High Court reverses Barclay adverse action decision

by 13 Sep 2012

Alison Baker outlines what the repercussions are for employers following on from the Barclay case.

In 2011, the Full Court of the Federal court upheld an appeal by the employee in Barclay v The Board of Bendigo Regional Institute of TAFE (the Barclay case). 

Following the Barclay case, there was concern that a near impossible test had been set for employers seeking to defend adverse action claims made under the General Protections provisions in the Fair Work Act (Act).

Last week, the High Court reversed the Full Court’s decision, bringing some relief to employers.

It is interesting to note that the recently completed review of the Act recommended that the Act be amended to reflect that the Full Court’s position was not the correct one.

Following the High Court decision, it is clear that in a General Protections case, employers need to provide credible evidence that shows that the decision to take adverse action was not for an unlawful reason, such as the exercise by the employee of their workplace right, but for another, lawful, reason and that the person who makes the decision should be the person who gives evidence in court to explain why they made the decision.

The General Protection provisions provide for, amongst other things, ‘workplace rights’ and protection against unlawful adverse action.

An employee will have a workplace right if, amongst other things, the employee makes a complaint or inquiry about their employment.  It is unlawful to take adverse action taken against an employee because of that complaint or inquiry.

Adverse action includes termination of employment as well as action taken during employment that is detrimental to an employee such as demotion, denying promotion, and disciplinary action.

Under the General Protections provisions, there is a reverse onus of proof so that employers have to prove that they took  adverse action for a specific reason that is not prohibited under the Act.

In a General Protections claim, an employee simply has to prove they had a workplace right and that adverse action was taken against them – not a very difficult task. Then the onus shifts to the employer, who has to prove that the adverse action was not taken for a reason that includes the employee’s exercise of a workplace right.

While the unfair dismissal jurisdiction is restricted to employees who have served a minimum period of employment and are covered by an award or agreement or earn less than the salary cap of $123,300, the General Protections provisions have none of these restrictions. 

Compounding the difficulties for employers is that employees often “piggyback” other claims onto General Protections claims. For example, breach of contract and misleading and deceptive conduct claims can be added to a General Protections claim.

Employers need to closely examine their existing HR operations and ensure that there are rigorous processes in place, so that if they are ever challenged, there is clear evidence that disciplinary action was appropriately and properly executed and not taken because of an employee’s exercise of a workplace right.

An employer considering disciplinary action, including termination of employment, would be prudent to seek expert advice before proceeding to ensure that the process is correctly handled and has been properly documented. 

The challenge becomes more complex in larger companies. With each layer of management in a company comes an increased risk of someone making a disciplinary decision without full regard for the need to follow correct HR processes.

Employers need to be proactive about ensuring management on all levels understands the importance of procedure. 

By exercising some diligence in relation to taking disciplinary action, employers are making an investment in resolving disputes more efficiently when they arise.


About the author 

Alison Baker is an employment partner at Hall & Wilcox lawyers