Employer decision-makers on notice in defending disciplinary action against employees

In the recent decision of Pilbrow v University of Melbourne [2024] FCA 1140, the Federal Court of Australia held that the failure to identify a decision-maker (or decision-makers) within an employer when taking disciplinary action against an employee was critical to defending a claim of adverse action.

Facts

The Applicant, Dr Varsha Pilbrow, claimed that her employer, the University of Melbourne (the University), put allegations of serious misconduct to her and subsequently terminated her employment, in response to making complaints in relation to her employment.

In May 2018, the University commenced a ‘review’ into Dr Pilbrow’s department, where it was determined that Dr Pilbrow’s research was no longer consistent with the University’s ‘research strategy’. The department was restructured and Dr Pilbrow’s position was proposed to be made redundant.

During this time, the University had placed Dr Pilbrow on a ‘Performance Improvement Plan’ (PIP), identifying areas of improvement relating to Dr Pilbrow’s ability to work collegially and develop a ‘viable research program’. Dr Pilbrow responded to the provision of the PIP with various complaints about the process that was followed in developing the PIP and with respect to the University’s review into her personal development.

The University then wrote to Dr Pilbrow to inform her of the proposed redundancy. In response to the proposed redundancy, Dr Pilbrow made submissions to the University, but on 1 November 2019, the University notified Dr Pilbrow that her position had become redundant, and her employment would cease.

In a turn of events, Dr Pilbrow’s employment was then extended on a number of occasions.

In between these extensions of employment, Dr Pilbrow was alleged to have deleted critical files of academic courses previously taught by her. This conduct was put to Dr Pilbrow in a letter of allegations on 25 October 2019, on behalf of the University, but it was later determined that the allegations were resolved.

Eventually, Dr Pilbrow was ultimately dismissed from her employment on the grounds of redundancy on 27 February 2020.

Dr Pilbrow argued the workplace investigation and redundancy of her position amounted to ‘adverse action’ for the purposes of section 340 of the Fair Work Act 2009 (Cth) (the FW Act) and contravened her general protections because these steps were taken because she had made complaints about her workplace rights.

Decision

This was an appeal of a decision of the Federal Circuit and Family Court. The most interesting issue for our readers in this appeal concerned the identification of the relevant decision maker(s).

Under section 340 of the FW Act, a person must ‘not take adverse action against another person’ because the other person has exercised workplace right (or intends to exercise a workplace right). Relevantly, a ‘workplace right’ includes making a complaint in relation to his or her employment.

Section 342 defines ‘adverse action’. It was not in dispute that the action taken against Dr Pilbrow was adverse action.

By operation of section 361 of the FW Act, in circumstances where an employee claims that adverse action has been taken against them for a particular reason, it is presumed that the adverse action was taken for that reason, unless the employer (the respondent) can prove otherwise (often referred to as discharging the onus of proof).

In discharging the onus of proof, the respondent must give evidence to establish that the decision-maker(s) involved in taking the action did not take the action in response to the employee exercising a workplace right. This becomes a question for the Court to assess the state of mind of the individuals involved in taking the action.

The issue before the Court in this instance was who took the adverse action on behalf of the University, and why did they do so.

The University needed to establish that Dr Pilbrow’s exercising of her workplace right did not factor in any ‘substantial’ or ‘operative’ way as a reason for its decision to take the adverse action against her.

The Court held that neither party had clearly identified which individuals of the University were involved in taking the action against Dr Pilbrow. The Court held that identifying the individuals involved was critical to the successful reversal of the onus of proof placed upon the University. In this case, the University did not provide sufficient evidence as to who made the decision to take in the adverse action. This made it difficult for the Court to determine what was the operative reason for the action.

It was also clear that there is a distinction between those who play a high-level role in planning or who are responsible for implementation, and those who actually make the decision to proceed with the alleged adverse action. As a result, the Court was not satisfied that the University could establish that it had not taken one of the alleged adverse actions (being the allegations of misconduct) because Dr Pilbrow exercised a workplace right.

Key message for employers

We recommend that employers keep detailed documentary evidence of all action taken, which may constitute adverse action, including why the decision was made and who made that decision. Such evidence will become critical in Court, should a general protections claim be made. While this was a general protections claim, this advice is equally true in other industrial matters so employers can defend other claims, such as unfair dismissals or discrimination claims.

Examples of documentary evidence may include copies of complaints received about an employee, copies of allegations made about an employee, contemporaneous notes during an investigation process, a thoroughly documented investigation process, responses of an employee alleged to have engaged in misconduct, and clearly documented reasoning for why disciplinary action is required (for example, because it is recommended by a disciplinary policy). These documents will help establish why it is that an employer took action against an employee and that it was unrelated to the exercise, or intention to exercise, a workplace right.

This case also highlights the importance of utilising a decision-maker who can provide sound witness evidence when explaining the decision to terminate an employee’s employment, and a decision-maker who is independent from any involvement with the exercise of a workplace right.

Should you wish to discuss the matters raised in this article, please contact Lincoln Smith on + 61 8 8210 1203 or lsmith@normans.com.au, or Annabelle Narayan on +61 8 8210 1292 or anarayan@normans.com.au, or Edward De Luca on +61 8 8210 1279 or edeluca@normans.com.au.