High Court set to rule on adverse action

In March this year, the High Court heard an appeal from a decision of the Federal Court about a claim by a union official that the Board of Bendigo Regional Institute of Technical and Further Education (BRIT) took adverse action against him because of lawful industrial activity he had undertaken in his role as a Sub-branch President of the Australian Education Union (AEU).

As many commentators have previously stated, the scope of adverse action claims under the Fair Work Act (Act) are potentially very wide.  As such, the High Court decision is highly anticipated as it is expected to define, to some extent, the breadth or otherwise of adverse action claims. 

The case concerned an email sent by Mr Barclay, an employee of BRIT and the Sub-branch President of the AEU.  The email reported that several members of the union had witnessed persons being asked or had been directly asked to produce false or fraudulent documents for a pending reaccreditation audit at BRIT.  Mr Barclay signed off the email in his capacity as the Sub-branch President of the AEU.  The email did not specify any particular instance where documents had been falsified or the identities of any person/s allegedly involved in the falsification of documentation.

As a result of the email, BRIT suspended Mr Barclay, pursuant to the Code of Conduct for Victorian Public Sector Employees, on full pay for failing to report the alleged misconduct to BRIT’s senior management, and for publicly making unfounded misconduct allegations which brought BRIT into disrepute.

By a Full Bench Federal Court majority of two to one, the Federal Court found that BRIT had taken unlawful adverse action against Mr Barclay.  It stated that:

The fact that Dr Harvey [Chief Executive Officer of BRIT] may have chosen to characterise the conduct of an officer as the conduct of an employee and therefore did not regard herself as taking action because Mr Barclay was an officer, or because of any of his industrial activities, does not alter the fact that her real reasons included these factors.

This statement exemplifies the potentially wide ranging impact of adverse action under the Act.  If any percentage of a decision to take action against an employee can be linked to a proscribed reason, that action by the employer is unlawful and the employer will be liable to an adverse action claim.

One of the central matters to be resolved by the High Court is whether an objective or subjective test is to be used to determine whether adverse action taken by a decision maker was for a proscribed reason under the general protection provisions of the Act.  It is BRIT’s contention that both the Act and the historical intention behind the legislation is that a subjective test be used to determine whether the action was taken for reasons that include, in some part, a proscribed reason.

The High Court’s ruling as to the test to be used to determine whether unlawful adverse action has been taken, will have a bearing on whether a decision maker that consciously takes adverse action for an innocent and non-proscribed reason has a good defence to a cause of action.

Until the High Court hands down its decision and provides clarity on this issue, employers need to exercise caution when pursuing disciplinary action against an employee for an activity that may be considered to be connected to the employee’s participation in union activities or any other industrial activity.

Should disciplinary action be considered against an employee for action that may possibly be construed as being linked to some deemed industrial activity, any associated documentation should be carefully considered and drafted so as not to constitute a link between the employee’s industrial activities and the disciplinary process.

Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.