News & Events

High Court majority applies Barclay decision to find “scab sign” dismissal was lawful

Submitted By Firm: Corrs Chambers Westgarth

Contact(s): John Tuck

Author(s):

By Nicholas Ellery (Partner) & Anthony Forsyth (Consultant)

Date Published: 10/16/2014

Article Type:

Share This:

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 Australia[2] 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.

[1] See article here.

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

[3] BHP 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].

Find a Member

View or print a complete ELA member list »

Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

Stephen HirschfeldAs an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld
Partner 

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

We have direct sales and service offices all over the U.S., but have not necessarily had the need in the past for assistance with legal work in every state where we have a business presence. From time to time, we suddenly find ourselves facing a legal issue in a state where we have no outside counsel relationship. It has been a real benefit to know that the ELA has assembled such an impressive team of experts throughout the U.S. and overseas.

A few years ago, we faced a very tough discrimination lawsuit in Mississippi. We had never had to retain a lawyer there before. I was absolutely delighted with the Mississippi ELA firm. We received an excellent result. They will no doubt handle all of our employment law matters in Mississippi in the future. I have also obtained the assistance of several other ELA firms around the U.S. and have received the same outstanding service. The ELA is a tremendous resource for our company.

Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

Elizabeth Daly
Assistant General Counsel

Sanmina-SCI

Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.

Starwood

We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel