In this article we look at a recent decision in the Federal Court that deals with whether adverse action taken by an employer was unlawful.

Chapter 3 of the Fair Work Act 2009 contains “General Protections”, which are designed to:  

  • protect workplace rights
  • protect freedom of association
  • provide protection from workplace discrimination.  

Under these provisions, a “reverse onus” applies. Consequently, if an employer is accused of taking adverse action against an employee for a prohibited reason the onus is on the employer to prove, if it can, that it took the action solely for other reasons.  

In an important decision handed down in February this year, the Federal Court has interpreted these provisions in Barclay v The Board of Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14.  

Facts

Mr Barclay was employed as a senior teacher by Bendigo Regional Institute of Technical and Further Education (BRIT). He was also president of a sub-branch of the Australian Education Union (AEU). BRIT was preparing for an important external audit. Its ability to offer certain courses, and to receive funding, was dependent on the outcome of the audit.

Using the BRIT email system, Barclay sent an email to fellow employees who were members of the AEU which included these words:  

“It has been reported by several members that they have witnessed or been asked to be part of producing false and fraudulent documents for the audit.

It is stating the obvious but, do not agree to be part of any attempt to create false/fraudulent documentation or participate in these kind of activities. If you have felt pressured to participate in this kind of activity please (as have several members to date) contact the AEU and seek their support and advice.”

Barclay signed off his email as “President BRIT AEU Sub-Branch.”  

A senior manager of BRIT saw Barclay’s email and asked him to divulge the names of the members referred to in the email as having witnessed or been asked to be part of producing false documents. Barclay refused on the basis that those people were members of the AEU and they did not want the fact of their membership to become known to BRIT management. The manager reported this to the CEO, Dr Harvey.  

Dr Harvey took the view that, because Barclay’s allegations were vague and general, he had placed some staff under suspicion and without any right of reply.

Dr Harvey required Barclay to attend a meeting with her. She gave him a letter stating that the allegations in his email would require a thorough independent investigation. Her letter went on to ask Barclay to show cause why he should not be subject to disciplinary action for serious misconduct on the basis of:

  • the manner in which he had raised the allegations, i.e. through a broadly distributed email
  • his actions in not reporting to his manager the instances of alleged improper conduct
  • his refusal to give particulars of the allegations when asked to do so.  

She informed Barclay that he was suspended from duty on full pay and that his access to the employer’s IT system was suspended, pending his response to the allegations.  

Barclay and the AEU alleged that BRIT had contravened the General Protections prohibition against adverse action against an employee because the employee “engages or proposes to engage in industrial activity.”

Initial success for BRIT

The case proceeded to hearing before Justice Tracey of the Federal Court.

BRIT conceded that it had taken adverse action against Barclay but argued that its actions were not taken for any prohibited reason.  

Dr Harvey’s evidence at trial was that the action she took was not because Barclay had engaged in industrial activities, but rather because it appeared to her that he had failed to bring serious allegations to the attention of senior managers and had “proceeded to cast aspersions and innuendo upon his colleagues” which she considered to be prima facie evidence of a breach of the Code of Conduct. She had decided to suspend him because the allegations were serious and she was concerned that if he was not suspended he might cause further damage to the reputation of BRIT and its staff.

Justice Tracey accepted that Dr Harvey acted solely for the reasons that she identified. He was satisfied that she did not act for any prohibited reason, and dismissed the claim.  

Appeal

Barclay and the AEU appealed to the Full Court.

By majority the Full Court (Justice Gray and Justice Bromberg; Justice Lander dissenting) allowed the appeal.

In the opinion of the majority, BRIT had taken the adverse action for prohibited reasons. Their key findings were:

  • In sending the email, Barclay was exercising one of his functions as an officer of the AEU  
  • Barclay was representing or advancing the views of the AEU. The fact that his email was expressed in strong language did not mean that it ceased to be a representation of the views of the AEU. He was also encouraging members to contact the AEU and seek support and advice and this was a lawful activity  
  • In refusing to give management the names of the members who had approached him, Barclay was acting in his capacity as an officer of the AEU and this was industrial activity  
  • Thus all of the relevant conduct involved Barclay in his union capacity, rather than his capacity as a BRIT employee
  • If BRIT had a basis for complaint, it should have addressed its complaint to the AEU, because if an employer were able to punish an employee for the conduct of their union the General Protections “would be entirely illusory and the purpose of the provision defeated”  
  • If adverse action is taken by an employer in response to conduct of a union, it is impossible for the employer to divorce from that conduct its reason for the taking of the adverse action simply by characterising the activity of the union as the activity of its employee  
  • Dr Harvey’s own evidence compelled a finding that adverse action was taken against Barclay for reasons that included the fact that he was an officer of the AEU and that he had engaged in industrial activity. The fact that Dr Harvey chose to characterise the conduct as the conduct of an employee did not alter the fact that her real reasons included prohibited reasons.  

The majority elaborated by saying:  

“Mr Barclay may not have performed the industrial activity in which he was engaged as well as it could have been performed. He may well have overstated the nature of the complaints that had been made to him. Even assuming that to be so, Mr Barclay’s failure was the failure of a union officer. It was not the failure of an employee and could not have been dealt with as such.”

The decision of the majority contrasts starkly with Justice Lander’s dissenting judgement. He said that Dr Harvey’s subjective intentions should have been the determining factor, and that if her evidence were accepted, the claim should have been dismissed.  

Consideration of the penalty to be imposed on BRIT was deferred until a later date.  

Lessons for employers

Unless and until the High Court is required to interpret the General Protections provisions, this is the most authoritative decision on this topic. It means that employers must proceed with great caution before taking adverse action against an employee in circumstances where it could be asserted that the action was taken for a prohibited reason. An objective analysis of the employer’s conduct, rather than the subjective intention of the decision-maker, will determine the outcome. This applies not only to adverse action for industrial activities, but also to the other types of proscribed conduct including adverse action because a person has a workplace right, and discrimination for a prohibited reason.