Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd

[2014] HCATrans 105

[2014] HCATrans 105

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane   No B6 of 2014

B e t w e e n -

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

Applicant

and

BHP COAL PTY LTD

Respondent

Application for special leave to appeal

CRENNAN J
GAGELER J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO BRISBANE

ON FRIDAY, 16 MAY 2014, AT 11.15 AM

Copyright in the High Court of Australia

MR H. BORENSTEIN, QC:   If your Honours please, I appear with MS C.M. HOWELL, for the applicant.  (instructed by Hall Payne Lawyers)

MR I.M. NEIL, SC:   If the Court pleases, I appear with my learned friend, MR R.P.P. DALTON, for the respondent.  (instructed by Ashurst Australia)

CRENNAN J:   You have got a dissent here, Mr Borenstein?

MR BORENSTEIN:   We do have a dissent, your Honour, Justice Kenny, in relation to at least part of the matter.

GAGELER J:   You have a two split in the Federal Court?

MR BORENSTEIN: We do, yes. The special leave point, as your Honours will have seen from the summary, that we wish to ventilate in the appeal is whether an employer that seeks to exercise a right of termination can avoid liability under Part 3‑1 of the Fair Work Act by recharacterising or redrawing the reason for dismissal in a way that escapes the prescribed prohibited reason.  Your Honours will have seen the discussion in the summaries.

CRENNAN J:   Yes, thank you.

MR BORENSTEIN: We say here that it was not in controversy that the conduct which led to Mr Doevendans’ dismissal was conduct which occurred as part of a lawful activity organised by the union and, therefore, came within section 347 of the Fair Work Act, which your Honours have, which defines the term “industrial activity”.  The claim that was made at trial was that the dismissal which would constitute adverse action under the definitions in the Act was taken for that reason.

In the evidence, a Mr Brick, who appears to have been the relevant decision‑maker, gave evidence in which he articulated explicitly that the activity which led to Mr Doevendans being dismissed was an activity which took place at a union organised protest and as part of the union organised protest.  Mr Doevendans was dismissed because he held a particular sign up.  The evidence, undisputed, was that all the signs and all the paraphernalia at the protest was provided by the union and his Honour the trial judge found that that whole activity, including the signs, was part of the union organised activity which was caught by the section.

Now, the difficulty that confronted the Full Court was that the evidence of Mr Brick was, yes, the waving of the sign was a very important matter and without it they may not have made the decision but then at the end, as one often finds in these cases when evidence is prepared on affidavit, there is a disavowal of the prohibited reason and he says that – and your Honours will find this at paragraph 30 of the trial judge’s decision.  He says I did it for that reason but I did not do it because Mr Doevendans was participating in the industrial activity.  So there is an interesting ‑ ‑ ‑

GAGELER J:   I did it because he held up the sign, I did not do it because – what?

MR BORENSTEIN: Yes. Well, this is the problem. We say what it exposes is that the employer picks out a piece of activity which is part of permitted activity under section 347 and says I am not happy with that activity so I am going to say that activity is in contravention of our code of conduct and not because it is part of the permitted activity and, therefore, I escape liability.

Now, we contend, and our special leave point is, that an employer cannot be permitted to do that because to do that would undermine the whole policy of these beneficial provisions of the Act, and they are central to the scheme of the Act because they protect people participating in the very processes which the Act sets up, voting in an election, voting for an agreement, all of those sort of things.

CRENNAN J:   Well, it raises the whole debate that has informed – both Bowling’s Case and Barclay’s Case – about whether one is confined to looking at subjective statements of intention ‑ ‑ ‑

MR BORENSTEIN:   Yes.

CRENNAN J:   ‑ ‑ ‑ for taking the action, or whether one adopts an approach which attempts to assess whether objectively what the substantial reason is, which was explained I think by Chief Justice Mason in Bowling’s Case.

MR BORENSTEIN:   It was, your Honour, and indeed it was addressed in Barclay as well.  We say, however, that the circumstance here is significantly to be distinguished from the particular circumstance that the Court addressed in Barclay.  Your Honour the presiding judge will remember that in Barclay the union delegate sent an unfortunate email to other employees critical ‑ or perhaps warning about questionable conduct that may be occurring at the university.  Dr Harvey, I think it was, who was the decision‑maker, said that that was a very inappropriate act to do because it raised all sorts of questions about the university’s integrity and that sort of thing and, because Mr Barclay was in a particular position of some importance, he should have reported it to the university rather than disseminating it.

Now, the particular difference between the Barclay circumstance and our circumstance is that Dr Harvey was concerned about the content of the email.  Mr Barclay said, “Well, the email is protected because I as a union delegate have sent it as part of the performance of my activities”, and so the email, it was said, was immune from attack because of the attribute of the sender.  It did not in itself have any protection.  It did not have any innate protection under the legislation.  An email is an email.

CRENNAN J:   We might be assisted by calling on Mr Neil ‑ ‑ ‑

MR BORENSTEIN:   Yes, indeed.  Thank you.

CRENNAN J:   ‑ ‑ ‑ at this point in the argument, Mr Borenstein.

MR NEIL:   If your Honours please.  Special leave, it is submitted, should be refused for two reasons.  The first is that there is no issue of law of public importance.  To make that submission good, I need to confront the dissenting judgment of Justice Kenny.  The second submission is that there is no reason to doubt the correctness of the decision.  May I go to the first submission by which we submit that there is no issue of law of public importance?  May I come to the dissenting judgment in a moment and make some preliminary observations?  This Court has expressly considered the correct approach to the statutory task laid down by sections 361 and 346(b) and their predecessors in three significant decisions:  Pearce, Bowling and Barclay.

In Barclay this Court recently unanimously confirmed that Bowling is the authoritative and comprehensive statement of the correct approach.  There is no gap in the jurisprudence and there is nothing left to say at the level of principle.  All that remains in any case is to apply those principles to the facts.

What we respectfully submit is the high degree of abstraction in the proposed special leave questions is a demonstration of that proposition.  The Full Court decided that in this case, as in Barclay, the respondent had discharged its burden of showing that the reason for the adverse action was not a prohibited reason and that Mr Doevendans’ industrial activity was not an operative factor in his dismissal.

Factually, this case is materially indistinguishable from Barclay.  Barclay did not simply concern Mr Barclay’s attribute as a union official, and thus section 347(b)(iii), it also concerned the fact that he was engaged in an activity that fell within the descriptor in paragraph 347(b)(v). Justice Dowsett, in the third sentence of paragraph 12, recognised the material similarity between the two cases. That is at page 85 of the application book, at about point 15:

Clearly, holding and waving the sign comprised part of the reason for the adverse action as did, in Barclay, the sending of the relevant email.

We turn now, against that background, to address more particularly the significance of Justice Kenny’s dissenting judgment.  The Full Court did not divide on any point of principle.  Every member of the Full Court correctly identified and articulated what had been decided in Barclay, including for present purposes, importantly for present purposes, Justice Kenny who dealt with that topic at paragraphs 22 to 32 on pages 89 to 93 of the application book and we would draw your Honours’ particular attention, if we may, with respect, to subparagraph 1 in paragraph 30.  The Full Court divided only on an analysis of the primary judge’s unchallenged findings of fact.  That, in our submission, is the critical point.

The majority gave full effect to the primary judge’s acceptance of Mr Brick’s evidence.  Your Honours will find that first in the judgment of Justice Dowsett in paragraph 13 at page 85 of the application book and then on the part of Justice Flick in paragraph 108 on pages 121 and 122.  Justice Kenny, on the other hand, analysed and treated the primary judge’s finding in a narrower way.  The two points of difference on the facts emerge first in the last sentence of paragraph 55, which is on page 102 of the application book ‑ that is the last four lines of that paragraph ‑ and second, in the last sentence of paragraph 39, which your Honours will find on page 97 at about point 10.

Justice Kenny’s analysis of the primary judge’s finding of fact was the key that opened to door to her Honour’s subsequent inquiry that, in turn, led to a conclusion on her Honour’s part that the primary judge’s findings as to paragraph 347(b)(v) were open.

GAGELER J:   Well, at the end of paragraph 60, on page 104, her Honour states the question.  Do you say that all judges were asking the same question?

MR NEIL:   Yes.

CRENNAN J:   But is not the difference ‑ ‑ ‑

MR NEIL:   May I interrupt by saying, precisely the same question.

CRENNAN J: But is not the difference between the majority and the minority that Justice Kenny, like the primary judge, took the question under section 347(b)(v) to require consideration of all the circumstances in the evidence, but not to confine that consideration to the stated reasons of the employer, and to then ask whether the dismissal occurred because the employee was representing or advancing the interests of the union? It gets back to what Chief Justice Mason said in Bowling’s Case.

MR NEIL:   With respect, your Honour, no, we do not accept that proposition.  Every member of the Full Court applied the test articulated in Bowling and approved in Barclay.  It was not simply a question of adopting the employer’s stated reason.  What happened was that the majority looked at the primary judge’s finding of fact and held that that finding of fact excluded a prohibited reason as an operative reason.  That is materially different, in our submission.  The true difference, and the only point of difference between the majority and the minority, is the narrow view that Justice Kenny took of the primary judge’s findings of fact.  We have drawn attention to two places in which that narrower view is articulated.  Of those two, the most important is at the top of page 97 of the application book, the last four lines in paragraph 39.

CRENNAN J:   So you are saying really that her reason does not go beyond saying certain findings of fact were open on the evidence?

MR NEIL:   Correct.  That proposition is exemplified by the way that her Honour dealt with so much of the case as related to paragraph 347(b)(iii).  Her Honour took the same view of that part of the case as the members of the majority, and did so by applying precisely the same test.  That test is, one looks at the real reason – or searches for the real reason – and that is the ‑ ‑ ‑

CRENNAN J:   Well, one does not confine oneself to the stated reason ‑ ‑ ‑

MR NEIL:   No, no ‑ ‑ ‑

CRENNAN J:   ‑ ‑ ‑because there is a search for the real reason, or the substantial reason ‑ ‑ ‑

MR NEIL:   Of course, your Honour.

CRENNAN J:   ‑ ‑ ‑whichever epithet you use.

MR NEIL:   I am sorry, I keep interrupting your Honour.

CRENNAN J:   Not at all.

MR NEIL:   That proposition was accepted throughout.  It was accepted by the primary judge, and it was accepted by every member of the Full Court.  If one looks at Barclay, for example, the proposition boils down to this.  The factual inquiry in a particular case can reveal a real distinction between the industrial activity within which an employee’s misconduct occurs on the one hand, and that misconduct on the other hand.  If the misconduct is as a matter of fact in a particular case shown to be the real reason for the employer’s adverse action, then the employer will have discharged its onus under section 361, notwithstanding that the employee was engaging in an industrial activity in the statutory sense, relevantly, within the meaning of paragraph 347(b)(v) at the same time.

May we remind your Honours of two places where that proposition emerges very clearly, we might submit with respect, in Barclay?  That is in the applicant’s bundle of authorities behind tab 2.  We draw attention first to paragraph 45 which is on page 517, and to the last sentence of that paragraph, and second, to paragraph 65 and to the penultimate sentence of that paragraph; that is on page 524.

GAGELER J:   Which sentence?

MR NEIL:   The penultimate sentence of paragraph 65.

GAGELER J:   Thank you.

CRENNAN J:   Well, they are really about discharging the onus on the employer though, are they not?  They are directed to that.

MR NEIL:   In part, yes, your Honour, but they are also about the level of the factual inquiry.  In Barclay, of course, as your Honour will recall, Mr Barclay was required to show cause why he might not be subjected to disciplinary action because in an email that he had broadcast, he had made some scurrilous comments about his employer and senior officers of that employer.  It was accepted by the primary judge, by the Full Federal Court and in this Court that in sending the email, Mr Barclay was acting in a union capacity within the meaning of paragraph 347(b)(iii), and he was representing or advancing the views of his union within the meaning of paragraph 347(b)(v).  Justice Dowsett makes that point very strongly, we submit with respect, in paragraph 2 in the first sentence; that is at page 80 of the application book.

The primary judge accepted the employer’s evidence that Mr Barclay was required to show cause, not because he had sent the email in his union capacity, and not because in doing so he was engaging – he was representing or advancing the views or interests of his union, but because the content of the email breached the employer’s good conduct policy.  He had misconducted himself in that regard.  The focus was on – and that was the operative reason for the dismissal.

CRENNAN J:   Well, one aspect of the reasoning was that the Court put to rest the idea that one can just invoke the concepts of subjective reasons and objective reasons and that is sufficient.

MR NEIL:   That is so.

CRENNAN J:   It gets back to what I put to you before, that Justice Kenny and Justice Jessup both emphasise in their reasoning processes that when you are asking the question about whether this dismissal occurred because the dismissed employee was representing or advancing the views and interests of the union one goes beyond – if I can put it this way – the stated reasons.

MR NEIL:   Of course, your Honour, and Justice Jessup did so go beyond the stated reasons.

CRENNAN J:   To that extent, it seems to reveal a difference of approach between the majority in the Full Court and Justice Kenny and the trial judge, Justice Jessup, as to exactly what Barclay stands for.

MR NEIL:   We would submit that that is not so, and the reason is that that is not ‑ the point of difference that your Honour has suggested is not, in fact, the point of difference.  Justice Jessup accepted that he was not confined to the employer’s stated reason.  His Honour conducted ‑ the employer – the respondent identified the reason for Mr Doevendans’ dismissal and exposed that reason to critical scrutiny, scrutiny of the kind that is discussed in paragraph 45 of Barclay, as your Honours may have noticed when looking at that paragraph earlier, and also in paragraph 127 in the reasons of Justices Gummow and Hayne.

His Honour subjected the respondent’s evidence in that regard to that scrutiny and did so explicitly.  Having done that, his Honour made the findings of fact that each of the members of the Full Court refer to, that is, his Honour found as a matter of fact that the fact that Mr Doevendans was engaged in industrial activity was not an operative reason for his dismissal and we have identified earlier the passages in Justice Dowsett’s and Justice Flick’s reasons where their Honours refer explicitly to that finding of fact.

GAGELER J:   I actually have a little difficulty following the layers here.

CRENNAN J:   Yes, I think that is right.

GAGELER J:   The gentleman holds up a sign, the sign contains some words and those words on the sign represent views, or advance interests, in industrial action.

MR NEIL:   Yes.

GAGELER J:   He is then dismissed because he has held up the sign containing those words.

MR NEIL:   No, your Honour, and may we say that the words had the undesirable attributes that Mr Brick swore to and that the primary judge accepted.  That is the critical point.

GAGELER J:   Yes, but there are two points in play, are there not?  The precise action that is taken into account in the dismissal is the action which represents or advances those views or claims?

MR NEIL:   Yes, to a degree, but the reason why Mr Doevendans was dismissed was not because he waved the sign simpliciter.  It was because by waving the sign in the way that he did, he communicated a message in terms that offended the company’s good conduct policy.

CRENNAN J:   May I take you to Justice Jessup on this issue?  At page 52, paragraph 114, is a conclusion after his Honour has dealt with several matters that the waving of the sign:

was conduct by way of participation in a lawful activity –

MR NEIL:   Yes.

CRENNAN J:   Then at 123 at page 55 of the application book, again he is stating a conclusion after having developed his reasons, that the employee:

was representing and advancing the views and interests of an industrial association –

MR NEIL:   Yes.

CRENNAN J:   So his Honour satisfies himself about that.  How do you get over that in terms of the argument you are putting to us?

MR NEIL:   In exactly the same way that this Court got over it, if I may use your Honour’s expression, in Barclay.  As a matter of fact, when Mr Barclay wrote and broadcast the email, he was representing and advancing the views of his union.  That was a fact.  But the fact that he was doing so was not the real reason for the disciplinary action.  The real reason for the disciplinary action, as the primary judge found, was that by doing so he was offending that employer’s good conduct policy.

CRENNAN J:   Policy.

MR NEIL:   The mere fact – I am sorry, your Honour?

GAGELER J:   Does that not expose a difference in principle between the approach of two judges in the Federal Court and the approach of the other two?  For two judges, was it not sufficient that the conduct which was the operative cause of the dismissal was conduct that met the statutory description?

MR NEIL:   Yes as to Justice Jessup, and no as to Justice Kenny.  Justice Kenny explicitly did not fall into the Barclay error.  Her Honour avoided that error.  What her Honour did was to look at the unchallenged finding of fact made by the primary judge, and to say it had a much narrower operation than the members of the majority gave it.  Once her Honour found that, then that opened up the field; we have used the expression “that was the key that opened the field” to the wider inquiry into what the employer’s real reasons were.

But the nature of that inquiry, although it arrived at a different result than that of the majority, the nature of the inquiry in point of principle was exactly the same.  It was an inquiry for the real reason, and explicitly did not make the error identified in Barclay of equating the fact that because Mr Doevendans, in communicating the message he did, was engaged in an industrial activity within the meaning of paragraph 347(b)(v), that he was representing the views of his union.  That fact was not the end of the inquiry, as Justice Jessup had wrongly thought.  The true inquiry was to look at what the real reason was.

This is made explicit ‑ the process of reasoning is made explicit in Justice Dowsett’s judgment in paragraphs 10 and 12.  The point is then brought home in the first sentence of paragraph 13, and in Justice Flick’s judgment, your Honours will find this point dealt with in paragraph 108.  That is a rather long paragraph.  We would respectfully draw attention particularly to the second and third dot points.  His Honour then goes to the point of principle, drawn from Barclay, in paragraphs 109 and 110, in ways which are, we would submit, perfectly orthodox and correct.  As his Honour observes at the foot of page 122 of the application book, at about point 55:

To fall within the protection afforded by s 346, it is necessary to establish – with the benefit of ss 360 and 361 – that “adverse action” has been taken “because” (for example) the employee engaged in “industrial activity”.  If this were not the case, the High Court could

not have reached the conclusion it did in fact reach in the Board of Bendigo case.

That is Barclay.  That is, in effect, our submission.  I notice that I have, some minutes ago, gone beyond my time.

CRENNAN J:   Do not trouble yourself about that, Mr Neil.

MR NEIL:   If there is anything more with which we can assist – or, not anything more with which we can assist, then those, in short, are the submissions we wish to make.

CRENNAN J:   There will be a grant of special leave in this matter.  One day should be sufficient time I would have thought, for the point?

MR NEIL:   Yes, your Honour.

CRENNAN J:   Mr Borenstein, you might give some consideration to the draft notice of appeal ‑ ‑ ‑ 

MR BORENSTEIN:   Yes.

CRENNAN J:   ‑ ‑ ‑ having heard what has been said about the clarity with which the issues have been articulated, and counsel is reminded of the time limits in relation to the preparation of the application ‑ ‑ ‑

MR BORENSTEIN:   Thank you, your Honour.

CRENNAN J:   ‑ ‑ ‑ of the appeal.  The Court will now adjourn to reconstitute.

AT 11.46 AM THE MATTER WAS CONCLUDED