Under s 351 of the Fair Work Act 2009 (Cth)(FW Act), an employer is prohibited from taking action adverse against an employee because of a defined attribute, such as race, sex, age, physical or mental disability or marital status. A reverse onus of proof applies, in that it falls to the employer to prove that their reasons for taking action were not unlawful. As a result of this reverse onus, the adverse action laws have proven a fertile ground for employees. The recent decision in RailPro Services Pty Ltd v Flavel1 provides a useful illustration of the operation of the adverse action laws in the context of allegations of discrimination, and the difference between adverse action discrimination under the FW Act and the state and federal anti-discrimination laws.

Flavel was an experienced train driver who commenced employment with RailPro in April 2011. In October 2011, while undergoing training, he was involved in an incident in which the train he was driving collided with another train, causing approximately $5m damage. Separately, Flavel had been in training far longer than usually expected, and had failed to demonstrate competent knowledge of the train routes. Internal investigations into the incident concluded that Flavel and a supervisor were at fault, that their conduct was sufficient to justify termination of employment, but that as a result of mitigating circumstances a final warning should be issued and competency assessment undertaken. Following the incident, Flavel was offered counselling, which he declined. He did not sustain any physical injury or take any time off work, although his wife had written to the company indicating Flavel was ‘punishing himself and overwhelmed with grief’.

In late November 2011, Flavel was required to undertake a competency assessment on various train routes. On the first attempt, on being told he could not use his notes consistent with company policy, he refused to drive the train and advised the assessor that he ‘felt violently ill’ about the prospect of doing so. On completion of the journey, Flavel was called into a meeting with senior management, at the conclusion of which his employment was terminated because of his failure to demonstrate competence in driving his allocated routes. Some months later he was diagnosed as suffering from Post Traumatic Stress Disorder (PTSD) as a result of the original rail incident. Flavel commenced action against RailPro on various bases, including s 351 of the FW Act, asserting that adverse action was taken against him by reason of his mental disability.

At first instance, Judge Simpson of the Federal Circuit Court considered RailPro management to have knowledge of Flavel’s psychological condition by virtue of his complaint of feeling violently ill, the note from his wife, and by virtue of the company’s evidence that it was aware that accidents may have adverse mental effects on individuals. The court went on to find RailPro breached s 351 of the FW Act as follows:

‘I find that the respondent’s termination of Mr Flavel’s employment was because of Mr Flavel’s mental and physical disability which reason for dismissal is unlawful pursuant to s15(2) of Disability Discrimination Act 1992 (Cth). This reason for dismissal is in breach of s351 of the Act.’

Issues can immediately be seen with this reasoning. Whether or not there was a breach of the Disability Discrimination Act 1992 (Cth) is not the relevant test in an adverse action case under the FW Act. State and federal discrimination legislation is in different terms, and includes extended definitions of discrimination to include indirect discrimination (which may arise where there is no intent to discriminate per se, but where the imposition of a requirement has a discriminatory impact on one person or a class of persons when compared with others).

On appeal to the Federal Court, Justice Perry confirmed that discrimination under the FW Act is more restrictive, and applies only where an employer acts directly ‘because of’ the relevant attribute, such attribute being a ‘substantial and operative reason’ for the decision. While s 351(2)(a) of the FW Act does provide that there is no breach of the FW Act by action which is not also unlawful under applicable State or Federal discrimination laws, that essentially adopts the defences available under those legislative schemes, rather than broadening the scope of discrimination under the FW Act itself.

Furthermore, Justice Perry noted that RailPro’s management could not act ‘because of’ a disability that they did not know existed, nor could reasonably have known existed given the minimal symptoms observed at the time. A disability under the FW Act ‘does not include ordinary human responses to particular circumstances, such as nervousness’. Merely because Flavel had an ‘attack of nerves’ on one occasion was no reason to conclude that the employer’s managers had knowledge of a disability, particularly given the absence of any other complaint, any time off work, and the refusal of counselling. Accordingly, the claim for discrimination under s 351 of the FW Act was dismissed.

Ultimately, Flavel did have some measure of success on other grounds. He had a legal duty under the Occupational, Health, Safety and Welfare Act 1986 (SA) to take reasonable care to protect the health and safety of himself and others at work, and to withdraw himself from work if he was unfit for duty. Accordingly, separate to discrimination, he alleged that adverse action was taken against him because of the exercise of a workplace right under s 340 of the FW Act.2 While the Federal Court accepted RailPro’s argument that Flavel’s competence or lack thereof in the performance of his duties was a valid reason for terminating his employment in these circumstances, the court concluded that RailPro had failed to address whether Flavel was unfit for duty on the day in question (which was a separate consideration to whether or not they had knowledge of a disability) and whether that was one of the operative reasons for the decision to terminate. Accordingly, the employer had not satisfied the reverse of proof, and Flavel was entitled to succeed.

As a result of the appeal and the more limited findings, damages for distress and hurt for the dismissal were reduced from $25,000 to $7,500. Damages for economic loss attributable to the dismissal (as distinct from those attributable to the injury itself) were remitted to the trial judge for determination.

The moral of the story is that the adverse action regime under the FW Act remains a minefield given the reverse onus of proof, such that employers must be very clear (and careful) as to the reasons why decisions are taken and ensure that appropriate evidence regarding those reasons is led at any hearing. However, there are some positives. The recognition that broader concepts of discrimination in State and Federal anti-discrimination laws, such as indirect discrimination, have no relevance to considerations under the FW Act is welcome and confirms other recent decisions,3 as is the recognition that normal human reactions to stressful situations, such as nervousness, nausea, sadness, etc. are by themselves insufficient to find that an employer had knowledge of a disability. As the test of whether adverse action was ‘because of’ a disability necessitates some level of knowledge regarding the disability, the level at which the manifestation of symptoms triggers the requisite knowledge remains an important factual issue.