Can employees be dismissed for making vexatious complaints?

Posted by October 26, 2018 | Articles | No Comments

By Gemma Little, Associate 

What can an employer do if an employee makes vexatious or baseless complaints in the pursuit of some ulterior purpose? These complaints might be made within the business, for example to a supervisor, HR or the Board, or externally, for example by way of a bullying application to the Fair Work Commission.

In either case, the employer will likely be required to divert considerable resources away from the business or organisation to respond to, investigate and manage the complaint, and it is likely to be a stressful and destabilising matter for the business and those affected.

Moreover, care is required to avoid the risk inherent in responding adversely to such complaints. Taking disciplinary action against the employee because they have made a complaint risks a claim that the employer has breached the employee’s general protections. The Fair Work Act 2009 (Cth) (FW Act) prohibits an employer from taking adverse action against an employee because, amongst other things, they make a complaint or enquiry in relation to their employment: section 340.

However, from an employer’s perspective, the vexatious nature of the complaint must be dealt with to avoid anarchic or capricious workplace practices.

This article will consider how courts have approached the issue and discuss how an employer may effectively manage vexatious complaints to mitigate the risk of legal claims.

The case law

The difficulties associated with managing vexatious complaints were considered by the Federal Court in Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271. In this case, Judge Dodds-Streeton found that, to be an exercise of a workplace right within the meaning of the FW Act, a complaint:

  • need not be factually correct, substantiated, proved or ultimately established; but
  • must be genuinely held or considered valid by the complainant; and
  • must be made in good faith and for a proper purpose.

A “proper purpose” when making a complaint was considered to be “giving notification of the grievance, accusation or finding of fault so that it may be, at least, received and, where appropriate, investigated or redressed.”

However, in Shea v EnergyAustralia Services Pty Ltd [2014] FCAFC 167 (an appeal against Dodds-Streeton J’s decision by Ms Shea), the Full Court, while not deciding the issue, cautioned that:

  • considerable care” needs to be exercised before constraining the meaning of the exercise of a workplace right to make a complaint; and
  • “to too readily imply” the need for the complaint to be genuine or bona fide may discourage those who may have mixed motivates for making a complaint.

Following the Shea cases, the issue remains unresolved. In light of the Full Court’s caution, courts have been unwilling to find that a complaint must be genuine to be considered the exercise of a workplace right. However, it appears that courts are prepared to make fine and, at times, tenuous distinctions between the vexatious complaint and the consequences flowing from it, such as a loss of trust and confidence, resulting in the general protections claims flowing from such complaints failing. For example:

  • In Wilson v Victorian Aboriginal Health Service Cooperative Limited [2015] FCCA 3237, Riley J found that the employer dismissed Mr Wilson, not because he made complaints, but because the complaints he made “were worded in such a way that they destroyed any possibility of a viable working relationship with senior management”; and that the employment relationship had broken down irretrievably.
  • In Mikulic v Ecolab Pty Ltd [2017] FCCA 146, Cameron J held that Ecolab dismissed Ms Mikulic, not because she made complaints, but because her complaints disclosed fundamental problems in the employment relationship, namely Ms Mikulic’s inability to work harmoniously with her supervisor and thus to function effectively as a member of the team; and her propensity to make allegations against her supervisor that were not, upon inquiry, made out.
  • In Morley v Monza Imports Australia Pty Ltd [2018] FCCA 622, Reithmuller J held that “the making of complaints per se” was not a reason for Ms Morley’s dismissal, but rather her dismissal was by reason of her harassment and intimidation of staff associated with her complaint and her inability to reasonably engage with the company on the outcome of the investigation.

Takeaways for employers

Where does this leave an employer who is managing an employee who makes damaging, baseless or vexatious complaints for some collateral advantage?

Whether a complaint must be genuinely held or made for a proper purpose for the purposes of a general protections claim is unresolved and, in the absence of affirmative authority, courts are unwilling to restrict the operation of the general protections provisions in the FW Act in this way.

However, not all is lost. There is an obvious need to balance the legitimate interests of both employees and employers in a manner consistent with the objects of the FW Act and the general protections provisions. The courts do recognise the irrationality of an employer being unable to take disciplinary action, up to and including termination, against an employee who makes vexatious complaints.

Courts appear willing to draw a distinction between the complaints and matters closely connected to or resulting from the complaints, for example by having regard to the complaints as a basis for determining that the employee is unable to work with supervisors, management or within a team; or to conclude that the employer has lost trust and confidence in the employee; or that there has been an irretrievable breakdown in the employment relationship.

Taking disciplinary action against employees who make vexatious complaints is not without risk; however, with careful management and a strategic approach focused on assessment of the employee’s ability to work within the company/organisation or with key employees, rather than on the employee’s complaints, the risk can be mitigated.

MDC Legal regularly assists employers to successfully navigate these and many other challenging situations. If you would like advice or assistance, please contact our office on (08) 9288 4000.