Client Update: High Court guidance on adverse action claims
10 September 2012
In brief: In overturning a recent Full Federal Court of Australia decision, the High Court found that an employee does not have special protection if they are a union member or are otherwise engaged in lawful industrial activity. Partner Peter Arthur (view CV) and Senior Associate Andrew Stirling report.
- Mr Barclay's claim
- The Full Federal Court decision
- The decision of the High Court
- The lessons of this case
Mr Barclay was a senior teacher at Bendigo Regional Institute of TAFE. He was also the President of the sub-branch of the Australian Education Union (AEU) at the TAFE.
The TAFE was preparing to be audited by the Victorian Registration and Qualifications Authority, which was crucial to its continuing accreditation and funding.
During preparations for the audit, Mr Barclay sent an email to all AEU members at the TAFE (the majority of staff) in his capacity as sub-branch President. In his email, Mr Barclay said that he had been informed by several members that they had been asked to be complicit in the preparation of false and fraudulent audit documentation. This assertion was completely untrue.
The email came to the attention of the TAFE's CEO, Dr Harvey, who issued Mr Barclay with a letter asking him to show cause why he should not be disciplined because he had:
- raised these allegations for the first time in an email to a large number of TAFE employees;
- failed to report to senior managers the misconduct referred to in the email; and
- refused to provide particulars of the allegations.
The letter stated that the allegations would be independently investigated and that he was to be suspended on full pay, during which time his electronic access to the TAFE's systems would be denied.
Mr Barclay and the AEU brought a claim against the TAFE, alleging that it had taken unlawful adverse action against him because he:
- was an officer of the AEU;
- engaged in lawful industrial activities; and
- exercised a workplace right.
Dr Harvey gave evidence at the hearing that the action was taken against Mr Barclay because, as an employee, he had breached the TAFE's policies and made defamatory statements about it. She said that Mr Barclay had been treated like any other employee who had engaged in similar conduct.
The Federal Court at first instance accepted this evidence by Dr Harvey and found that unlawful adverse action had not been taken against Mr Barclay.
The Full Federal Court overturned this decision by a majority of two to one. The majority held that the TAFE had taken adverse action against Mr Barclay because:
- he was a union member;
- he had engaged in lawful industrial activity, despite the inaccuracy of his email;
- logically, there was a connection between the adverse action and the employee's status as a union official; and
- since the TAFE was unable to disprove that connection through objective evidence, its conduct was deemed to be unlawful adverse action. The subjective evidence of Dr Harvey was not sufficient for this purpose.
The High Court unanimously rejected the Full Federal Court's reasoning1 and held:
- Direct evidence by the decision-maker about its state of mind, intent or purpose will be relevant to determining whether the adverse action was unlawful. The reliability and weight to be given to that evidence should be tested against other evidence and is not accepted without question.
- However, if the decision-maker's evidence is believed, as Dr Harvey's evidence was believed by the trial judge, it is capable of proving that the employer did not take adverse action against the employee for a prohibited motive, even though the employee may be an officer or member of an industrial association or be engaging in industrial activity.
- The general protections provisions of the Fair Work Act 2009 (Cth) prohibit an employer from taking adverse action against an employee because of their industrial rights, eg union membership.
- The employer has the onus of proving that any adverse action it takes against an employee was not taken with a prohibited motive.
- The High Court affirmed that the evidence of a subjective intention of a decision-maker in taking the adverse action may be sufficient to disprove a prohibited motive.
- As a result, it is now easier for an employer to succeed in defending an adverse action claim.
- Board of Bendigo Regional Institute of Technical and Further Education v Barclay  HCA 32.
- Peter ArthurPartner,
Ph: +61 2 9230 4728
- Tim FrostPartner,
Ph: +61 2 9230 4930
- Jamie WellsPartner,
Ph: +61 7 3334 3268
- Simon DewberryPartner,
Ph: +61 3 9613 8110