In a judgment handed down today, the High Court has clarified the operation of the General Protections provisions of the Fair Work Act. Prior to today’s decision, there had been extensive debate about whether a subjective or objective test was to be applied to determine the reason why adverse action was taken by an employer against an employee.

In The Board of Bendigo Regional Institute of TAFE v Barclay [2012] HCA 32, the Court held that:

“...the central question remains "why was the adverse action taken?. This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker's evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.”

“In this case the primary judge adopted the correct approach to the relevant provisions. Dr Harvey gave evidence of her reason for taking adverse action against Mr Barclay and also gave positive evidence that this was not for a prohibited reason and that she would have taken the same action against a person circulating a similar email who was not an officer of the AEU. That evidence was accepted by the primary judge and his findings in that regard were not challenged before the Full Court. The appellant discharged the burden cast upon it to show that the reason for the adverse action was not a prohibited reason, and that Mr Barclay's union position and activities were not operative factors in him being required to show cause. The appeal must be upheld and consequential orders made.”

A majority of the Full Federal Court (consisting of Gray and Bromberg JJ) had previously found differently. They held that the taking of adverse action must be shown to be objectively “dissociated from the circumstances” that the aggrieved person has or had in relation to a workplace right, protected attribute or industrial activity.

In its June 2012 report to the Federal Government, the Fair Work Act Review Panel recommended that, if the High Court did not overturn the Full Federal Court decision in Barclay, the Government should amend the Fair Work Act to give employers access to a complete defence if it is established that the decision-maker had a belief about the lawfulness of their action that was honestly held and reasonable considering all of the circumstances.

The High Court decision has removed the need for this amendment.  Employers giving testimony of such a belief about the lawfulness of the action will still need to convince the judge, on a balance of probabilities, that in all of the circumstances the belief was honestly and sincerely held.  However once the employer discharges this evidential onus, a claimant will find it extremely difficult to succeed.