16 Jun 2011

Court sends strong message on adverse action protections in the Fair Work Act 2009

by Joe Catanzariti

A recent decision in the Federal Court has sent a solid message to employers that employees have a right to raise concerns about their pay rates and entitlements without the fear of being sacked or victimised.

In Australia Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd [2011] FCA 333, Justice Barker noted that there has been an emphasis on the importance of industrial freedom of association in Australian workplace laws, and that the Fair Work Act "marks out industrial freedom of association as one of its important objectives".

The case joins to other recent cases in confirming that the new adverse action protections in the fair Work Act 2009 can be enforced, despite the string of unsuccessful claims heard by Fair Work Australia (Barclay v The Board of Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14 and Australian Licensed Aircraft Engineers Association v Qantas Airways Limited [2011] FMCA 58).

What led to the court case?

The applicant, Mr Puspitono, was a licensed aircraft maintenance engineer for the International Aviation Service Assistance (IASA), which carries out aircraft maintenance for major airlines, including Garuda Indonesia Airlines.

In April 2009, Mr Puspitono had several concerns with his roster as well as overtime, and lodged a formal complaint to the IASA management team. He then left work at the end of his scheduled roster without authorising the release of a late scheduled Garuda aircraft since his supervisor was not able to guarantee that his overtime would be paid

Following the complaint, IASA suspended Mr Puspitono and reviewed his performance. Initially Mr Puspitono was refused representation by IASA, but it later relented and allowed the Australian Licensed Aircraft Engineers Association to represent him. Nevertheless, his employment was eventually terminated.

Following an unfair dismissal claim under the then operating Workplace Relations Act 1996 (Cth), he was reinstated under orders of the Federal Court.

Five months after the reinstatement, however, IASA passed a negative assessment to Garuda, which then did not re-authorise the engineer's qualification. His loss of authorisation with Garuda resulted in the termination of his employment.

The allegations of adverse action

The union submitted that adverse action was taken when:

  • IASA gave Mr Puspitono four weeks' notice of dismissal;
  • IASA injured Mr Puspitono in his employment when it dismissed him;
  • IASA altered the position of Mr Puspitono to his prejudice when it dismissed him;
  • IASA solicited, counselled, procured, induced or caused Garuda to refuse to provide a renewal to Mr Puspitono, which had the effect of denying him the opportunity of continuing to certify Garuda planes and so had the effect of injuring him in his employment or altering his position to his prejudice; and
  • the negative assessment was made, as well as when it was given to Garuda.

The court's findings

Mr Scott, the manager who signed off on the negative authorisation, only knew Mr Puspitono for a short amount of time, and the other information he used to form the assessment would amount to hearsay. The court accepted that when Mr Puspitono was called to sign the renewal application, Mr Scott did not bring the unsatisfactory ratings to his attention. With this, the court held that the employer failed to discharge its onus in proving that it did not take adverse action against the employee.

Justice Barker noted that the question is whether the identified adverse action was taken because Mr Puspitono both tried (unsuccessfully) to exercise his identified workplace right and/or because he (successfully) exercised it through the union representatives. On this note, the reverse onus mentioned in Barclays is relevant and hence the burden was cast on the employer to prove that the adverse action was not taken because of his workplace right or the exercise of it. The court found that IASA failed to adduce appropriate, cogent evidence of the actual decision-making process to prove the reason for the dismissal, and hence contravened sections 340 and 346 of the Fair Work Act.

In terms of the negative assessment made by the employer, the court said the question is whether the assessment was made because of the circumstances mentioned in section 340 or because Mr Puspitono had engaged in industrial activity as defined in section 346.

Justice Barker found that the employer had taken adverse action against the employee, contravening both sections 340(1) and 346(1) of the Fair Work Act by:

  • dismissing Mr Puspitono from his employment;
  • making a negative personality assessment; and
  • sending off this negative personality assessment to Garuda.

Justice Barker also noted that by issuing a negative performance assessment, the company was possibly looking to reverse the consent orders by the Federal Court which reinstated Mr Puspitono's position after a successful unfair dismissal claim.

The Federal Court upheld the claim and in addition to awarding almost $77,000 in lost wages, awarded Mr Puspitono further $7,500 for hurt and humiliation.

Implications

Anyone in an organisation who can decide to take action that could be construed as adverse action under the Fair Work Act must understand properly how these laws operate. This is especially so when industrial activity, or the exercise of a workplace right, blurs into employment activities. Great caution needs to be exercised if an organisation is contemplating action against an employee in response to something that the employee has done or said that was arguably done in their capacity as a union member or official, or as part of their industrial activities.

This article was written when Joe Catanzariti was a partner at Clayton Utz and does not necessarily reflect his views as Vice-President of the Fair Work Commission.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.