Beware — Adverse Action may result in reinstatement

In Brief

The last thing any employ­er wants is to be forced into rein­stat­ing an employ­ee after a messy gen­er­al pro­tec­tions dis­pute. Until recent­ly, most gen­er­al pro­tec­tions claims have result­ed in either the dis­missal of an employ­ee or an award of dam­ages and com­pen­sa­tion. How­ev­er the recent case of CFMEU v Pil­bara Iron Com­pa­ny (Ser­vices) Pty Ltd (No 3) [2012] FCA 697 high­lights the pos­si­bil­i­ty of rein­stat­ing employ­ees sub­ject­ed to adverse action.

Dar­ren Lam­berth (‘the Sec­ond Appli­cant’), who was a mem­ber of the CFMEU (‘the First Appli­cant’), was employed by Pil­bara (‘the Respon­dent’) under a fixed term con­tract of 12 months, but unlike most oth­ers in his posi­tion, was not offered per­ma­nent employment.

The Respon­dent was also found to have marked down his per­for­mance review from a ​“pass” in the draft assess­ment to a ​“fail” in the final assess­ment, and reject­ed his nom­i­na­tion as a Health and Safe­ty Representative.

The Fed­er­al Court reject­ed the Respon­den­t’s argu­ment that the fail­ure to extend the Sec­ond Appli­can­t’s con­tract was because of issues relat­ing to his atti­tude, com­mu­ni­ca­tion and behav­iour. The court instead agreed with the Appli­cants’ claim that the actions amount­ed to adverse action, actu­at­ed because of the Sec­ond Appli­can­t’s union mem­ber­ship, indus­tri­al activism and com­plaints and inquiries about work­place prac­tices — rea­sons which are pro­hib­it­ed by ss340 and 346 of the Fair Work Act.

In reach­ing this deci­sion, the Court applied an impor­tant ear­li­er deci­sion (cur­rent­ly before the High Court)¹, which held that in deter­min­ing whether actions tak­en by an employ­er were unlaw­ful required a deter­mi­na­tion of the actu­al rea­sons as to why the action was tak­en, rather than the rea­sons assert­ed by the employer.

The Respon­dent was ordered to offer per­ma­nent employ­ment to the Sec­ond Appli­cant, after the Court found that there was no evi­dence which sug­gest­ed that re-employ­ment was imprac­ti­ca­ble. At the time of writ­ing this arti­cle, the Court has yet to decide whether a penal­ty will be imposed on the Respondent. 

What does this mean for employers?

Employ­ers who are found to have tak­en adverse action face severe con­se­quences, includ­ing sig­nif­i­cant penal­ties and even rein­state­ment of the employ­ee. It is there­fore our view that employ­ers exer­cise extreme cau­tion to ensure that dis­ci­pli­nary actions are not linked to unlaw­ful rea­sons, includ­ing union mem­ber­ship or com­plaints made by the employ­ee. We strong­ly rec­om­mend obtain­ing pro­fes­sion advice pri­or to exer­cis­ing any dis­ci­pli­nary actions.

¹Bar­clay v The Board of Bendi­go Region­al Insti­tute of Tech­ni­cal and Fur­ther Edu­ca­tion [2011] FCAFC 14