The CFMEU has filed an application for special leave to the High Court, seeking to overturn a Full Court Federal Court ruling that Endeavour Coal had not taken unlawful adverse action when it reallocated an employee to weekday shifts from weekend shifts in response to a pattern of sick leave absences.   

If successful, this application could have significant implications for adverse action claims.   

The Full Court of the Federal Court had, by majority, accepted that Endeavour's decision was based on the employee's unreliability and breach of an attendance plan rather than because he had exercised a workplace right by taking accrued personal leave.  It is likely that the CFMEU was emboldened to appeal the majority's decision by Bromberg J's strongly worded dissent. In his dissenting judgment, Bromberg J warned the majority's interpretation strips employees of their ability to exercise legitimate workplace rights.

What happened?

The employee, Mr McDermott, had a poor attendance record, which made him unreliable. However in almost every case he was found to have been legitimately taking leave – which meant that in taking the leave he was exercising a 'workplace right'.   

In response, Endeavour reallocated Mr McDermott from weekend shifts to weekday shifts (where an absence could be more easily covered).   

A few months later, Mr McDermott was moved back onto weekend shifts after agreeing to an Attendance Management Plan. The Plan required him to notify Endeavour of future absences and provide supporting medical evidence.   

However, Endeavour moved Mr McDermott back to weekday shifts for a second time after an absence where he failed to comply with the Attendance Plan, and issued him with a final warning for absenteeism.   

Mr McDermott, through his union the CFMEU, challenged both reallocations and the warning on the basis that they represented adverse action because he had exercised his workplace right to take legitimate sick leave.

What did the Full Court say?

The Full Court accepted that both shift reallocations and the warning were "adverse", because the weekend shift was better paid.   

The issue was whether Endeavour made the decision to reallocate the shifts and issue the warning because Mr McDermott had exercised a workplace right – here, the taking of his accrued leave.   

The majority (Jessup and Perram JJ) accepted that Endeavour's decision to reallocate the shifts the first time was because Mr McDermott's attendance was unreliable and unpredictable, and that reliability and predictability was particularly important on the weekend shift. The majority also accepted that Endeavour's second decision to reallocate shifts and issue the warning was based on Mr McDermott's breach of the Attendance Plan.   

The majority accepted that as long as the manager's reasons were related to the unreliability or the breach (and not on the fact that the underlying reason was the taking of sick leave), that reason was a lawful reason which could be separated from the exercise of the workplace right.   

In dissent, Bromberg J said that no such distinction could be drawn between the employee taking accrued leave to which he was entitled (thereby exercising a workplace right) and his non-attendance - the absence was merely a consequence of him exercising his workplace right. In his Honour's view, the proper question was whether the adverse action was taken because the employee exercised his workplace right to take leave "including by reference to the substance, content or effect [ie. his absence] of that exercise".

What does this mean?

We will have to wait and see whether the High Court decides to grant special leave, and if it does what conclusion it reaches. However as Bromberg J said, the Federal Court decision does have the potential to significantly limit the operation of the adverse action provisions, at least to the extent they prohibit adverse action because of the exercise of a "workplace right".   

In this case there is no doubt that it was the exercise of the workplace right which directly caused the unreliability. By its nature, a need to take sick leave cannot always be predicted or foreshadowed in advance, and most sick leave causes a measure of unpredictability and unreliability.   

If this decision is correct it will not be unlawful under these provisions to treat an employee "adversely" because of that unreliability, as long as the focus is on the employee's reliability and its impact on the operation – and not on the fact that the unreliability was caused by a legitimate absence because of illness.   

In this case the "adverse treatment" was a shift change and the warning. However if the decision is correct, then logically there is no reason why Mr McDermott could not have been dismissed because of the unreliability, at least without breaching the adverse action protections – other risks, of course, might arise.   

The High Court may yet find, consistent with the dissenting judgement of Bromberg J, that it was not in fact possible to separate the exercise of the workplace right (taking personal leave) from the operational disruption which it caused.   

What do you need to do?

If the decision stands, it will make it easier for employers to deal with the operational consequences of unplanned and ad-hoc personal leave. It may also have broader implications for the scope of the adverse action protections in other areas.   

However, at least until the High Court has considered the matter, great care should be taken. The general protections provisions are clearly intended to protect employees from adverse consequences if they exercise a workplace right, including the taking of legitimate personal leave.   

Even if the decision stands, a discrimination complaint might still succeed and, if the "adverse" action involved dismissal, an unfair dismissal application might be available.   

The decision also emphasises that where employers make decisions which might be adverse to employees who have exercised (or might exercise) a workplace right, employers need to be very careful in identifying exactly what the reasons are for the decision. These claims often turn on very fine distinctions between the fact of exercising a workplace right, and the true reason for the employer's action. Good documents and a thoughtful decision making process are essential.

Want more information?

A link to the decision is here