The High Court has handed down an important and much anticipated ruling on the meaning of the ‘general protections’ against wrongful or discriminatory workplace conduct in Part 3-1 of the Fair Work Act 2009.

The decision in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 significantly strengthens the chances of employers and other defendants being able to resist claims that they have breached these provisions.

Among other things, the general protections prohibit an employer from taking adverse action against an employee for certain prohibited reasons: for example that the employee is or is not a union member, or that they have (or are proposing to exercise) a particular ‘workplace right’.

For the purpose of these protections, section 361 of the FW Act casts on the defendant the burden of proving that any adverse action they may have taken was not for a prohibited reason. This type of ‘reverse onus’ provision has been part of federal industrial law since 1904.

In the Barclay case the employer, Bendigo TAFE, had taken disciplinary action against a senior employee, a union delegate, for sending out an e-mail that suggested corrupt behaviour by management. In response to an allegation that this breached section 346 of the FW Act (which prohibits adverse action for engaging in ‘industrial activities’), the employer argued that the employee had been disciplined for failing to comply with his employment obligations in the way in which he dealt with the matter, not because of his status or activities as a union official.

The employer’s argument succeeded at trial. But a majority of the Full Federal Court held that it was not enough that the relevant decision-maker believed they had acted for such a reason. If, objectively, the ‘real’ reason for adverse action lay in something lawfully done by the employee in his capacity as a union delegate, that was sufficient to contravene section 346, regardless of any subjective belief.

The High Court has now, however, restored the original finding that the employer had discharged the burden of showing that any action taken against Mr Barclay was not because he was a union official, or had been acting in that capacity. The employer’s CEO had given uncontested evidence that her reasons for initiating action against the employee were based on her concerns that he had not, for instance, reported the allegations to management before broadcasting them by e-mail. That was sufficient to make out the defence.

As Chief Justice French and Justice Crennan stressed in their leading judgment, in this sort of case it is a question of fact as to why the relevant action was taken, and that matter is not to be approached on any kind of ‘objective’ basis. It will inevitably require consideration as to the ‘state of mind, intent or purpose’ of the relevant decision-maker. If direct testimony from that person that they did not act for a prohibited reason is accepted as reliable, that is capable of discharging the burden of proof imposed by section 361.

Their Honours also rejected the suggestion that ‘Mr Barclay’s union position and activities were inextricably entwined with the adverse action, and that Mr Barclay was therefore immune, and protected, from the adverse action’. Such a view would, they said, ‘destroy the balance between employers and employees’ that is central to the operation of this part of the legislation.

The High Court’s decision in Barclay effectively restores the understanding of section 361 that most practitioners would have had prior to the Full Federal Court’s judgment.

It does not mean that employers have carte blanche to take adverse action against employees who are also union members or officials, or who are seeking to exercise a workplace right. But it does confirm that if relevant managers present credible and convincing evidence that prohibited reasons played no part in the treatment of a complainant, and that evidence is accepted, that will provide the basis for a defence.

In the recent independent review of the Fair Work legislation, it was recommended that if the High Court failed to allow the appeal in Barclay, the legislation should be amended to clarify that ‘the central consideration about the reason for adverse action is the subjective intention of the person taking the alleged adverse action’: see Towards More Productive Workplaces: An Evaluation of the Fair Work Legislation, 2012, p 26.

Given the decision that has now been handed down, no such amendment would seem necessary. The ruling is likely, however, to intensify pressure on the Gillard Government from the union movement to restore the effect of the Full Federal Court’s view. It remains to be seen how, if at all, the government will react.

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