The Fair Work Commission recently ordered the reinstatement of a shop steward on the basis that the employer’s conduct in dismissing the shop steward was arguably a breach of its good faith bargaining obligations.1 The case serves as a timely reminder of the breadth of orders that may be made in response to a breach of the good faith bargaining obligations, and that employers should be particularly cautious when considering the dismissal of an employee who is directly involved in bargaining for an enterprise agreement. 

Background Mr Caspersz was first employed by W.W Wedderburn Pty Ltd (Wedderburn) as an apprentice in 2001. By 2015, he was shop steward for the Australian Manufacturing Workers’ Union (AMWU) and a part of the bargaining team for a new enterprise agreement.

In September 2015, AMWU members employed by Wedderburn took protected industrial action in support of their claims for the proposed agreement. At this time, Mr Caspersz made a number of statements to the media. The final text of the agreement could not be agreed so further protected industrial action was notified for December 2015.

On 12 January 2016, Wedderburn met with Mr Caspersz and alleged that his earlier comments to the media had been made in breach of his employment contract. When these allegations were put to Mr Caspersz, he “stormed out”. Following this, Wedderburn sent Mr Caspersz an email further alleging that his decision to leave the meeting constituted an abandonment of employment and that he had breached his confidentiality obligations by sharing information about the disciplinary process with one of his co-workers.

Subsequently, Mr Caspersz was issued with a formal warning for making unauthorised comments to the media, breaching his confidentiality obligations, and for failing to comply with a lawful and reasonable direction by leaving the meeting early. The AMWU disputed the warning and sought its retraction but Wedderburn rejected this proposal.

The dismissal

On 12 February 2016, protected action notices, including a ban on the performance of overtime, were in place. On that day, Mr Caspersz was working at a Woolworths site that was some distance from Wedderburn’s premises, which was his usual place of work.

Mr Caspersz informed the relevant Woolworths and Wedderburn managers that he would be leaving in order to comply with the overtime ban because he estimated that it would take him 90 minutes to get home. Mr Caspersz later received a telephone call from a senior manager at Wedderburn, Mr Alvarez, who told him to go back to work as overtime did not include travel but Mr Caspersz argued that “it has always included travel at Wedderburn in all [his] years.”

Over a month later, Wedderburn met with Mr Caspersz and put a number of allegations to him around the fact that he had left work early on the day of the overtime ban and subsequently damaged the relationship with a major customer. On this basis, Wedderburn summarily terminated Mr Caspersz’s employment.

Proceedings in the Fair Work Commission

It would have been open to Mr Caspersz and the AMWU to challenge the termination of employment by bringing either an unfair dismissal or general protections claim. However, they instead opted to seek an order for Mr Caspersz’s reinstatement under section 231(2) of the Fair Work Act 2009 (Cth) (FW Act), on the basis that Wedderburn’s decision to dismiss Mr Caspersz was in contravention of its good faith bargaining obligations under section 228(e) of the Act, specifically to refrain from “capricious or unfair conduct that undermines freedom of association or collective bargaining”.

Mr Caspersz and the AMWU made an urgent interim application to reinstate Mr Caspersz until such time as the matter could be heard in full and finally determined. To be successful in this application, it was only necessary for Mr Caspersz to show that there was a “serious question to be tried” as to whether his dismissal was in breach of Wedderburn’s good faith bargaining obligations and that the “balance of convenience” favoured reinstating him to his employment.

At the interim hearing, Mr Caspersz and the AMWU argued that Wedderburn’s treatment of Mr Caspersz was unfair conduct which undermined collective bargaining and/or freedom of association. In support of this position, they pointed to the speed of the final disciplinary process and the fact that the allegations relating to Mr Caspersz’s comments to the media had only been raised with him months later, once further protected industrial action commenced. They also provided evidence from Mr Caspersz and a co-worker that Wedderburn had always paid employees working away from site for the time it took them to get home, arguing the actions that led to Mr Caspersz’s dismissal were therefore protected industrial action.

Wedderburn submitted it had not acted in an unfair or capricious manner because Mr Caspersz’s comments to the media and his decision to leave work early were both valid reasons for dismissal. It said that overtime was not travelling time but, in any event, it would only have taken Mr Caspersz an hour to return to Wedderburn’s premises and so he still left 30 minutes too early, even if he was correct that overtime included travel time.

The decision

In making her decision, Deputy President Gooley (Gooley) focused on whether Mr Caspersz’s early departure from work was caught by the protected action notice that was in place. Citing the recent decision in Esso Australia Pty Ltd v The Australian Workers’ Union (which has subsequently been largely upheld on appeal), she noted that the relevant question to ask when determining the meaning of such a notice is “what the applicant’s management would reasonably have understood by that expression.”

Having regard to the evidence, DP Gooley found there was an arguable case that Wedderburn would have understood an overtime ban to include travel time. On that basis, DP Gooley was also satisfied that there was an arguable case that Mr Caspersz’s dismissal was unfair or capricious, and that his conduct in leaving early was protected industrial action, meaning that his dismissal was not only unfair, but also in contravention of the general protections provisions of the FW Act. DP Gooley also found that there was an arguable case that Wedderburn was motivated by its belief that Mr Caspersz was responsible for the industrial action being taken generally, and that dismissing a shop steward who had been part of a bargaining team since bargaining commenced would undermine collective bargaining and freedom of association.

On the basis of the financial and emotional pain caused to Mr Caspersz by the dismissal, it was held that the “balance of convenience” weighed in favour of making an order to reinstate him until such time as the matter could be heard and finally determined.

At the time of publication, the final hearing is yet to occur and it is unclear whether Wedderburn intends to pursue its opposition to the application.

Bottom line for employers

So can you dismiss or take disciplinary action against an employee who has been involved in enterprise bargaining? Yes, however:

  • if the reason for dismissal or disciplinary action includes industrial action taken by the employee, then careful consideration must be afforded to the nature of the action taken and whether or not it falls within the scope of any protected action order; and
  • the impact of the dismissal or disciplinary action on the bargaining process should be assessed to ensure that the dismissal or disciplinary action is not capricious and would not undermine collective bargaining and/or freedom of association, so as to breach the FW Act.

KEY POINTS

  • Dismissing an employee who has been involved in bargaining may constitute capricious or unfair conduct that undermines freedom of association or collective bargaining.
  • Careful consideration should be given before taking disciplinary action against a worker for conduct connected with participation in industrial action.