07 December 2009

IRONY - When the Bully uses the FAIR WORK "Adverse Action" laws to obtain interlocutory injunction to stop potential dismissal

Case note: Fair work “adverse action” claim wins interlocutory injunction

Jones v Queensland Tertiary Admissions Centre Ltd [2009] FCA 1382 (25 November 2009).

Justice Collier of the Federal Court has issued an interlocutory injunction in favour of an Applicant to stop her potential dismissal.

The Applicant, Elizabeth Louise Jones, was the Chief Executive Officer of the Queensland Tertiary Admissions Centre (QTAC).

The Centre processes applications for admissions to the majority of undergraduate courses offered by universities in Queensland and also Bond University, The Australian Maritime College in Tasmania and to some courses at universities in Northern New South Wales. It also processes applications for diploma courses in Queensland Institutes of TAFE and other private providers of post-secondary education.

Ms Jones had been employed by QTAC since about 2002 without any issue being raised about her employment. From the beginning of this year, she was QTAC’s chief negotiator with the Australian Services Union (ASU) in the re-negotiation of the Enterprise Agreement governing the terms and conditions of QTAC’s employees. As a result of her involvement as the negotiator, she was the subject of a number of complaints by the ASU, named individuals and also some complaints which were made anonymously. An investigator was instructed to provide a report, and as a result of the investigator’s report, QTAC was of the belief that Ms Jones had acted in a way which amounted to “bullying or harassment of employees” (at [28]). Ms Jones claimed that the investigation instituted by QTAC into her behaviour was improper and that she was concerned, not only by the investigation, but also by the prospect that she could have her employment terminated.

In her application for an interlocutory injunction and for final relief, Ms Jones asserted that there had been various breaches of the Fair Work Act 2009 (Cth) and her contract of employment, that damages were not an adequate remedy and that on the balance of convenience an interlocutory injunction should be granted pending a final determination of her action.

Ms Jones was successful in arguing that there was a serious question to be tried in that there had been a breach on a prima facie level of the Fair Work Act. Paragraph [17] of the judgment sets out the summary of the submissions made by Ms Jones concerning the Fair Work Act. The summary reads as follows:

“[17] In summary, the case submitted by Ms Jones as to the existence of a serious question to be tried can be summarised as follows:

  • Section 340(1) of the FW Act provides that a person must not take adverse action against another person because the other person has a workplace right, or has or has not exercised a workplace right.
  • A “workplace right” means, inter alia, that a person is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body (s 341(1)(a)), or is able to initiate or participate in a process or proceedings under a workplace law or workplace instrument (s 341(1)(b)).
  • “Adverse action” is taken by an employer against an employee if, inter alia, the employer dismisses the employee, or injures the employee in his or her employment, or alters the position of the employee to the employee’s prejudice (s 342(1) Item 1). Threatening to take such action also constitutes adverse action (s 342(2)).
  • Ms Jones’ workplace right was in respect of either:
  • her role or responsibility in negotiating the Enterprise Agreement on behalf of QTAC: s 341(1)(a); or
  • her participation in the process of making an Enterprise Agreement: s 341(1)(b).
  • In relation to Ms Jones’ participation in the process of making an Enterprise Agreement:
  • Ms Jones had a role as a “bargaining representative” of QTAC for the purposes of the Enterprise Agreement negotiations;
  • so far as relevant s 176 of the FW Act provides that:

“a person is a bargaining representative of an employer that will be covered by the agreement if the employer appoints, in writing, the person as his or her bargaining representative for the agreement. (s 176(1)(d))”

  • in a letter to the ASU dated 18 July 2009, Mr McAndrew said that the QTAC Board had confirmed that Ms Jones would continue to be QTAC’s “bargaining representative”.
  • QTAC has taken, and is proposing to take, adverse action against Ms Jones because she has exercised a workplace right, in that:
  • adverse action has already been taken by QTAC in relation to the commissioning and conduct of the Carol Watson report, and informing QTAC staff of the report;
  • QTAC proposes to take adverse action in that it threatens to terminate or otherwise discipline Ms Jones because of the view QTAC takes of the Carol Watson report and the various complaints.”

The Judge did not find there was a prima facie breach of the contract of employment. However, in view of the serious question concerning the breach of the Fair Work Act, His Honour found there was a serious question to be tried and that damages would not be an adequate remedy. The Judge said (at [49]):

“Discipline of a Chief Executive Officer for allegedly creating a culture of fear or terror in the workplace, be such discipline in the form of termination of employment or otherwise, is a very serious matter. In my view, it is likely that such a course of conduct would have a detrimental effect on Ms Jones’ reputation and impose a stigma which could adversely affect her future career prospects …”

His Honour, on balance, favoured the making of the interlocutory injunction sought (at [52]) and that the difficulties that might cause QTAC in the granting of such an injunction could be ameliorated by the accelerated timetable for the hearing of the substantive issues in the proceedings (at [58]).

This case is further evidence of the various uses which some of the provisions of the Fair Work Act will be able to reveal as useful adjuncts to employment disputes even for people who are not otherwise covered by industrial instruments.


Adverse action shock

Not long after the introduction of the Keating Government's 1993 Industrial Relations Reform legislation, the then Minister, Laurie Brereton was forced into an embarrassing back down. The new unfair dismissal laws designed to protect ordinary workers from capricious dismissal was being used by senior management employees to claim hundreds of thousands of dollars in compensation. The government hastily amended the legislation to prevent the majority of employees who were considered high income earners from making a claim. An arbitrary remuneration limit of $60,000 per annum was introduced.

In what shapes up as an important test case for the legislation, a Chief Executive Officer has won a Federal Court injunction to prevent her employer terminating her employment. The CEO is arguing that the employer was proposing to terminate her employment because she exercised a "workplace right" and because she was participating in the process of making an enterprise agreement.

For many years industrial legislation has protected employees from prejudice in their employment because of their participation in union related activities or because they have insisted on their rights to minimum employment conditions. What makes the case of Jones v Queensland Tertiary Admissions Centre Ltd (QTAC) different, is that the employee has claimed that by representing her employer - not, one will note, other employees - in enterprise bargaining negotiations, she is entitled to the protection of the Act. The timing of events which led to the claim are perhaps a little unusual, but even if Ms Jones ultimately does not succeed in her action, the scope for the "adverse action" provisions of the Fair Work Act to become a heavy yoke for employers is slowly being exposed.

As CEO, Ms Jones represented QTAC in negotiations with the Australian Services Union for a new enterprise agreement. QTAC's initial attempt to put an agreement to an employee vote was thwarted by the ASU obtaining a good faith bargaining order from Fair Work Australia. During the course of subsequent negotiations, the ASU and individual employees made complaints about Ms Jones conduct, which amounted to allegations of bullying and harassment.

QTAC initiated an investigation into the CEO's conduct, as a result of which a report was produced. The findings of the report were adverse to the CEO and QTAC indicated to her that it was considering terminating her employment.

Enter Julia Gillard's "adverse action" laws. Ms Jones successfully argued that there was a serious question for the court to consider as to whether her employment was under threat because of her participation in the enterprise bargaining negotiations. QTAC argued it was acting in good faith in order to prevent further instances of bullying and harassment of the type alleged against Ms Jones, consistently with its obligations under Queensland's occupational health and safety laws.

By identifying the "timing of the allegations against Ms Jones... and the identity of the complainants, including the ASU" as factors weighing in favour of granting the injunction, the Court has left open a finding that the complaints were in fact industrially motivated. The Court recognised in its decision that if Ms Jones is ultimately successful in arguing that, as CEO, she had "workplace rights" as a consequence of the enterprise bargaining process, such a finding could have an impact on all CEO's or executives who have those responsibilities. The court has yet to make its final determination, which will occur when the case goes to trial in early 2010 and there is no suggestion that the outcome of the enterprise bargaining negotiations were themselves negative for QTAC.

Quite aside from its impact in this case, the establishment of a "workplace right" for executives simply because they are involved in enterprise bargaining will potentially hobble the ability of employers to make business decisions about executives who behave inappropriately or who handle negotiations poorly.

Ironically, the consequences of an executive's conduct might include an adverse action claim against the employer by unions or employees. Given the gusto of attacks on the apparent lack of executive accountability to shareholders, you have to wonder if that was really what was intended by the Rudd Government in making the Fair Work Act law. At some point, the Government will have to re-examine the scope of these laws. Hopefully before creative lawyers have their way with Fair Work.'

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