Summary

The High Court has, in a 3:2 majority decision, upheld a Federal Court full bench decision that BHP Coal (BHP) did not take adverse action against an employee when it dismissed him for waving a sign that read "No principles SCABS No guts" during protected industrial action at a BHP Coal mine site in Queensland's Bowen Basin in 2012.

The decision confirms that employees may not be protected from dismissal or other adverse action simply because certain conduct takes place as part of an industrial activity, or because the employee is advancing the claim, views or interests of an industrial association.

In this eBulletin we look at the result of the CFMEU's High Court appeal and what it means for employers, particularly in terms of the fine line between legitimate disciplinary action and prohibited adverse action relating to industrial activity.

Background

In February 2012, protected industrial action was taken by BHP employees at mine sites in the Bowen Basin in Queensland. During the protest, a worker, who was the CFMEU lodge president at the mine, was observed at the picket line waving a sign that read "No principles SCABS No guts."

Following an investigation, BHP dismissed the worker, finding that he had acted contrary to the company's Workplace Conduct Policy, Charter Values and expected workplace behaviours.

The CFMEU brought a general protections application against BHP alleging, among other things, that BHP had breached the Fair Work Act 2009 (Cth) (FW Act) when it dismissed the worker because he had engaged in industrial activity.

This long-running piece of litigation was fought through the Federal Court and the Full Federal Court, all the way up to the High Court of Australia.

Originally, the Federal Court found in favour of the worker. It ordered him to be reinstated and imposed a penalty of $7,500 on BHP. BHP appealed to the Full Court of the Federal Court, which overturned the original decision.

The CFMEU then appealed to the High Court of Australia, which dismissed the appeal.

Result of the CFMEU's High Court appeal

An interesting point to note is that The High Court's judgment was a 3:2 decision, in other words, it was certainly not unanimous, and it is worthwhile for employers to take a look at the reasoning behind the various judgments:

  • Two of the High Court Justices who found against the CFMEU's appeal said that the question is not whether there is a connection between the adverse action and the industrial activity, but rather why the adverse action was taken. They noted that a court was not directed to enquire into whether the adverse action could be characterised as being connected with industrial activities that are protected by the FW Act. Instead a court was required to determine "the reasons which motivated the person who took the adverse action."
  • The third Justice who found against the CFMEU, did so for different reasons, noting that an employer will not be able to escape culpability simply by applying its own characterisation of otherwise protected industrial activity. Instead, an employer must prove that the protected industrial activity played no operative part in its decision.
  • The two dissenting Justices both said that they would have allowed the union's appeal. Interestingly, Justice Crennan said that the Barclay decision does not mean that an assertion by a credible decision-maker that adverse action was not taken because of any prohibited reason will always discharge the onus on an employer to prove that the reasons for taking adverse action did not include a prohibited reason. Rather, it is open for a court to draw "available inferences" which may contradict an honest decision maker's assertion that he or she did not take adverse action for any prohibited reason.

Lessons for employers

The case confirms the principle set by the High Court in Barclay, that unionists are not "immune" from disciplinary action. However, it also highlights for employers what can be a very fine line between legitimate disciplinary action and prohibited adverse action, particularly relating to industrial activity.

Employees are not insulated from disciplinary action simply because certain conduct takes place as part of an industrial activity or because the employee is advancing the claims, views or interests of an industrial association.

An employee can be validly dismissed for certain conduct during the course of participating in a protest. However, this is not the equivalent of dismissing the employee "because" they participated in the protest.

This decision also confirms that the courts will critically examine reasons given by decision makers for taking adverse action. Employers should ensure that all reasons for disciplinary or other adverse action taken against employees are carefully considered and thoroughly documented.