A 3-2 majority of the High Court of Australia (HCA) has dismissed the appeal of the Construction, Forestry, Mining and Energy Union (CFMEU), providing important guidance on the operation of the adverse action provisions of the Fair Work Act (FW Act).


Implications for employers

This decision signifies that if an employer provides persuasive reasons for the action they took, the court may accept that action was not taken because of an unlawful reason. An employer should take care to document the reasons for dismissing an employee and any other disciplinary action. This provides employers with the best possible chance of discharging the reverse onus of proof.

The fact that there was no clear majority in this case suggests that it is still a contentious area of law and employers should continue to exercise caution. It was important in this case that the decision to terminate the employee’s employment was not a spur of the moment reaction, but a decision reached over time and after systematic consideration of the facts.

With due process and care, employers should feel confident in their ability to dismiss employees in accordance with their policies, even if the employee is also part of a union or has participated in industrial action.

Background

In May 2012, CFMEU members took part in protected industrial action in the course of negotiating an enterprise agreement at Saraji Mine which was run by the respondent, BHP Coal. An employee of BHP Coal and member of the CFMEU, Mr Doevendans, attended the protest and held up a sign supplied by the CFMEU which read ‘No principles SCABS No guts’.

After an investigation of Mr Doevendans’ conduct, BHP Coal terminated his employment. The CFMEU brought proceedings on Mr Doevendans’ behalf, arguing that BHP Coal’s actions constituted adverse action for a prohibited reason, namely his participation in lawful industrial activity (section 347(b)(iii)) and his advancement or representation of the union’s views or interests (section 347(b)(v)).

Decision at first instance

At first instance Justice Jessup of the Federal Court of Australia held that BHP Coal did dismiss Mr Doevendans because he had participated in a lawful activity organised by an industrial association and because he had represented and advanced the views of that association, the CFMEU.

BHP Coal was found to have taken adverse action against Mr Doevendans for an unlawful reason, and he was reinstated as an employee with a civil penalty imposed on BHP Coal.

While His Honour accepted the evidence of BHP Coal’s General Manager, Mr Brick, it was also found that the employee’s industrial activity and representation of union views were also reasons for his dismissal. As such, it was held to be unlawful.

Decision of the Full Federal Court

BHP Coal appealed to the Full Federal Court, where a majority (Justices Dowsett and Flick, Justice Kenny in dissent) overturned Justice Jessup’s decision.

The majority held that the conclusions of Justice Jessup were not based on a factual enquiry as to the reasons for the adverse action, which previously in the Barclay decision, the High Court had confirmed is the correct enquiry.

Justice Kitto emphasised that an employee’s activity is not protected from adverse action just because it happens to be done in the course of an otherwise lawful industrial activity. As Chief Justice French and Justice Crennan highlighted in Barclay, the onus imposed on an employer by section 361 is not heavier or different if adverse action is taken while an employee is engaged in industrial activity. An employee is not immune and protected from adverse actions purely because of their union position and involvement.

Decision of the High Court

By a 3-2 majority, the appeal of the CFMEU was dismissed. Chief Justice French and Justice Kiefel wrote a joint judgment and Justice Gageler wrote a separate judgment. Justices Hayne and Crennan were in dissent.

Joint judgment of Chief Justice French and Justice Kiefel

Their Honours emphasised that the focus of the enquiry was the reasons and motivation for Mr Brick taking the adverse action. The determination that is made by the court is one of fact, taking into account all of the circumstances of the case and available inferences.

Their Honours accepted Mr Brick’s evidence as true in fact, and held that none of the reasons given were prohibited by s 346(b).

Judgment of Justice Gageler

His Honour affirmed the reasoning in Barclay that the word ‘because’ in section 346 of the FW Act connotes the existence of a particular reason as an operative and immediate reason for taking adverse action. His Honour found that in the present case, the totality of the operative and immediate reasons for BHP Coal taking adverse action against Mr Doevendans was proven by the evidence of Mr Brick about his own process of reasoning. Accordingly, the dismissal was not because he had engaged in industrial action.

Dissenting Judgments of Justices Hayne and Crennan

Justice Hayne held that while there is no doubt that the sign Mr Doevendans held was offensive and abusive, the use of the word ‘Scab’ cannot be separated from the circumstances in which it was used. It was used in the course of lawful industrial action. His Honour reasoned that if the activity is lawful, the method and manner of participation in the activity must also be lawful. Justice Crennan agreed with Justice Hayne and commented that the fact that the sign used ‘conspicuously offensive language’ did not take the dismissal outside section 346(b). Their Honours held that the appeal should be allowed.