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Federal Court finds employee was not demoted due to his exercise of workplace rights

Employees are protected from adverse action because they have exercised, or propose to exercise, the workplace right to make a “complaint” or “inquiry” in relation to their employment within the meaning of section 341(1)(c)(ii) of the Fair Work Act 2009 (Cth).

Employees are protected from adverse action because they have exercised, or propose to exercise, the workplace right to make a “complaint” or “inquiry” in relation to their employment within the meaning of section 341(1)(c)(ii) of the Fair Work Act 2009 (Cth) (FW Act).

The existence of a complaint or inquiry which is protected from adverse action will not in itself be enough to satisfy a court that adverse action was taken against the employee in contravention of the FW Act.

The court must also be satisfied that the employer took adverse action against the employee and that the adverse action was taken for a prohibited reason having regard to the reasons of the primary decision maker(s).

The Federal Court of Australia (Federal Court) was recently required to consider the adverse action claim of an employee in the decision of Nuttall v Hatch Pty Ltd [2024] FCA 339.

The employee was employed by Hatch Pty Ltd (the Employer) as the Manager of Infrastructure.

In or around February 2018, the employee attended a meeting in which he was directed by the Managing Director to step down into the role of Structures Team Lead until he demonstrated an improvement in his performance.

The following day, the Managing Director sent an email to the employee’s team sharing a new organisational structure which reflected the employee’s position as being Structures Team Lead.

Before the Federal Court, the employee claimed that the Employer took adverse action against him in contravention of s340 and s 342 of the FW Act by injuring him in his employment and altering his position to his detriment when he was directed to step down into the position of Structures Team Lead.

The employee claimed that the adverse action was taken because he had exercised numerous complaints in the month leading up to the meeting, including but not limited to complaints he made to a colleague and two managers about the Managing Director’s management style.

The Federal Court was satisfied that the direction provided to the employee in the meeting that his role was changing, and the email sent to his team the day following effected a real and substantial deterioration in the employee’s position. Therefore, it found that the Employer took adverse action against the employee by altering his position to his prejudice.

Turning then to the purported complaints made by the employee, the Federal Court found that the employee’s complaint to his colleague did not fall within the meaning of s 341(1)(c)(ii) of the FW Act because his colleague did not hold any managerial responsibility or ability to provide the employee with redress.

However, the Federal Court was satisfied that the employee’s complaints made to the managers constituted a “complaint” which was protected from adverse action because the employee expressed grievances about the Managing Director’s management style with the purpose of obtaining informal assistance and support.

The Federal Court was also satisfied that the complaints made to the managers were related to the employee’s employment and were complaints which the employee was “able to make” given they were both founded on entitlements contained in the Employer’s Grievance Policy.

The Federal Court stated that it is irrelevant as to whether the person complaining or the person responding to the complaint is aware of the existence or operation of such a policy. It stated that instead, by its published document, the Employer provided the employee with the ability to complain about personality conflicts in the workplace.

On that basis, the Federal Court found that the employee’s conversations with his managers fell within the definition of a “grievance” under the policy and therefore, the employee exercised his ability under that policy to complain about personality conflicts.

Finding that the Employer had taken adverse action against the employee, and that the employee exercised at least two complaints which were protected from adverse action, the Federal Court then turned to whether the adverse action was taken by the Employer for a prohibited reason.

The Federal Court ultimately accepted the evidence of the Employer and found that the Managing Director made the decision to restructure the employee’s position because of genuine concerns he had in relation to his performance.

The Federal Court did not accept that the Managing Director made the decision to demote the employee because the employee had made complaints to the managers, noting the Employer’s evidence suggested that the Managing Director was unaware the employee had made such complaints at the time of making the decision.

Therefore, the Federal Court found that the Employer did not take adverse action against the employee for a prohibited reason and dismissed the application.

Lessons for employers

This decision demonstrates the nuances of adverse action claims and the evidence required to satisfy a court that adverse action was not taken against an employee for a prohibited reason.

As seen in this decision, the Federal Court found that adverse action was taken against the employee and that the employee had made complaints which were protected from adverse action. However, the case failed as the employer’s evidence satisfied the court that adverse action was taken due to the employee’s performance and not because he had exercised workplace rights.

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

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