Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41

HIGH COURT OF AUSTRALIA

FRENCH CJ, HAYNE, CRENNAN, KIEFEL AND GAGELER JJ

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION APPELLANT

AND

BHP COAL PTY LTD RESPONDENT

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41 16 October 2014 B23/2014

ORDER

Appeal dismissed.

On appeal from the Federal Court of Australia

Representation

H Borenstein QC with C M Howell for the appellant (instructed by Hall Payne Lawyers)

B W Walker SC with I M Neil SC and R P P Dalton for the respondent (instructed by Ashurst Australia)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd

Industrial law (Cth) – General protections – Adverse action – Section 346(b) of Fair Work Act 2009 (Cth) prohibits employer from taking adverse action against employee because employee engages in industrial activity or has engaged in industrial activity – Where appellant was industrial association – Where member of appellant engaged in industrial activity – Where officer of respondent employer took adverse action against member – Where officer gave evidence at trial that adverse action not taken for prohibited reasons – Whether adverse action taken for prohibited reason.

Words and phrases – "because", "engages in industrial activity", "prohibited reason".

Fair Work Act 2009 (Cth), ss 346(b), 347(b)(iii), 347(b)(v), 360, 361.

FRENCH CJ AND KIEFEL J. This appeal concerns the termination of the employment of an employee of the respondent ("BHP Coal") at the Saraji Mine, and whether that termination was an action taken for a reason which is prohibited by the Fair Work Act 2009 (Cth) ("the Act"). The employee in question, Mr Doevendans, was a member of the appellant ("the CFMEU"), an industrial association. Some months prior to the termination of his employment he had participated in a protest organised by the CFMEU, which was a lawful activity within the meaning of s 347(b)(iii) of the Act. In the course of that protest he held and waved a sign at passing motorists, which had been supplied by the CFMEU, and which read "No principles SCABS No guts". The general manager of the Saraji Mine, Mr Brick, gave evidence before the Federal Court of Australia as to why Mr Doevendans' employment had been terminated. The primary judge in the Federal Court, Jessup J, detailed this evidence in his reasons. His Honour then made findings, under the heading "The Reasons for Mr Doevendans' Dismissal". His Honour accepted the reasons given by Mr Brick for his action. Those reasons may be summarised as follows: the word "scab", which appeared on the sign Mr Doevendans held up and waved, was inappropriate, offensive, humiliating, harassing, intimidating, and flagrantly in violation of BHP Coal's workplace conduct policy (that policy required courtesy and respect to be accorded to fellow employees); Mr Doevendans was well aware of the policy; Mr Doevendans demonstrated arrogance when confronted with the objections to his conduct; and Mr Brick regarded the conduct as not only contrary to the policy, but antagonistic to the culture that Mr Brick was endeavouring to develop at the mine. His Honour added that the decision to terminate Mr Doevendans' employment was "not a spur-of-the-moment reaction", but one arrived at by Mr Brick over time and after a systematic consideration of the facts. His Honour did not find that the mere fact that Mr Doevendans had held and waved the sign was one of Mr Brick's reasons for terminating the employment. Mr Brick's reasons had to do with the nature of Mr Doevendans' conduct. His Honour accepted Mr Brick's evidence that the fact that Mr Doevendans occupied certain positions within the CFMEU, and had engaged in industrial activity, did not play any part in Mr Brick's decision. Section 346(b) appears in Pt 3-1 of Ch 3 of the Act. It prohibits a person taking "adverse action" against another person "because" the other person has engaged in industrial activity within the meaning of s 347(a) or (b). "Adverse action" includes dismissal (s 342(1), Item (1)(a)). Section 347(b) relevantly provides that a person "engages in industrial activity" if the person: (iii) participates in a lawful activity organised by an industrial association; or (v) represents or advances the views or interests of an industrial association. Section 346 directs attention to the reason why a person – here Mr Brick – took the adverse action. If there were multiple reasons, s 360 provides that "a person takes action for a particular reason if the reasons for the action include that reason." Section 361 provides that if it is alleged that a person took action for a particular reason, being a prohibited reason, it is presumed that the action was taken for that reason unless the person proves otherwise. Section 361 therefore places the onus on BHP Coal to prove that a reason for the adverse action was not one of the two prohibited reasons in s 347(b)(iii) and (v). Central to the operation of s 361 is a balance between employers and employees determined by the legislature. The focus of the enquiry as to whether s 346(b) has been contravened is upon the reasons for Mr Brick taking the adverse action. This is evident from the word "because" in s 346, and from the terms of s 361. The enquiry involves a search for the reasoning actually employed by Mr Brick. The determination to be made by the court is one of fact, taking account of all the facts and circumstances of the case and available inferences. In Board of Bendigo Regional Institute of Technical and Further Education v Barclay [No 1], French CJ and Crennan J observed that it would ordinarily be difficult for an employer who has taken adverse action to discharge the onus of proof in s 361 without calling direct evidence from the decision-maker as to his or her reasons. The court is not obliged to accept such evidence. It may be unreliable for a number of reasons. For example, other objective evidence may contradict it. However, s 346 does not involve an objective test. In Bendigo, Gummow and Hayne JJ explained that it is misleading to use the terms "objective" or "subjective" to describe the enquiry in s 346. To speak of objectively ascertained reasons risks the substitution by the court of its own view, rather than making a finding of fact as to the true reason of the decision-maker. None of the reasons given by Mr Brick, and accepted by the primary judge as true in fact, was a reason prohibited by s 346(b). Mr Brick did not dismiss Mr Doevendans because he participated in the lawful activity of a protest organised by the CFMEU (s 347(b)(iii)), nor did he dismiss Mr Doevendans because, in carrying and waving the sign, Mr Doevendans was representing or advancing the views or interests of the CFMEU (s 347(b)(v)), as the CFMEU alleged. Mr Brick's reasons related to the content of Mr Doevendans' communications with his fellow employees, the way in which he made those communications and what that conveyed about him as an employee. Mr Brick's reasons included his concern that Mr Doevendans could not or would not comply with the standards of behaviour which Mr Brick was attempting to instil in employees at the mine. The CFMEU submitted before the primary judge that it was to be inferred that Mr Brick was in fact motivated by these prohibited reasons rather than the reasons he gave. His Honour rejected the submission. Despite the findings referred to above, the primary judge concluded that s 346(b) had been contravened in two respects. His Honour held that Mr Doevendans' conduct in holding and waving the sign was, for the purposes of s 347(b)(iii), conduct by way of participation in a lawful activity organised by an industrial association. His Honour said: "Since a reason for his dismissal was that he did so hold and wave the sign, it follows that his dismissal was done in contravention of s 346(b)". His Honour also determined that holding and waving the sign could be characterised as representing or advancing the views and interests of an industrial association, for the purposes of s 347(b)(v). His Honour again concluded: "Since he was dismissed for that conduct, it follows that the dismissal was done in contravention of s 346(b)". In the Full Court, Dowsett and Flick JJ considered that these conclusions were not based on the factual enquiry as to the reasons for the adverse action required by s 346(b), and which Bendigo confirmed as the correct enquiry. Dowsett J also expressed the view that the primary judge's finding that the employee's engagement in industrial activity played no part in Mr Brick's decision-making process disposed of the matter. Kenny J agreed that the primary judge was in error in considering that Mr Doevendans was dismissed because he participated in a lawful activity organised by the CFMEU. Her Honour pointed out that this Court in Bendigo rejected the proposition that an employer must establish that the reasons for the adverse action were entirely dissociated from the employee's union activities, in order to discharge the onus of proof. Her Honour added that an employee's activity is not insulated from adverse action by an employer because it happens to be done in the course of an otherwise lawful industrial activity. Kenny J did not, however, consider that the primary judge was in error in concluding that Mr Doevendans was dismissed for representing or advancing the views or interests of the CFMEU, which was the second alleged ground for the contravention of s 346(b). The difficulty with this conclusion is that the primary judge's reasoning with respect to each of the two alleged grounds for contravention proceeded from the same premise. That is, it is a necessary inference from his Honour's reasons that, if the adverse action (the termination of employment) was connected to an industrial activity, it must be taken to be a reason for the adverse action. That reasoning is incorrect for the reasons Kenny J identified with respect to the first alleged ground for contravention. The reasoning of the primary judge is analogous to that of the majority of the Full Court of the Federal Court in Bendigo, which this Court held to be incorrect. In Bendigo, an employee, who was an officer of an industrial association, sent an email to other employees who were also members of the association. In the email, he warned them not to participate in the creation of false or fraudulent documents for the purposes of an audit being conducted of the employer Institute, the implication being that such fraudulent conduct was taking place. The Chief Executive Officer of the Institute suspended the employee and required him to show cause why he should not be subject to disciplinary action for serious misconduct. In evidence to the Federal Court, she explained her motivations for this action by saying that the employee had made serious allegations in the email without first having made any report or complaint to senior management about the alleged conduct. The primary judge accepted the Chief Executive Officer's evidence and found that the adverse action taken by her was not actuated by any reason associated with the employee's position as an officer of the industrial association, or his engagement in industrial activity. On appeal, a majority of the Full Court of the Federal Court reasoned that, because the sending of the email amounted to engagement in an industrial activity, and because the employer's adverse action was consequent upon the sending of the email, it necessarily followed that a reason why the adverse action was taken was that the employee was an officer of the industrial association and had engaged in industrial activity. It is to be inferred that the majority considered that, so long as there was a connection between the industrial activity and the adverse action, it followed that the adverse action contravened s 346(b). Lander J, in dissent, held that a contravention is not made out simply by establishing that adverse action was taken whilst the union official was engaged in industrial activity; which is to say, by a temporal connection between the two. Section 346 does not direct a court to enquire whether the adverse action can be characterised as connected with the industrial activities which are protected by the Act. It requires a determination of fact as to the reasons which motivated the person who took the adverse action. In Bendigo, French CJ and Crennan J pointed out that it is erroneous to treat the onus imposed on the employer by s 361 as being heavier, or different, if adverse action is taken while an employee happens to be engaged in industrial activity. Their Honours said that it is incorrect to conclude that, because the employee's union position and activities were inextricably entwined with the adverse action, the employee was therefore immune, and protected, from the adverse action. Such an approach would destroy the balance between employers and employees which the Act seeks to attain and which is central to s 361. In the present case, the reasons found by the primary judge to actuate Mr Brick's decision did not include Mr Doevendans' participation in industrial activity, or his representing the views of the CFMEU. To the contrary, his Honour found that Mr Brick had not been motivated by such considerations. This was consistent with the reasons given by Mr Brick in evidence accepted by his Honour, which related to the nature of Mr Doevendans' conduct and what it represented to Mr Brick about Mr Doevendans as an employee. The primary judge then went on to consider whether Mr Doevendans' conduct constituted an industrial activity in the relevant respects. The only inference which can be drawn from this additional reasoning is that, because the adverse action was based upon the sign which Mr Doevendans held and waved, this activity must be taken as one of the reasons for the action. That is to say no more than that the adverse action had a connection, in fact, to the industrial activity. That connection may necessitate some consideration as to the true motivations of Mr Brick, but it cannot itself provide the reason why Mr Brick took the action he did. That enquiry was concluded by his Honour's earlier findings. His Honour, in effect, wrongly added a further requirement to s 361, namely that the employer dissociate its adverse action completely from any industrial activity. The appeal should be dismissed.