17 Oct 2014

Employees engaged in lawful industrial activity aren't immune from adverse action, says High Court

An employee whose actions while on a stop-work protest breached his employer's Code of Conduct was dismissed lawfully, according to the High Court (Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41) – but the nature of the decision means employers should be careful before they take disciplinary action which is prompted by an employee doing something in the course of undertaking lawful union activity.

Mr Doevendans stops work and starts protesting

Employees of BHP Coal at seven coal mines were taking industrial action in support of negotiations for an enterprise agreement in February 2012. Mr Henk Doevendans was one of the employees (and active CFMEU member) who stopped work and protested. He repeatedly waved a sign saying:

"No principles


No guts"

Non-striking workers told management they felt intimidated by that conduct. The general manager, Mr Geoff Brick, in explaining his reasons for dismissing Mr Doevendans said that "scabs" is "an offensive, intimidating and humiliating word" which could make others feel "harassed, insulted, abused, bullied and intimidated", and that he regarded the conduct as contrary to the mine's Code of Conduct. He also gave evidence, which was accepted by the trial judge and not challenged on appeal, that he considered Mr Doevendans to be unrepentant, defensive, arrogant, and unlikely to change his ways.

On 21 May 2012 BHP Coal terminated his employment. The CFMEU then began proceedings, claiming that the dismissal was adverse action in contravention of section 346(b) of the Fair Work Act, in particular, that it was action taken because of the fact that Mr Doevendans had engaged in industrial activity by way of:

  • participating in a lawful activity organised or promoted by a union (section 347(b)(ii)); and 
  • representing or advancing the views claims or interests of a union (section 347(b)(v)).

Under the provisions the activity doesn't have to be the sole reason, only one of the reasons (section 360). Also, it is presumed that the action taken by an employer for the prohibited reason alleged, unless the employer establishes otherwise (section 361).

The court's role is to decide why the employer took the adverse action against the employee, and, given the reverse onus, whether or not the employer has established that the operative reasons for its action did not include any of the prohibited reasons alleged.

Mr Doevendans' dismissal not for a prohibited reason

Mr Brick, the relevant decision-maker, gave evidence that he did not dismiss Mr Doevendans because he engaged in the protest or because he was representing union views. He said he was dismissed because he had used language that the employer considered contrary to its workplace culture and Code of Conduct.

The first instance judge made findings in those terms but went on to conclude, in essence, that those reasons could not be distinguished from reasons based in Mr Doevendans' participation in a lawful activity organised by a union and because he had represented and advanced the views and interests of the union. He therefore found the contravention made out.

A Full Court of the Federal Court reversed the finding. Justices Dowsett and Flick concluded that BHP Coal had not dismissed Mr Doevendans because he had engaged in industrial activity within the meaning of either section 347(b)(iii) or section 347(b)(v). In dissent, Justice Kenny concluded that BHP Coal had not proved that Mr Doevendans' representing or advancing the views of the CFMEU written on the sign was not a reason for his dismissal.

On appeal by the CFMEU from that decision, the majority of the High Court (Chief Justice French and Justice Kiefel, with Justice Gageler delivering a separate judgment agreeing in the result) said that what a Court had to do was to determine as a fact what the reasons were which motivated the employer to take the adverse action – and this was a different exercise from reaching a conclusion as to whether the adverse action was connected to industrial activity. Just because the conduct attracting the punitive action by the employer was connected to industrial activity did not mean that the punitive action was taken because the employee engaged in industrial activity. They said that once Mr Brick's reasons had been accepted as genuine (ie. that the dismissal was because of breach of the company's code of conduct), that was the end of the matter; the employer had discharged the onus to establish that the dismissal was not because Mr Dovendans had engaged in industrial activity in either of the senses alleged.

Showing the complexity of the issue, however, the two dissenting judges, Justices Hayne and Crennan, both noted that the language on the sign, albeit offensive was lawful, and held that the reasons for dismissing Mr Dovendans could not be divorced from reasons based on Mr Doevendans' lawful activity.

What does this mean for employers?

One clear result is that conduct of an employee-unionist that can be characterised as the representation or advancing of views or interests of a union is not absolutely protected. If it offends or is inimical to values that an employer requires of its employees, then an employer may well be able to take disciplinary action.

In practice however employers will still need to be cautious. As the dissenting judges argued, it can be hard to draw a bright clear line between the taking part in industrial action, and the way the employee actually takes part. They will also still have to show that the adverse action was not taken for a prohibited reason – and mere assertion won't be enough.

To minimise risk employers should ensure that:

  • Where possible, disciplinary decisions are based upon well-developed and sound policies and/or codes of conduct.
  • They ensure that the decision-maker acts on, expresses their reasons for acting and can defend their decision, by reference to those policies/codes and the values behind them, particularly in cases involving industrial activity.
  • They undertake a robust and defensible investigation process to form the basis (and evidence the objective reasons) for any decision to implement disciplinary conduct.

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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.