Key Points: Anyone in your organisation who can decide to take action that could be construed as adverse action under the Fair Work Act must understand properly how these laws can operate.

The Fair Work Act 2009 ("FW Act") prohibits a person from taking "adverse action" against another person where that action is taken because of certain specific reasons such as the possession of a "workplace right" it s exercise or proposed exercise (section 340) and because of union membership or being a union official or engaging in industrial activity (section 346).

The operation of those adverse action provisions has been the subject of a great deal of debate and commentary amongst workplace relations and HR practitioners, advisers and managers.

On 9 February the Full Court of the Federal Court handed down its decision in Barclay v The Board of Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14. It deals with a critical aspect of the operation of those provisions in the context of a claim that an employee was subject to adverse action because they were a union official and because they engaged in industrial activity as defined in section 347 of the FW Act.

In allowing the appeal the majority judges (Justices Gray and Bromberg) in a joint judgment set out and applied a particular view about how the question of whether action was taken because of that particular reason is to be approached and determined under those provisions. Their reasoning applies to that aspect of the operation of the adverse action provisions, whether the basis of the allegation is that the adverse action was taken for the particular reasons alleged in that case, or for any of the other reasons that the legislation identifies as reasons for which adverse action is not to be taken eg. possession of a workplace right.

Their reasoning differed significantly from that used by the judge at first instance (Justice Tracey) and it has the effect of giving the adverse action provisions a wider application and of creating for employers (and other persons) a larger area of potential liability than might previously have been thought to be the case

It is fair to say that the reasoning of the majority may be regarded by some as having some contentious elements. However, unless and until the reasoning of the majority joint judgment is overturned by a Court of higher authority ( the High Court) or departed from by a differently constituted Full Court, that reasoning must be treated as stating the law on that issue. It is therefore very important that those working in the field of workplace relations have a good understanding of what was decided in that case and the reasoning used by the majority to reach their decision.

The case

The case concerned a claim that adverse action had been taken by an educational institution (BRIT) against one its senior teachers (Greg Barclay) because he was a union official and because he had engaged in "industrial activity" as that expression is defined in section 347 of the FW Act.

Mr Barclay was a delegate of the AEU at the institution and President of the sub-branch of that union. Using his work email account, but identifying himself as the President of his union sub-branch, Greg Barclay emailed other union members saying some union members had told him about serious misconduct by unnamed persons at his workplace. He did not report these allegations to his managers before sending the email, nor give them the names of the complaining members when requested.

His employer then asked him to show cause why he should not be disciplined for failing to report the misconduct. He was suspended on full pay, had his internet access suspended and was required not to attend work during his suspension. He was also asked to show cause why he should not be subject to disciplinary action for his conduct. Each of those actions by his employer were alleged to "adverse action" in his claim. BRIT conceded that the first three of those actions were adverse actions but in respect of each of the alleged actions contended that it had not taken those actions because of a prohibited reason.

Because of the "reverse onus" and mixed reasons provisions that operate in relation to such claims, in order to succeed in its defence against the claim, BRIT had to positively establish that the adverse action was not taken for reasons that included a prohibited reason (see sections 360, 361 FW Act).

The trial judge (Justice Tracey) held that the adverse action was not taken for a prohibited reason, essentially on the basis that he was satisfied on the evidence that the relevant BRIT decision-maker had not taken any of the actions "because" of a prohibited reason. Rather, BRIT had been successful in establishing that the decision-maker's subjective reason was not because of Mr Barclay's status as a union official or because he had engaged in industrial activity as defined in the FW Act

The majority in the Full Federal Court disagreed with that reasoning and allowed the appeal.

In summary, the majority judges held that in order to reach a conclusion about whether action that was adverse action was taken because of a prohibited reason it was necessary to determine what they termed the "real reason" for that action.

On this matter, the majority judges said:

  • the real reason may not be the reason that the relevant decision-maker asserts it is;
  • the real reason is not necessarily the reason the employer thinks it might have been – it might be an unconscious reason – and it doesn't matter that the employer had a benevolent intent; and
  • if there is an objective connection between the decision to take the action and the attribute or activity in question, for example, union activity, a conclusion can be reached that the action was taken because the person affected had that attribute or engaged in that activity.

Applying this approach to the circumstance of the case, the majority held that as a matter of objective fact the e-mail was sent by Mr Barclay in his capacity as a union officer and its was part of activities he engaged in that capacity. None of the conduct, they said was engaged in by Mr Barclay in his capacity as an employee of BRIT. In those circumstances, they said that it would be "impossible" for BRIT to divorce from its action the objective fact that the e-mail was sent by Mr Barclay in his union official capacity and as part of his union activities. On this reasoning their Honours said that it followed that a reason for BRIT taking the adverse action was because Mr Barclay was a union official and because he engaged in activities in that capacity.

They added that in order for BRIT to have succeeded in establishing that its actions in relation to Mr Barclay were not taken because of a prohibited reason it would have been necessary for it to establish by evidence that its real reason were "disassociated" from the circumstance of Mr Barclay's status as a union official and his activities as such.

The dissenting judge, Justice Landers, agreed with the reasoning of the trial judge and considered that the appeal should be dismissed.

Some further observations

In the joint judgment it was said:

"If adverse action is taken by an employer in response to conduct of a union, it is impossible for that employer to dissociate or divorce from that conduct its reason for the taking of the adverse action simply by characterising the activity of the union as the activity of its employee."

On one reading of that passage and the whole of paragraphs [73]-[74] of the joint judgment it could be suggested that it means that in any case in which the conduct of the employee that prompted the employer's action, objectively speaking, is done in the capacity of a union member, official and/or as part of his activities as such it will follow that the employers reactive action is to be regarded as having been because the employee was a union official member and/or as part of the employee's activities as such.

That is a challenging proposition and it will require and will attract a large amount attention and analysis over the next several months.

For the present, it is sufficient to say that it signals to all practitioners and employers that great caution needs to be exercised in any case in which taking action against an employee is contemplated in response to something that the employees has done or said and it is arguable that it was done in their capacity as a union member, official or as part of their industrial activities as such.  

Does it matter how the employer would have treated other employees?

Generally, no. It won't normally matter that the employer would have taken the same action against any other employee who acted in the same way.

The only time it will matter is if the adverse action is itself alleged to be discrimination when compared with other employees.

Does it matter how the employee / unionist expresses his or her views?

Here Mr Barclay expressed himself very strongly. That doesn't mean that he wasn't representing or advancing his union's views. As the Full Federal Court pointed out, it's not for the employer or the court "to make too close an examination of the terms in which a union delegate communicated with he members of his or her union".

So what does this mean for employers?

The Full Federal Court's decision to employers is that their subjective good intentions may not be enough.

Anyone in your organisation who can decide to take action that could be construed as adverse action under the Fair Work Act must understand properly how these laws can operate.

This is especially so when industrial activity, or the exercise of a workplace right, blurs into employment activities.

It is always necessary to analyse carefully what the employee is doing, whether that's part of their employment or a protected activity, and what (if any) response should be made. If there are doubts, it is prudent to seek advice.

We understand that an application for special leave to appeal to the High Court has been filed, so this might not be the end of the matter. We will continue to monitor any developments.