Adverse action claims - reaching new heights

Articles Written by Jan Dransfield (Partner), Andrea Sun

The general protections provisions of the Fair Work Act 2009 (Cth) (the Act) are becoming an increasingly popular forum of redress for individuals and unions. In the last financial year over 1,000 claims were filed with the Fair Work Commission. Some recent cases provide valuable insights into, and highlight the broad scope of, the general protections provisions.

These provisions of the Act prohibit a person from taking adverse action against another person because the other person has a "workplace right". A "workplace right" includes circumstances where a person is entitled to the benefit of a "workplace law" or is able to make "a complaint or inquiry". Two recent cases consider the meaning of "workplace right" in the following situations:

  • An employee seeking legal advice about commission entitlements under an employment contract; and
  • An applicant refusing to provide pre-employment information due to privacy concerns.

Two other cases, involving the State of Victoria, are interesting because they highlight the ability of unions to rely on the general protections provisions in the context of tendering for government projects, particularly where enterprise agreements of project managers do not comply with Government codes of practice for the building industry.

Seeking legal advice: Murrihy v Pty Ltd [2013] FCA 908 (Betezy decision)

In theBetezy decision, the Federal Court considered the application of a "workplace right" in the context of seeking legal advice about an employment contract. The employee had argued that her employer threatened to dismiss her because she said she would seek legal advice about her employer's failure to pay commissions under her contract of employment.

Justice Jessup of the Federal Court accepted that the employee's manager did threaten to fire the employee if she sought legal advice. Justice Jessup was satisfied that obtaining legal advice about remuneration and commission came within the definition of a "complaint or inquiry" for the purposes of s 341(c)(ii) of the Act.

In coming to his conclusion, Justice Jessup noted that s 323(1) of the Act, which requires employers to pay employees for the performance of work, covers entitlements under contracts of employment and gives statutory consequences to an employer's failure to pay entitlements under those contracts. Justice Jessup found that it was within the purposes of s 341(c)(ii) of the Act that an employee should be able to seek legal advice without adverse action being taken against them.

The Betezy decision has implications for employers where employees seek or propose to seek legal advice on entitlements under employment contracts.

"Workplace right" and privacy laws: Austin v Honeywell Ltd [2013] FCCA 662 (Austin decision)

In the Austin decision, an employer withdrew an offer of employment after an applicant declined to provide an electronic copy of her signature and a digital copy of her passport for a pre-employment screening process. The applicant refused to provide the information due to privacy concerns, and asserted that the withdrawal of the offer of employment constituted adverse action because the applicant had exercised a workplace right under the workplace law of the Privacy Act 1988 (Cth) (Privacy Act).

Judge Riley of the Federal Circuit Court was not satisfied that the Privacy Act is a workplace law as referred to in s 341 of the Act as the Privacy Act does not regulate the relationship between employers and employees.

Judge Riley noted that at most, the Privacy Act incidentally imposes duties on prospective employers to achieve ends that do not primarily concern the regulation of the relationship between employers and employees. Further, s 7B(3) of the Privacy Act specifically exempts acts or practices directly relating to a current or former employment relationship and employee records.

The Austindecision therefore provides valuable guidance on what types of laws will be found to be a workplace law within the meaning of s 12 of the Act.

Enterprise agreements and government tenders

Construction, Forestry, Mining and Energy Union v State of Victoria [2013] FCA 445 (Bendigo Hospital decision) and Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd and the State of Victoria (No 2) [2013] FCA 446 (Circus Oz decision)

In the Bendigo Hospital and Circus Oz decisions, Justice Bromberg of the Federal Court interpreted the term "independent contractor" in s 342(1) of the Act to include contractors who provide services other than labour. In doing so, Justice Bromberg found that adverse action had been taken by:

  • the State of Victoria against employees of Lend Lease Project Management Construction (Australia) Pty Ltd (Lend Lease) in the Bendigo Hospital decision; and
  • McCorkell Constructions Pty Ltd against employees of Eco Recyclers Pty Ltd (Eco) in the Circus Oz decision.

The reason for the adverse action was that enterprise agreements which applied at Lend Lease and Eco were considered by the Victorian Department of Treasury and Finance's Construction Code Compliance Unit not to comply with the Victorian Code of Practice for the Building and Construction Industry (Code). One consequence of not complying with the Code was the potential exclusion from tenders for Victorian Government projects, such as constructing the new Bendigo Hospital and refurbishing the Circus Oz premises.

At the date of publication, appeals by the State of Victoria against the Bendigo Hospital and Circus Oz decisions are listed for hearing before a Full Court of the Federal Court on 11 to 13 November 2013.

The outcome of the appeals could have a significant impact on how organisations manage competing interests in tendering, compliance and enterprise bargaining. It will also be interesting to see what approach the new Federal Government takes with respect to Government codes of practice.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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