General Protections Applications – When an employee who has been working just a few weeks for a business doesn’t work out – they may get disgruntled. They may be simply poor performers, have a bad attitude or simply are not a good fit. A probationary period was built for this very reason to give an Employer options to terminate the employment of an employee if it becomes apparent they won’t work out.
But – – What if an employee during this short period of time also made complaints about other staff, how they are being treated or even against directors themselves.
NB Lawyers – Lawyers for Employers has recently (successfully) defended a general protections application (the Application) on behalf of one of our valued clients in the Federal Circuit Court (FCC). The (former) employee who made the Application alleged our client had terminated his employment because he exercised his workplace rights to make a complaint and/or because of his religious beliefs. This article explores the key considerations of the FCC in its decision to dismiss the Application in our client’s favour with a view on assisting employers in understanding the very (technical) nature of a general protections application (as distinct from an unfair dismissal application).
Key facts of the Application
What are the general protections?
The general protections found in Part 3-1 of the Fair Work Act 2009 (Cth) (FW Act) establish employees have certain workplace rights (or benefits) arising under workplace laws (such as the FW Act itself), workplace instruments (such as a modern award) or an order made by an industrial body (such as the Fair Work Commission or the FCC). The FW Act provides an employer must not take adverse action (such as dismissal, discrimination or demotion) against an employee because the employee has exercised their workplace rights. On that basis, an employee’s exercise of their workplace right is ‘protected’.
Once an employee establishes they have exercised their workplace right(s) and the adverse action taken by an employer (usually a dismissal), the onus shifts to the employer to provide an explanation on the reasoning for taking the adverse action. The reverse onus of proof can give rise to significant difficulties for an employer, particularly where reasoning for the actions taken is undocumented or ambiguous. Mere (verbal) assertions of an employer that adverse action was not taken because an employee had exercised their workplace rights is not necessarily sufficient. This was emphasised by the FCC in the Application at paragraph 17:
mere declarations of an innocent reason or intent in taking adverse action may not satisfy the onus on an employer if contrary inferences are available on the facts
[our emphasis added]
Probationary period is not a defence
In the Application, the employee’s continuing employment was subject to a probationary period. A probationary period is a common term of employment contracts, and in its decision the FCC noted the very purpose of a probationary period is to “provide for a period in which an employee can be trained to do the work required, and in which an assessment can be made of his or her aptitude and capacity to do the work once the employee has been trained”.
Whilst an employer is usually contractually entitled to dismiss an employee for an unsuccessful probationary period of employment, the Application highlights a key consideration for employers – dismissal of an employee during a probationary period of employment does not provide immunity against general protections claims. It remains the case an employer must prove, by way of evidence, the substantial and operative reasons for an employee’s dismissal was not a reason prohibited (religious discrimination) by the FW Act. It is likely to be insufficient for an employer to rely on a probationary period (on its own) to defend against a general protections application.
Consideration of substantial and operative reasons
In the Application, the FCC adopted the approach taken by the High Court of Australia in the matter of Board of Bendigo Regional Institute of Technical and Further Education v Barclay (the Barclay Decision). By way of a brief summary, the Barclay Decision concluded the role of a Court (or Tribunal) in deciding a general protections application is to determine why an employer has taken adverse action against an employee and assessing whether the “substantial and operative” reasons are prohibited by the FW Act. Given the requirement to focus on the reasons for the adverse action, the person responsible for the action (i.e. the decision maker) is ordinarily required to give evidence as to their state of mind. If the evidence of the decision maker is accepted as reliable and supports an inference an employee was not terminated because of a prohibited reason, the employer’s reverse onus of proof will be discharged.
In the Application, our client’s decision maker was the managing director, who gave evidence (……was an impressive witness) of the employee’s conduct and performance issues during his probationary period of employment. Our client’s decision maker conceded the employee did in fact make two (2) specific complaints but gave (credible) explanations as to how the complaints were resolved.
By doing so, our client was able to demonstrate there was a system in place within the business for the expedient resolution of complaints. The concessions given by our client’s decision maker (which was indicative of an honest and forthright witness) meant the FCC accepted the evidence given by the decision maker as to the substantial and operative reasons for the employee’s dismissal (i.e. the employee was dismissed due to conduct and performance issues). This approach was consistent with the approach in the Barclay Decision.
The FCC was also satisfied with our client’s complaints system, forming a view that given it was our client’s practice “to deal with workplace issues quickly with a view to resolving them”. The lack of meetings (to deal with workplace issues) meant the FCC could not be satisfied the employee had made certain complaints to our client. Given this finding, it necessarily followed the FCC could not be satisfied our client took adverse action against the employee because of an (alleged) exercise of a workplace right to make a complaint if no complaints were made.
Key lessons for employers
The nature of our client’s industry meant that feedback and performance management was often done ‘on the job’ to improve the employee’s conduct and performance. Whilst this was an expedient process, it meant many of the employee’s issues were not formally documented. This was a key risk for our client, given the onus was on our client to discharge the reverse onus of proof (that adverse action was not taken for a prohibited reason under the FW Act).
Fortunately, our client had the benefit of two (2) staff members (a supervisor and a manager) who were capable of giving (credible) evidence at trial on the employee’s conduct and performance issues. This evidence corroborated the evidence of our client’s decision maker (who also personally witnessed the employee’s conduct and performance issues). An employer may not necessarily have the benefit of corroborated (verbal) evidence, which emphasises the necessity for documented evidence (to substantiate the reasons and intention for taking management action against employees).
In practical terms we were able to argue successfully that the “workplace right” complained of was simply conjured up as an argument to satisfy the criteria of a general protections application. The application was rightly dismissed – merely claiming to be religious or using this as an excuse for behaviour and performance should not provide a right for an employee to file such a claim – unfortunately as the law stands it can go this far. Hopefully more cases like this will deter newly employed employees filing baseless claims.
Key lessons for employers which can be drawn from the judgment delivered by the FCC for the Application include:
- ensuring conduct and performance issues are documented in writing and if possible, recording the reasoning for management action taken;
- implementing a clear complaint management process to effectively deal with any grievances or disputes from employees. If the grievances or disputes are resolved, documenting the resolution reached and the underlying reasons for the resolution;
- if an employee is underperforming during a probationary period of employment, documenting the particulars of the underperformance and actions taken to rectify the underperformance. This will increase the credibility of an argument that an employee (if dismissed) was unsuccessful during their probationary period of employment; and
- always be prepared to clearly explain the reasoning for an employee’s dismissal (regardless of whether they are terminated during their probationary period) to a Court or Tribunal. Prepare documentary evidence to support the reasoning (if possible).
The Application is a reminder to employers of the pitfalls of relying on probationary periods of employment. If you are an employer facing an employee who is underperforming or engaging in misconduct we offer an obligation free consultation for all Employers – please call +61 (07) 3876 5111 to arrange an obligation free consultation to discuss your inquiries and we will do our best to provide a practical solution.
About the Authors
Jonathan Mamaril leads a team of handpicked experts in the areas of employment law and commercial law who focus on educating clients to avoid headaches, provide advice on issues before they fester and when action needs to be taken and there is a problem mitigate risk and liability.
Dan Chen is a lawyer at NB Lawyers, the lawyers for employers, and specialises in employment law. Dan is passionate about assisting business owners, small and large understand their obligations under Australia’s complex workplace relations system.
 Gibbons v C&M Plant Hire Pty Ltd T/A C&M Plant Hire & Anor  FCCA 849.
 Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500.