A deteriorating relationship between an HR leader and an executive led to a ruling against their company. The appeal reveals how complex workplace law can be.
A senior executive’s $1 million payout and reinstatement to the company that dismissed him has been overturned after an appeal has been allowed by the Federal Court.
In the original trial dealing with the general protections application, the presiding judge ruled against the company Cummins Group, finding that adverse actions taken against its senior executive, including his dismissal, were primarily motivated by complaints he made about an HR leader.
In the appeal decision, three justices of the full Federal Court felt the original judge had erred in parts. They allowed the appeal on several grounds and ordered the proceeding be referred for urgent mediation and, if that fails, another court date be organised.
Their ruling holds lessons for HR on the nature of workplace complaints and how they should be dealt with.
Do you need a basis of complaint?
In its appeal, Cummins argued that four of the five complaints the executive referred to in his original claim were not protected for two reasons. To simplify, they were arguing:
- that a complaining employee needs to have a right or entitlement underpinning their complaint in order for it to be protected;
- and that the complaint itself needs to have certain features (specifically, it needs to “seek redress”) in order to be a protected complaint.
In rebutting Cummins’ first reason, Justice Bromberg came down on the side that employees do not have to have specific rights or entitlements underpinning their complaints in order to be protected, so long as the complaint is related to their employment.
“Why would it be that Parliament intended that an employee dismissed for complaining about her existing rate of pay should have a remedy, but an employee dismissed for complaining about her lack of any entitlement to work at home should not?” he says.
Justice Mortimer generally agreed with Bromberg on all issues, providing a majority ruling for his findings. But there was dissent. Justice Anastassiou disagreed on several points.
He argued “an anterior right or entitlement to make a complaint” is required based on the understanding established in previous cases. He examined one in particular where it was found the submission of a CEO report did not count as a workplace complaint as it was an ordinary duty, and therefore not underpinned by a right.
What should HR do with this ambiguity?
“The law remains unsettled: there is no determinative statement of what constitutes a complaint or enquiry,” says partner at Swaab Michael Byrnes. “So it would be prudent for employers to assume courts will take the Bromberg view.”
That means taking every complaint seriously, and not worrying about whether it will fit a narrow technical definition.
“The best way of doing that is to take each complaint and enquiry and address it. Investigate the complaint, take action if appropriate, then report back to the employee on the outcome,” he says.
“You want to be able to say this employee raised an issue, we treated it as a complaint under the Fair Work Act, and we had it addressed. That enables the employer to isolate the enquiry from any disciplinary action.”
This means if you demote, dismiss or otherwise sanction an employee, the evidence you’ve documented will clearly demonstrate that it had nothing to do with their complaints.
“You want to be able to say this employee raised an issue, we treated it as a complaint under the Fair Work Act, and we had it addressed. That enables the employer to isolate the enquiry from any disciplinary action.”
When a complaint isn’t a complaint
Documentation is even more important with relation to Cummins’ second reason. To simplify again, the justices investigated whether or not the executives’ complaints were merely expressions of frustration.
The crucial difference isn’t so much the location and timing – it’s if the complaint is seeking redress. Is the employee making an off-handed statement, or are they expecting the company to do something?
Bromberg found that the first two complaints, which were both about tension between the executive and the HR leader, were legitimate. The first because the executive mentioned wanting to have a meeting to come up with “a strategy to resolve the current situation”.
The second is more interesting because it took place in a bar. The executive apparently asked why the HR leader was “making false allegations against him”. Bromberg agreed with the initial judge that it didn’t matter that it took place in a social setting, saying, “viewed in its proper context, including the making of the first complaint, the communications made by [the executive] was at least impliedly seeking redress”.
The third complaint was about a performance improvement plan (PIP) the executive had been placed on. The executive complained aspects of the plan were “subjective and ambiguous”. At trial, the executive said he was “just giving feedback on the document”. Bromberg said that this was tantamount to admitting he wasn’t seeking redress, and so upheld Cummins’ appeal.
Anastassiou ruled in the opposite direction for all three complaints.
For the first two he found that the executive was voicing “dissatisfaction about the interpersonal relationship” between himself and the HR leader and that – although “deteriorating relationships may mature into formal complaints” and there is no “requirement of formality for a complaint” – the complaints failed to reach the required standards. Returning to the previous disagreement between him and Bromberg, he says, “these complaints were not underpinned by any right or entitlement to complain”.
On the other hand, the third complaint was legitimate, says Anastassiou. The fact that the executive was contractually obligated to engage in it meant there was an implied underpinning of a right to complain.
This fact, and the executive’s view that it was forced on him, explained why his “express complaint fell short of making any specific demand for redress”.
These two justices disagreed again on the fourth complaint for much the same reasons as the first two, and all these differences show that this area of the law is not cut and dry. The justices applied the same tests against the same evidence and came up with different conclusions – they even had different views on when seeking redress was or was not implied.
Again, it’s better to not dig into the technical aspects of the complaint, it’s better to just deal with it, says Byrnes, which means not paying too much attention to where and when potential complaints occur.
This does raise the question of how you could possibly do that much investigating. Every workplace in the world is subject to countless comments, criticisms, from all sorts of staff every day – in all manner of contexts. How could you possibly go about chasing up each and every one?
“It’s about educating and informing frontline managers about this issue, what a complaint is, and making sure they are in regular communication with HR,” says Byrnes.
Frontline managers are going to be dealing with informal complaints far more frequently than the HR team, so giving them a sense of what they should do with them is important.
“That doesn’t mean you need a complex investigation into every grievance, just that each is dealt with proportionately and appropriately,” says Byrnes.
It should be noted that this appeal was not an outright win for Cummins. In the majority opinion, the original judge inappropriately took a “global approach” to the complaints rather than assessing each adverse action claim separately to see if they were motivated by protected reasons.
The court upheld the appeal because it found that the original judge made errors – it’s quite possible that a different judge would have conducted a more thorough investigation and made the same ruling.
The best thing HR can do to help their organisations is to understand the general protections provisions, ensure adverse action is never taken for the wrong reasons, and to conduct appropriate complaint resolution in every instance. Because once a claim is in court, a lot rests on factors outside your control.
HR law underpins much of the work that HR practitioners do across the employment lifecycle. Improve your understanding with AHRI’s Introduction to HR Law short course.