitlement that is ‘instrumental or otherwise’? Similarly, is it the thing complained about that must be founded in an entitlement? Or is it the right to complain?

The last two questions were considered by the Full Court in PIA.

The facts

Mr King, the Applicant in PIA, was employed as the CEO of PIA Mortgage Services (PIAMS) for a fixed term of five years. Mr King had responsibility for managing a mortgage broking business, Zenik, which was associated with PIAMS. Mr King was advised that there were some issues with Zenik as a business. 

Once employed, Mr King found that the issues with Zenik were more serious than what he was initially advised, and, its broking licences were revoked, which impacted PIAMS.

Mr King made two complaints to PIAMS. The first was that Mr King was entitled to be retained for five years, or to receive payment in lieu of the remainder of his employment (the Termination Complaint). The second was that he had been misled about the issues with Zenik and its commercial viability (the Misleading Conduct Complaint).

Mr King was dismissed following the complaints and he claimed he was dismissed as a result of the Termination Complaint and the Misleading Conduct Complaint.

The primary judge held that Mr King had been dismissed because of the complaints in breach of s 340 and awarded him $100,000. The main question considered in the appeal was whether the Termination Complaint and the Misleading Conduct Complaint were protected by s 340.

PIA Insurance: the split

The issue split the Full Court, two to one. It is useful to look at Justice Snaden’s dissenting decision first. His Honour held that a complaint will only be protected where an employee can identify the source of an entitlement or right to make it. Unless the right to complain has a source that is ‘instrumental or otherwise’, it is not protected.

For example, awards and other industrial instruments contain clauses regulating how disputes are to be resolved. A complaint made in accordance with such a provision, Justice Snaden held, would be protected. A complaint not founded on a right to complain, conversely, would not. 

Justice Snaden held that Mr King could have sued under his employment contract to vindicate the Termination Complaint. But threatening to sue was not enough. Mr King’s complaint was not sourced ‘in an instrument or otherwise’ as he only threatened to sue.

Similarly, the Misleading Conduct Complaint was not based on any entitlement to complain. Mr King could not point to any entitlement or right to complain about the misleading conduct he alleged, so the complaint was unprotected.

The majority, Justices Rangiah and Charlesworth, disagreed with Justice Snaden and upheld Mr King’s claim under s 340. The majority agreed that an employee must have a right to complain to get the protection of s 340. However, the employee does not need to find a source of a right to make their particular complaint, it is a right to complain about the subject matter of the complaint that matters, not the right to make the complaint.

For example, an employee who has a right to sue for breach of their employment contract can make a protected complaint about the breach. They don’t need to point to a clause of the contract allowing them to make the complaint.

The majority held the Termination Complaint was protected, as Mr King was complaining about an alleged breach of contract, so his complaint was underpinned by the general law of contract. Similarly, the Misleading Conduct Complaint alleged a breach of the Australian Consumer Law (ACL), and, the source of his complaint was therefore the ACL.

Accordingly, the majority upheld the primary judge’s finding on s 340 and Mr King was successful.  

So does my member have a claim?

Yes, though, it is still unclear what ‘instrumental or otherwise’ means. We can at least say that a complaint will have a basis that is ‘instrumental or otherwise’ when it is underpinned by a right to sue under the general law. That would include employees’ common law rights in contract, tort, and a legislative remedy such as that sourced in the ACL.

A complaint can be protected even if it is not a complaint made under a complaints process, like a dispute settlement clause in an enterprise agreement. Rather, it is enough if the employee complains about something they could sue about.

Certainly, if an employer has contravened the law and a member wants to complain about the breach, the member should identify the law they say is has been breached in any complaint they make.

 

[1] Sea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271 [65].

[2] Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456, [43].

[3] See Cigarette & Gift Warehouse Pty Ltd v Whelan [2019] FCAFC 16 [28]; The Environmental Group Ltd v Bowd [2019] FCA 951, [128].

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