Injunctions in dismissal cases

The following extract from a decision of the Federal Circuit Court makes clear the principles the court (and the Federal Court too) will impose when determining an application by an employee to restrain a dismissal in a general protections case.

“The applicable law

  1. The relevant sections of the Fair Work Act include sections 340, 341, 342 and 545. Those sections are well known to those involved in this litigation and thus do not need to be reproduced.
  2. The Court notes that under section 545 of the Act, it has power to make any order it considers appropriate if satisfied that a person has contravened, or indeed proposes to contravene, a civil remedy provision such as section 340. There is no doubt that the Court may order reinstatement on an interim basis.
  3. The decision of Her Honour Katzmann J in Construction Forestry Mining and Energy Union v Anglo Coal (Capcoal Management) Pty Ltd [2016] FCA 1582 (hereafter referred to as “CFMEU v Anglo Coal”) at [39] to [45] contains a useful discussion of the law:

[39] I have set out the applicants’ prayers for interlocutory relief at [6] above. The relief is described as “interim injunction[s]”, pursuant to s 545(1) and (2)(a) of the Act. Subsections 545(1) and (2) provide:

545 Orders that can be made by particular courts

Federal Court and Federal Circuit Court

(1) The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.

(2) Without limiting subsection (1), orders the Federal Court or Federal Circuit Court may make include the following:

(a) an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;

(b) an order awarding compensation for loss that a person has suffered because of the contravention;

(c) an order for reinstatement of a person.

[40] Capcoal submits that the relief the Applicants seek is not “interim injunction[s]” within the meaning of para 370(b) of the Act, because s 545(2) “distinguishes between an interim injunction and an order for reinstatement and treats them as two entirely separate concepts.”

[41] The submission is misconceived.

[42] First, the ordinary meaning of “injunction”, in a legal context, is simply an order that a person do something or refrain from doing something (see Manos v Maras [2007] SASC 192 (FC) at [51]–[52]). An interim injunction is an order of that kind made pending some further event, most often the final resolution of the matter in which the interim order is made. The interlocutory orders sought by the Applicants in this proceeding fit that description exactly.

[43] Secondly, there is no indication in s 545(2) that the categories of relief listed are intended to be mutually exclusive. There is therefore no warrant for treating an “interim injunction” and an “order for reinstatement” as distinct and non-overlapping concepts within the Act.

[44] Thirdly, the obvious purpose of s 370(b) is to allow an Applicant entitled to an interim injunction to apply directly to a court, without first having the matter dealt with by the FWC as s 370(a) would otherwise require. The heading to s 370 is “taking a dismissal dispute to Court”. The section is only engaged where the Applicant alleges that there was a contravention of the general protections provisions that has resulted in a person’s dismissal: s 365. It would substantially defeat the purpose of s 370(b) if the Applicant were able to apply directly to a court seeking an interim injunction, but not an injunction reinstating the dismissed employee.

[45] For all these reasons I consider that the words “interim injunction” in s 370(b) are apt to include the kind of interim orders that the Applicants seek in this proceeding, and accordingly that s 370 presents no bar to their application.

  1. Section 15 of the Federal Circuit Court of Australia Act 1999 (Cth) also provides this Court with power to make the interlocutory orders, including interim reinstatement, pending a final hearing.
  2. During submissions, there was no contention that the test to be applied by this Court in determining whether to make interlocutory orders, including interim reinstatement, was summarised by Katzmann J in CFMEU v Anglo Coal at [8] to [9]:

[8] Two questions arise on any such application.

[9] The first is whether the Applicant has made out a prima facie case in the sense that if the evidence were to remain as it is, there is a probability that at the trial of the action the Applicant would be entitled to relief. The second is whether the inconvenience or injury the Applicant is likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the Respondent would suffer if the injunction were granted. See Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618 at 622–3; Australian Broadcasting Corporation v O’Neill [2016] HCA 46; (2006) 227 CLR 57 at [65].

  1. The relevant test was discussed by Her Honour Judge Barnes in McAllan v National Prescribing Service trading as NPS Medicinewise [2017] FCCA 3151 (hereafter referred to as “McAllan”) at [18] to [21]:

[18] The first question is sometimes referred to as the issue of whether there is a “serious question to be tried”, while the second question is referred to as the test of the “balance of convenience”. As submitted by the Respondent, the two limbs of this test are interrelated in the sense that the stronger the prima facie case for final relief, the less may be required to tip the balance of convenience; while the greater the preponderance of the balance of convenience, the less strong a case for final relief may be required (see Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46 at [65]- [72] and Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238; [2011] FCAFC 156 at [44]- [74]).

[19] As pointed out by Tracey J in Kweifio-Okai v Australian College of Natural Medicine [2014] FCA 746 at [11] in considering an application for interlocutory relief:

In a practical sense what the Court strives to do is to adopt the course which is attended by the lower risk of injustice if, after trial, the Applicant fails to establish his or her case: see Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499 at 501-3.

[20] It is important to note that in determining whether or not a prima facie case, in the sense referred to above, has been made out, the Court does not conduct a preliminary trial or resolve conflicts arising on the evidence advanced by each party, although some attempt must be made to assess the relative strengths of the parties’ cases (Kweifio-Okai at [12]).

[21] Greenwood J explained in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Bluestar Pacific Pty Ltd (2009) 184 IR 333; [2009] FCA 726 at [21]:

It is therefore necessary for the Applicants to show a sufficient likelihood of success in the principal proceeding at trial to justify, in the circumstances, the preservation of the status quo pending the trial. That is the sense in which the Applicants must demonstrate whether a prima facie case is made out. In analysing whether the Applicants have demonstrated a sufficient likelihood of success to justify the preservation of the status quo pending trial, the court will examine the strength of the prima facie case and whether, if the evidence remains as it is, there is a probability that at the trial of the action the plaintiff will be held entitled to relief. The strength of the probability of success depends in part upon the nature of the rights asserted by the Applicants and the practical consequences likely to flow from the order the Applicants seek. A sufficient likelihood of success in this sense might properly also be described as whether the Applicants have shown a serious question to be tried. The Applicants must also demonstrate that the injury the individual Applicants would be likely to suffer if an interlocutory injunction is not granted, outweighs the injury the defendant would suffer if the injunction is granted. Further, the Applicants must show that damages will not be an adequate remedy. The question of balance of convenience and the adequacy of damages are in turn influenced by the strength of the prima facie case and the nature of the rights asserted by the individual Applicants.

  1. As Her Honour also noted at [23] of her Judgment in McAllan, an application for an interim reinstatement is, in effect, an application for a mandatory interlocutory injunction and thus;

Caution should be exercised in circumstances where to require a party to do something on an interim basis may carry a greater risk of injustice than requiring a party not to do something on an interim basis.

Indeed, as will be seen below, one of the issues in this case is balancing the competing but potential injustice to the Applicant, the Respondent, and to third parties.

  1. At [24] of McAllan Judge Barnes also made this important observation:

In considering an application for an interlocutory order reinstating employees who had been dismissed in Australian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd (2000) 100 IR 383; [2000] FCA 627 at [55], Gray J considered whether the circumstances in that case gave rise to “a serious question as to whether [employees] will be entitled to be reinstated in due course”. In other words, if the case in favour of reinstatement as a final remedy is weak, it is less likely that it will be appropriate to order reinstatement on an interim basis.

  1. This Court also accepts the observation made by Judge Barnes at [25] in McAllan where she states:

[The Applicant] bears the onus of proof in relation to his application for interlocutory relief. Under s.361(2) of the FW Act the presumption in s.361(1) of the Act (that a person took, or is taking, action for a particular reason or with a particular intent where taking that action for that reason or with that intent would constitute a contravention of Part 3-1 of the Act) does not apply in relation to an application for interim orders. However there is authority to the effect that, in assessing whether there is a serious question to be tried, regard may be had to the fact that the presumption will be available in the final determination of the principal proceedings. Account can also be taken of this in assessing the respective strengths and weaknesses of the parties’ cases in exercising the discretion to grant or withhold interlocutory relief (see CFMEU v Anglo Coal at [77] and cases cited therein).

Is there a serious question to be tried?

  1. Counsel for the Applicant, and Senior Counsel for the Respondent, deal with this extensively in their written submissions This Court is of the view that there is a serious question to be tried.
  2. Nonetheless, for reasons which will be explained below, it declined to grant the order for reinstatement sought by the Applicant.  In the circumstances, this Court sees little utility and, indeed, potential detriment, if it engages in a detailed discussion of the comparative strengths and weaknesses of the Applicant’s case.  This matter will be heard within five months of delivering the present Reasons for judgment.  Other than expressing to the parties, in these Reasons, that the Court is satisfied, considering the relative strength of the parties’ cases on the evidence presently before the Court, that the Applicant has a prima facie case such as to establish a sufficient likelihood of success in the principal proceedings, such as to support her present application for interim relief.  The Court sees no utility in discussing the matter further.

The balance of convenience

  1. This Court concludes that the inconvenience or injury to the Applicant if she is not reinstated is outweighed by the injury which the Respondent or third parties would suffer if the injunction were granted.  The basis of the Court’s decision is not so much based on hardship to the Respondent, but the potential risk to its customers who, for present purposes, the Court will regard as either third parties, or members of the public, who are considered to have an interest in the proceedings.
  2. In this regard, the Court is influenced by, and accepts the evidence contained by Sandhya Maini, one of the Respondent’s officers, in her Affidavit affirmed 26 July 2019 at paragraphs 31, 32, and 33(a), which are reproduced below:

[31]  NAB operates in a highly regulated environment and there has been an increased focus on the financial services industry, and in particular, the major retail banks, of which NAB is one. This focus takes many forms, including the Financial Services Royal Commission, further legal regulation, increasing political scrutiny and media interest.

[32] It is imperative that NAB ensures compliance with its legislative and regulatory obligations, which are reflected in its own policies, procedures and standards. Failure to do so not only impacts NAB internally but has the potential to impact the NAB brand and reputation more broadly. In my view, Ms Alam’s conduct was unacceptable, placed NAB at risk and does not accord with the expectation it has of its employees.

[33] I do not have trust and confidence in Ms Alam’s ability to perform her role (including to protect customer’s confidential information) and comply with NAB’s policies and procedures. The bases of my view is for the following reasons:

(a) Ms Alam’s conduct in sending customers’ confidential information to her personal email accounts demonstrates a fundamental incompatibility with the essential requirement of trust that must exist between individuals working in the financial services industry and customers. Customers must be able to trust that the money and information they have provided to NAB is only used for the purpose in which it was provided. Ms Alam’s conduct demonstrated that she is incapable of meeting the standards required of a financial planner to ensure that customer’s interests are not harmed…

  1. The Court makes the following observations in this regard:
  2. a)The Respondent does operate in a highly regulated environment in which its activities are closely, and appropriately, scrutinised by regulators, and the public.
  3. b)It is imperative that the Respondent ensures compliance with its legislative and regulatory obligation and, the Court adds, the statutory and common law duties that it owes to its customers.
  4. c)The Respondent contends that the Applicant’s employment was terminated because she sent customers’ confidential information to her personal email accounts.  One preliminary impression that may be formed from the evidence before the Court at the moment, is that this confidential information does appear to have been sent from the Applicant’s personal email accounts.  An issue for the Court at the Hearing may well be whether it was the Applicant who, in fact, caused this confidential information to be sent, because, if it was, the Respondent’s case that this was the only reason for the Applicant’s summary dismissal is more plausible.
  5. d)It is very hard to argue with the logic of Ms Maini’s contention that the Respondent’s customers must be able to trust that the money and information they have provided to the Respondent is only used for the purpose in which it was provided.  The Applicant is an associate financial planner.  To reinstate her to that position, or any position that involves access to the information and financial resources of the Respondent’s customers, cannot possibly be in the interests of those customers, whether they are regarded as third parties to this litigation, or members of the public having an interest in the same.
  6. e)Of course, this situation could be entirely different after a Final Hearing when the Court may be able to make a clearer assessment, not only of the motives behind the decision made to terminate the Applicant’s employment, but the background facts.  The background facts, of course, are highly relevant to the application for reinstatement as part of the final relief sought.

Conclusion

  1. For the time being, the Court declines to make an order reinstating the Applicant’s employment with the Respondent.  This issue may be reconsidered at a Final Hearing. “

 

ALAM v NATIONAL AUSTRALIA BANK LIMITED [2019] FCCA 3740 delivered 20 December 2019 per Altobelli J