This morning, the High Court handed down its decision in Bendigo Regional Institute of TAFE v Barclay [2012] HCA 32 – its first major decision considering the adverse action provisions since the Patricks dispute in 1998.
The Fair Work Act prohibits an employer from taking adverse action against an employee for what might be termed a prohibited reason – such as union membership or activities, making a complaint, or for a discriminatory reason such as race, gender or disability.
Critically, the High Court decided that the TAFE did not breach the adverse action provisions by suspending and issuing a show cause letter to a union delegate over an inflammatory email – reversing the controversial decision of the Full Court of the Federal Court.
The High Court’s reasoning is particularly significant and could assist in stemming the tide of speculative adverse action claims that employers are currently experiencing.
There were three separate judgments delivered – Chief Justice French and Justice Crennan; Justices Gummow and Hayne; and Justice Heydon. The key conclusions are:
- The prohibited reason must be a substantial and operative factor in taking the adverse action. There was no requirement that the prohibited reason be entirely disassociated from the adverse action. In this regard, the fact of union membership did not confer an immunity from disciplinary action or give union members advantages not enjoyed by other employees – this would destroy the balance of relations between employers and employees.
- Chief Justice French and Justice Crennan observed that evidence could be relevant comparing the applicant employee with an employee who has no union involvement – which imports a notion of comparator, a principle that is particularly relevant in discrimination law.
- By majority, Justices Gummow, Hayne and Heydon said that the Act was not concerned with unconscious motivations. Justice Heydon dryly observed:
How could an employer ever prove that there was no unconscious reason of a prohibited kind? An employer's inquiries of the relevant employees would provoke, at best, nothing but hilarity. The employees might retort that while they could say what reasons they were conscious of, they could say nothing about those they were not conscious of.
Why is the High Court's decision important?
Adverse action complaints have become the weapon of choice for applicant lawyers – typically combined with other claims, such as breach of contract and misleading and deceptive conduct – often referred to as ‘cocktail claims’.
A recent high profile example of an adverse action claim is the Peter Slipper case, but there are many other cases being brought or threatened. We see them on a daily basis.
The High Court decision is, bluntly, a breath of fresh air – a commonsense approach to the broad protections contained in the adverse action provisions.
However, it would be a serious mistake for employers to regard the adverse action provisions as a ‘dead letter’. They remain very important provisions – not least because of the reverse onus of proof and the extension of the protections to employees making internal complaints. There is no doubt that they will continue to be a significant part of the industrial relations landscape.
The background
Mr Barclay was a senior teacher at the TAFE and also a union delegate – the President of Bendigo TAFE sub-branch of the Australian Education Union. In January 2010, he sent an email to the AEU members at the TAFE asserting that various AEU members had “witnessed or been asked to be part of producing false and fraudulent documents” for the TAFE’s reaccreditation audit.
The TAFE suspended Mr Barclay on full pay and sent him a ‘show cause letter’ threatening disciplinary action.
Federal Court proceedings
Mr Barclay commenced proceedings in the Federal Court under the adverse action provisions of the Fair Work Act 2009 (Act) in relation to the suspension and other things.
In this regard, an employer cannot take adverse action against an employee for what might be termed a prohibited reason – such as union membership or activities; making a complaint or for a discriminatory reason, such as race, gender or disability. (sections 340, 346 and 351) (Adverse Action Provisions). For convenience, we’ll refer to the reason as the ‘prohibited reason’ (although we note this is no longer the terminology used by the Act). A Court can award uncapped damages, impose penalties and make injunctive orders.
Importantly, there is a reverse onus of proof – in effect, the employer must prove themselves innocent.
Returning to the proceedings. At the trial, Mr Barclay was unsuccessful – with the Court accepting evidence from the Chief Executive Officer, Dr Harvey, that she was not motivated by Mr Barclay’s industrial activities or affiliation, but because of the inappropriate way in which he had raised the allegations of fraud.
However, this was overruled on appeal by a majority of the Full Court of the Federal Court (Full Court Decision) – who decided that the TAFE breached the Adverse Action Provisions. Most importantly, as part of their reasoning, they said:
- a prohibited reason could be unconscious;
- a person could breach the Adverse Action provisions even if they honestly believed they were not acting for a prohibited reason.
- a prohibited reason need only be broadly associated with the action taken and not a primary motivation.
They concluded that the TAFE had suspended Mr Barclay because of the email and that the email was an industrial activity undertaken by Mr Barclay in his capacity as a union delegate, not as an employee.
Want more information?
Click here for the official High Court decision summary
Click here for the High Court decision