Writing for the Law Society of Western Australia, Gemma Little, Associate at MDC Legal, outlines your rights and responsibilities under the law as an employer when faced with a vexatious complaint from your employee.
What can an employer do if an employee makes vexatious or baseless complaints for some ulterior purpose? Such complaints, whether made internally or externally, can require the employer to divert considerable resources away from the business to investigate and respond to the complaint, despite its vexatious nature, and is likely to be stressful and destabilising 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 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 they make a complaint or enquiry in relation to their employment.
However, from an employer’s perspective, the vexatious nature of the complaint must be dealt with to avoid anarchic or capricious workplace practices.
How have courts approached the issue and how may an employer effectively manage vexatious complaints to mitigate the risk of legal claims?
The case law
The difficulties associated with managing vexatious complaints were considered in Shea v TRUenergy Services Pty Ltd (No 6)  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” was considered to be so that the complaint “may be, at least, received and, where appropriate, investigated or redressed.”
However, in Shea v EnergyAustralia Services Pty Ltd  FCAFC 167 (an appeal against Dodds-Streeton J’s decision by Ms Shea), the 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 may discourage those who have mixed motivates for making a complaint.
Following the Shea cases, the issue remains unresolved. In light of the above caution, courts have been unwilling to find that a complaint must be genuine to be considered the exercise of a workplace right under the FW Act. 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, resulting in general protections claims based on such complaints failing. For example:
- In Wilson v Victorian Aboriginal Health Service Cooperative Limited  FCCA 3237, the Court 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 the employment relationship had broken down irretrievably.
- In Mikulic v Ecolab Pty Ltd  FCCA 146, the Court found that Ecolab dismissed Ms Mikulic, not because she made complaints, but because her complaints demonstrated an 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.
Takeaways for employers
Where does this leave employers who are managing baseless or vexatious complaints made for some collateral advantage?
Whether a complaint must be genuinely held or made for a proper purpose is unresolved and courts are currently unwilling to restrict the operation of the general protections provisions 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, careful management and a strategic approach focused on assessment of the employee’s ability to work within the company or with key employees, rather than on the employee’s complaints, can mitigate the risk.
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.
This article was originally published in the February 2019 edition of Brief, the Law Society’s monthly journal. Find out more at www.lawsocietywa.asn.au.