Towards the end of last year, along with 21 other AHRI members, I attended my first networking forum as an AHRI employee.  The topic was about managing adverse action claims following the High Court decision in the Barclay case.

In a highly entertaining and enlightening report on the case, Justin Bourke SC (the barrister who won the High Court appeal) explained to the AHRI forum members the finer details and practical implications of the case.

Fortunately, I took notes, which reveal that I learnt a few things:

What are adverse action claims?

Justin Bourke SC explained that in order to make a general protections claim under the Fair Work Act, employees simply need to allege that they were ‘adversely affected’ by a management decision made because of their workplace rights, or because they possessed a discriminatory attribute (age, race, gender etc.)

A simple example would be where an employee alleged that her employment had been terminated because she was pregnant. From that point, a ‘reverse onus of proof’ would apply and an employer must then prove the decision-making process that followed was not for that reason, but for an acceptable reason, such as continued and well documented under-performance combined with a lack of improvement.

What was the Barclay case?

Mr Barclay was the president of an Australian Education Union sub-branch and worked at Bendigo TAFE. He was disciplined by the TAFE for sending an email in his capacity as president to his fellow union members alleging instances of serious misconduct by unnamed employees. Barclay sent the email without first notifying his employer of the misconduct allegations which had potentially damaging effects on the TAFE’s reputation. Accordingly, his employer took disciplinary action by suspending him on full pay.

Barclay alleged that the action was taken because of his union status, to which the TAFE argued it would have acted in the same way had Barclay not been a union member. The TAFE won the case with that argument in the Federal Court, to which Barclay appealed and subsequently won in a controversial Full Federal Court appeal. The effects of that decision left employers, human resources managers and industrial relations experts reeling at the practical implications on workplace decision making.

Effectively, the Full Federal Court determined that taking into account the employer’s subjective reasons (or conscious reasons) for making a decision was not enough. Instead, an assessment of the ‘unconscious reasons’ or real reasons behind making a decision was required.

Ultimately the Court found that even though Bendigo TAFE provided evidence that its decision to take disciplinary action against the employee was made irrespective of the employee’s union status, the employer was not able to disprove to the satisfaction of the Full Federal Court that the real reason behind making that decision was the fact that Barclay was a union representative. The decision at that stage created a very high bar for employers when attempting to defend adverse action claims, and arguably made union representatives a “protected species”.

Why are the adverse action claims so significant?

General protections present considerable risks for employers for a number of reasons. Firstly, they are open to prospective and current employees as well as contractors and other workers.  When compared with the minimum employment period needed to be served before having access to unfair dismissal remedies, general protections are accessible by a wider range of people and provide broader remedies including injunctions.  

Time limits for lodging claims are also longer than for unfair dismissal applications, damages are uncapped and the reverse onus of proof means that employers are effectively guilty until proven innocent. Add to that, following the Full Federal Court decision in Barclay, a court could take into account the unconscious reasons for making a decision.

In summary, the risks associated with adverse action claims are extensive and need to be taken seriously by HR managers (who may be named as separate parties to litigation) and their employers.

What are the implications of the High Court appeal in Barclay?

Justin Bourke SC set out four implications that I believe are worth mentioning:

First, it rejects the Full Federal Court’s decision that the ‘unconscious’ reasons of a decision maker can be taken into account. Following the High Court appeal, the reverse onus of proof will now be discharged if a decision maker can prove that the decision was made for legitimate reasons and a judge accepts those reasons. There is no longer a need to enquire into the employer’s ‘unconscious’ mind.

Second, it is now established that union delegates are not a protected species. If they engage in activity worthy of discipline and the same disciplinary procedures would be followed regardless of union status, then the employer can exercise disciplinary action without incurring liability. This re-establishes the appropriateness of the comparative test in determining whether a decision was made for a prohibited reason.

Third, even if a decision were infected by the fact that a party is a union delegate but that was not really the substantial and operative reason for making the decision, it does not mean that the employer has contravened the provision. The trigger for the decision is what needs to be taken into account.

Fourth, the fact that a workplace decision may involve intertwining a person’s union status and the activity in which the person has been engaged (i.e. sending an email in the person’s union capacity) does not of itself mean the employer is liable for any subsequent decision taken. Again, the relevant trigger for the decision needs to be assessed.

What does the High Court decision mean for HR practitioners?

This is my summary of the HR implications following Justin Bourke’s talk:

• Despite the decision, adverse action is still a risky area for employers, and HR managers need to be careful to look at the facts thoroughly to ensure they don’t engage in illegal activity.
• HR managers can be named personally and separately as parties to litigation, and potentially held liable for adverse action claims along with their employers.
• Training for line managers and HR managers alike is needed to ensure they know what adverse action is, and how to avoid making flawed decisions.
• Strong policies and procedures are needed to back up a decision maker. If placed in a situation of needing to defend reasons for making a decision, being able to point to a policy that supports the decision gives employers a better chance of doing that.
• Making an employee redundant does not necessarily place an employer on safer ground. Sham redundancies are never a wise option as they can be complex and genuineness can be difficult to prove.

Lessons for AHRI members

After the session I stayed around, like a number of the other participants, for an informal discussion. As the only AHRI staff member at the forum, two points struck me:

• A number of participants made the point that they were very fortunate to have the opportunity to attend quality professional briefing sessions such as the forum we had just experienced – and for free. As the convenor of the forum, Kejal Khajuria, put it to me in an email the following day, the AHRI members he spoke to were “blown away that a presentation like that was free. They could not believe they could attend a free event where Justin Bourke was the guest speaker.” That made me feel good as an AHRI staff member.
• Kejal also noted that the session drove home the realisation that AHRI ProCover (AHRI’s indemnity insurance cover, which is free for professional members) needed to be promoted more by AHRI and its value more robustly highlighted to members. One attendee made the point very strongly that, in situations where cases go to Fair Work Australia or to other courts, the role of the HR professional can come under great scrutiny, and individuals can be held personally liable.