The General Protections Regime: Four Things you Probably Don’t Know
Most employers are well aware of the basic principles of the general protections regime of the Fair Work Act 2009 (Cth) (the “FW Act”)… and so they should be. After unfair dismissal claims, general protections claims are the most common type of claim faced by employers in the Fair Work Commission (the “FWC”), with 987 claims lodged in the first quarter of 2015 alone.1 Further, employers face a maximum penalty of $54,000 for a breach of the regime and, in addition, may be ordered to pay compensation to an affected individual.
For those of us a little rusty, under the general protections regime, a person must not take “adverse action” against another person (for example, by terminating their employment) for certain prohibited reasons (for example, because that person has exercised a “workplace right” or because of their sex, race, age or disability).
While the concept behind the regime is straightforward, its intricacies are less so. Here are four things you probably don’t, but definitely should, know…
1: It’s not all bad news… employers have workplace rights and can bring a general protections claim
While the majority of general protections claims are brought against employers by employees, the FW Act also enables employers to bring claims against employees, independent contractors or industrial associations in certain circumstances. This means that the general protections regime is a source of rights, not just responsibilities, for employers.
In Esso Australia Pty Ltd v The Australian Workers’ Union  FCA 758, the FWC found that the AWU took adverse action against Esso by organising unprotected industrial action in an attempt to coerce Esso into changing its position in relation to a proposed enterprise agreement.
While the AWU had obtained authorisation to undertake certain protected industrial action in relation to the negotiations, a number of particular work bans it proposed had not been notified to Esso in accordance with the FW Act, and therefore constituted unprotected industrial action which fell outside the scope of the authorisation. The question was then whether that unprotected action was intended to deny Esso its “workplace right” to freely negotiate an enterprise agreement with regard to its own interests.
Having regard to the fact that relevant AWU officials were aware of the significant impact the industrial action would have on Esso’s productivity, the Court held that the intent of the AWU “was to apply sufficient direct pressure on [Esso] to cause it to act otherwise than in the exercise of its own free choice. It was to cause it to agree to terms in a prospective enterprise agreement to which it would not, as a matter of choice, have agreed in the absence of that pressure”.2
2: HR managers beware… individuals can be held personally liable for their role in breaches of the general protections regime
While many human resources managers will be aware of the FWC’s power to impose a penalty on organisations for a breach of the general protections regimes, it is less well-known that individuals may be held personally liable for their involvement in such a breach. The maximum penalty that can be imposed on an individual for each breach is $10,800.
Significantly, it is not necessary that an individual be actively involved in aiding or abetting a breach in order to have a penalty imposed on them. Rather, it is enough that an individual has been in any way “knowingly concerned in” or “party to” the breach, whether directly or indirectly. The breadth of this provision makes it essential for managers to be thoroughly aware of their organisation’s obligations, in order to avoid liability for a perhaps unintentional misstep and to actively assert their voice within their organsaition in order to steer it clear of legal pitfalls.
In Director of the Fair Work Building Industry Inspectorate v Baulderstone Pty Ltd & Ors (No 2)  FCCA 2129, the Federal Circuit Court fined two human resources managers $3,500 each for their role in coercing an employee off his salaried contract of employment and onto an enterprise agreement under which he would be paid wages.
Interestingly, in that case, the Court rejected an argument that the managers should not be personally fined because they were following their employer’s direction, highlighting the need for human resource managers to take personal responsibility for their organisation’s dealings with employees. The Court held that the managers “had a choice of not implementing the decision [to move the employee off his salaried contract], but failed to implement that choice”.
3: One bad apple spoils the bunch… a decision motivated in part by a prohibited reason will be unlawful, even if the decision can be justified on other grounds
It is common sense that not everyone in a workplace will get along. From an organisational perspective, while personal animosities may be difficult to stamp out completely, it is essential that they are not allowed to infect professional decision-making processes. That is because perceptions of “bad attitude” may be motivated (perhaps subconsciously) by a prohibited reason under the general protections regime, for example, a person’s tendency to make complaints in relation to their employment. To this end, every person materially involved in a decision in relation to an individual’s employment must be able to justify that decision on objective grounds related to the employment.
The danger that arises if such justification is not possible was recently demonstrated in Construction, Forestry, Mining and Energy Union v Clermont Coal Pty Ltd  FCA 1014. In September 2014, Clermont Coal announced a restructure that would result in around 100 workers losing their jobs. Redundancies were to be determined based on scores awarded to employees in four criteria:
- performance reviews;
- performance management;
- skills/competencies; and
Following his assessment by multiple managers, Mr Scott, an executive member of the CFMEU, was selected for redundancy. The CFMEU challenged Mr Scott’s redundancy on his behalf, alleging that Mr Scott had been made redundant because of his union activities.
While the Court was satisfied with the decision making process of two of Mr Scott’s three managers, it upheld the CFMEU’s claim, noting the consistently low scores attributed to Mr Scott for his “attitude” by the other manager, Mr Fleming. The Court held that “Mr Fleming [did not concentrate] as he should have… on Mr Scott’s performance as an employee and his attitude and manner more generally. Instead…Mr Fleming was distracted from that course by his difficult relationship with Mr Scott, which stemmed from his terse dealings with him as a CFMEU executive member”.3
4: Same same, but different… there is a difference between the exercise of a workplace right and the impact of the exercise of a workplace right… for now
In a decision which could limit the scope of operation of the general protections regime, the Full Court of the Federal Court, in Construction Forestry Mining and Energy Union v Endeavour Coal Pty Ltd  FCAFC 76, has held that adverse action is not taken against an employee if that employee is dismissed due to the impact on the employer of the employee exercising a workplace right, rather than due to the exercise of that workplace right itself.
That case involved an employee, Mr McDermott, being moved from a weekend to weekday roster after failing to present for weekend shifts due to illness (the “First Decision”). After some months, Mr McDermott was moved back to weekend shifts, on the condition that he agree to provide a medical certificate for future absences due to illness. Following a subsequent absence, Mr McDermott failed to provide a medical certificate, and was moved back to weekday shifts (the “Second Decision”).
By majority, the Full Court of the Federal Court held that neither of the Decisions contravened the general protections regime. Highlighting the importance of the “subjective reasons for action of the decision-maker”4, the majority upheld the original finding that:
- the First Decision was made because of the “lack of predictability” in Mr McDermott’s attendance on weekend shifts;5 and
- the Second Decision was made because Mr McDermott failed to notify his absence in accordance with the agreement and, taking into account Mr McDermott’s history, Endeavour Coal had reason to doubt that his absence was due to illness.6
The Court accepted that, in making the Decisions, Endeavour Coal was concerned only with the implications of Mr McDermott’s absences, rather than his right to be absent from work on personal leave.
The distinction between the impact and exercise of a workplace right is complex and evolving. We will be following its development with interest, particularly given the CFMEU is seeking to appeal the Endeavour Coal decision in the High Court.
If the distinction is ultimately upheld, employers may be able to successfully defend a general protections claim despite:
- the employee exercising a workplace right; and
- adverse action having being taken,
if the employee’s exercise of that right negatively impacts the business and that impact is the subjective reason for the adverse action being taken.
2. Esso Australia Pty Ltd v The Australian Workers’ Union  FCA 758, .
3. Construction, Forestry, Mining and Energy Union v Clermont Coal Pty Ltd  FCA 1014 .
4. Construction Forestry Mining and Energy Union v Endeavour Coal Pty Ltd  FCAFC 76 .
5. Endeavour Coal, .
6. Endeavour Coal, .