Adverse Action – Full Bench Decision

24 February 2011

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Barclay v The Board of Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14

by Michael Whitbread and Sally Woodward 

The Barclay decision was one of the first general protections decisions handed down by the Federal Court following the introduction of the Fair Work Act 2009 (Act). The Full Bench of the Federal Court last week overturned the Federal Court decision, significantly extending the protection afforded to employees, particularly those who are union officials.

Summary

The case stands for two propositions:

  • Whether action is taken ‘because’ of a proscribed ground (such as industrial activity by a union official) depends on the ‘objective’ reasons for the action and not only the subjective intentions of the employer;
  • Conduct by an employee in their capacity as a union officer will not usually form a valid basis for disciplinary action, unless it involves unlawful conduct.
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Facts

Turning to the facts, which we reported on in detail on 16 April 2010, Mr Barclay was an employed teacher who was also sub-branch president and delegate for the Australian Education Union (AEU). He had emailed AEU members on his work email alleging that several members had informed him that they had witnessed or been asked to create false documents for a TAFE accreditation audit. Sending the email in this fashion, rather than notifying management in confidence, was considered by Bendigo TAFE to breach the applicable code of conduct.

The subsequent action taken by the employer against Mr Barclay included suspension, a ban from the worksite, limited internet access and disciplinary action. This became the subject of the general protections claim.

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The majority decision

By majority, Gray and Blomberg JJ found that the action contravened the general protections provisions of the Act and that the employer had engaged in adverse action against Mr Barclay. They did so because the objective reasons for the action included the reason that the employee was engaging in industrial activities. Whatever the employer said or believed about the basis for its actions, “[t]he sending of the email, and the manner in which it was expressed, were part of the exercise by Mr Barclay of his functions as an officer of the AEU” and were “at the heart of his engagement in industrial activity.

Their Honours said that under the general protections provisions in the Act, “[e]mployees are to be free to assume membership and office in industrial associations and to be represented by industrial associations, and to engage in lawful industrial activities, without the risk that their employers will disadvantage them as a consequence.

To defeat a claim, the Court held, the employer would need to show that the real reasons are “dissociated” from the proscribed grounds. That is, not only that the employer was acting to manage the employee’s conduct, but that the employer’s action could not reasonably be seen as based on one of the proscribed grounds either.

In the circumstances, contrary to the trial judge’s findings, their Honours found that the objective reason for the action taken against Mr Barclay was the exercise of his functions as an industrial officer and his engagement in industrial action. The fact that the employer may have characterised Mr Barclay’s conduct as being in his capacity as an employee and a breach of his employment obligations does not alter the objective fact that in sending the email he was in reality acting in his capacity as an industrial officer.

The appropriate avenue to address concerns with a union official’s conduct, their Honours suggested, was to complain to the union secretary, because if Mr Barclay failed in his duties as a union officer, this was “the failure of a union officer” and not of an employee.

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The minority decision

In Lander J’s view, although he agreed that the real reason(s) for the action must be determined, one cannot make that assessment “in a vacuum”. The subjective intentions of the employer for the action are highly relevant and potentially decisive. His Honour would have upheld the decision of the primary judge.

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Implications

Bona fide disciplinary action can constitute adverse action if the reasons for the action, viewed objectively, includes a proscribed ground. A genuine yet mistaken belief as to the lawfulness of adverse action will not be defeat a claim of adverse action in this circumstance.

The implications of this decision are far reaching. There are real questions about the extent to which union activities at the workplace can be overseen by the employer. The decision could significantly limit an employer’s ability to take disciplinary action against a union officer, when carrying out union business, even if he or she is acting inappropriately in the course of such business. The question has to be asked how extreme the conduct needs to be to constitute a breach of the individual’s obligations as an employee, rather than improper performance of the duties of an industrial officer to be addressed with the union secretary. In circumstances where there is, in any event, a reverse onus of proof, it may well prove difficult from a practical perspective to satisfy the court that action was taken for an objective reason entirely disconnected to the industrial activity.  

In light of the number of adverse action claims that are being run, or at least threatened, this decision is a timely reminder that managers need to understand the general protection provisions in the Act before action is taken or threatened against an employee. Particular care must be taken to reinforce to the manager that their subjective reason for taking the action will not be decisive (or even necessarily relevant) as to whether or not action was taken on the basis of a proscribed ground.

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