High Court Clarifies Adverse Action Onus

The High Court has brought a welcome level of clarity to the threshold question for considering adverse action claims. The following article summarises the main aspects of the decision.

Background

The Fair Work Act 2009 (Cth) prohibits an employer taking adverse action (or threatening to take adverse action) against an employee where that employee engages (or does not engage) in industrial activity. This includes, amongst other factors, because the employee is (or is not) a member or officer of a union or, because the employee engages or proposes to engage in certain forms of industrial action.

Where an application for adverse action is made a reverse onus of proof applies. That is, it will be presumed that the employer took action (or threatened action) against the employee for a prohibited reason unless the employer proves otherwise. For this reason, the question of why the employer took (or threatened to take)adverse action becomes a central issue in determining if it was taken for a prohibited reason such as the employee’s union activities and, if the prohibited reason was an operative, substantial or immediate reason for the decision to act.

In January 2010, Bendigo TAFE suspended an employee, Mr Barclay, based on disciplinary grounds.

Mr Barclay was employed as a Team Leader – Teacher Excellence and part of his role included ensuring that the courses provided by Bendigo TAFE were and retained accreditation and was also the president of the Bendigo TAFE sub branch of the Australian Education Union (AEU).

Mr Barclay became aware of complaints by AEU members regarding allegations of incorrect information being included in documentation that was being prepared for the re-accreditation audit. As a result, Mr Barclay in his capacity as a AEU officer, forwarded an email to AEU members stating that several members had witnessed or been asked to produce false or fraudulent documents for the accreditation and recommending that employees do not agree to be part of any attempt to create false or fraudulent documentation or similar activities.

When Bendigo TAFE became aware of the email, the Executive Officer – Dr Harvey met with Mr Barclay and provided him with a ‘show cause’ letter why he should not be subject to disciplinary action for serious misconduct in his role as Team Leader for:

• Raising allegations regarding fradulent activities via a broadly distributed email;
• Failing to report the allegations directly with his manager; and
• Refusing to provide further particulars of the allegations when requested to do so by his manager.

Mr Barclay was suspended on full pay, denied access to the work internet and to the workplace. Mr Barclay subsequently lodged an adverse action claim. As a result an interlocutory hearing was held in February 2010, which made orders for Mr Barclay to return to work and the disciplinary action suspended until the outcome of his adverse action is determined.

The adverse action claim was initially determined by a single member of the Federal Court who dismissed the application. Mr Barcley appealed to a full court of the Federal Court who upheld the appeal but referred it back to the primary judge for consideration. By special leave, Bendigo TAFE appealed to the High Court.

Findings

During the initial decision, Bendigo TAFE gave evidence that the reasons for suspending Mr Barclay were that:

• he failed to notify a senior manager of the serious allegations of fradulent conduct in the workplace;
• he breached the code of conduct as a Bendigo TAFE employee;
• his action caused Bendigo TAFE serious concerns that if he was not suspended that he might cause further damage to Bendigo TAFE and its staff reputation (both during and after the audit).

Bendigo TAFE also stated it would have taken that action regardless of whether Mr Barclay was a member or an officer of the AEU or not.

The High Court determined the reverse onus of proof on an employer should not be made more difficult to overcome, or provide a level of immunity to the employee, merely because the employee happens to be a union official. The test to be applied is "whether adverse action has been taken because of a proscribed reason."

The direct testimony of a decision maker regarding why a decision was made to take adverse action is central to this issue and should be given due consideration by the Court. In this case, Bendigo TAFE "discharged the burden cast upon it to show that the reason for the adverse action was not for a prohibited reason, and that Mr Barclay’s union position and activities were not operative factors in him being required to show cause."

Conclusion

The High Court decision confirms a common sense approach to be taken by the Courts in considering if employers have discharged their burden of proof and including that the reasons of the decision maker in taking potential adverse action are given due consideration. Further when an employee acts inappropriately, under the cover of industrial activity or position, that he or she is not immune to disciplinary action by reason of that activity or position.

Regardless, where employers intend to take action which may be considered adverse action, care should be taken to ensure that the decision is carefully reviewed and considered before the action is taken.

If you would like more information about the case, please contact National Workplace Lawyers on +61 2 9233 3989. 

National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.