Adverse action and the general protections

Here is a useful summary by the Federal Court of the legal principles generally associated with a claim alleging a breach of the general protections in the form of unlawful adverse action for a prohibited reason.

“LEGAL PRINCIPLES

In order to engage the presumption in s 361(1), an applicant must plead in the originating application, statement of claim or some other document the particular reason or intention for which he or she alleges that the respondent took the adverse action complained of in the proceeding. That pleading must make clear what the case is about and include the identification of that particular proscribed reason or intention: Australian Federation of Air Pilots v Regional Express Holdings Ltd (2021) 290 FCR 239 at 282 [140] per Bromberg, Kerr and Wheelahan JJ.

In order to be a workplace right within the meaning of s 341(1)(c), an employee must have the ability, founded on a source of entitlement (whether instrumental or otherwise), to make a complaint or inquiry in relation to his or her employment: Alam v National Australia Bank Ltd (2021) 288 FCR 301 at 331–332 [97] per White, O’Callaghan and Colvin JJ applying (at 288 FCR 325 [74]–[76]) Whelan v Cigarette & Gift Warehouse Pty Ltd (2017) 275 IR 285 at 298 [33] per Collier J as approved in Cigarette & Gift Warehouse Pty Ltd v Whelan (2019) 268 FCR 46 at 56 [28] per Greenwood, Logan and Derrington JJ.

The central issue under Pt 3-1 of the Fair Work Act in the determination of a claim that a person has taken adverse action against another person in contravention of ss 340(1) or 351(1) is a factual one that must be evaluated in the matrix that the Parliament created through ss 360 and 361. The factual question requires the Court to ascertain, having regard to the rebuttable presumptions created by ss 360 and 361, what was the decision-maker’s substantial and operative reason for taking or engaging in the action alleged to be adverse: see Rumble v The Partnership (t/as HWL Ebsworth Lawyers) (2020) 275 FCR 423 at 430–432 [30]–[39] per Rares and Katzmann JJ and their analysis of Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 and Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243; see also Victoria (Office of Public Prosecutions) v Grant (2014) 246 IR 441 at 447–448 [32] per Tracey and Buchanan JJ. In other words, the factual enquiry must answer the question “why was the adverse action taken?”. If the Court’s answer is a finding that the decision-maker’s reasons for taking that adverse action included a reason proscribed by ss 340(1)(a) or 351(1), then the applicant will have established that the other person, in taking the adverse action, contravened the relevant provision.

The effect of ss 360 and 361 is that the person alleged to have taken adverse action under Pt 3-1 of the Act has the onus of proving that the pleaded proscribed reason or intention for taking the action did not form the, or a, substantial and operative reason or intention of each of the decision-maker(s) or other individual(s) involved in the decision-maker(s) coming to have the relevant impugned state of mind in doing so: Qantas Airways Ltd v Transport Workers’ Union of Australia (2022) 292 FCR 34 at 86–87 [174], [177] per Bromberg, Rangiah and Bromwich JJ. Their Honours also held, in the context of considering the position where there is more than one decision-maker or individual involved whose reasons for taking the adverse action must be evaluated (at 101 [230]):

 

It must be kept steadily in mind that what is required is a causal and thus factual inquiry into all of the substantial and operative reasons for a decision being made. It is necessarily fact and circumstance specific, potentially with a multitude of such reasons being in play. In the field of causation, the question of fact as to whether something is a cause (or may have been a cause so as to trigger the presumption in s 361(1)), is required to be ascertained “by reference to common sense and experience and one into which considerations of policy and value judgments necessarily enter”: see Minister for the Environment v Sharma (2022) 291 FCR 311 per Allsop CJ at [305], citing March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 per Mason CJ (with whom Toohey J and Gaudron J agreed).

 

(emphasis added)

Where more than one person is involved in the taking of action, including the making of a decision, it is necessary to consider and evaluate the role that each played in that action or decision and whether that individual had the, or a, substantial and operative reason for the taking of the adverse action that, by force of s 793(2), would be the, or a, proscribed reason because of which that person or another person involved took that action.

The reason or intention for which a person takes adverse action for the purposes of ss 360 and 361 of the Act need not involve the person having an accurate appreciation of the legal nature of the action: Esso Australia Pty Ltd v Australian Workers’ Union (2017) 263 CLR 551 at 585–‍568 [61] per Kiefel CJ, Keane, Nettle and Edelman JJ. They explained (relying on what Gleeson CJ had said in Electrolux Home Products Pty Ltd v Australian Workers’ Union (2004) 221 CLR 309 at 330–331 [26]) that it is sufficient to establish the person’s intention or purpose by showing that he or she intended to take the particular action (here, giving Ms Han the warning or terminating her employment) with actual knowledge of the circumstance that, and engaged in that conduct because, relevantly, the employee had exercised the workplace right in issue or the conduct discriminated against him or her because of his or her race (or one or more other reasons or characterisations proscribed in s 351). But it is not relevant to establish liability that a person acts under a mistake of law as to whether an adverse action is lawful.

A person involved in a process that leads to the adverse action may be a decision-maker, or person whose state of mind suffices, pursuant to s 793(2), for the purpose of determining whether adverse action was taken for a proscribed reason, even though the ultimate act, such as termination, is taken or conveyed by another decision-maker: see Australian Red Cross Society v Queensland Nurses’ Union of Employees (2019) 273 FCR 332 at 347–348 [90]–[91] per Greenwood, Besanko and Rangiah JJ. That is because, as Lee, Madgwick and Gyles JJ held in Elliott v Kodak Australasia Pty Ltd (2001) 129 IR 251 at 260 [37], where a decision-maker takes adverse action in reliance on another individual’s input, such as his or her report or assessment of a matter that the ultimate decision‑maker took into account, and the individual was influenced in making the report or assessment for a reason, or with an intention, proscribed in Pt 3-1 of the Act, such as one in ss 340(1) or 351(1), whether disclosed or undisclosed, the participation in the decision-making process of that individual, while he or she acts with the impugned state of mind, will amount to a reason or intention for the taking of the adverse action within the meaning of s 360, even if the decision-maker is not aware that the individual acted because of that proscribed reason.

Thus, in Kodak 129 IR 251, an employee, Mr Lay, gave a ranking of employees to assist his superiors in determining whether to make particular ranked employees redundant. Mr Lay’s rankings played an indispensable part in the assessment process that his superiors undertook in arriving at the adverse action against Mr Elliot. Lee, Madgwick and Gyles JJ explained that, if Mr Lay was influenced in giving a low assessment for a proscribed reason, first, it was likely that he would have given a different assessment were he not so influenced, secondly, this inevitably would have affected the ranking process for employees based on the assessment, whatever the view of appropriate ranking by others, including one of the company’s directors, involved in the decision to take adverse action, and that, therefore, it “would have been a different assessment process”.  Their Honours explained (at 260 [37]):

 

Furthermore, whatever debate there might be about the extent of [the director’s] power or involvement in the decision, his evidence was that he took the Lay/Shannon assessment and worked from there. It follows that if the Lay/Shannon assessment is affected (or infected) by either Lay or Shannon having held an undisclosed prohibited reason, then he [scil: the director] would have, in effect, inadvertently adopted it so that its force continued regardless of the lack of any express prohibited reason in the mind of [the director].

 

(emphasis added)

In Wong v National Australia Bank Ltd (2022) 318 IR 148 at 159 [37], 167–168 [78]–[83], Katzmann, Charlesworth and O‘Sullivan JJ applied Kodak 129 IR 251. In that case, an individual provided information to the decision-maker on which the latter proceeded without investigating its reasonableness, truth or accuracy (at 167 [79]). Their Honours said that, first, it is necessary to enquire into whether an individual contributed to the decision-making process culminating in the adverse action to a degree sufficient to warrant an evaluation as to whether he or she acted for a proscribed reason or with a proscribed intent (at 167 [78]).  Secondly, where the decision-maker acts on the basis of such information, the state of mind of the individual who supplied it is relevant.  They said (at 167 [80]):

 

an inquiry into the reasons of a corporate entity may require an examination of the states of mind of human actors other than the single individual having the authority to bind the corporation in the relevant act.

Depending on the nature and degree of the involvement of the other individual (or individuals) in the decision-maker’s process in arriving at the decision, it may be necessary to assess whether each individual relevantly had a proscribed state of mind, within the meaning of s 793(2), that affected the reason or intention why the decision-maker took the adverse action (at 167–168 [81]–[82]). Their Honours said (at 168 [83]):

 

it was necessary to inquire into Mr Arnott’s reasons for making the contribution that he did, whether it be described as “significant”, “plainly important”, “major”, “substantial” or “essential”. It is enough to identify that Ms MacLeod proceeded from factual assumptions that were detrimental to Ms Wong and that were principally (although not solely) based on an assumption that Mr Arnott’s assertions were true. Mr Arnott’s motivations were relevant and as such his actions and accompanying state of mind may be attributed to NAB in accordance with s 793 of the [Fair Work Act].”

 

Han v St Basil’s Homes [2023] FCA 1010 delivered 25 August 2023 per Rares J

 

(emphasis added)