Introduction

Board of Bendigo Regional Institute of Technical and Further Education v. Barclay and Anor [2012] HCA 32 (7 September 2012)

On 7 September 2012, the High Court of Australia handed down its decision in the landmark case of Board of Bendigo Regional Institute of Technical and Further Education v. Barclay and Anor [2012] HCA 32. The High Court unanimously upheld the appeal and in so doing found that for the purposes of the general protection provisions in the Fair Work Act 2009 (Cth)(the Fair Work Act), the subjective intent of the employer is a relevant consideration.

The lesson for employers is to make sure that there is evidence of such intent and that it is documented at the time of dealing with the employee and that the evidence is preserved.

Facts

Mr Barclay was employed by the Bendigo Regional Institute of Technical and Further Education (BRIT) as a teacher and he was also Sub-Branch President and delegate for the Australian Education Union (AEU). He had emailed AEU members on his work email alleging that several members had informed him that they had witnessed or been asked to create false documents for a TAFE accreditation audit. Sending the email in this fashion, rather than notifying management in confidence, was considered by BRIT to breach the applicable code of conduct.

The subsequent action taken by Dr Louise Harvey, (BRIT’s Chief Executive Officer) against Mr Barclay included suspension, a ban from the worksite, limited internet access and disciplinary action. This became the subject of the general protections claim.

Findings at first instance

Mr Barclay and the AEU sought a Federal Court declaration that BRIT had contravened s346 of the Fair Work Act by taking adverse action against Mr Barclay for the reasons that he:

  • was an officer of the AEU;
  • encouraged or participated in lawful activity promoted by the AEU, or advanced views of the AEU; and
  • exercised workplace rights based on provisions in the employer’s policies.

At first instance, Tracey J, dismissed the application, finding that adverse action was taken against Mr Barclay for the reasons submitted by Dr Harvey, i.e. inappropriate workplace conduct. Although the judge found that adverse action had occurred, the action was not taken for a proscribed reason and the claim was dismissed.

Findings on appeal at Full Court

The AEU and Mr Barclay appealed the decision to the Full Court. We reported on the findings of the Full Court on 24 February 2011.

The Full Court (by majority decision) found that the employer must show that the “real” reason for taking the adverse action was disassociated from the employee’s position as a union officer. The real reason may not be the reason the relevant decision-maker asserts it is (in this case, Dr Harvey), rather, it may be an unconscious reason, and it is not relevant that the employer may have otherwise had a benevolent intent. The majority found that while the subjective intention of the decision maker is relevant, it is not determinative. Instead an objective approach was favoured to determine a decision-maker’s “real reasons”.

On this basis, the majority of the Full Court found that the sending of the email and the manner in which it was expressed were part of Mr Barclay exercising his functions as an officer of the AEU. Similarly, interacting with other members and maintaining the confidence of fellow members was considered as Mr Barclay acting in his capacity as an officer of AEU. Accordingly, BRIT took adverse action against Mr Barclay for conduct founded on reasons that he was an officer of the union and engaged in industrial activity.

Fair Work Act review recommendations

While we have been waiting for the High Court to hand down its decision on BRIT’s appeal of the Full Court decision, the panel constituted to review the Fair Work Act has recommended that the general protections provisions of the Fair Work Act be amended so that the central consideration about the reason for adverse action is the subjective intention of the person taking the alleged adverse action. This proposal, while not a complete reversal of the Full Court’s decision, certainly suggested that the panel considered that the wrong outcome and principles had been applied in this case.

Findings in the High Court

In three separate, but concurring judgments, the High Court held that Dr Harvey’s (BRIT’s decision –maker’s) evidence which was accepted by the primary judge, and not challenged before the Full Court, established that the reason the adverse action was taken against Mr Barclay was because of his alleged serious misconduct, and had not been for a proscribed reason such as his industrial activity.

French CJ and Crennan J held that the ‘correct approach’ for the Court in determining why an employer took adverse action against an employee is a question of fact that involves consideration of the decision maker’s ‘particular reason’ as well as the employee’s circumstances, at the time the adverse action was taken. In particular, their Honours confirmed that, as was the case with Dr Harvey’s evidence, a decision maker’s direct testimony as to their ‘particular reason’, if reliable and accepted, is sufficient to discharge the burden on the employer, and that this approach applied in the Fair Work Act as it did in previous versions of the legislation. Their Honours also dismissed the respondent’s argument that the conduct and proscribed reason were ‘inextricably entwined’, and held that such an approach would ‘destroy the balance between employers and employees’ in this area.

Gummow and Hayne JJ held that the argument in support of a search for ‘objective’ reasons erroneously suggested that it was open to a Court to make its own findings, rather than make findings of fact based on the evidence before the Court.

Heydon J’s judgment made the strongest comments in allowing BRIT’s appeal, noting that even Counsel for the respondents did not fully embrace the approach taken by the Full Court majority. His Honour held that “to search for the “reason” for a voluntary action is to search for the reasoning actually employed by the person who acted. Nothing in the Act expressly suggests that the courts are to search for “unconscious” elements in the impugned reasoning of persons in Dr Harvey’s position. No requirement for such a search can be implied”. His Honour also commented on the ‘hilarity’ of an employer having to defend such an ‘impossible burden’, and found that, even if such a search was permitted, there was no evidence before the primary judge that Dr Harvey held any ‘unconscious’ proscribed reasons.

Implications for employers

Although this decision is based on the protection provided for union members and officers, similar reasoning will apply to the Fair Work Act’s protection of other employees who exercise workplace rights.

The High Court’s decision ends a period of great uncertainty in this area, and provides assurance to employers that they will be able to successfully discharge the reverse onus of proof in adverse action claims under section 361 of the Fair Work Act, if the Court accepts the employer’s subjective reasons for engaging in certain conduct.

Employers will need to ensure that they can produce sufficient evidence of the subjective intent. They should make and retain contemporaneous documents or records which describe their purpose and intent at the time of the relevant conduct.