Australia: Because – four reasons why a simple word has confused employment lawyers for a generation

Last Updated: 16 April 2017
Article by Brian Powles

There are over 200,000 words in the Fair Work Act 2009 (Cth). It is longer than the New Testament. It is a 'plain English statute', which means most of the words are ordinary. The word 'and' is used 3,099 times, 'or' is used 5,030 times, and the word 'if' is used 1,478 times. The word 'because', used 197 times, has created significantly more controversy than any other, and has occupied Australian Unions and Employment Lawyers for probably close to a million billable hours since 2009 alone. It is a simple word, used and understood by most Australian toddlers, but its legal nuance has baffled some of Australia's great legal minds.

This is because part 3-1 of the act provides employees with 'General Protections' against unlawful harm. Specifically, employers are prohibited from adversely treating employees 'because' of certain protected types of employee conduct, or protected employee characteristics. Most notably, section 340 protects employees against adverse action 'because' they exercise rights at work, section 346 protects them against adverse action 'because' of their connection or involvement in industrial activity, and section 351 protects them against adverse action 'because' of discriminatory grounds, such as sex, gender, race, national origin, or family responsibilities etc.

Numerous aspects these provisions have received attention in the Courts, but none more than the operation of the word 'because'. There are several reasons for this. Firstly, section 360 provides that if there are multiple reasons for an action, the unlawful reason only has to be included as 'one of the reasons'. Secondly, section 361 reverses the onus, which means that once alleged, an employer must prove that the reasons did not include the alleged unlawful reason. With this enactment, Parliament have clearly intended for these protections to contain a very broad understanding of the word 'because'. Not surprisingly, employers, and subsequently courts, have pushed back. The High Court attempted a definitive statement in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 ('Barclay'). This case involved an employee who was both a manager, and a senior union official. He had been suspended for sending an email that accused a number of colleagues of serious misconduct, in falsifying records for the purposes of an audit. The allegation was made that the suspension 'because' of his union involvement, in breach of section 346. At first instance in the Federal Court, it was held that the reasons for the suspension were the misconduct only. The Full Federal Court overturned this decision, claiming that unconscious factors played a part in the decision. The High Court disagreed. In a detailed judgment, the Court addressed a number of issues, and provided us with a comprehensive statement regarding the meaning of 'because'. However, the decision is so comprehensive, it is almost unhelpful. Our state of knowledge is greatly improved by Barclay, however our understanding of 'because' has not particularly improved following this decision. Barclay is a conceptual smorgasbord, and parties now help themselves to whichever parts of the judgment that their case finds most appetising. In just about every General Protections dispute I have been involved in, Barclay has been relied upon heavily by both sides in argument. There are four key issues that have fallen from this:

  1. How significant does a reason need to be, before it is considered to be an 'included reason'?

In drafting section 360, it was the clear intention of parliament to suggest that a prohibited reason only needs to be included as one of the reasons. However, the conduct still has to be 'because' of that reason, at least to some extent. In the Explanatory Memorandum to the Act, it was explained that the pre-existing common law has been adopted, and that the reason does not have to be the 'sole or dominant' reason. It may be a 'subsidiary' reason, but it must be an 'operative or immediate' reason. In Barclay, the High Court describe this enquiry as being the thing that 'actuated' the decision. Multiple reasons can exist, but unless the prohibited reason 'actuated' the decision, there is no breach. In some ways, this adopts the traditional 'but for' test. If the reason had not been present, would the decision still have been made? Following Barclay however, the status of cumulative reasons (ie a 'the straw that breaks the camel's back'), is a little unclear. This is especially given the next major issue – whether or not an 'unconscious' reason can be unlawful.

  1. Can reasons be 'unconscious'?

A basic understanding of the human condition recognises that we don't always consciously know why we do the things that we do. From an intuitive or 'common sense' point of view, it is reasonable to presume that sub-conscious factors will have a 'substantial and operative' impact on a decision maker. However, the High Court has held that this is not the case as a question of law. The reverse onus in section 361 is of fundamental importance to this. The Court noted that the onus was on a decision maker to 'prove otherwise' once an allegation is made. As a question of logic, how can a decision maker 'prove' that they did not act for an unconscious reason? This would be an impossible burden. It follows therefore, that the notion of 'because', relates to the conscious, subjective, reasons for the decision.

But this doesn't help us when a reason is a 'straw that breaks the camel's back'. If we presume that the pre-existing load on a camel are the unconscious reasons, and the 'straw' is the conscious reason that 'actuates' the decision, then a variety of unconscious unlawful decisions contributing to the decision cannot be held to be breaches of the general protections. Conversely, if the unconscious pre-existing 'load' is lawful, but the 'straw' is a minor, unlawful reason, which on its own would not have been an 'operative' reason, then the employer will not be able to discharge the onus, and the Act will have been breached.

  1. Can a mistaken reason be unlawful, if the mistake was genuine and made in good faith?

Further difficulties arise when we recognise that the subjective reason which actuated a decision can also be made in error. In CFMEU v Anglo Coal [2015] FCAFC 157, an employee had an application for annual leave refused, because too many employees were on annual leave at the same time. The employee made threats that he would phone in sick. When the day in question came, the employee was actually sick. The employee was dismissed for dishonesty, and an allegation was made that the employee was dismissed for exercising a workplace right, in contravention of the General Protection. The majority of the Full Court of the Federal Court found that the employee was not dismissed because he exercised a workplace right. It was found that at the time of terminating the employment, Anglo Coal were not aware that he had been legitimately sick and that he was dismissed because he was dishonest and his conduct irreparably broke down the employment relationship. The court held that whilst the decision might be unjust as the employee had been legitimately sick when he took personal leave, there was no evidence that Anglo Coal had terminated the employee because he actually took personal leave.

Again, applying the 'subjectivity' principles in Barclay, we see that the court's application of the General Protections provisions is not concerned with the 'justness' of outcomes, but the motivating reasons behind the conduct of decision makers. A mistake, made in good faith, is therefore not unlawful. Analogous to the public law principles of Administrative law, it could be argued that the General Protections in practice have become less concerned with the protection of specific workers' rights, and more concerned with the lawfulness of employers' intentions when making decisions.

  1. To what extent can reasons that are related to each other, be separated in the mind of the decision maker?

By far the most challenging aspect of 'because', has proven to be the issue of the disaggregation of associated conduct. In Barclay, it was argued by the employee that it was impossible for the decision maker to separate his role in the union from the alleged misconduct. The court held that they were satisfied with the decision maker's explanation. However, in more recent cases, this determination has been more challenging.

In CFMEU v BHP Coal Pty Ltd [2014] HCA 41, the employee was involved in a protest organised by the CFMEU where he held and waved a sign that said "No principles SCABS no guts". Some employees of BHP Coal complained about the sign. The general manager of the Saraji Mine where the employee worked found the word "scab" to be "inappropriate, offensive, humiliating, harassing, intimidating, and flagrantly in violation of BHP Coal's workplace conduct policy". The employee was aware of this policy. In response, the employee was terminated.

BHP Coal argued that the decision was based on "manner" in which the employee had taken part in the protest, not because he had decided to engage in a CFMEU strike.

The primary judge disagreed, holding that because the adverse action was based on the sign which the employee held and waved, this activity must be taken as one of the reasons for the action. The High Court of Australia, by a three to two majority, found the primary judge was incorrect, and had "wrongly added a further requirement to s 361, namely that the employer dissociate its adverse action completely from any industrial activity".

A similar issue was heard in CFMEU v Endeavour Coal Pty Ltd [2015] FCAFC 76, where the employee had been employed on the weekend roster for over five years. In this time period, he had taken 15 absences, amounting to nearly 30 days. The employee was moved away from the weekend roster, which had suited the employee and been of financial benefit to him. Endeavour Coal conceded that this action was taken 'because' of the absences, but argued that this decision was purely motivated by operational reasons – as absences on the weekend shifts were much harder to rectify. The argument was that the adverse action was 'because' of the exercise of the workplace right, but not 'because it was' a workplace right. The majority of the court agreed, Bromberg J stating that a distinction could be drawn between the employee's absences, and the 'character' of those absences.

The current authorities therefore suggest that the adverse action required to ground a breach needs to be 'because' of the protected activity, and not merely that the adverse action was taken 'because' of some instance of the protected activity arising. Many people in the legal community consider that the Federal Court have gone too far in this decision. However, the High Court did not give the CFMEU leave to appeal.

Those of us that are looking for clarity around the word 'because' will therefore have to wait for the next chapter to unfold.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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