General Protections claims – beware of personal liability
It has been more than 8 years since the Fair Work Act 2009 (Cth) (the Act) came into force, however many business owners and senior managers are unaware of the existence and effect of the "General Protections" regime contained in Part 3-1 of the Act.
Part 3-1 of the Act provides protection of a person's workplace rights. Employers can find themselves in contravention of Part 3-1 if they engage in conduct that amounts to "adverse action" being taken against an employee. Adverse Action includes (but is not limited to) the dismissal of an employee, injuring an employee in their employment, altering the position of an employee to the employee's detriment or an employer discriminating between employees.
We have seen an increasing trend with applicants in General Protections matters bringing claims not only against their employer but also against the employer's owners and directors - even line managers and supervisors - personally. These individuals often do not initially appreciate that they are being sued personally.
Typically the first question that we are asked by individuals who have been personally joined to a General Protections claim is: "I am not the employer so how can this person be suing me?"
The answer is found in s.550(2) of the Act, which states that an individual person is involved in (and can therefore be liable for) a contravention committed by another party where that person has:
- aided, abetted, counselled or procured the contravention; or
- induced the contravention, whether by threats or promises or otherwise; or
- been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
- conspired with others to effect the contravention.
Often individuals who have been joined as a party to a General Protections matter have done none of the above things and have been joined as a party merely to provide a strong incentive to settle the matter as quickly as possible. Despite this, involvement in the matter personally is not trivial and can incur significant personal time, effort and expense.
It is very important that managers at all levels within a business are aware of Part 3-1 of the Act and that they tread carefully whenever a substantial change is proposed to the terms upon which an individual employee is engaged. Middle managers in particular need to be aware that "just doing what senior management wants" could result in a disgruntled employee suing them personally.
When looking to resolve employment law matters, prevention is the best cure. If you have a query relating to any of the information in this article, or you would like to speak with a lawyer in Coleman Greig's Employment Law team with regard to difficulties that you're having with regard to the management of an employee, please contact us prior to taking any significant steps so that you can avoid potentially creating a bigger problem.