Frontline Intelligence: Legal - The politics of adverse action

by 01 Feb 2012

On 2 September 2011, the High Court granted special leave for Bendigo TAFE to appeal the majority decision of the Full Federal Court in the matter of Barclay v The Board of Bendigo Regional Institute of Technical and Further Education [2011]. Until the High Court rules on the matter, the Full Court’s decision – handed down on 9 February 2011 – provides the most authoritative test for establishing proscribed adverse action under the Fair Work Act 2009 since the provisions came into effect in July 2009.

In the Full Court decision, the majority (comprising Justices Gray and Bromberg) held that the TAFE engaged in proscribed adverse action against Mr Greg Barclay, teacher at the TAFE and sub-branch president of the AEU. The “spark” for the adverse action was the release of an email by Barclay to union members at the workplace which suggested that the TAFE was engaging in inappropriate practices by producing false and fraudulent documentation, and instructed members to resist any pressure to take part in these practices. The TAFE (unsuccessfully) defended its disciplinary action by arguing that Barclay’s email caused significant damage to the TAFE’s reputation, and that Barclay had breached the TAFE’s Code of Conduct by failing to firstly raise the matter with TAFE administration.

In a decision that has given employers significant cause for concern, Justices Gray and Bromberg reasoned that “It is not the employer’s intent alone that matters in determining the reason for an adverse action... adverse action will not be excused simply because its perpetrator held a benevolent intent. It is not open to the decision-maker to choose to ignore the objective connection between the decision and the attribute or activity in question.” Put simply, an employer may be found to have engaged in proscribed adverse action against an employee even if the employer produces evidence that the action was taken for a legitimate, non-proscribed reason.

In early November, following the granting of special leave, the Federal Government filed intervening submissions in the High Court relating to the appropriate test for determining unlawful adverse action. In its 14-page filing, the Government submitted that the true test applicable to the issue of liability is a determination of what ‘truly actuated’ the adverse action. The Government submitted that evidence from the decision-maker ought to be ‘centrally relevant’, but not necessarily determinative of the decision-maker’s defensive position, even if the evidence presented was accepted as honest or genuine.

In the event that the Government’s submissions are accepted and/or the Full Court’s decision upheld, any action taken against an employee, where that employee has previously exercised a workplace right, could render an employer liable under the Act. Given the reverse evidentiary onus applicable to adverse action claims, it may not be sufficient for an employer to produce evidence suggesting that the action was taken for an unrelated reason, even if the decision-maker’s evidence is legitimate and accepted. The employer will need to show that the proscribed reason (such as the exercise of a workplace right) could not be seen to have formed the basis for the action taken. For obvious reasons, producing evidence of the absence of a subjectively-held belief will be challenging for employers and decision-makers.

As a result of the Government throwing its metaphorical ‘hat’ into the ring, many employers (and conservative critics of the Act) have concluded that the Federal Government seeks for the adverse action provisions to operate as widely as possible, to the detriment of employer’s management prerogatives over its workforce. Despite justifying its filing of these intervening submissions on public interest grounds, it appears that the Government has exposed its position as being in full-throated support of Mr Barclay’s (and employees’) protections over employers’ freedoms.

No date has yet been fixed for the hearing of the appeal before the High Court, and beyond the general submissions provided by the Federal Government on the basis of public interest, there is much speculation as to the ultimate position that the Government will take in the hearing. Accordingly, industrial lawyers, businesses, unions and industrial organisations are holding their collective breath over the High Court’s decision, and whether it will clarify the test for adverse action or contribute more uncertainty to interaction within industrial relationships.

About the author

Peter Doughman is a solicitor at Carroll & O’Dea Lawyers, Employment & Industrial Relations Group (02) 9291 7100. Visit www.codea.com.au

COMMENTS

Most Read