Issue 5: was the action taken because the De Martin & Gasparini employees had, or had exercised, a workplace right?
295 As has already been noted, s 361 creates a statutory presumption that operates in cases where it is alleged that a person contravened s 340. Relevantly, where it is alleged that a person has taken adverse action against another person because that other person has a workplace right, or has exercised a workplace right, it is presumed that the action was taken for that reason, unless the person proves otherwise. Here, the CFMEU alleged that De Martin & Gasparini took adverse action against its employees for reasons that included that the employees had or had exercised workplace rights. Those workplace rights were the benefit of the Enterprise Agreement (a workplace instrument), and the ability to approve or not approve a variation of the Enterprise Agreement (a process under the Fair Work Act). By reason of s 361, it is to be presumed that De Martin & Gasparini took the adverse action for those reasons unless it proves otherwise.
296 One might be forgiven for thinking, at least at first blush, that the question whether a person took certain action for a particular prohibited reason is a fairly straightforward question. It is, however, a question which, in the context of s 340 and cognate provisions (for example s 346 of the Fair Work Act), has excited some considerable debate and controversy. Following the decisions of the High Court in Barclay and BHP Coal, however, it could now be said that the relevant principles are relatively well-settled. The key principles, in simple terms, are as follows.
297 First, the question is one of fact: Barclay at [41], [45], [101]; BHP at [7].
298 Second, the question is why the adverse action was taken: Barclay at [5], [44]. The focus of the inquiry is the reason or reasons of the relevant decision-maker: Barclay at [101], [127], [140], [146]; BHP Coal at [7], [19], [85]. More particularly, the question is whether the alleged prohibited reason was a "substantial and operative" reason for taking the adverse action: Barclay at [56]-[59], [104], [127]; or an operative or immediate reason: Barclay at [140].
299 Third, the test does not involve any objective element: Barclay at [107], [121], [129]; BHP Coal at [9]. To speak of objectively obtained reasons risks the substitution by the court of its view, rather than making a finding of fact as to the true reasons of the decision-maker: Barclay at [121]; BHP Coal at [9].
300 Fourth, the inquiry is not concerned with mere causation, in the sense that it is not sufficient that there is factual or temporal connection between the relevant protected workplace rights and the adverse action: BHP Coal at [18]-[20]. Any such connection, however, may necessitate some consideration as to the true motivation or reasons of the decision-maker: BHP Coal at [22].
301 Fifth, the question must be answered having regard to all of the relevant facts and circumstances and the inferences available from them: Barclay at [45], [127]; BHP Coal at [7].
302 Sixth, direct testimony from the decision-maker as to why the adverse action was taken is capable of discharging the burden imposed by s 361: Barclay at [45], [71]; BHP Coal at [38]. However, declarations that the action was taken for an innocent reason may not discharge the onus if contrary inferences are available on the facts: Barclay at [54], [79], [141]. The reliability and weight to be given to such evidence must be assessed having regard to the overall facts and circumstances: Barclay at [127].
303 Seventh, it is not necessary for the decision-maker to establish that the reason for the adverse action was entirely disassociated from the relevant protected workplace right: Barclay at [62].
304 It is necessary to address one final point that emerges from the judgment of Gageler J in BHP Coal. To properly address that point, it is necessary to say something briefly about the facts in BHP Coal. In that case, a member of the CFMEU engaged in a lawful activity organised by the union. During his participation in that activity, the member waved a placard that included the word "scab". His employment was subsequently terminated. The decision-maker gave evidence at the trial concerning his reasons for dismissing the union member. The reasons included that the word "scab" was considered to be inappropriate, offensive, humiliating, harassing and intimidating and in violation of the employer's workplace conduct policy. The primary judge accepted that the fact that the member had engaged in industrial activity did not play any part in the reasons of the decision-maker to terminate the member's employment. Nevertheless, the primary judge found that the dismissal contravened s 346 because in waving the placard, the member was participating in a lawful activity organised by the CFMEU. The Full Court allowed an appeal from the judgment of the primary judge.
305 The High Court, by majority (French CJ, Kiefel and Gageler JJ, Hayne and Crennan JJ dissenting), dismissed an appeal from the Full Court. In his judgment, Gageler J said (at [91]-[93]):
The CFMEU argues that the consequence of allowing the decision of the Full Court in the present case to stand will be to undermine the statutory protection afforded to protected industrial activity by allowing an employer to escape culpability by choosing to apply its own characterisation to otherwise protected industrial activity.
Part of the answer to that argument lies in recognition of the nature of the protection that is afforded to protected industrial activity through the operation of s 346(b). The protection afforded by s 346(b) is not protection against adverse action being taken by reason of engaging in an act or omission that has the character of a protected industrial activity. It is protection against adverse action being taken by reason of that act or omission having the character of a protected industrial activity.
Another part of the answer lies in recognition of the significance of the combined operation of ss 360 and 361. An employer could not escape the proscription in s 346(b) merely by proving that the employer applied its own characterisation to an act or omission having the character of a protected industrial activity. The employer would need, in addition, to prove that the act or omission having the character of a protected industrial activity played no operative part in its decision.
306 One can readily comprehend the distinction drawn by Gageler J between taking adverse action by reason of conduct that has the character of protected industrial activity, and taking adverse action by reason that the conduct has the character of protected industrial activity, having regard to the particular facts of BHP Coal. The trial judge accepted the decision-maker's evidence that he did not dismiss the employee because he had engaged in conduct that had the character of protected industrial activity. He did not dismiss the employee because he was engaged in the protest. He dismissed the employee because the placard he was waving was offensive and contrary to company workplace policy. While that conduct happened to occur in the context of protected industrial activity, that was not the reason for the dismissal.
307 The distinction drawn by Gageler J is potentially important to the resolution of the issue concerning the decision-maker's reasons in this matter. BHP Coal concerned an alleged contravention s 346 of the Fair Work Act. While it might be thought to be a very fine and highly nuanced distinction, if Gageler J's distinction is applied to s 340 of the Fair Work Act, it would follow that the protection afforded by s 340 is not protection against adverse action by reason that an employee had, or exercised, a right that happened to have the character of a workplace right. It is a protection against adverse action being taken by reason of the fact that the right possessed by the employee had the character of a workplace right.
308 By the same token, an employer could not escape the proscription in s 340(1) merely by proving that the employer applied its own characterisation to a right having the character of a workplace right. The employer would need, in addition, to prove that the right having the character of a workplace right played no operative part in its decision.
309 While the principles concerning the application of s 340 (and cognate provisions) and s 361 may be relatively well settled, they are not always easy to apply. This is a case in point.
310 De Martin & Gasparini submitted that it had discharged its onus of proving that the action that was taken on 3 July 2017 was not taken because the employees had or had exercised a right that had the character of a workplace right. It relied in that regard almost entirely on the evidence of Mr Harper, who was said to be the ultimate decision-maker. It submitted that Mr Harper's evidence demonstrated that the facts and matters that were operating on his mind were: the future significant consequences for De Martin & Gasparini and Boral if De Martin & Gasparini did not find a way to make the non-compliant Enterprise Agreement "inoperative" by 31 August 2017; his duties as a senior executive of Boral to the company and its shareholders; and the lack of time and certainty to take other potential measures to ensure that De Martin & Gasparini did not have an enterprise agreement that did not comply with the Code by 31 August 2017.
311 De Martin & Gasparini submitted that Mr Harper's evidence proved that the operative reason for Mr Harper's decision was to ensure the ongoing viability and success of De Martin & Gasparini and the broader Boral Group. Perhaps more fundamentally, it submitted that Mr Harper's evidence proved that the fact that the De Martin & Gasparini employees had benefits under the Enterprise Agreement, or had, and had exercised, the right under the Fair Work Act to vote for or against variations to the Enterprise Agreement, were not operative reasons for his decision. Instead, his decision was motivated by "business considerations".
312 Mr Harper's evidence was discussed at length earlier in these reasons in the context of the findings concerning the 28 June meeting (issue 1). For the reasons given there, I have doubts about the credibility and reliability of aspects of Mr Harper's evidence. I do not accept that he gave a full, accurate and reliable account of all the discussions at and surrounding the 28 June meeting at which the relevant decision was made. More significantly, I do not accept Mr Harper's evidence, which really amounted to little more than a bald assertion or denial that the fact that the employees had rights under, or were entitled to the benefits of the Enterprise Agreement, played no role or part in his decision. I also do not accept Mr Harper's evidence that the fact that the employees had exercised their right to vote in respect of the variation of the Enterprise Agreement played no role in his decision.
313 Likewise, again for the reasons already given, I do not accept that Mr Miller and Mr Mazzarolo gave credible or reliable evidence concerning the 28 June meeting. I also do not accept that Mr Miller's evidence concerning his understanding of the reasons for the decision made on 28 June 2017 was credible or reliable.
314 There could be no doubt that there was a very close temporal and causal connection between the fact that the employees had the benefit of the Enterprise Agreement and the decision to make the employees redundant. The difficulty for De Martin & Gasparini and Boral, and the problem that Mr Harper had to resolve, was that the Enterprise Agreement that the employees had the benefit of did not comply with the Code. If the workers were not entitled to the benefit of the Enterprise Agreement, there was quite simply no reason to make them redundant. This was reflected in Mr Harper's own characterisation of the decision: that there would be "redundancies for all EBA covered workers". Likewise, there was an even closer temporal and causal connection between the fact that the employees had exercised their right to vote in respect of the variations to the Enterprise Agreement and the decision to make them redundant come 31 August 2017 if nothing else changed. If the employees had not exercised their right to vote against the variation, there was no reason to make them redundant. Mr Harper agreed in cross-examination that the vote by the employees on 28 June 2017 was fundamental to his decision made later that day.
315 As has already been noted, it is accepted that the relevant inquiry concerns the reason or reasons for making the decision. As the relevant decision-maker was said to be Mr Harper, the inquiry accordingly concerned his reason or reasons for making the decision. The important point is that the question is not merely one of causation. It may readily be accepted that there can be a significant difference between a person's reasons for engaging in particular conduct, and the objective circumstances that led the person to engage in that conduct: cf. Greater Dandenong City Council v Australian Municipal, Clerical and Services Union [2001] FCA 349; 112 FCR 232 at [164]. The fact that there is a close factual or temporal connection between the adverse action and the relevant workplace rights, however, may well bear on the determination of what the true reason for the decision was. Equally, it may readily be accepted that to discharge the burden of proof under s 361, it is not necessary for the decision-maker to establish that the reason for the adverse action was entirely disassociated from the relevant protected workplace right. Thus it was not incumbent on De Martin & Gasparini to prove that the proposal to make the employees redundant had nothing at all to do with the fact that the employees had the benefit of the Enterprise Agreement, or had, and had exercised, the right under the Fair Work Act to vote to approve or disapprove any variation to the agreement.
316 The decision-maker or the person who took the adverse action must, however, prove that the fact that the relevant benefit or right had the character of a workplace right played no operative part in the decision. Here, therefore, it was incumbent on De Martin & Gasparini to prove that the fact that the employees had the benefit of the Enterprise Agreement, or had, and had exercised, the right under the Fair Work Act to vote to approve or disapprove any variation to the agreement, played no operative role in Mr Harper's decision. I am not satisfied that De Martin & Gasparini has discharged that burden. In particular, I am not satisfied that Mr Harper's evidence proved that the fact that the employees had the benefit of the Enterprise Agreement, or the fact that the employees were entitled to participate, and had participated, in a vote relating to the variation of the Enterprise Agreement, and that those rights had the character of workplace rights, played no operative part in his decision. Nor am I satisfied that the evidence of either Mr Miller or Mr Mazzarolo assisted.
317 I accept Mr Harper's evidence that he and other senior officers of Boral and De Martin & Gasparini were very concerned about the commercial implications for Boral if De Martin & Gasparini and its employees were covered by an enterprise agreement that did not comply with the Code as at 1 September 2017. That was no doubt an important element in his decision. Equally, however, there could be little doubt that Mr Harper was acutely aware that the very source of Boral's and De Martin & Gasparini's problem was that the employees had, and continued to have, the benefit of the non-complying Enterprise Agreement and had voted against De Martin & Gasparini's proposal to vary the agreement to make it Code compliant. If the employees did not continue to have the benefit of those rights, Boral and De Martin & Gasparini would not have had a problem in terms of compliance with the Code, and it would not have been necessary to make any decision concerning the redundancy of the employees. In other words, the Code compliance problem that Mr Harper was endeavouring to deal with was inextricably entwined with the fact that the employees had the benefit of the relevant rights. It is, in those circumstances, difficult to accept that those matters played no operative role in Mr Harper's decision.
318 I also find it difficult to accept that Mr Harper was not aware, in general terms at least, that the rights or benefits that the employees possessed - the benefit of the Enterprise Agreement, and the ability to be involved in a process relating to the variation of the agreement - had the character of workplace rights. Having regard to his position, it is likely that Mr Harper was aware that the Enterprise Agreement was an agreement made under or recognised by a workplace law, and that the employees' ability to participate in a vote concerning the variation of the Enterprise Agreement was protected by, or in some way enshrined in, the law. Were it otherwise, there could be little doubt that Mr Harper would have taken steps to ensure that the Enterprise Agreement was terminated or varied without bothering to seek the employees' agreement by vote.
319 In all the circumstances, I am not satisfied that De Martin & Gasparini has proved that the existence of the relevant workplace rights - the entitlement of the employees to the benefit of the Enterprise Agreement, and the ability of the employees to participate in a vote concerning the variation of the agreement - was not front and centre in Mr Harper's mind when he made the decision. They were bound up with the very problem that his decision was supposed to resolve. Accordingly, I am not satisfied, in all the circumstances, that De Martin & Gasparini has proved that the continued existence of those rights, and the fact that they had the character of workplace rights, were not a substantial and operative reason for Mr Harper's decision and its actions.
320 I should emphasise in that context that I am unable to accept that, in his own mind, Mr Harper drew any distinction between making the decision because the employees continued to have the benefit of the relevant rights, as opposed to making the decision because those rights had the character of workplace rights. Certainly Mr Harper's evidence did not suggest that he drew any such fine or nuanced distinctions. He simply said that the fact that the employees had the benefit of the Enterprise Agreement and were able to vote in relation to the variation of it, played no role in his decision. For the reasons already given, I do not accept that evidence.
321 De Martin & Gasparini relied almost entirely on the evidence of Mr Harper in seeking to discharge the burden of proving that the action taken on 3 July 2017 was not taken because the employees had, or had exercised, a workplace right. It is, nevertheless, important to also have regard to the evidence of Mr Mazzarolo and Mr Miller concerning the action that was taken on 3 July 2017 and their understanding of the reason or reasons for taking that action.
322 The evidence of Mr Mazzarolo was considered in some detail in the context of both the 28 June meeting (issue 1) and the events of 3 July 2017 (issue 2). It is unnecessary to rehearse the discussion of his evidence. Suffice it to say that his evidence concerning the discussions at the 28 June meeting and the events at the 3 July meeting was unreliable in certain respects. More significantly, to the extent that Mr Mazzarolo's evidence touched on his understanding of the reasons for the decision that was made at or as a result of the 28 June meeting, it did not materially assist De Martin & Gasparini in discharging the burden of proof under s 361.
323 If anything, the evidence concerning what Mr Mazzarolo said at the 3 July meeting weighed against De Martin & Gasparini discharging the s 361 burden. I have found, for the reasons addressed earlier, that Mr Mazzarolo opened the meeting with words to the effect "we're here because we failed to get the yes vote up". He also said, at some stage, that "we told you this would happen". That evidence certainly supports the inference that the action taken at the 3 July meeting was causally related to the fact that the employees had exercised their vote against the variation of the agreement. It also tends against the inference that the employees' benefits under the Enterprise Agreement, and their ability to participate in a vote in relation to the variation of the Enterprise Agreement, were not operative reasons for De Martin & Gasparini taking the action on 3 July 2017, at least as far as Mr Mazzarolo understood the reasons.
324 Mr Miller's evidence also did not materially assist De Martin & Gasparini in discharging the s 361 burden. Mr Miller's evidence was discussed at length in the context of the 28 June meeting and the 3 July meeting. For the reasons given during that discussion, Mr Miller's evidence concerning the discussions and events at those meetings lacked credibility and was unreliable in certain important respects. For the reasons given earlier, Mr Miller's bare assertion or denial that, as he understood it, the fact that the employees were entitled to the benefit of the Enterprise Agreement and had the ability to participate in the voting process to vary the Enterprise Agreement played no part in the decision, lacked credibility and is rejected.
325 The evidence concerning what Mr Miller said to the employees at the 3 July meeting also does not assist De Martin & Gasparini in discharging the burden. Indeed, if anything, it again goes against De Martin & Gasparini's contention that the decision had nothing to do with the fact that the employees had the relevant workplace rights. Much of what I have found that Mr Miller said to the employees at the 3 July meeting tends to suggest, contrary to his evidence, that he well understood that the decision to make the employees redundant by 31 August 2017, unless there was a revote proposed by the employees, was at least causally linked to the fact that the employees continued to have the benefit of the Enterprise Agreement, and that the employees were able to approve or disapprove variations to the agreement.
326 In their submissions, De Martin & Gasparini relied on some other cases where the Court had to grapple with the often difficult question of determining the reason or reasons that a decision was made, a determination that is often made all the more difficult where it involves disentangling the reasons from questions of causation. Reliance was placed, in particular, on Unsworth v Tristar Steering and Suspension Australia Limited [2008] FCA 1224; 216 FCR 122; Maritime Union of Australia v CSL Australia Pty Ltd [2002] FCA 513; Maritime Union of Australia v Geraldton Port Authority [1999] FCA 899; 93 FCR 34; and Greater Dandenong City Council. The reasoning employed in those cases is undoubtedly instructive. At the end of the day, however, the question whether conduct was engaged in for a particular reason is a question of fact and is to be determined on the basis of the evidence, facts and circumstances of the particular case at hand. The consideration of findings of fact made by judges in other cases, even where the facts and circumstances of those cases may in some respects be similar or analogous to the case at hand, is not always fruitful.
327 On balance, I am not satisfied on the whole of the evidence, that De Martin & Gasparini has discharged its burden of proving that the adverse action taken at the 3 July meeting was not taken because the employees had, or had exercised, the relevant workplace rights. I am not satisfied, on balance, that the evidence shows that the fact that the employees were entitled to the benefit of the Enterprise Agreement, or that the employees were able to participate, and had participated, in a vote to vary the Enterprise Agreement, and the fact that those rights had the character of workplace rights, were not operative reasons for the decision taken by Mr Harper and put into effect at the 3 July meeting.