My website is getting a makeover. This page hasn’t been done yet. It shouldn’t take too long before normality is achieved.
sincerely,
GrahamUnfair dismissals. Of all the subjects that you, as small or mid-size business owner, have to get your head around, unfair dismissals are near the top of the ‘too hard’ list and the ‘do I really need to worry myself about this?’ list. In my discussions over the years with small and mid-size business owners like you, some of the words often used in conjunction with the phrase ‘unfair dismissals’ are hatred, loathing, indignation, outrage, disgust, tricky, expensive and costly. You can see that this subject attracts a great deal of anger, passion and rage.
Survive IR; navigate the minefield. While this subject, and the closely related issues of constructive dismissal and unlawful dismissal attracts a great deal of emotion, this is not as it should be.
Surviving IR. Through my blog, under the heading of ‘surviving IR’, I will try and remove some of the emotional overtones associated with unfair dismissals. On the broader front, ‘surviving IR’ will provide a source of advice to help small and mid-size business owners like you to navigate the minefield that is the Australian industrial relations system.
Case studies will be the go. I will do this primarily by drawing attention to actual cases that come before industrial tribunals and courts where the Arbitrators (judges and commissioners) make rulings and comments that small and mid-size business owners can adopt in their own people management policies and procedures. Rulings of course, are the application of law to the circumstances of the case. Comments from an Arbitrator, on the other hand, are usually gems of wisdom that have their base in the long experience that Arbitrators will have gained in their pre-appointment work as an industrial relations practitioner. As employers, we can use these gems of wisdom to our advantage.
My background in the field. If you are wondering how I can write authoritatively about unfair dismissals and the accompanying industrial relations framework that surrounds them, could I simply say that I have been personally and directly involved with negotiating or arbitrating probably a couple of hundred unfair dismissal cases. Additionally, during this period, I would have supervised the management of at least the same number of unfair dismissal cases (if not more) that were conducted by industrial advocates, members of my team.
Employers do occasionally win unfair dismissal cases! Here’s one tick on the board.
An important employer win. Let’s start on a positive note. Here’s a win for an employer in an unfair dismissal case that ended up before the highest court in the land, the High Court of Australia. The significance of that decision is that the principles arising from the case are now settled law.
Reference. The High Court case is known officially as Board Of Bendigo Regional Institute Of Technical And Further Education vs. Gregory Paul Barclay & Anor (the Australian Education Union). For reference, the case number is [2012] HCA 32; and the case is popularly referred to as either Barclay’s Case or the Bendigo TAFE Case.
The win. In this decision, the High Court allowed an appeal by the Bendigo Regional Institute of Technical and Further Education (“Bendigo TAFE”) from a decision of the Full Court of the Federal Court of Australia. The High Court held that Bendigo TAFE’s Chief Executive Officer, Dr Louise Harvey, had not taken adverse action against the first respondent, Mr Gregory Barclay, for a reason prohibited by the Fair Work Act 2009 (Cth) (“the Act”). The adverse action here related to Mr. Barclay’s dismissal by Dr Harvey.
Circumstances of the case
The facts 1. Mr Barclay was an employee of Bendigo TAFE and an officer of the Australian Education Union (“the AEU”), the second respondent in the case. On 29 January 2010, Mr Barclay sent an email to all members of the AEU employed at Bendigo TAFE. The email noted allegations of serious misconduct by unnamed persons at Bendigo TAFE, who were said to have been involved in the production of false or fraudulent documents in connection with an upcoming audit. Mr Barclay did not report the allegations of misconduct to Bendigo TAFE management when he became aware of them, as he was required to do under his terms of employment. Neither did he provide details of the allegations to management when he was asked to do so.
The facts 2. On 2 February 2010, after Dr Harvey became aware of Mr. Barclay’s email, she formally requested Mr Barclay to show cause why he should not be disciplined for this conduct. At this same time, Dr Harvey suspended Mr Barclay on full pay pending a disciplinary investigation.
What does the Fair Work Act say? Section 346 of the Act prohibits an employer from taking adverse action against an employee because the employee “is … an officer or member of an industrial association” or “engages … in industrial activity”. Adverse action includes dismissing an employee and altering the position of an employee to the employee’s prejudice.
First Round: Federal Court, Single Judge
The union case. Mr Barclay and the AEU applied to the Federal Court for a declaration that Bendigo TAFE had contravened s 346 of the Act. Mr Barclay and the union argued that the Bendigo TAFE took the adverse action against him because
- he was a union member,
- he was an officer of the union, and
- he had engaged in lawful industrial activity.
The employer case. Dr Harvey submitted evidence to the Federal Court trial judge that she had not taken adverse action against Mr Barclay because of his industrial activities or union affiliation, but because of the inappropriate way in which he had raised the allegations of serious misconduct. The trial judge accepted Dr Harvey’s evidence that she had not taken the adverse action for a prohibited reason, and dismissed the application.
Score: Bendigo TAFE: 1 | Barclay & AEU: Nil
Second Round: Federal Court, Full Court (Three Judges)
Mr Barclay and the AEU then appealed to the Full Court of the Federal Court, which by majority, overruled the trial judge and allowed the appeal. The interesting point in these proceedings was that there was no direct challenge to Dr. Harvey’s evidence. This is crucial to the eventual outcome.
Score: Bendigo TAFE: 1 | Barclay & AEU: 1
Third Round: High Court, Bendigo TAFE Application for Special Leave to Appeal
Bendigo TAFE formally sought, and was granted, special leave to appeal to the High Court. Appeals to the High Court are not an automatic right. Appeals to the High Court have to be justified on grounds that the High Court is required to declare the law in relation to a set of specific circumstances.
Score: Bendigo TAFE: 3 | Barclay & AEU: 1
Fourth Round: High Court of Australia (Full Court)
Decision. The High Court unanimously allowed the appeal (that means there were no dissenting judges from the principles outlined in the decision). The Court held that Dr Harvey’s unchallenged evidence, which the trial judge had accepted but the Full Court had not, established that the adverse action taken against Mr Barclay had not been for a prohibited reason.
Reverse onus reversed. In terms of principle, where an employer is alleged to have taken adverse action against an employee for a prohibited reason, there is a presumption that the employer has taken action for that prohibited reason unless the employer can prove that the action was not taken for that reason. This is a reverse onus of proof situation. After consideration, the High Court held that Bendigo TAFE did not take action against Mr Barclay because of Mr Barclay’s union status and industrial activity.
Score: Bendigo TAFE: 4 | Barclay & AEU: 1
Comment
Onus is on the employer. The essential point in this decision is that the Court ruled that in determining whether an employer’s adverse action is taken ‘because’ of a prohibited reason, it is necessary for the employer to consider whether or not the reason is a substantial or operative reason that can justify the employer’s action.
Employer process must be fastidious. The Court said that this consideration involves an examination of the review process followed by the employer and the reasons the actual employer decision-maker (viz., usually the Chief Executive or the Board) relies upon to support the decision to take the adverse action. If that actual employer decision-maker gives evidence to the Court that they did not take the adverse action for a prohibited reason and their evidence is believed (which involves taking into account whether there are facts and circumstances surrounding the situation that contradicts the decision-maker’s account), then the employer can be expected to successfully discharge the reverse onus of proof.
The Court made other important points about circumstances of this nature.
Fairness of treatment across employees. The Court pointed out that in its defence, an employer was entitled to provide evidence comparing how they treated the recipient of the adverse action with how they would have treated another employee who did not have the protected status or activities under the Act.
Union membership & union activity has consequential responsibilities. An employee’s union membership or activity is not a ‘get out of gaol free’ card. Very importantly, the High Court acknowledged that an employee’s union membership or union activity does not have to be entirely dissociated from the reason for the adverse action. Consequently, an employee’s union membership or union activity is not a ‘get out of gaol free’ card that permits unfettered industrial relations activity without responsibility. An employer therefore is entitled to take adverse action against an employee if the employee is a union member or engaging in union activities. An employer can even do so if the adverse action relates to acts of the employee (such as misconduct) carried out in the course of their union membership or union activities.
What’s this mean for you
Here’s the scenario. Your elected shop steward does something wrong, and as you are the business owner, the matter is referred to you for action. In terms of the High Court decision, must carefully think through your next actions.
Condonation. Firstly, whatever you decide to do, you must do it within a reasonable period. If you delay your action for any length of time, you can prejudice your situation under the doctrine of condonation. In effect, by delaying your action against the employee, you could be held to condone the offence. Condoning the offence has the effect of preventing any later disciplinary action. What is a reasonable time? That depends on the circumstances existing at the time.
Reasonable time. One or two days may be reasonable to investigate a breach of company procedures that causes workplace disruption, particularly where statements may be required from a number of people. One or two hours may be reasonable to investigate breaches of safety regulations or insubordination. One or two minutes may be reasonable where an employee’s negligence or misconduct causes injury or death to one or more other employees. It’s a question of horses for courses, where common sense must play a part.
Record everything. To subvert any possible ‘adverse action’ claim from the employee or the employee’s union, you will need to record all the evidence that you will rely upon to reach your decision. Keep the paper trail fluid and relevant to the point. Monitor, as best you can, the actions of the employee and the employee’s union.
Evidence. The evidence that you will rely upon to reach your decision must be credible, convincing and trustworthy. It must clearly justify the adverse action taken against the employee. The evidence must include substantive material that clearly denies that the adverse action against the employee was taken for prohibited reasons that may (or may not) be alleged against you. At this point, you can only assume that you may trigger an action against you, but you must prepare yourself on the basis that you will get one.
Contradictory evidence. If you discover evidence that contradicts or goes against your proposed action against the employee, it will obviously be more difficult to reach your decision as to what action to take. Substantial contradictory evidence naturally provides a launching pad for a challenge to your decision-making credibility by the employee or the employee’s union. That is, where contradictory evidence exists, it will be that much more difficult for you to discharge the reverse onus requirement. This is a touchstone point because if you are not able to discharge this onus clearly, a court will be entitled to conclude that you have taken the adverse action against the employee for a prohibited reason.
Conflict: employment work & union work. There is a even more difficult managerial issue for you in situations of this nature. This relates to, or arises in circumstances where the employee’s conduct of any of the prohibited reasons (union membership, industrial activity or exercise of a workplace right) interferes with the employee’s expected work performance to the extent that it constitutes misconduct or neglect, but dismissal is not a reasonable option in the circumstances.
Performance management. In that particular circumstance, you can take action to performance manage or discipline the employee only where you make it quite clear that your action is related purely to the employee’s actual work performance. If you face that circumstance, you may need to provide some personal guidance to the employee so that the employee can carry out his or her union activities without permitting them to interfere with his or her work responsibilities.
It’s your turn.
Do you have any questions or comments about the decision reviewed above? Why not share them with me. I may be able to use them as a future post (in that respect, you could be ‘a named respondent’, ‘an informed source’ or ‘a source close to the blogmaster’: the choice would be yours).
I’m sure you have some interesting tales to tell about your experiences with unfair dismissals. I have some more tales to tell, and I will be sharing them with you over the next few months.
Yours sincerely,
Graham