Adverse action and the Fair Work Act

These passages from a decision of the Federal Court explain how wide is the concept of adverse action under the general protections of the Fair Work Act.

“(4) WHETHER THE RESPONDENT ENGAGED IN ADVERSE ACTION AGAINST MS STAR (ISSUES 9 AND 10)

  1. Relevantly for present purposes, “adverse action” is defined by s 342(1) Item 3 (d) of the Fair Work Act as follows:

Adverse action is taken by….

a person (the principal) who has entered into a contract for services with an independent contractor against the independent contractor, or a person employed or engaged by the independent contractor

if…

the principal:

(d)

refuses to make use of, or agree to make use of, services offered by the independent contractor;

  1. It is not in dispute that at all relevant times Ms Star was employed by WorkPac, an independent contractor, rather than BMA. It is further not in dispute that on 10 November 2017, and again on 24 September 2018, BMA excluded Ms Star from working at the Mine site.
  1. The relationship between BMA and WorkPac was the subject of a Services Contract – Labor Hire (Services Contract) signed 18 September 2017. A copy was annexed to an affidavit of the applicant’s lawyer Mr Joseph Kennedy dated 8 October 2018. The services provided by WorkPac were described in Schedule 1 to the Services Contract. Importantly, the Overview of the Scope of Services was as follows:
  1. The Services encompass the provision of suitably qualified Personnel for short, medium and long term engagements at the Company’s operations located in various sites within Australia.
  1. The Services Contract set out standard requirements for pre-employment checks in addition to such matters as personal protective equipment requirements for recruited personnel.
  1. In summary, the respondent submits that the applicant did not establish that the services that were to be provided by WorkPac under the Services Contract were refused in any manner. It submits that there was insufficient evidence to establish whether, and to what extent, the services that were to be provided by WorkPac under the contract were provided or not (by reference to number of hours: see transcript 18 February 2021 p 85).
  1. In particular, the respondent submitted that the work performed by Ms Star at the Mine was not the relevant “services” under the contract. In order to demonstrate that the exclusion of Ms Star amounted to a refusal by BMA to make use of WorkPac’s services, the applicant was required to establish that Ms Star’s exclusion meant that there had been some impact or effect on the gross number of hours offered by WorkPac. The applicant had not established that.
  1. In summary, the respondent submitted that the deficiency in the applicant’s argument was that it assumed, in the absence of evidence (or proof), that the exclusion of Ms Star necessarily meant that BMA refused some aspect of the services offered by WorkPac under the Services Contract, being the gross number of hours.
  1. The applicant submitted that WorkPac had offered and discharged its obligation to provide suitably qualified personnel to the respondent, in part, by supplying Ms Star. The applicant referred to cl 12 of the Services Contract, which specifically set out a procedure for addressing circumstances where BMA was dissatisfied with personnel offered by WorkPac, and which provided:
  1. CONTRACTOR’S PERSONNEL AND CONTRACTOR’S KEY PERSONNEL

12.1         If the Company or the Company’s Representative is dissatisfied with the performance of the Services by any of the Contractor’s Personnel:

  1. a)           The Company may hold discussions with the Contractor to address the Company’s dissatisfaction and give the Contractor a reasonable opportunity to remedy the Issue;
  2. b)            If, on a reasonable basis, the Company remains dissatisfied, the Company or its Company’s Representative may give written notice to the Contractor requiring removal of the relevant Contractor’s Personnel from provision of the Services; and
  3. c)            upon receipt of a notice pursuant to clause 12.1 b), the Contractor must immediately comply with the notice and provide, at the Contractor’s expense, a suitable replacement.

12.2     The Contractor must:

  1. a)           whenever the Company or the Company’s Representative directs the Contractor to do so, provide the Company with any information reasonably required regarding Key Personnel; and
  2. b)           use reasonable endeavours to:

(i)          supply and retain the Key Personnel and not remove the Key Personnel from their position without the prior approval in writing of the Company or the Company’s Representative;

(ii)          If it is necessary to replace Key Personnel (whether as a result of death, Illness, Injury, resignation, or an act or omission of the Contractor), promptly replace the relevant Key Personnel, at the Contractor’s expense, with a person of comparable skill, experience, expertise and qualification, approved by the Company or the Company’s Representative

(iii)         ensure that each of the Key Personnel is available at the times set out in this Contract or as otherwise required to ensure Completion; and

(iv)          ensure that the Contractor’s Personnel and Key Personnel:

(A)          properly perform their roles and responsibilities; and

(B)          have appropriate skill, experience, professional qualifications and membership of appropriate professional organisations and have completed the appropriate training and competency assessments in order to work on the Site; and

  1. The applicant submitted that effect of the exclusion of Ms Star from the Mine was that if WorkPac continued to offer Ms Star as part of their suitably qualified personnel, the respondent would refuse the performance of the contract by way of provision of services by Ms Star.
  1. In my view the applicant’s submission that the conduct of BMA in excluding Ms Star from the Mine constituted adverse action for the purposes of the Fair Work Act is substantiated.
  1. I am not persuaded that BMA could only be said to have refused to make use of services offered by its contractor WorkPac if BMA refused to allow WorkPac to offer suitably qualified personnel to work up to a gross number of agreed hours, and that there was no adverse action by BMA if WorkPac substituted workers acceptable to BMA for Ms Star.
  1. The Service Contract obliged WorkPac to provide BMA with “suitably qualified personnel for short, medium and long term engagements”. It also appears to be common ground that, under purchase orders, the respondent requested a gross number of hours of work to be provided by those suitably qualified personnel. Evidence to that effect was given by Mr Brent Gee, the Manager Production Coal at the Mine, in his affidavit dated 25 November 2020. In that affidavit Mr Gee also gave evidence that none of the purchase orders were personal or specific to any individual. Further, it does not appear to be in dispute that Ms Star was a suitably qualified worker within the meaning of the Service Contract.
  1. However Part 3.1 of the Fair Work Act addresses general protections including the provision of effective relief for persons who have been, inter alia, adversely affected as a result of contraventions of that Part: s 336. The definition of adverse action in s 342(1) item 3 (d) includes a principal – namely an entity such as BMA – taking adverse action against not only an independent contractor, but against a person employed or engaged by the independent contractor – namely a person such as Ms Star – in circumstances where:
  • the independent contractor offers the services of that employee as part of the discharge by the independent contractor of its obligations, and
  • the principal refuses the services of that employee.
  1. A construction of the definition of adverse action in s 342(1) as advanced by the respondent – potentially permitting exclusion by a principal of an employee provided by an independent contractor from a site, for reasons which are prohibited by the Fair Work Act – would be contrary to the policy of the Fair Work Act, in particular as exemplified by s 340 which prohibits a person a person taking adverse action against another person because the other person has, inter alia, exercised or proposed to exercise a workplace right.
  1. I note cl 12 of the Service Contract which addresses concerns of BMA in respect of personnel provided by WorkPac. Clause 12 contemplates a process where BMA can hold discussions with WorkPac to address BMA’s dissatisfaction with particular personnel.  It is unclear to me however how this clause advances determination of the question whether BMA has refused services under the Services Contract. Rather, obligations imposed by cl 12 are relevant to the nature of the contractual obligations of the parties in question, as opposed to informing consideration of whether the principal has engaged in adverse action within the meaning of

 

s 342 (1) Item 3(d).

  1. The evidence before the Court is that BMA refused to allow Ms Star to enter the Mine site and therefore work at the Mine as an employee of WorkPac, in performance by WorkPac of its contract with BMA, either on 10 November 2017 or 24 September 2018. In that regard, BMA refused to make use of services offered by WorkPac insofar as those services related to Ms Star working on the BMA Mine site on either of those dates. This constituted adverse action on the part of BMA against Ms Star within the meaning of s 342(1) Item 3 (d) of the Fair Work Act.”

Construction, Forestry, Maritime, Mining and Energy Union v BM Alliance Coal Operations Pty Ltd (No 3) [2022] FCA 1345 delivered 11 November 2022per Collier J