Australia: The Esselte Case And The Reverse Onus Of Proof In Unlawful Termination Claims

The dismissal of Mr Rojas came about as a result of several allegations against Mr Rojas which occurred during a period of protected industrial action conducted at Esselte's site at Minto.

These allegations included that Mr Rojas:

  • encouraged another employee, Mr Sharma, not to enter the site and made rude and offensive comments and gestures to Mr Sharma in respect of his entry into the site
  • blocked entry, or caused entry to be blocked, into the site in respect of another employee, Mr Simmonds, and made offensive comments to Mr Simmonds in respect of his entry into the site
  • personally blocked access to the site by vehicles trying to enter the site by standing across the entry to the site
  • conducted, or caused to be conducted, a letter drop of a document entitled "Do You Know Your Neighbour?" to the residential mailboxes of the neighbours of the site's Warehouse Distribution Manager, Mr Reidy, containing defamatory statements regarding Mr Reidy.

Esselte alleged that the above conduct constituted serious misconduct and requested Mr Rojas's response to the allegations in two letters sent to him dated 19 June 2007 and 21 June 2007 respectively. Answering on behalf of Mr Rojas in a letter dated 22 June 2007, the NUW denied the allegations as unfounded and lacking in specifics, and gave an alibi for Mr Rojas in respect of the letter drop allegations.

No further action was taken by Esselte in respect of the allegations until after the industrial action ended on 4 September 2007. The following day, Mr Rojas was suspended with full pay for the purposes of Esselte carrying out an investigation into the allegations against him.

On 10 September 2007, Mr Rojas was called to a meeting with the managers of the Minto site. At this meeting, Mr Rojas admitted a verbal altercation with Mr Sharma and offered to apologise, but denied any incidents with Mr Simmonds, including a further allegation by Mr Simmonds that Mr Rojas had threatened to fight him. The letter drop incident was not raised by Esselte in this meeting.

Two days later, on 12 September 2008, Mr Rojas was informed that his employment had been terminated.

Findings of the Court

In making its decision, the Court restated the principle that, in the instances of unlawful termination, the burden of proof is shifted to the employer to establish, on the balance of probabilities, that the employment of the applicant was not terminated for an unlawful reason, or reasons that include an unlawful reason.

In this instance, Esselte failed to satisfy that burden because it failed to satisfy the Court that the dismissal was for the stated reason, being the serious misconduct of Mr Rojas. As a result of the circumstances, the Court found that it was far more likely that, in the absence of serious misconduct, the dismissal was for an unlawful reason relating to Mr Rojas' standing as a NUW delegate. The Court formed this view on the basis of many reasons, but predominantly because:

  • the facts indicated that other individuals, who were not employees, had manned the picket line and prevented vehicles from entering or leaving and there was no direct evidence other than that of Mr Simmonds' that Mr Rojas had personally engaged in such conduct
  • Mr Simmonds was an unreliable witness whose version of events was not credible, and the evidence indicated that the management of Esselte was at least in part aware of this before making the decision to dismiss Mr Rojas
  • the delay between the allegations against Mr Rojas in June 2007 (including those in relation to Mr Sharma, which Mr Rojas admitted were true and in respect of which he offered to apologise to Mr Sharma) and the decision of Esselte not to deal with the allegations until September 2007 when the industrial action was over was indicative of an effort to dismiss an individual who was at the centre of "a bitter and protracted industrial dispute" by virtue of his role as an NUW delegate, and counterintuitive to a belief that Mr Rojas had engaged in serious and wilful misconduct that would justify dismissal.

Accordingly, as Esselte had failed to make out the serious misconduct, the Court determined that Mr Rojas's dismissal had been for reasons including the reason that he was the NUW delegate at the Minto site. Esselte was ordered to reinstate Mr Rojas, pay backpay to Mr Rojas for the period of lost wages between his dismissal and interim reinstatement, and ordered a penalty of $12,000 be paid by Esselte into consolidated revenue.

Lessons for Employers

So what can be learned by this case? There would seem to be a number of issues that would be applicable to other workplaces where there is a Union presence, but also in relation to claims for unlawful termination generally.

First, a time of industrial action is not an excuse for delay in taking action in respect of allegations of serious misconduct by one employee against another. If the conduct truly is serious misconduct warranting dismissal, then the employer needs to act on that basis or risk the Court regarding a delay as an indication that the conduct was not so serious as to warrant dismissal, and thus infer that any dismissal was for another reason.

Second, in a time of lawful industrial action it is possible that third parties, who are not bound by the restrictions in the orders of the Australian Industrial Relations Commission in relation to lawful industrial action, may also picket the workplace and engage in activity that would otherwise be unlawful industrial action if they were bound by the order of the Commission. If it is alleged that actual employees are also engaging in this activity, clear evidence will be required to establish this and it will not be sufficient to group the activities of the third parties and employees into one course of conduct.

Third, and most importantly, the implications of the reverse onus of proof in unlawful terminations means that employers should have very clear evidence to dispel any implication that the dismissal was for an unlawful reason, or reasons including an unlawful reason. In this case, the dismissed employee was a high risk for an unlawful termination claim due to the circumstances – he was a union member and delegate; he had been involved in lawful industrial action and in fact had led that industrial action; and he had been involved in the failed negotiations for a new collective agreement leading to the industrial action. Given these factors, Esselte was always going to face a significant hurdle in proving that the dismissal of Mr Rojas was not for an unlawful reason. Yet it did not conduct a full investigation into the allegations, it relied on testimony from a witness it strongly suspected was unreliable, and the only admitted misconduct by Mr Rojas was not conduct warranting dismissal.

This case neatly highlights the importance of properly managing serious misconduct allegations, particularly in circumstances where a reverse onus of proof is likely to be applied. Employers should not delay in acting on serious misconduct allegations, and should always take care to appreciate the potential for an unlawful termination claim and the extra burden this will place on the employer in any litigation. Finally, if a decision to dismiss is to be made, the employer should ensure that its evidence sustaining the decision is credible.

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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