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Bullet proofing against adverse action claims

Bullet proofing against adverse action claims

Published on May 1, 2013 by Nicole Dunn

As first published on Workplace Info

The adverse action provisions in the Fair Work Act 2009 (Cth) (‘the Act’) have the potential to provide very broad protections to employees and others. Taking adverse action is not, on its own, unlawful; however, it is unlawful to take adverse action because of a prescribed ground such as union membership, sex, race and disability.

A key question in a claim for adverse action under the Act is the causal link between the adverse action alleged and the prescribed ground. How the link is proven in practice is usually the central issue.
This article briefly outlines the adverse action framework with a focus on the link between union membership and adverse action and how the Federal Court in a recent case applied the High Court decision in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 (7 September 2012).
What is adverse action?
Adverse action broadly includes doing, threatening or organising any of the following:
  • an employer against an employee: dismissing them, injuring them in their employment, altering their position to their prejudice or discriminating between them and other employees (s342(1)).
  • outside the employment relationship: by prospective employers against prospective employees, principals against independent contractors and industrial associations against others (s342(1)).
What are the prescribed grounds?
Three main categories are prescribed grounds under the Act:
1.      industrial activities
2.      workplace rights
3.      discrimination.
With regard to industrial activities, an employer must not take adverse action against an employee because the employee is or is not an officer or member of a union or engages (or does not engage) in certain industrial activities (including participating in lawful union activities and representing the views of the union) (ss346347).
What is the causal link?
Adverse action is only prohibited if taken ‘because’ of a prescribed ground. The word ‘because’ determines the causal link between the prescribed ground and the adverse action necessary to create a breach of the Act.
As soon as an employee has established they have suffered adverse action and have alleged the action is within the scope of a prescribed ground, it is presumed that the employer’s action was taken for that reason unless the employer proves otherwise (s361).
Barclay decision
As most of us are aware, the High Court upheld an appeal in favour of the employer in the decision of Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 (7 September 2012).
In this case, Mr Barclay alleged his employer had taken adverse action against him by suspending him because of his union status or activities.
Dr Harvey made the decision to suspend Mr Barclay and gave evidence, which was accepted by the trial judge, that the suspension of Mr Barclay was not due to his union membership, office or activities.
The trial judge accepted the evidence from the employer that the suspension of Mr Barclay was not because of his union status.
The matter was appealed to the Full Federal Court, which by majority, overturned the trial judge’s decision finding that although the evidence of the decision maker is relevant, it is not conclusive. The majority held that what is required is a determination of the ‘real reason’ for the conduct, which may not necessarily be the reason the decision maker asserts.
The employer appealed to the High Court, which took a straightforward approach in determining the causal link between the adverse action taken and the prescribed ground. The High Court held that if the decision maker gives evidence that they did not take adverse action for a prescribed reason, and that evidence is accepted, there will be no breach of the Act.
In doing so, the court affirmed and applied a well-known decision from 1976, in the matter of General Motors-Holdens Pty Ltd v Bowling (1976) 51 ALJR 235, which took the same approach in relation to earlier legislation.
Federal Court applies High Court decision
Last month, Justice Katzmann delivered judgment in the matter ofConstruction, Forestry, Mining and Energy Union v Bengalla Mining Company Pty Limited [2013] FCA 267 (28 March 2013), finding that the employer had not taken adverse action against the employee for the reason of his union membership, office or activities.
Summary of facts
Mr Dever was employed by Bengalla Mining Company Pty Ltd (‘Bengalla’) (Bengalla is a member of the Rio Tinto group of companies) and was a member of the board of management, Mining & Energy Division, Northern District of the CFMEU.
On three occasions, Mr Dever applied for unpaid leave to attend union meetings.
Bengalla has in place a Leave Policy (‘the policy’), the relevant provisions provide:
‘… Unpaid leave

The Company recognises that special circumstances may arise when an employee finds it necessary to be absent from work for personal reasons which may not be covered by the company’s normal leave provisions. In such circumstances, where an employee has used all of their relevant accrued leave, the company may grant unpaid leave.
Approval
The authority to approve unpaid leave rests with the relevant Manager, and each case is determined on its merits. Employees should submit applications for unpaid leave through their leader who, after consideration of the circumstances, will forward a recommendation to the relevant Manager. The General Manager is to be notified of all unpaid leave that is approved …

Unauthorised leave

any absence that is not approved by the employee’s leader or higher level manager…

Breaches of policy
If an employee breaches this policy, their leader should refer to the “Managing Performance Policy”. Such breaches may include cases where the leader finds the employee:
(1) demonstrates a trend or pattern of absenteeism, or
(2) takes leave without adequate supporting documentation.
Any employee who believes that they have been treated unfairly by the application of this policy may access the RTCA [Rio Tinto Coal Australia] Fair Treatment System …’ 
Upon receiving Mr Dever’s first application for unpaid leave, Mr Blason, Mr Dever’s superintendent, reviewed the leave policy and interpreted the policy to mean that unpaid leave was only available if all other leave was exhausted.
Mr Blason checked with Mr Lawler, Bengalla’s service manager who confirmed Mr Blason’s interpretation of the policy.
After checking on the balance of Mr Dever’s leave accruals, Mr Blason spoke with Mr Dever’s line manager, Mr Korman, recommending that the application for unpaid leave not be approved. Mr Korman accepted the recommendation and advised Mr Dever by email that his application for unpaid leave had not been approved because it is outside the policy, and noted that at the time of the requested leave [24 and 25 October 2012] he will have accrued 327.73 hours of annual leave.
Mr Dever then sent an email to his supervisors confirming his appointment with the CFMEU. He later resubmitted his application for unpaid leave to attend the CFMEU national conference on 24 and 25 October 2012, and made an application for unpaid leave to attend a union meeting on 29 August 2012.
Following receipt of the resubmitted application for unpaid leave, Mr Dever’s managers discussed the application and exchanged emails regarding the interpretation and application of the policy. All agreed the request for unpaid leave by Mr Dever was outside the scope of the policy.
Mr Dever was advised Bengalla could not support the request for unpaid leave, but that it would support an application for annual leave.
Mr Dever contacted Mr Williams, the vice-president, Northern District Branch, CFMEU of Bengalla’s decision to refuse his request for unpaid leave to attend union business.
Mr Williams, on behalf of the CFMEU, wrote to Mr Janney, the general manager of Bengalla stating that Mr Dever’s attendance at the union meeting was participation in industrial activity as defined in s347 of the Act.
In responding to Mr William’s letter, Mr Janney confirmed the decision to refuse Mr Dever’s application for unpaid leave was not associated with the reason for the request. The letter noted that if Mr Dever fails to attend work when rostered to do so, his absence will be dealt with in accordance with the usual policies and procedures.
On 29 August 2012, Mr Dever failed to attend for work as rostered. Mr Blason telephoned Mr Dever and was told he had attended the board of management meeting and that he understood Bengalla knew that.
A meeting was arranged with Mr Dever and his representative to discuss his absence. At the meeting, Mr Blason noted that the reason for the absence was irrelevant, the issue was the unauthorised absence from work.
Following the meeting, Mr Korman, Mr Lawler and Mr Blason discussed the absence and decided to issue Mr Dever with a written warning. The warning was prepared by Mr Lawler and signed and issued by Mr Blason at Mr Korman’s request. The letter relevantly provided:
‘…[as] discussed with you in a meeting held with me on Friday 7 September 2012 … you agreed that you received the email notification on 19 July stating that your leave application for unpaid leave (for 29 August) was not approved … Unless the employee has approved leave the employee is expected to attend work as normal. This is the case for all Bengalla employees.
The investigation into the matter showed that you did not have approved leave for 29 August 2012, a day when you were rostered to work. Furthermore, you had knowledge that your leave application for this day was not approved yet you decided not to attend work as normal. This behavior is unacceptable.

 

This letter constitutes a written warning. Further incidents of this behavior will result in disciplinary action. Termination of your employment at Bengalla may result.’

 

The proceedings

Proceedings were commenced by the CFMEU on behalf of Mr Dever, alleging that the issuing of the warning letter amounted to adverse action for a prohibited reason; namely, Mr Dever’s union membership, office or activities.
The issue in the case was whether the adverse action was taken for a prohibited reason.
At the hearing, Mr Blason, Mr Lawler and Mr Korman all gave evidence in relation to the reason for their decision to issue the warning letter to Mr Dever.
Mr Blason gave evidence that he did not take into account Mr Dever’s union membership or status in issuing the warning letter. He did so due to Mr Dever’s breach of the policy.
Mr Lawler stated that Mr Dever’s union membership or role was not taken into account by him during the investigation or in the preparation of the warning letter.
Mr Korman gave evidence that he decided Mr Dever should receive a written warning after considering the policy, Mr Dever’s breach of the policy and his failure to notify his supervisor on the day of his unauthorised absence.

 

Findings

Justice Katzmann accepted the evidence given by Mr Blason, Mr Lawler and Mr Korman that Mr Dever’s union membership status or activities had nothing to do with the Bengalla’s decision to issue the written warning.
The CFMEU, on behalf of Mr Dever, tried to establish its case by showing that Bengalla’s managers knew that Mr Dever was going to be absent to engage in what was clearly a legitimate union activity. Her Honour made the important (even if only common sense) point that just because a decision maker knows a fact that does not mean the decision was ‘because’ of that fact.
Her Honour found that Mr Dever knowingly failed to attend work when rostered to do so and took leave without adequate supporting documentation, in breach of the policy.
Her Honour dismissed the union’s application.
Lessons for employers
This decision demonstrates how essential it is for employers in defending allegations of adverse action to ensure:
  • it has clear up-to-date policies in place
  • all employees are made aware of the existence of policies
  • managers/supervisors are trained on the interpretation and application of policies
  • policies are enforced consistently and without discrimination
  • the decision maker(s) be available to give evidence at the trial.

Compliance with the above can provide employers with the best defence to a claim for adverse action for a prohibited reason.

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