Australia: High Court majority applies Barclay decision to find that the scab-sign dismissal was lawful

The decision in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41, handed down yesterday, provides important guidance on the operation of the adverse action provisions in Part 3-1 of the Fair Work Act 2009 (Cth) (FW Act).

By a 3-2 majority, the High Court of Australia reaffirmed the approach it adopted in Board of Bendigo Regional Institute of TAFE v Barclay [2012] HCA 32 (Barclay).1

BACKGROUND

In early 2012, CFMEU members at a Queensland mine site operated by BHP Coal Pty Ltd (BHP) took protected industrial action in support of claims for a new enterprise agreement. The union organised a protest at the entrance to the mine site. A BHP employee and union lodge vice-president, Mr Doevendans, attended the protest on several occasions and was seen holding a sign reading "No Principles SCABS No Guts" towards vehicles as they went into and left the site.

Following an investigation into Mr Doevendans' alleged misconduct in displaying the sign at the protest site, BHP terminated his employment. The CFMEU brought proceedings on his behalf under Part 3-1 of the FW Act, arguing that Mr Doevendans had been subjected to adverse action on the basis of:

  • his participation in lawful industrial activity (section 347(b)(iii)); and/or
  • his representation or advancement of the union's views, claims and interests (section 347(b)(v))).

DECISION AT FIRST INSTANCE

Justice Jessup of the Federal Court of Australia2 found that BHP had taken adverse action against Mr Doevendans, reinstated him and imposed a civil penalty on BHP.

His Honour accepted the evidence of the BHP mine's general manager that he had dismissed Mr Doevendans because his conduct did not conform to company expectations.

However, Justice Jessup went on to find that BHP was also motivated by the employee's industrial activity and representation of union views – which included the holding of the sign as part of lawful protest action.

DECISION OF THE FULL FEDERAL COURT

In BHP's appeal to the Full Federal Court, a majority (Justices Dowsett and Flick; Justice Kenny dissenting)3 overturned Justice Jessup's first instance decision and orders.

In separate judgments, the majority held that Justice Jessup's approach was inconsistent with that set down by the High Court in Barclay.

For Justice Flick, the trial judge had erred by failing to take sufficient account of the general manager's reasoning for dismissing Mr Doevendans, which included not only his holding of the "scab" sign but also his "arrogance" and "antagonistic" conduct in the events that followed.

According to Justice Dowsett, the primary judge's finding that Mr Doevendans' engagement in industrial activity played no part in the manager's termination decision should have been determinative. The fact that the holding of the sign also fell within some of the areas of protected activity under section 347 of the FW Act was irrelevant.

THE HIGH COURT DECISION

Of the three judges forming the majority in the High Court, Chief Justice French and Justice Kiefel wrote a joint judgment, and Justice Gageler wrote a separate judgment. In dissent, Justices Hayne and Crennan each provided separate reasons.

Joint Judgment of French CJ and Kiefel J

Their Honours stated that the focus of the enquiry as to whether BHP took unlawful adverse action in dismissing Mr Doevendans is upon the general manager's reasons for taking that action; it is "a search for the reasoning [the manager] actually employed".4 Following Barclay, this would usually require the giving of direct evidence by the decision-maker as to his or her reasons, although: "The court is not obliged to accept such evidence. It may be unreliable for a number of reasons."5

In this case, none of the reasons given by the general manager – and accepted by the primary judge – involved a reason prohibited by section 346(b) of the FW Act. The manager's reasons "included his concern that Mr Doevendans could not or would not comply with the standards of behaviour" expected of employees at the mine.6

Further, in their Honours' view, the primary judge had found that the manager's reasons for acting did not include Mr Doevendans' participation in industrial activity or his representing the views of the CFMEU. In proceeding to consider also whether Mr Doevendans' conduct involved activity of the kind protected by Part 3-1, the trial judge "wrongly added a further requirement ..., namely that the employer dissociate its adverse action completely from any industrial activity".7

For these reasons, their Honours dismissed the union's appeal.

Judgment of Gageler J

His Honour indicated that: "In a case where the totality of the operative and immediate reasons for one person having taken adverse action against another person are proved, the question presented by s 346(b) is whether any one or more of those reasons answers the description of the other person having engaged in any one or more of the industrial activities listed in s 347(a) or (b)."8

Here, that question was answered in the negative as the mine manager had provided evidence about his process of reasoning, and: "The fact that Mr Doevendans held and waved signs while participating in the protest organised by the CFMEU was not an operative part of [the manager's] reasoning."9

In dismissing the appeal, his Honour also dismissed the union's argument that the approach adopted would undermine the protections of industrial activity in Part 3-1 of the FW Act, by allowing an employer to choose its own characterisation of otherwise protected activity and thereby avoid liability.10

The Dissenting Judgments

Hayne J considered that the effect of the Barclay decision was not: "that accepting the decision-maker's evidence of why adverse action was taken necessarily concluded the issue in a case where the employee was engaged in industrial activity."11

His Honour went on to find that in this case, while there was no doubt that the word "scab" was offensive (and intended to be so), its use by Mr Doevendans could not be separated from the circumstances in which it was used: "He used it in the course of participating in a union-organised protest. The protest was directed at BHP Coal as employer. But it was also directed at those employees who had not joined the work stoppage."12

As the activity engaged in by Mr Doevendans was lawful, no enquiry should be made as to whether the manner of participating in that activity was offensive, because Part 3-1 does not make any distinction of that kind.

Crennan J agreed with Hayne J, stating that: "The circumstance that the scabs sign used 'conspicuously offensive language' ... does not take [the dismissal of Mr Doevendans] outside s 346(b). The only qualification of the protection given by s 347(b)(iii) is that the activity (in which an employee participates) which has been organised by a union be lawful – there is no additional qualification that it be anodyne."13

Their Honours would have allowed the appeal and set aside the judgment of the Full Federal Court.

IMPLICATIONS FOR EMPLOYERS

  • The majority decision in CFMEU v BHP Coal affirms the approach taken by the High Court in Barclay, which places the focus on the reasons of the employer's decision-maker for taking particular action.
  • If the evidence given by that person is persuasive, a court will accept that they did not act for an unlawful reason in breach of Part 3-1 of the FW Act.
  • This should embolden employers to apply the usual management processes, for example relating to employee misconduct or poor performance, even in instances where the relevant employee is a union member, delegate or activist.
  • However, employers should keep in mind that they bear the onus in adverse action cases (under FW Act, section 361) for proving that action taken against an employee was not for a prohibited reason.
  • Therefore all disciplinary, performance and dismissal processes should be properly documented to ensure that the relevant evidence can be adduced in the event that an employee challenges any adverse action taken against them. Employers should also carefully consider who will be involved as decision-makers in such processes, as their evidence may be critical in defending adverse action claims.
  • Different views were taken by various judges in the various stages of this case. The CFMEU was successful at first instance, the Full Federal Court found in favour of BHP Coal by a 2-1 majority, and the High Court was split 3-2 in BHP's favour . This suggests that there remain enough areas of uncertainty in this area of the law for unions to keep trying to test the boundaries of the adverse action provisions, and to explore different factual scenarios for successful claims.

Footnotes

1See article here.

2CFMEU v BHP Coal Pty Ltd (No 3) [2012] FCA 1218 (7 November 2012).

3BHP Coal Pty Ltd v CFMEU [2013] FCAFC 132 (13 December 2013).

4[2014] HCA 41, [7].

5[2014] HCA 41, [8].

6[2014] HCA 41, [10].

7[2014] HCA 41, [22].

8[2014] HCA 41, [89].

9[2014] HCA 41, [90].

10[2014] HCA 41, [91]-[93].

11[2014] HCA 41, [38].

12[2014] HCA 41, [42].

13[2014] HCA 41, [66].

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