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When disciplinary action is not ‘adverse action’

The recent federal court decision in CFMEU v Bengalla Mining Company Pty Ltd [2013] FCA 267 held that a warning letter issued for an employee’s unauthorised absence did not amount to adverse action. This case is important as it demonstrates that clearly communicated workplace policies, and consequences for breach, may mean the difference between allowable disciplinary action and unlawful adverse action.

Facts

The employee lodged three applications for unpaid leave to attend union meetings. The employer, citing the company’s leave policy, declined each time to provide unpaid leave as the employee had a substantial amount of accrued paid leave available.

For the first of the union meetings, the employee did not apply for paid leave, he still attended the function, and he did not notify the employer of his absence. A warning letter was subsequently issued to the employee for his unauthorised absence and breach of company policy. The CFMEU, on behalf of the employee, claimed that the warning letter was issued because the employee was a union member seeking to attend a union event.

Adverse action claims

What is an adverse action claim? The applicant, usually an employee, alleges that action was taken against them by their employer for a prohibited reason. Prohibited reasons include such things as union membership and also grounds of discrimination such as pregnancy or race, for example.

The applicant must initially show that, on the facts, there is a case to be argued. Once it is established that there is a case to be argued, the onus of proof is then on the respondent, usually the employer, to show that the action was not taken because of the alleged prohibited reason(s). This is referred to as a ‘reverse onus of proof’.

On the facts here, it meant that the employer had to show that the prohibited reason alleged by the CFMEU, namely union membership, was not a significant or operative part of the reason for the warning letter being issued. Justice Katzmann held that, on the facts, the disciplinary action taken against the employee was justified and that there was no adverse action. The existence of a clear company policy which spelt out the situation for accrued leave was an important factor. The policy both clarified the position at the outset and provided a basis for disciplinary action in the face of a policy breach.

Why is this case important?

The case is instructive in both a legal and practical sense. From a legal perspective the case applies an important High Court[1] decision last year which clarified the test to be used for these types of cases.  Put simply it is adverse action if a prohibited reason is a ‘substantial and operative factor’.

Practically this means that an employer’s stated reasons, provided they can be substantiated with evidence, are sufficient to satisfy the question as to the reasons for making a decision. Objectively, the employee was a union representative and the employer was aware of this, and that the leave was to attend a union function. Importantly, however, the decision maker’s evidence was clear that the reason he made the decision was not because the employee was a union rep, or attending a union function, but rather because he refused to follow the company policy on leave despite being made aware of the situation.

Lessons for employers

When disciplining employees, it is important that employers spell out very clearly the reasons for the disciplinary action. Not only will this give employees a clear understanding of what they have done wrong, but will also assist in overcoming the burden of the reverse onus of proof. If the employer takes a position which is either inconsistent or unclear, it may lead employees to misconceive the reasons for the disciplinary action.

The other key lesson here for employers is to regularly review your policies and consider whether they are meeting the needs of your business.  A good policy establishes clear expectations and provides a basis for disciplinary action if needed.

 

Sarah Waterhouse, Paralegal, Blandslaw

 


 


[1] Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 (7 September 2012).

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