Superb summary of adverse action in fair work law

The prohibition in the Fair Work Act of the taking of adverse action against another person for a proscribed reason, for example for exercising a workplace right, is featuring more and more frequently in decisions of the Federal Court of Australia and the Federal Circuit Court of Australia. What follows is a summary of the law, put with astonishing clarity given the complexities of the issue by a Perth based Federal Circuit Court judge

“If Mr Rothnie proves the conduct and alleges that the conduct was carried out for a prohibited reason, it is for the Hospital to prove, on the balance of probabilities, that it was not motivated by an impermissible reason: FW Act, s.361(1); Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 248 CLR 500; (2012) 86 ALJR 1044; (2012) 220 IR 445; (2012) 290 ALR 647 (“Barclay”); Maritime Union of Australia v Geraldton Port Authority [1999] FCA 899; (1999) 93 FCR 34; (1999) 94 IR 244; (1999) 165 ALR 67 at [221] per RD Nicholson J (“Geraldton Port Authority”).

In Barclay the High Court said:

  1. a)the task of a court in a proceeding alleging a contravention by reason of adverse action “… is to determine, on the balance of probabilities, why the employer took adverse action against the employee, and to ask whether it was for a prohibited reason or reasons which included a prohibited reason …”: Barclayat [5] per French CJ and Crennan J;
  2. b)adverse action will have been found to have been taken if the prohibited reason, or reasons including the prohibited reason, for the action was a “substantial and operative reason” for the employer taking adverse action against the employee: Barclayat [104] per Gummow and Hayne JJ;
  3. c)the test is whether adverse action has been taken because of a prohibited reason: Barclayat [129] per Gummow and Hayne JJ; and
  4. d)“[e]xamining whether a particular reason was an operative or immediate reason for an action calls for an inquiry into the mental processes of the person responsible for that action”:Barclay at [140] per Heydon J.

The use of the word “because” in s.340(1) of the FW Act requires that a causal link be established between the adverse action complained of and the matters referred to in s.340 of the FW Act: Russell v Institution of Engineers Australia T/A Engineers Australia [2013] FCA 1250 at [60] per Foster J (“Russell”). In Russell at [63] per Foster J the Federal Court observed that it was sufficient if the prohibited reason is one of several reasons for the taking of the action, but the prohibited reason “must have operated as a substantial and operative factor in the taking of the adverse action”.

In relation to the evidence bearing upon the decision made by an employer:

  1. a)French CJ and Crennan J in Barclaysaid:
  2. i)at [41] that “… why an employer took adverse action against an employee is a question of fact …”;
  3. ii)at [44] that “… direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains ‘why was the adverse action taken?’”; and

iii)         at [45] that:

This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.

  1. b)Gummow and Hayne JJ in Barclayat [127] said that:

In determining an application under s 346 the Federal Court was to assess whether the engagement of an employee in an industrial activity was a “substantial and operative factor” as to constitute a “reason”, potentially amongst many reasons, for adverse action to be taken against that employee. In assessing the evidence led to discharge the onus upon the employer under s 361(1), the reliability and weight of such evidence was to be balanced against evidence adduced by the employee and the overall facts and circumstances of each case; but it was the reasons of the decision-maker at the time the adverse action was taken which was the focus of the inquiry.

This Court in Maslen v Core Drilling Services Pty Ltd & Anor [2013] FCCA 460 at [17] per Judge Lucev in relation to the approach adopted in Barclay said that it suggested that:

… the decision-maker’s subjective intention, if accepted by the primary judge in the context of relevant objective facts, will provide a defence to an adverse action claim. Mere assertion is not enough, however, and whether an employer took adverse action for a prohibited reason is a question of fact for a primary judge to determine on the evidence, bearing in mind the employer bears an onus to show that it did not take adverse action for a prohibited reason.

In Barclay the High Court also observed that the purpose of s.361 of the FW Act was to place on the defendant employer the onus of proving that which lies peculiarly within the employer’s own knowledge: Barclay at [50] per French CJ and Crennan J, at [86] per Gummow and Hayne JJ, and at [149] per Heydon J, all adopting what was said in General Motors-Holden’s Pty Ltd v Bowling (1976) 136 CLR 676; (1976) 51 ALJR 235; (1976) 12 ALR 605 at 617 per Mason J.”

Rothnie v ST John of God Hospital (No 2) (2017) FCCA 3129 delivered14 December 2017 per Lucev J