Ruttley v Willis Brothers Installation: Illustrating a Typical General Protections (Adverse Action) Case

In June 2022, the Federal Circuit and Family Court of Australia handed down a decision on a general protections application by an employee. This case, Ruttley v Willis Brothers Installation [2022] FedCFamC2G 430, perfectly illustrates a typical general protections (adverse action) case which employees may encounter in their working life.

This article aims to provide both employers and employees with context and an insight into:

1. what adverse action is;
2. how to avoid committing adverse action; and
3. the penalties associated with a breach of general protections laws.

Summary of Facts

Willis Brothers Installation (the Employer) operated a business of manufacturing and installing kitchen and bathroom stone benchtops. Timothy Ruttley (Timothy) had worked as a stonemason for the Employer since he was 18 years old. At the time of the termination of his employment he was working as the Employer’s Production Manager. Duncan Willis (Duncan) was the majority shareholder of the Employer. Timothy and his brother Simon had acquired interest as shareholders for the Employer, with Timothy having interest of 17%.

In 2017, Work Health and Safety Queensland directed the Employer to have its employees screened for silicosis. Both Timothy and Simon were diagnosed with lymph node silicosis in November 2018.  WorkCover directed all workers who had been diagnosed with silicosis to refrain from performing work in an environment containing silica dust. Consequently, Timothy ceased being directly involved with the physical installation and manufacturing of stone benchtops. However, he remained active in the administration of the Employer’s business.

Between July 2019 and January 2020, Duncan behaved in a bullying and aggressive manner towards Timothy in an attempt to exit him from the business. The following were some of the allegations levelled at the Employer by Timothy:

1. the Employer had denied him the ability to check his leave entitlements and subsequently reduced his leave entitlements;
2. the Employer altered his position to one in which he received a reduced wage;
3. the Employer failed to pay him his wage whilst he was on personal leave;
4. Duncan requested that he surrender his company car;
5. Duncan diverted his work phone to the office and disconnected his mobile phone;
6. Duncan cancelled his fuel card.

Timothy believed that Duncan had behaved in this manner towards him because of his physical disability of having been diagnosed with silicosis, and because he had exercised workplace rights by seeking information about his leave entitlements.

On the morning of 14 January 2020, Duncan entered Timothy’s office, slammed his fist on Timothy’s desk, and said “I want my fucking shares back you hear me”. Later that morning, Timothy received an email from Duncan demanding the return of his company car or that he pay for it. Timothy angrily told Duncan that his email was a “joke”. He subsequently became very shaken by the events of the morning and left work to see his doctor, who provided him a medical certificate to be absent from work. Timothy was declared unfit for work due to the stress he was suffering from as a result of the bullying he had been subjected to at work. He did not return to work thereafter.

On 11 May 2020, Timothy received a letter from the Employer stating that his employment had been terminated because he had taken excessive leave and his absence was not because he was on WorkCover.

Adverse Action

The Fair Work Act 2009 (Cth) provides “general protections” for employees to ensure they are protected from unlawful conduct by their employers. One type of “general protections” claim is an adverse action claim. Adverse action refers to unlawful and unfavourable conduct which is committed by an employer against an employee. A general protections (adverse action) application is always made by submitting an application to the Fair Work Commission.

In order to make a successful general protections (adverse action) application, the applicant must first establish that adverse action occurred.

Many different parties can commit adverse action against one another, including an employer against and employee (and vice-versa), a principal against a contractor (and vice-versa), and a prospective employer against a prospective employee. However, for the purposes of adverse action by an employer against an employee, adverse action includes:

1. the employer dismissing the employee;
2. the employer injuring the employee in their employment;
3. the employer altering the position of the employee to their prejudice; or
4. the employer discriminating between the employee and other employees.

In Timothy’s case, the adverse action committed against him consisted of all of the allegations listed earlier in this article.

Prohibited Reason

It is not sufficient to merely establish that adverse action has occurred. In order to make a successful general protections (adverse action) claim; an employee must also be able to establish that they were subjected to adverse action by the employer due to a prohibited reason. Two of the most common prohibited reasons for adverse action is that the employee had exercised or proposed to exercise their workplace rights, or that the employee had been discriminated against due to a protected trait.

Once the employee has established that they had a protected trait or had exercised a workplace right, then the employer will bear the onus of proving that the adverse action was not for that prohibited reason.

Exercise of Workplace Rights

Employees are protected from adverse action on the basis that:

1. they have a workplace right;
2. they have proposed to exercise or not exercise the workplace right; or
3. they have or have not exercised the workplace right.

Broadly speaking, a workplace right is a right which could be derived from the law or the employee’s contract of employment. This includes any benefits the employee is entitled to receive, any processes the employee can initiate or participate in, or the employee’s ability to make a workplace complaint or inquiry in relation to their employment.

In Timothy’s case, he had exercised his workplace rights throughout his employment and the Employer had taken adverse action against him for exercising those workplace rights.

1. Timothy exercised his workplace right to make a worker’s compensation claim for his silicosis injury, and this claim was accepted by WorkCover. Consequently, the Employer took adverse action against him by injuring him in his employment by removing his company car, mobile phone and fuel card. It also reduced his wage and failed to pay his entitlement while he was on personal leave.
2. Timothy also exercised his workplace right to make a complaint or inquiry about his leave entitlements. From November 2019 until April 2020, Timothy made multiple inquiries with the employer by seeking information on his leave entitlements. He was not provided with a response to these inquiries. The Court was satisfied that adverse action was taken against Timothy because he had made these inquiries.

Discrimination

Employees are also protected from adverse action on the basis that they are being discriminated against due to a trait they possess. These protected attributes (traits) include: race, colour, sex, sexual orientation, breastfeeding, gender identity, intersex status, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

Adverse action taken because of a protected attribute is only permissible in circumstances where the conduct;

1. would not otherwise breach anti-discrimination legislation;
2. is taken because of the inherent requirements of the employee’s position (e.g. an electrician business refuses to hire a person to be an electrician because the person cannot stand or walk); or
3. is taken in good faith for religious reasons (e.g. a Catholic school refuses to hire a woman as its priest).

In Timothy’s case, the Court found that the adverse action committed against him was partly due to his physical disability of lymph node silicosis. This is because once Duncan was aware of Timothy’s diagnosis, Duncan formed the view that Timothy would be unable to fulfil his duties as production and installation manager. This thought was not justified and no evidence was tendered which suggested that Timothy was unable to fulfil the inherent requirements of his position.

Orders and Civil Penalties

If a general protections action proceeds to Court and is subsequently substantiated, the employee may be able to claim an unlimited amount of compensation. Often, the amount of compensation will have some form of connection with the employee’s ability to seek alternate employment (if they are terminated by the employer), and the level of pain, suffering and detriment the employer’s conduct has caused the employee.

Further to this, breaches of general protections provisions within the Fair Work Act 2009 (Cth) are civil remedy breaches. This means that the employer will be liable to pay fines for each breach of their conduct. As of July 2023, the current civil penalty for company employers for each breach of general protections provisions is 300 penalty units ($93,900). The Court can rule that part of or the full amount of the fine should be paid to the employee.

The Court can also make other orders against the employer (especially in cases not involving dismissal). This can include injunctions to stop the behaviours, or an order for reinstatement if the employee has been dismissed.

In Timothy’s case, he was compensated $142,631 for his past economic loss – including unpaid leave and loss on income. He was awarded $20,000 for the distress, hurt and humiliation he suffered as a result of the Employer’s actions. The Court also eventually ordered that the Employer pay $75,600 in civil penalties to Timothy.

Disclaimer:  Nothing in this article should be relied upon as legal advice. The contents of this article should be regarded as information only, and for specific legal matters, independent advice should always be sought.