Construction, Forestry, Mining and Energy Union & Anor v Anglo Coal (Dawson Services) Pty Ltd

[2016] HCATrans 142

[2016] HCATrans 142

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B71 of 2015

B e t w e e n -

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

First Applicant

STEPHEN BYRNE

Second Applicant

and

ANGLO COAL (DAWSON SERVICES) PTY LTD

Respondent

Application for special leave to appeal

FRENCH CJ
GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 17 JUNE 2016, AT 9.32 AM

Copyright in the High Court of Australia

MR H. BORENSTEIN, QC:   If the Court pleases, I appear with MR E.P.WHITE for the applicants.  (instructed by Hall Payne Lawyers)

MR I.M. NEIL, SC:   If the Court pleases, I appear with my learned friend, MR A.W. DUFFY, QC, for the respondent.  (instructed by Ashurst Australia)

FRENCH CJ:   Yes, Mr Borenstein.

MR BORENSTEIN:   Your Honours will have seen from our summary of argument that essentially we seek to raise two special leave grounds.  One relates to the aspect of this case that arises under the Fair Work Act and the other one arises under the contract of employment.  In relation to the special leave questions that we say arise under the Fair Work Act, they can be encapsulated in the proposition that whether it is permissible for an employer to escape liability for taking adverse action under the Fair Work Act in reliance on a refusal to believe an employee’s claim of exercise of a protected workplace right.

FRENCH CJ:   You use the words “refusal to believe” - and I notice that in your submissions - as though that is some sort of wilful turning of a blind eye - he did not believe.

MR BORENSTEIN:   Well, he did not believe him.  He did not believe him for a range of reasons.  We do not shy away from that, your Honour, but what we say – the important matter that we say this case exposes is that on the evidence as found by the trial judge Mr Byrne was sick and was, in fact, entitled to exercise a right to take sick leave and did that.  What happened was that when he came back to work, presented his evidence of sickness, Mr Power did not believe it.  Indeed, there was no evidence that Mr Power did anything to check with the doctor who he did not believe.

FRENCH CJ:   But all this fed into, did it not, a characterisation of the reason for the action?

MR BORENSTEIN:   No, your Honour, with respect, we say that this is not a characterisation case.  It is to be distinguished from the earlier cases where, for example, in Barclay, the email sent by the union official was said by the applicant in that case to be industrial activity and the employer said, no, it is misconduct because you have spread innuendos about the operations of the institute.

In BHP Coal, Mr Doevendans, the man at the demonstration with the sign, said I am participating in a protected union activity and the employer said, but we take issue with the sign and we say the sign offends our managerial policy about human relations and so on.  Here, there is no question, when you look at what happened, that Mr Byrne was taking sick leave, a protected activity, and the employer does not say, we are recharacterising that leave as something else.

FRENCH CJ:   Well, the employer thought he was being dishonest.

MR BORENSTEIN:   Exactly.

FRENCH CJ:   That is the reason for the action, is it not?

MR BORENSTEIN:   That is so, but, your Honour ‑ ‑ ‑

FRENCH CJ:   There was some basis for that in the way that ‑ ‑ ‑

MR BORENSTEIN:   Well, there was some anterior basis for that and also there was history with Mr Power.  He gives evidence of his experiences previously where people can procure doctor’s certificates when they are not genuine and so on, so he brought a mindset to the task.  But at the end of the day, there was an exercise of a workplace right and the reason why it was not acknowledged by the employer was that the employer simply said, I do not believe you or I regard it ‑ and the corollary of that, of course, is that I do not believe it is genuine but our question here is whether an employer should be able to avoid liability when on the facts ‑ ‑ ‑

FRENCH CJ:   Well, is that the right question?  Is not the question whether the employer should be liable?

MR BORENSTEIN:   Well, your Honour, in the outline at application book 125 we have produced some extracts from the Fair Work Act and at page 125 we have produced section 336 which contains the objects of the part.  Now, that is a guide to how the Court should interpret the operation of the subsequent substantive provisions.  Your Honour will see there that the objects of the part are in subsection (1)(a):

to protect workplace rights –

that means taking sick leave, for example, and in (b)(iii):

free to participate, or not participate, in lawful industrial activities –

that does not apply here, (d):

to provide effective relief for persons who have been discriminated against, victimised or otherwise adversely affected as a result of contraventions of this Part.

The objects of the part are principally to protect workplace rights.  It is remedial legislation.  The primary function as described in the objects is to ensure that people can exercise the rights which the sections protect.  Mr Byrne had a right to take his leave.  It was a right to take his leave under an agreement that had been made with the employer.

FRENCH CJ:   The question is whether the employer acted in a way that was in contravention of the Act.

MR BORENSTEIN:   Yes, and in answering that we would submit that the Court has to have regard to the fact that the primary function of this part of the Act is to ensure that people like Mr Byrne can exercise their workplace rights and if they are not to be allowed to exercise them there needs to be some proper basis for precluding it. 

Now, in the two earlier cases the court held that the employer was entitled to recharacterise ‑ it is probably a provocative term but it is the term that seems to be used ‑ to recharacterise aspects of the industrial activity.  Here, there is no recharacterisation, there is just, I do not believe you, I think you are cheating.

FRENCH CJ:   It was a question in each case of what was the employer acting upon.

MR BORENSTEIN:   Well, if we come to that, what we have here is we have a discussion between Mr Byrne and one of the other supervisors prior to the leave, saying he wants to take annual leave, and your Honours have seen that obviously, and then when he is told he cannot, he said, well, I will get a sick certificate.  We understand the problems about that.

But then subsequently he does get sick and he does get the certificate and it is found that he was genuinely sick and it was a genuine certificate and he presents it.  Now, when he comes to present it, there is no evidence that the employer said, well, I am dubious about this.  You have made all these comments.  Let us ring the doctor and find out what the doctor has to say.  The employer does not do that, Mr Power does not do that.

The enterprise agreement, which we have produced in our reply, gives the employer a right to make that inquiry ‑ not done ‑ and he simply applies the reasoning, it is highly suspicious because of what you said the day before you went on leave and I have got a history of experiences where certificates can be obtained for the asking.

GAGELER J:   So if we look at Justice Rangiah’s judgment at paragraph 133, the gist of his reasons, really, in the last two sentences.  In terms of legal analysis what, if anything, is wrong with what he there says and if there is nothing wrong with the legal analysis is there something wrong with his factual assumptions?

MR BORENSTEIN:   We say, your Honour, that it cannot be a correct analysis in circumstances where what has occurred is an established, legitimate exercise of a workplace right for an employer to simply assert, I do not believe it and to exculpate ‑ ‑ ‑

GAGELER J:   Well, that is not what the judge has said.  He is referring to a finding about the belief which was operative in the dismissal.

MR BORENSTEIN:   But the way in which Justice Rangiah characterises it, he says that:

the taking of sick leave cannot itself be described as an operative reason for the dismissal.

Now, that in one sense begs the question.  There is no question, we would say, on the findings of the trial judge that the taking of the leave was the precipitant for the actions that were taken against Mr Byrne. 

GAGELER J:   In a sense, that “but for” the taking of the leave nothing would have happened.

MR BORENSTEIN:   Nothing would have been done, that is right.  So, then, we say, the proper analysis is to ask the next question, well, was the taking of the leave legitimate sick leave, and if it was then it is not right to say that the taking of sick leave cannot be described as an operative reason for the dismissal.  The reason for the dismissal was that the employer did not believe it was legitimate sick leave.

GAGELER J:   So, you are saying a sufficient statutory connection lies in “but for” causation.  Is that what it comes down to?

MR BORENSTEIN:   I am hesitant about putting that as a general proposition.  In these circumstances, we are looking for a precipitant of the action that was taken.  It was the taking of the leave.  I do not think there can be any argument about that.  The real ‑ ‑ ‑

FRENCH CJ:   The Picketing Case would have been decided another way, but for ‑ ‑ ‑

MR BORENSTEIN:   Well, I suppose that is so too, but we say that the vice in what has happened here is that ‑ if Mr Power had believed that the leave was legitimate sick leave, nothing would have been done, so it all turns on whether it is permissible for Mr Power, unlike the Picketing Case and unlike the other case, to simply say, I do not believe you.

You can think of a large number of examples which would demonstrate the incongruity of the result.  If you have a person who is a member of the union in a workplace but has not told his employer for one reason or another and then the union gives notice of taking protected industrial action on a Friday before a long weekend and the union person goes to the employer and says, well, I am in the union, I am going to take the action, I am going to be away.  The employer says, well, you never told me you were in the union, I do not believe you, and the worker produces a union card and the employer says, I do not believe you, and if you leave I will sack you.  Now, in the same way as Mr Byrne, that person is exercising ‑ ‑ ‑

FRENCH CJ:   Well, the court might not believe the employer.

MR BORENSTEIN:   I beg your pardon.

FRENCH CJ:   The court might not believe the employer.

MR BORENSTEIN:   Well, that is so, but even if the employer, hand on heart, genuinely does not believe the person, there are surrounding circumstances, as the two lead judgments in Barclay tell us, that you are entitled to take into account the circumstances of the case, and if the circumstances of a case include the fact that there was an actual exercise of a workplace right, legitimately, and that the only reason why the employer acted was because they did not believe it and nothing more is said apart from historical matters that might or might not have influenced them, but no analysis or no investigation of whether or not the sick leave was legitimate, then in those circumstances, in our respectful submission, it would be a serious inroad into the sort of protections which the objects speak about.

Now, we understand, your Honour the Chief Justice and Justice Crennan wrote about the balance in Barclay and repeated it in BHP.  Now, we understand that analysis and that is an analysis drawn from the historical origins of the legislation, clearly, and it is an analysis designed to refer to the balance which the legislation sought to create between employers and employees and their representatives.  That was at a time when the sort of protected characteristics and activities were far more limited.

Since then, as the Court has seen, the Fair Work Act has vastly extended the range of protected activities and where you have a protected activity then, in terms of assessing the balance, you need at the very least to be able to point ‑ if you are going to cut down the ability to rely on that activity, you need at the very least to be able to point to some legitimate operational reason for doing that.  Now, in the BHP Case ‑ ‑ ‑

GAGELER J:   What do you mean by “legitimate”, I mean, it seems to carry quite a load in your argument?

MR BORENSTEIN:   I am sorry for using jargon but you need to point to some credible operational consideration.  In the Picket Case the decision‑maker pointed to the policy about relationships between employees and it was affecting – or he thought it would affect the culture that they were trying to establish in the workplace.  In the Barclay Case the decision‑maker was concerned that there was a spread of allegations of corrupt conduct and so on and that that affected the standing of the college. 

But here, what we have got is a man who seeks to exercise on a single occasion his right to sick leave and he is not refused because this is going to affect – have some operational effect on the organisation, he is refused simply because Mr Power says, well, you asked for leave the time before and I now do not believe you and I have had experience with doctors and I know they give out certificates just for the asking.  But the thing he did not do was to offer an explanation that goes beyond Mr Byrne, and the second thing that he did not do, perhaps more importantly, is he took no step to check the veracity of the certificate upon which Mr Byrne relied and he had that power.

FRENCH CJ:   Can you just explain to me how does that go to the characterisation of the reason for which the employer took the action he did?

MR BORENSTEIN:   It goes to the proposition that in the balancing between protecting the right to resort or to use workplace rights and protecting the, if you like, the business of the employer, before you cut down the right to the workplace right, there needs to be some credible explanation, operational explanation in terms of the business of the employer to say, well, that is a proper foundation for the employer taking the action that they did outside of simply wishing to obstruct the resort to the workplace activity or to the industrial activity.

GAGELER J:   All of that is to be found in the word “because” appearing in two sections of the Act. 

MR BORENSTEIN:   It is to be found in the word “because” in the context of Part 3‑1 and you have got to look at it in the context of Part 3‑1 as we are told in Project Blue Sky.  You are entitled to look at what you make of the word “because” and what you make of section 361.

FRENCH CJ:   I can understand how a reference to failure to verify the correctness or otherwise ‑ it might go to the question of whether the Court accepts what the employer says about his or her reason for taking action against somebody.  I do not understand how it actually goes as a matter of logic to causation.

MR BORENSTEIN:   We say the reason why Mr Byrne was sacked was because the employer did not believe his claim to sick leave.  It may then be said against us, well, but you know, that is a construction that is too narrow because you have got to maintain a balance, you have got to look at it in the context of balance, and it is only for the purpose of addressing that issue of the balance that we say that you have got to look for more than just the absolute right of an employer to say, well, I am not going to let you do it.

FRENCH CJ:   Now, Mr Borenstein, did you want to say something about specific performance?

MR BORENSTEIN:   Very briefly.  The circumstances of this case, we submit ‑ the circumstances of this case demonstrate that this may be an opportune time and an opportune case in which the Court might consider whether it is still appropriate to apply a special circumstances test to employment contracts rather than to allow claims for mandatory injunctions or specific performance to be determined in the equitable jurisdiction in the same way as other contracts. 

The analysis of the trial judge, we submit, with the greatest of respect, is coloured by the finding which she made which was overturned on appeal, that there had been serious misconduct which justified a summary dismissal and her analysis, the Court will see in the judgment, is coloured heavily by that.  But we say that there is no reason in the modern employment world for the courts to exercise the powers, the equitable powers, to grant injunctions by reference to the sort of considerations that would apply on a daily basis in other areas.  So, if there are issues about loss of confidence, that would obviously be a consideration.  If there are issues about the need for superintendence of the relationship that, too, would be a consideration but it does not need to be a prima facie threshold…..of exceptional circumstances.  We say that that is a legitimate matter for the Court to give consideration to arising out of the circumstances of the case.

FRENCH CJ: Thank you. Yes, we will not need to trouble you Mr Neil. In our opinion, the application does not give rise to issues of principle which would warrant the grant of special leave and special leave will be refused. Mr Borenstein, I noticed at paragraph 55, you made some mention of a gap in the costs regime otherwise applicable under the Fair Work Act.

MR BORENSTEIN:   Yes.

FRENCH CJ:   You accept that is not applicable in these proceedings?

MR BORENSTEIN:   The point I was trying to make, your Honour, perhaps obviously not well enough, is that we understand the approach of the Court in these sort of applications on the basis that they are not a proceeding.  We understand that.  What we are really asking the Court to do is in the exercise of its discretion to have regard about ordering costs, to have regard to the fact that this is a step in a real proceeding that would be covered by a no cost jurisdiction.

FRENCH CJ:   To be infused by the equity of the statute.

MR BORENSTEIN:   That is the point we seek to make in that paragraph.

FRENCH CJ:   Yes, all right.  What do you say about that, Mr Neil?

MR NEIL:   In our submission, this step does not fall within that gap, if that gap exists.

FRENCH CJ:   Yes, but we are being asked to exercise the discretion anyway.  What do you say about that?

MR NEIL:   There is no such discretion, in our submission.

FRENCH CJ:   I beg your pardon.

MR NEIL:   There is no such discretion in our submission.

FRENCH CJ:   Thank you.  Costs will follow the event in the usual way so it will be special leave refused with costs.

AT 9.54 AM THE MATTER WAS CONCLUDED