General protections claims are on the increase. More and more businesses are facing these claims (also known as ‘adverse action’ or ‘GP’ claims) from former, and even existing, employees in a myriad of situations.

Recent years have delivered two High Court cases which provide guidance about what an employer will need to do to discharge the reverse onus it bears in GP claims. Once the adverse action is established (for example, that a disciplinary action or dismissal occurred), the employer has to prove that the action was not taken for a prohibited reason.

In the first of the High Court decisions, Board of Bendigo Regional Institute of TAFE v Barclay1 , an employee who was also a union official was suspended by his employer, the Bendigo Institute of TAFE, for circulating an email to union members alleging fraud by TAFE officers. The employee claimed the suspension was adverse action taken for unlawful reasons including that he was an officer of the union. The High Court ultimately accepted that the alleged unlawful reasons played no part in the decision and that the employee’s union position did not, of itself, grant him immunity from being disciplined for any actions he undertook wearing his union hat.

Last year, in CFMEU v BHP Coal Pty Ltd2 the High Court again found in favour of an employer who had dismissed an employee who was a union member and had held up a ‘scab’ sign on a picket line during industrial action. The company dismissed the employee because his actions were intimidating and offensive to other employees and breached the company’s Code of Conduct. The employee claimed the dismissal was adverse action taken against him for prohibited reasons (his union membership and participation in industrial activities). Following Barclay, the High Court accepted that the evidence established that the decision-maker had not been motivated by prohibited reasons in dismissing the employee.

Guidance for employers

From those cases, we know that:

  • The court will focus on the decision-maker’s reasons for taking the adverse action. This is a question of fact. The decision-maker’s evidence (and ultimately how that person performs in the witness box) will be critical to successfully defending a GP claim.
  • If the court is satisfied that the decision-maker’s reasons for taking the adverse action did not include any unlawful consideration, the GP claim cannot succeed.
  • Determining the reasons for the adverse action is not an objective test. The court cannot substitute its own view. It must make findings of fact about the true reason of the decision-maker. It will have to weigh up all of the available evidence (which should include the decision-maker’s testimony about why the action was taken).
  • Just because the adverse action is connected in some way to union membership, participation in industrial activity or some other prohibited reason, does not automatically make the prohibited reason the reason for the adverse action. The connection may force the court to consider the true motivations of the decision-maker, but the connection is not enough of itself to prove the decision-maker took the action for the prohibited reason, particularly where the decision-maker’s evidence says otherwise.
  • The majority held that it is not necessary to completely dissociate the adverse action from any industrial activity. (In contrast, the minority took the approach that the waving of the ‘scabs’ sign could not be divorced from the fact that it was done while participating in a union-organised protest).
  • In Barclay, it was said that just because an employee’s union position and activities were inextricably entwined with the adverse action, an employee was not immune and protected from the adverse action. It was held that such an approach would destroy the balance between employers and employees which is central to the provisions. 
  • The trial judge had found that the reasons for the dismissal decision did not include the operator’s participation in industrial activity or his representing the union’s views, and that the decision-maker had not been motivated by those considerations. The majority held that the trial judge did not need to make any further inquiry; those findings alone should have led the trial judge to find that there had been no breach.
  • The critical distinction was articulated by Gageler J (in the majority). The protection afforded:
    • is not protection against adverse action being taken by reason of engaging in an act or omission that has the character of a protected industrial activity;

    • rather, it is protection against adverse action being taken by reason of that act or omission having the character of a protected industrial activity.

In other words, action taken because the act or omission had the protected character will breach the Act.

Other recent ‘adverse action’ cases

In December last year, a Federal Court full bench overturned an order to reinstate a Victorian government solicitor who claimed he had suffered adverse action when he was dismissed while suffering depression.

The Court accepted the government’s evidence that the true reason for the solicitor’s dismissal was related to his conduct and not his depressive condition. While the solicitor argued that his conduct had been a result of his depression (eg poor punctuality and failing to meet deadlines), the Court found that there was insufficient evidence linking the conduct to the depression. There was also contrary evidence that the solicitor’s excuses to his employer for the relevant misconduct had nothing to do with his depression.

The Court reasoned that even where there is a close connection between the reason that adverse action is taken (here, the misconduct) and a prohibited reason (his mental condition), it may be possible for an employer to prove that the prohibited reason was not a factor at play.

No-one is immune

A further illustration that exercising a ‘workplace right’ does not make an employee a protected species in the context of ‘adverse action’ is the recent case of Mendonca v Chan and Naylor (Parramatta) Pty Ltd & Anor.4

In this case, a client manager for a firm of accountants, Mr Mendonca, lodged a GP claim against his employer after being dismissed for serious misconduct.

Mr Mendonca had raised bullying complaints with his employer, the Fair Work Ombudsman and WorkCover New South Wales. He also made complaints to his employer that he had been underpaid his wages and annual leave entitlements. He claimed he was dismissed because he made these complaints, and that they which constituted a ‘workplace right’.

The firm claimed the dismissal related to serious concerns about Mr Mendonca’s skills, diligence and work performance which had been discovered during a period when he was absent from work.   The firm alleged that some of Mr Mendonca’s actions had the potential to expose its clients to additional tax liabilities, fines and penalties, and also put the reputation of the business at risk.

There was no dispute that Mr Mendonca had made the complaints to the Fair Work Ombudsman and WorkCover. Accordingly, the Judge accepted that Mr Mendonca had exercised a workplace right. There was also no dispute that his dismissal amounted to adverse action.

The firm bore the onus of proving that its reasons for dismissing Mr Mendonca did not include the complaints he had made and it produced evidence of its investigation into Mr Mendonca’s file management and advice to clients. 

Mr Mendonca argued that to succeed in its defence his employer would have to prove not only that they thought he was guilty of serious misconduct, but that he was actually guilty of serious misconduct. 

The Judge rejected this approach saying that the question to be answered is whether the adverse action was motivated by a prohibited reason (that is, because Mr Mendonca had exercised a workplace right), not whether the firm’s conclusion about his conduct was correct.

The Judge accepted that the firm’s decision to dismiss Mr Mendonca was not motivated by his exercising of his workplace rights and the claim was dismissed.

Tips for avoiding liability

The fact that an employee has exercised a workplace right or has a protected attribute will not make unlawful any adverse action taken against them. The employee can still be the subject of disciplinary action for conduct or performance issues as long as the conduct or performance of the employee is (and can be proven to be) separate to their workplace right or protected attribute. 

The risks of GP claims arising out of dismissals are an unfortunate reality. To minimise exposure to such claims, employers need to ensure that any decision to dismiss an employee is defensible for reasons that do not include prohibited reasons. 

Employers who are managing performance or conduct issues of an employee who has exercised a workplace right should consider the following tips:

  • take appropriate steps to investigate or deal with the employee’s complaints separate to the performance or misconduct process;
  • if practicable, quarantine the decision maker in the performance/misconduct process from other matters that gave rise to the workplace right;
  • follow a process of procedural fairness to deal with the performance/misconduct issue; and
  • decision makers must exercise great care to ensure their decisions are not infected by prohibited reasons, such as a belief that an employee is a troublemaker because he or she has exercised a workplace right.