The Federal Court of Australia handed down two judgments in early 2014 where employee applicants unsuccessfully alleged that section 340(1) of the Fair Work Act 2009 (Cth) (‘the Act’) had been breached by their employers. Section 340(1) of the Act prohibits an employer from taking adverse action against an employee because the employee has exercised a workplace right. Section 341(1)(c)(ii) provides that a person has a workplace right if the person is able to make a complaint in relation to his or her employment.
Adverse action is defined in section 342(1) of the Act to include action by an employer against an employee which:
- dismiss the employee;
- injures the employee in his or her employment;
- alters the position of the employee to the employee’s prejudice; or
- discriminates between the employee and other employees of the employer.
Under section 36 of the Act an allegation that adverse action was taken because of the exercise of a workplace right is presumed to be made out unless the person accused of taking that adverse action proves otherwise.
The Rowland Case
In Rowland v Alfred Health [2014] FCA 2 (‘the Rowland case’) Mr Michal Rowland was an experienced and highly competent cardiothoracic and transplant consultant surgeon who from August 2001 until August 2011 had worked for Alfred Health and its predecessor bodies. After a “spill and fill” restructure exercise undertaken by Alfred Health in 2010/2011, Alfred Health made Mr Rowland’s position redundant. Mr Rowland contended that the restructure of the Cardiothoracic Unit (‘the Unit’) at the Alfred Hospital was directed at him and arose out of the recommendations of an internal panel set up to investigate a complaint that he and another employee (Mr Negri) made against the Director of the Unit, Professor Donald Esmore. In fact in the ten years Mr Rowland was employed by Alfred Health he made six complaints in relation to his employment each of which was alleged to constitute the exercise of a workplace right by Mr Rowland. Counsel for Mr Rowland argued that the decision to terminate Mr Rowland on the ground of redundancy cannot be severed from the reasons of Alfred Health in deciding to undertake the restructure and the restructure was a response to the exercise by Mr Rowland of a workplace right to make complaints in relation to employment.
The Federal Court had two key issues on which to adjudicate namely:
- Was the decision to restructure the Unit adverse action under s342(1) of the Act?; and
- Was adverse action taken against Mr Rowland because he exercised a workplace right?
The Restructure
Alfred Health argued that the decision to restructure did not constitute adverse action with respect to Mr Rowland as the decision to restructure the Unit involved non-discriminatory action in which all consultants subject to the restructure were in the same position of having to apply for a position in the Unit. The Federal Court did not accept that submission and found that the decision to restructure the Unit constituted adverse action against all employees whose employment was put at risk by the “spill and fill” process and Mr Rowland was one such employee.
Did Alfred Health take adverse action against Mr Rowland?
Alfred Health submitted that the restructure was designed to address problems hindering the efficient working of the Unit. The final complaint made by Mr Rowland (together with Mr Negri) led to the appointment of an internal Alfred Health panel to investigate their claims. The panel produced a report in late 2010 finding that the Unit was dysfunctional and in turmoil and recommended that Alfred Health should restructure and reorganise the Unit. Specifically the report provided that in the committee’s view “… Alfred Health should seriously consider whether all consultant positions in the Unit should be declared vacant and that positions be advertised.” The Court found that given the report it would have been negligent for Alfred Health to ignore the problems in the Unit.
Alfred Health also led evidence that Mr Rowland interviewed very poorly, he lacked enthusiasm for research or training, he was not pro-active in thinking about the future of the Unit, his ability to work effectively in a team environment was questionable and his skill set was not as strong as that of most other candidates.
As such the Court found that Alfred Health had discharged its onus of proving that, in deciding to restructure the Unit, the substantial and operative reasons for that restructure did not include the fact that Mr Rowland had made a number of workplace complaints. The Court found that “Mr Rowland sowed the seeds of his own redundancy by perceiving that the selection process was targeted at him. That the outcome eventuated does not prove that Alfred Health conspired against him to achieve it”.
The Short Case
In Short v Ambulance Victoria [2014] FCA3 (‘the Short case’) Mr Darren Short’s employment as a paramedic with Ambulance Victoria was terminated in July 2011. At that time, Mr Short was employed as a qualified ambulance paramedic at the Lakes Entrance branch of Ambulance Victoria. Mr Short contended that in terminating his employment Ambulance Victoria contravened section 340(1) of the Act by taking adverse action against him because he “vigorously” exercised his workplace rights by making inquiries and/or complaints in relation to his employment. Mr Short also submitted that Ambulance Victoria took adverse action against him by:
- refusing to allow him to perform higher duties;
- issuing a formal warning; and
- standing him down.
Further Mr Short made associated claims of discrimination by Ambulance Victoria contrary to section 351(1) of the Act on the basis of his alleged mental disability and breach of the implied term of mutual trust and confidence in his contract of employment.
In relation to the issue of refusal of higher duties Mr Short alleged that Ambulance Victoria took adverse action against him by refusing to permit him to perform higher duties because Mr Short made a complaint or inquiry in relation to his employment. However Ambulance Victoria successfully led evidence that in the months before the opportunity to perform higher duties arose, Mr Short was on sick leave suffering from a stress related condition and it would not have been wise to place him in a stressful role on his return and further Mr Short had in the past often exhibited ‘explosive’ behaviour and his communication style was a problem. Similarly the Federal Court found that Mr Short’s claim of discrimination was not made out as he was not rejected from performing higher duties because of any mental disability but rather because Ambulance Victoria considered he needed more time to recover before taking on a stressful role that might aggravate his condition.
In issuing the formal warning the Court found that whilst this amounted to adverse action the issue was whether the complaints made by Mr Short prior to the warning were an operative factor. The Court held it was not as the formal warning related to the unacceptable behaviour of Mr Short towards people performing supervisory or management roles and for no other reason. Further the Court rejected Mr Short’s contention that Ambulance Victoria breached the implied term of trust and confidence as the warning was issued with reasonable and proper cause. The Court also found that the reason Mr Short’s employment was terminated was because of his ‘unprovoked and unreasonable personal attack’ on his Team Manager. As such the Federal Court determined that no aspect of Mr Short’s claims were made out and dismissed his application.
Lessons for Employers concerning discharging the onus in adverse action claims
The Rowland case and the Short case should provide a degree of comfort to employers concerned with the reach of adverse action provisions of the Act and particularly the onus on the employer to discharge the presumption that an allegation of adverse action was taken because of the exercise of a workplace right.
The decisions in the Rowland and Short cases discredit the view that any complaint by any employee will result in orders against the employer for breach of the adverse action provisions of the Act where there is direct evidence to the contrary.
For further information in or any queries in relation to adverse action claims please contact Michael Bishop or Amelita Hensman of our office on 03 9614 7707.
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