In this decision, recently retired Justice Gray of the Federal Court of Australia found that the selection of an academic for redundancy was unlawful adverse action and that RMIT had undertaken the redundancy process as a "pretext for getting rid of an undesired employee".

Implications for employers

This case highlights two things:

  • first, the importance of those involved keeping clear contemporaneous records around redundancy processes and decisions. This will assist in defending any adverse action (and other) claims around the redundancy; and
  • second, the standard required for an employer to discharge the reverse onus of proof when an adverse action claim is made. In Justice Gray's view, an employer must provide evidence not only as to the real reasons for the decision, but must also directly answer the employee's allegations. The employee's allegations need to be directly put to the decision-maker and positively denied.

Background: Legislation

Relevantly in this instance:

  • section 340(1) of the Fair Work Act 2009 (FW Act) prohibits a person from taking adverse action against another person because the other person had a workplace right, has or has not exercised a workplace right or proposes or proposes not to exercise a workplace right. Among other things, a workplace right includes the ability of an employee to make a complaint or enquiry in relation to his or her employment;
  • section 361(1) reverses the usual onus of proof in civil litigation. That is, once an employee proves that the adverse action was this is to the effect that employers have to prove that they took adverse action for a specific reason that is not prohibited under the FW Act; and
  • section 50 provides that a person must not contravene a term of an enterprise agreement.

Background: facts

Professor Judith Bessant was an academic at Royal Melbourne Institute of Technology (RMIT), employed as head of the Youth Work discipline in the School of Global Studies, Social Science & Planning. Professor David Hayward was Head of the School.

In 2009 and 2010, Professor Bessant made a number of complaints regarding Professor Hayward. She alleged, among other things, that Professor Hayward had bullied her and she had not been provided with a safe place of work. A formal complaint was made to the regulator, to various people within RMIT, to the National Tertiary Education Union (NTEU) and to Professor Hayward himself.

In 2010, RMIT commenced an investigation of the financial viability of certain disciplines within the School. As Head of School, Professor Hayward undertook to reorganise the School's structure and was ultimately responsible for making a range of recommendations to the Vice-Chancellor, Professor Margaret Gardner.

As part of that process, in March 2010 Professor Hayward wrote to Professor Gardner to indicate that as part of the restructure, he thought Professor Bessant should be made redundant. He noted that this would assist the School with its financial position. He further commented that he proposed Professor Bessant's redundancy for "a mixture of inter-personal, organisational and financial reasons." He noted that Professor Bessant had "a history of major work based conflict".

In April and June 2010, Professor Bessant made further complaints against Professor Hayward. In June 2010, this included formal notification of a dispute under the applicable enterprise agreement (Enterprise Agreement) regarding alleged failure by RMIT to meet its statutory health and safety obligations. In response to this complaint, RMIT engaged an independent Human Resources consultant. The consultant concluded that Professor Bessant's complaints were not substantiated, notwithstanding the fact that there were flaws in the restructuring process which had adversely affected Professor Bessant.

Pursuant to the dispute-resolution provisions in the Enterprise Agreement, Professor Gardner formed an Issues Resolution Committee. The outcome of this was a "settlement and release agreement" (Agreement), under which RMIT agreed to take a number of steps to placate Professor Bessant, including relocating her physically to a different office.

Meanwhile, Professor Hayward had begun taking steps toward effecting redundancies in the Youth Work area. On the day the Agreement was signed, Professor Hayward emailed staff in the Youth Work discipline to invite them to consider a voluntary redundancy. At a subsequent meeting, Professor Hayward advised that a targeted redundancy process would commence if there were insufficient voluntary redundancies.

By email on 18 July 2011, Professor Hayward invited Professor Bessant to a meeting to discuss the potential targeted redundancy of her position. After this meeting, Professor Bessant was advised that her position "had been identified as potentially redundant". RMIT and the NTEU each notified Fair Work Australia (as it then was) of a redundancy dispute under the Enterprise Agreement, which lead to an unsuccessful conciliation.

On 28 October 2011, Professor Bessant was advised that her job was no longer required to be performed by anyone and her employment was terminated by reason of redundancy

Professor Bessant, represented by the NTEU, commenced an adverse action claim.

The parties' arguments

Professor Bessant and the NTEU

Professor Bessant and the NTEU claimed that this was not a genuine redundancy and Professor Bessant had been terminated from her employment because in making her complaints she had exercised, or proposed to exercise, a workplace right. It was also alleged that RMIT was in breach of the Enterprise Agreement.

RMIT

RMIT did not dispute that the termination of Professor Bessant's employment amounted to adverse action, or that she was exercising a workplace right. However, RMIT argued that the termination did not constitute unlawful adverse action, as Professor Bessant had been selected for redundancy for financial reasons. The Youth Work discipline was running at an annual loss of $300,000, and termination of Professor Bessant would contribute significantly to improving this position.

Decision

Justice Gray found in favour of Professor Bessant. He ordered her reinstatement and directed that RMIT pay a combined penalty of $37,000 for contravening the adverse action provisions of the FW Act and for breaching the Enterprise Agreement. In reaching this conclusion, Justice Gray held that:

  • although the Youth Work discipline was running at a loss, there was no clear connection between the financial position of the discipline and the selection of Professor Bessant for redundancy;
  • while Professor Gardner gave evidence that the reasons for selecting Professor Bessant for termination were "primarily financial", this did not preclude the possibility that other reasons were also considered. Importantly, Professor Gardner was aware of the dispute between Professor Bessant and Professor Hayward. Professor Gardner was not asked, and did not give evidence, about whether any of the specific reasons alleged in the statement of claim were not reasons for her decision. His Honour found that this was not in fact sufficient to discharge the onus of proof:

Generally... the evidence as to the state of mind of the decision-maker or decision-makers will include evidence as to what are claimed to be the actual reasons for the decision. Even if the reasons advanced as actual reasons for the decision are accepted as such, the absence of evidence that there were no additional reasons, or that the actual reasons did not include the alleged proscribed reasons, will usually result in a failure to rebut the presumption.

  • there was no contemporaneous account of the reasons for the determination that Professor Bessant's position should be made redundant. Justice Gray commented that "Anyone with a background in the discipline of industrial relations would understand the importance of recording reasons for dismissal". The absence of documentary evidence to support RMIT's case was a primary factor which meant the decision was exposed to a possibility that other prohibited reasons had been in operation; and
  • in view of the above, RMIT had failed to disprove Professor Bessant's claim that RMIT had taken adverse action against Professor Bessant because she had exercised a workplace right, namely, to complain about her employment to RMIT and the regulator.

Justice Gray also found that RMIT had breached the Enterprise Agreement, as it had failed to offer Professor Bessant the option of participating in a voluntary redeployment process, as it was required to do under the Enterprise Agreement

National Tertiary Education Union v Royal Melbourne Institute of Technology [2013] FCA 51 (16 May 2013)