A recent decision highlights the broad range of remedies that are available in response to adverse action, including pre-emptive strike proceedings in the form of an interim injunction.
An independent contractor provided concrete cartage services to a building materials supplier as an independent contractor. The independent contractor claimed that the company undertook to extend the contract between the parties until September 2020 if it upgraded to a larger truck. As a result, the independent contractor spent $150,000 to buy a new truck, after which the company informed the contractor that it did not intend to continue their work arrangement beyond September 2013.
The independent contractor claimed that the company took adverse action against him by repudiating the contract for services and refusing to continue the working arrangement because the independent contractor was actively involved in industrial activity. On this basis, the independent contractor brought an adverse action claim against the company.
The company denied that it had breached any of its contractual obligations and denied that its decision to end the contractor arrangement had anything to do with the independent contractor’s industrial activity.
The independent contractor successfully applied for an injunction requiring the company to continue to use its services until the adverse action case was heard and determined by the Federal Court.
What did the Court decide?
The Court ordered that, until final hearing and determination of the adverse action claim, or further order, the company was required to provide work to the independent contractor as though the contract for services, which had been terminated, continued to apply.
The Court took the view that:
- the independent contractor’s preliminary evidence supported the case that the company took adverse action against him because of the independent contractor’s industrial activities, and that preliminary evidence could be supported by further evidence in the course of the trial;
- granting the interlocutory relief would maintain the status quo. If the Court did not make the interlocutory order sought, the independent contractor would put be at a disadvantage;
- the company failed to demonstrate that it would suffer any meaningful prejudice if the interlocutory relief was granted;
- damages would not be an adequate remedy for the independent contractor, even if the adverse action claim was successful at trial, because of the disruption to his business; and
- the balance of convenience supported the grant of interlocutory relief. The Court found that the adverse action claim was not a ‘normal’ commercial dispute but a dispute between a large corporation and an independent contractor whose livelihood depended on the outcome of the proceedings.
Lesson for employers and principals
Employers and principals should be aware of the wide ranging powers available to the Court under the general protections (adverse action) provisions of the Fair Work Act 2009 (Cth).
Interlocutory injunctions are available for applicants and can be used to order a company to desist from nominated activity. However, they can also be used to compel positive action.
Depending on the circumstances of each case, the threat of adverse action may sometimes be enough for the court to find in favour of an applicant, at least at an interlocutory stage, and make orders to preserve the status quo until both parties have adduced all their evidence and the matter has been finally determined.