Fine lines blurred in adverse action applications

The ‘general protections’ provisions of the Fair Work Act 2009 (Cth) (‘FW Act’) are commonly utilised by employees to challenge employer decisions that adversely impact the employee. The attraction of the jurisdiction for applicants includes a ‘reverse onus of proof’ that requires the respondent to positively establish that the alleged unlawful reason was not an operative reason for the action. Further, an unlawful reason also need only be one of the reasons for the adverse action, not the sole or dominant reason.

In practice, however, few applications succeed. The cases have evolved such that courts are focussed on the ‘actual’ reason of the decision maker(s). Therefore, to successfully defend an application, an employer must call the decision maker(s) who can attest to their actual reasoning – devoid of any unlawful reasons. This evidence is then extensively tested – typically with extensive cross examination, competing witness evidence or contradictory documents. Where this evidence is accepted, the employee’s application must fail.

Focussing on the actual reason of the employer has led the Courts to draw a fine line between a decision made because of a protected attribute, as opposed to a decision made because of the consequence of that protected attribute. By way of example, in Construction Forestry Mining and Energy Union v Endeavour Coal Pty Ltd [2015] FCAFC 76, a Full Court of the Federal Court held that Endeavour Coal’s decision to reassign a mineworker to a less lucrative roster because of his unpredictable and unreliable attendance was not a decision made for unlawful reasons, notwithstanding that the mineworker’s unreliable attendance was (at least arguably) the consequence of his exercising his statutory right to take personal leave. Similarly, an employer who dismissed an employee when the employee took personal leave was found not to have taken adverse action because the Court accepted that the decision maker genuinely, but mistakenly, thought the employee had dishonestly taken the leave (Construction, Forestry, Mining and Energy Union v Anglo Coal Pty Ltd [2015] FCAFC 157).

Robinson v Western Union Business Solutions

The recent Federal Court decision of Robinson v Western Union Business Solutions (Australia) Pty Limited [2018] FCA 1913, highlights that the distinction between a decision made because of a protected attribute or reasons, and the effect of the reason or attribute, is a fine and often precarious one.

In that case, which is subject to an appeal to be heard in May, the Federal Court did not accept there was a separation between the reason for the employer’s action and the manifestations of that reason. The Court held that the stated reason of the termination (the employee’s incapacity to return to work) could not be ‘severed’ from the unlawful attribute (the employee’s disability).

Background

David Robinson was employed as a Client Executive with Western Union Business Solutions (Australia) Pty Ltd (‘Western Union’) in 2013. In September 2016, Mr Robinson commenced a period of sick leave citing work-related stress and depression. Between September 2016 and January 2017, he produced medical certificates from his treating practitioner in support of his ongoing absence. Between October 2016 and April 2017, he also provided numerous Work Cover Certificates stating that he had a ‘psychiatric condition’ and ‘no current work capacity for any employment’.

From October 2016, Western Union began asking Mr Robinson about his anticipated return to work date, and from late January 2017, requested on at least six separate occasions that he attend an independent medical examination (‘IME’).

Throughout January to March 2017, Mr Robinson repeatedly refused to attend an IME, citing his ongoing illness and/or the confirmation of his incapacity previously provided by his own doctors. On 13 March 2017, a member of Western Union’s HR Team again wrote to Mr Robinson directing him to attend an IME and advising ‘[w]e are obtaining dates and times of [the IME’s] availability. We will then advise you and ask that you nominate a suitable time. We will then confirm the appointment with you and [the IME].’ As a result of administrative oversight, Western Union did not advise Mr Robinson of the IME’s availability.

On 8 May 2017, Western Union terminated Mr Robinson’s employment. Relevantly, the letter of termination read as follows:

‘Given that you cannot give any indication as to when you will return to work, your unreasonable failure to cooperate with the Company’s attempts to obtain up-to-date, specialist medical advice and in light of the Company’s serious concerns about your capacity to return to work, the company has decided to terminate your employment.’

Mr Robinson commenced proceedings in the Federal Court, alleging that Western Union had contravened s 351 of the FW Act by dismissing him because of his mental disability (‘General Protections Claim’). He also argued that Western Union engaged in ‘unconscionable conduct’ in contravention of the Competition and Consumer Act 2010 when it terminated his employment after indicating that it would first provide him with a further opportunity to attend a medical assessment (‘CCA Claim’).

The General Protections claim

Mr Robinson alleged that Western Union had contravened s 351 of the FW Act, which relevantly provides:

‘ (1) An employer must not take adverse action against a person who is an employee … of the employer because of the person’s … physical or mental disability …

(2) However, subsection (1) does not apply to action that is:

…

(b) taken because of the inherent requirements of the particular position concerned …’

Justice Flick recited the well-established proposition that adverse action will have been taken ‘because of’ a particular reason if the reasons for the action included that reason. See, e.g, Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32, (2012) 248 CLR 500 at 534.

His Honour observed that, based on the termination letter and the evidence before him, Western Union’s reasons for terminating Mr Robinson’s employment were two-fold:

• Mr Robinson’s failure to comply with lawful directions to attend an IME; and
• Western Union’s concerns about his capacity to return to work.

Whilst the lawfulness of the first of these reasons was not in dispute, the lawfulness of the second was a point of some contention.

Despite accepting the genuineness of the decision maker’s evidence that she did not terminate Mr Robinson’s employment because he suffered a mental disability, Flick J concluded that ‘no distinction can be drawn … between [Mr Robinson’s] “capacity” to return to work and his mental disability’ (at [39]). As a consequence, he held that by dismissing Mr Robinson because of concerns about his capacity, Western Union had dismissed Mr Robinson because of his disability. The disability – being the psychiatric condition – formed part of the decision-making process when concerns were expressed about Mr Robinson’s capacity to return to work. In reaching this conclusion, Justice Flick relied heavily on the decision of Katzmann J in Shizas v Commissioner of Police [2017] FCA 61, (2017) 268 IR 71, where her Honour reasoned that the ‘manifestations’ of a disability could not be severed from the disability itself.

Justice Flick further held that Western Union could not rely on the ‘inherent requirements’ defence contained in s 351(2) as, by its own admission, Western Union had not made a decision as to the actual capacity of Mr Robinson to perform the inherent requirements of his role. At its highest, Western Union had only concerns about Mr Robinson’s capacity. His Honour therefore observed that the difficulties associated with defining precisely the limits of what constitutes the ‘inherent requirements’ of a position did not need to be resolved.

Justice Flick ordered that Western Union pay Mr Robinson an amount of $160,000, comprised of $125,000 for economic loss, $15,000 for general damages, and $20,000 by way of pecuniary penalty.

The Competition and Consumer Act claim

Justice Flick dismissed the CCA claim, observing that, ‘as a matter of general principle, neither:

• the termination of an employee’s contract of employment generally; nor
• the termination of a contract of employment contrary to… “procedural fairness”,

could be properly characterised as an act of a corporate employer engaged in “trade or commerce”’ (at [74]).

Flick J also remarked he would have had some difficulty accepting that Western Union’s conduct could be characterised as ‘unconscionable’ in circumstances where its failure to provide Mr Robinson with a further opportunity to attend an IME was properly characterised as a ‘misstep’, rather than any attempt by Western Union to take some ‘unconscientious advantage’ of Mr Robinson.

Implications of the decision

As noted above, the federal judiciary had seemingly recognised a distinction between adverse action taken because of a protected right/attribute, and that which was taken because of the consequence of that protected right/attribute (with only the former being considered to be unlawful). However, the decision of Justice Flick (and Justice Katzmann in Shizas before him), highlights the inherent difficulty in differentiating between a disability and the consequences of that disability.

The fine lines that are often relied upon by an employer when defending an adverse action claim appear to be blurred. The decision challenges the distinction relied upon by many employers in defending these matters between a protected right or attribute and the manifestations of that protected right or attribute. The Full Court appeal this May, will further clarify the law in this frequently utilised jurisdiction.

*Corrs Chambers Westgarth is acting for Western Union in this matter.

Jack de Flamingh is a partner and Hannah Peters is a lawyer, both at Corrs Chambers Westgarth.