Grievance and Complaint Procedure

What Is a Grievance and Complaint Procedure?

A grievance and complaint procedure is a formal document that sets out the steps for resolving problems within a business. It provides a clear roadmap for handling disputes. This document serves two main purposes. It manages internal issues between staff, such as bullying or wage disputes, and it manages external issues from clients or customers regarding service delivery.

For Australian business owners, this document is a risk management tool. It ensures that everyone knows what to do when something goes wrong. Without a procedure, decisions are often made on the spot. This can lead to inconsistent outcomes, confusion, and potential legal trouble.

The procedure outlines exactly how a person can raise an issue. It explains how the business will investigate the matter. It also sets timeframes for resolution. This transparency helps to build trust. Employees feel safer knowing there is a fair process to follow. Clients feel heard when they know their complaint will be taken seriously.

In essence, this procedure turns a chaotic conflict into a manageable process. It moves disputes away from emotional arguments and toward logical steps.

When to Use This Document

You should use this document as soon as you start hiring staff or dealing with the public. It is not just for large corporations. Sole traders, subcontractors, and small partnerships benefit from having these rules in place.

You need this document in specific situations. The first is when an employee has a workplace issue. This might be a disagreement with a manager, a concern about safety, or an allegation of bullying. Under the Fair Work Act 2009, having a clear procedure helps you show the Fair Work Commission (FWC) that you acted fairly if an unfair dismissal claim arises later.

The second situation is when a client is unhappy. If a customer believes your work was defective or your service was rude, this document guides them on how to complain. It helps you manage their expectations and protects your reputation.

Specific industries have triggers for this document. If you operate under a Modern Award, such as the Building and Construction General On-site Award 2020, you are legally required to have a dispute resolution clause in your employment agreements. A standalone procedure satisfies this requirement.

You should also review this document when your business grows. Adding new staff, taking on larger contracts, or expanding into new states are good times to update your policies.

Key Sections and Required Elements

A robust grievance and complaint procedure must contain specific sections to be effective. These sections ensure the document is legally sound and practical to use.

Purpose and Scope

This opening section explains why the document exists. It should state that the business aims to resolve issues fairly and quickly. It must explicitly mention compliance with the Fair Work Act 2009 and relevant Work Health and Safety (WHS) laws.

You need to define who the policy covers. This list usually includes employees, contractors, subcontractors, volunteers, and clients. Being clear about the scope prevents people from claiming they did not know the rules applied to them.

Definitions

Confusion often arises from unclear language. You must define key terms. Distinguish between a "grievance" and a "complaint." A grievance usually refers to an internal employment issue. A complaint is typically an external service issue.

You also need definitions for serious terms. Define "misconduct," "serious misconduct," "bullying," and "harassment." Use definitions provided by Safe Work Australia to ensure accuracy. Clear definitions help the person making the complaint understand the severity of their allegation.

Confidentiality and Victimisation

This section is critical for encouraging people to come forward. It must state that all information shared during the process is confidential. Information should only be shared on a "need-to-know" basis.

You must include a strong clause regarding victimisation. Victimisation is when someone is punished for making a complaint. The document should state that retaliation against a complainant is grounds for immediate disciplinary action. This protection is supported by Section 789FD of the Fair Work Act, which deals with anti-bullying.

The Resolution Procedure

This is the core of the document. It outlines the steps for resolving the issue. Best practice follows a "ladder" approach.

1. Step 1 (Informal): Encourage the parties to talk to each other or with their direct supervisor. Many minor disputes can be solved with a simple conversation.
2. Step 2 (Formal): If the informal step fails, the complainant submits a written request to management or HR. This triggers a formal investigation.
3. Step 3 (External): If the internal process does not resolve the issue, the document should outline external avenues. This includes the Fair Work Commission, state Ombudsman, or WHS regulators.

Roles and Responsibilities

Ambiguity causes problems. You must assign clear roles. The complainant has a responsibility to be truthful and cooperate. The respondent (the person accused) has the right to know the details of the allegation and to respond. The decision-maker, usually the business owner or manager, must remain impartial. They cannot investigate if they have a personal interest in the outcome.

Record Keeping

Good records are your best defence. This section should state that the business will keep records of all complaints and investigations. You must mention that records are stored securely. For businesses with a turnover of more than $3 million, this relates to the Privacy Act 1988. Even smaller businesses should follow this practice. The Corporations Act 2001 requires financial records to be kept for seven years, and it is wise to apply this retention period to grievance records as well.

How to Write a Grievance and Complaint Procedure (Step by Step)

Writing this document does not have to be difficult. You can follow a logical sequence to build a procedure that works for your specific business.

Step 1: Assess Your Risks

Start by looking at your industry. Construction sites have different risks than corporate offices. If you work in a high-risk industry, your procedure needs to emphasise safety grievances immediately. Refer to the Model Code of Practice: Managing psychosocial hazards at work to understand your obligations regarding psychological health.

Step 2: Choose Your Format

Decide if you want one combined document or two separate ones. Many small businesses combine internal employee grievances and external client complaints into a single "Dispute Resolution Policy" to save time. However, legal experts often advise keeping them separate. Employee matters involve privacy laws and sensitive personal information. Client complaints are often less sensitive. Separating them helps you manage confidentiality risks.

Step 3: Draft the Policy Statement

Write a clear statement at the top. It should say something like, "This business is committed to providing a workplace free from bullying and discrimination." This sets the tone. It shows that the business takes the issue seriously.

Step 4: Map Out the Steps

Write down the process clearly. Use bullet points or numbered lists. Avoid complex legal jargon. Use plain English so that a tradie or an apprentice can understand it easily.

Ensure you include the informal stage first. Australian industry practice favours informal resolution. The Fair Work Commission views mediation as a primary tool. Encouraging a chat between colleagues before launching a formal investigation can save time and stress.

Step 5: Insert the Legal References

You must mention the specific laws that apply to you. If your staff are covered by a Modern Award, you must state that the procedure complies with the dispute resolution clause of that Award. Mention the Fair Work Act 2009 and the WHS Act in your jurisdiction.

You might also choose to reference the Australian Standard AS 4260:2020. This is the voluntary standard for complaint handling. While not mandatory, it is often cited by Ombudsmen as the benchmark for best practice. Refencing it shows you are committed to high standards.

Step 6: Define the Timeframes

A complaint that drags on for months is bad for morale. Set reasonable timeframes for each step. For example, you might state that a formal complaint will be acknowledged within two working days and investigated within ten working days.

Step 7: Plan for Communication

Decide how you will tell people about this procedure. A document is useless if it sits in a drawer. You should plan to include the procedure in your Induction Checklist for new staff. You should also display a summary in the staff room or on site.

Common Mistakes to Avoid

Many Australian business owners make avoidable errors when creating these documents. Being aware of these pitfalls can save you significant trouble later.

Confusing Fair Work with WHS Issues

This is a dangerous mistake. If an employee raises a safety issue, such as a lack of scaffolding or broken machinery, it is a WHS matter. You cannot treat it solely as a "grievance" to be scheduled for a meeting next week. WHS risks must be eliminated or minimised immediately. Failing to act instantly on a safety hazard breaches your duty of care under the WHS Act. Always screen complaints for safety risks first. If there is immediate danger, stop work and fix it. The procedure can wait until the risk is managed.

Promising Absolute Anonymity

It is common to want to promise that a complainant will remain anonymous. This encourages people to speak up. However, promising "absolute anonymity" is a legal trap. It is often impossible to investigate a serious complaint fairly without revealing the complainant's identity to the accused person. This is a requirement of natural justice.

Instead of promising anonymity, promise confidentiality. Use a disclaimer in your document. State clearly: "While we will protect your privacy as much as possible, we cannot guarantee absolute anonymity if the matter proceeds to a formal investigation." This manages expectations and protects you legally.

Pre-judging the Outcome

The document must be neutral. The language you use matters. Avoid phrases that suggest the business will always side with the employee or the employer. For example, avoid saying "We will always support the victim." Use impartial language like "We will investigate all claims fairly and without bias."

A document that suggests the manager will act as judge and jury undermines the process. The investigator must be objective. If the procedure implies a bias, it can be used against you in court or at the Fair Work Commission.

Ignoring Small Business Exemptions

Small businesses often think they are exempt from all regulations. While the Privacy Act 1988 generally exempts businesses with a turnover of less than $3 million, there are exceptions. If you handle sensitive employee data, such as medical records related to a stress claim, you still have obligations. Do not assume you can ignore privacy and record-keeping requirements just because you are a small operator.

Legal Considerations (AU)

Operating a business in Australia requires you to navigate a complex web of laws. A grievance procedure is not just administrative paperwork. It is a legal shield.

Fair Work Act 2009 (Cth) & Modern Awards

Most Australian tradespeople and small businesses operate under the national workplace relations system. The Fair Work Act 2009 is the primary law. It encourages dispute resolution to prevent Unfair Dismissal claims. The Fair Work Commission looks very favourably on employers who attempted a fair internal process before terminating an employee.

If you employ staff under a Modern Award, the law is stricter. Awards like the Hospitality Industry (General) Award 2020 contain a mandatory "Dispute Resolution" procedure. You must follow these steps to manage grievances about the application of the Award or employment terms. If you do not follow the Award procedure, you may be found in breach of industrial laws.

Work Health and Safety Act 2011 (Cth) & State Equivalents

Employers have a duty of care to protect both physical and psychological health. This includes bullying and harassment. Safe Work Australia’s Model Code of Practice explicitly requires procedures for workers to raise and resolve psychosocial concerns.

In states like New South Wales, complying with this Code is mandatory evidence for WHS compliance. This means that if a worker claims they were bullied and suffered a psychological injury, WorkSafe will ask to see your grievance procedure. Not having one can be seen as a failure in your duty of care.

Anti-Discrimination Legislation

Federal laws like the Racial Discrimination Act 1975 and the Sex Discrimination Act 1984 require employers to take "all reasonable steps" to prevent discrimination and harassment. State laws, such as the Anti-Discrimination Act 1977 (NSW), have similar requirements.

A formal grievance procedure is considered a "reasonable step." It demonstrates your due diligence. If an employee sues you for discrimination, you can show the court that you had a robust procedure in place to prevent and address such behaviour. Without it, proving you took "all reasonable steps" is very difficult.

Privacy Act 1988 (Cth)

If your business has an annual turnover of more than $3 million, you must adhere to the Australian Privacy Principles (APPs). This applies to how you collect and store complaint details. You must keep the information secure and only use it for the intended purpose.

Even if your turnover is under $3 million, you should follow these principles. Handling sensitive grievance data carelessly can lead to a breach of trust and potential legal action.

Australian Standard AS 4260:2020

While voluntary, Australian Standard AS 4260:2020 is the benchmark for complaint handling. It recommends principles such as visibility, accessibility, responsiveness, and objectivity. If your business is ever investigated by an Ombudsman, they will measure your procedures against this standard. Aligning your document with AS 4260:2020 shows you are committed to best practice.

Frequently Asked Questions (preview)

Do I legally have to have a written grievance procedure?

For some businesses, yes. If your employees are covered by a Modern Award, the Award requires a dispute resolution procedure. Even if not required by an Award, it is highly recommended. It is difficult to defend an unfair dismissal claim without one.

Can an employee bring a support person to a meeting?

Yes. It is best practice to allow an employee to bring a support person to a formal grievance meeting. This is often a requirement under Fair Work Commission anti-bullying orders and helps ensure the process feels fair to the employee.

What if a client makes a complaint about an employee?

You should treat this seriously. Use your internal grievance procedure to investigate the employee's conduct. You must also follow up with the client regarding their service complaint. Keep the two processes separate to protect the employee's privacy.

How long should I keep records of a complaint?

You should keep records for at least seven years. This aligns with the record-keeping requirements of the Corporations Act 2001. This ensures you have evidence if a legal claim arises years later.

Can I dismiss an employee for making a false complaint?

You can, but you must be very careful. You need solid evidence that the complaint was malicious and deliberately false, not just mistaken or unsubstantiated. Dismissing someone for raising a genuine concern, even if you find it was not proven, can lead to an adverse action claim. Always seek legal advice before taking this step.