Background

In 2020, Qantas experienced significant financial losses as a result of Covid. Qantas decided to outsource their ground services to third parties at 10 of their Australian Airports, effectively making 1,700 of their employees redundant. All these employees were employed under an Enterprise Agreement. Importantly, these employees were expecting to be able to undertake enterprise bargaining in 2021 once the EA’s expired (future workplace right). This falls under a workplace right being protected industrial action (s 341(2)(c)). Qantas made the decision to outsource the work to third parties whilst the EA was still active. 

Qantas’ position 

Qantas argued that its decision was not an adverse action to the employees because the employees did not have a present right to negotiate a new EA. Qantas’ submission was that adverse action only applied to the present opportunity to exercise a workplace right. The High Court did not accept these submissions. 

Trial decision 

The trial judge found that one reason Qantas outsourced was for commercial reasons. However, the trial judge also found that an additional reason Qantas had outsourced was to prevent its employees exercising a future workplace right (engaging in enterprise bargaining). The trial judge said that this reason was ‘substantial and operative’. 

High Court decision

The High Court upheld the trial judge’s findings. 

The High Court gave clarification to the meaning of workplace rights and adverse action in sections 340, 341 and 361 in the FWA. 

The Court stated adverse action is an action taken by an employer which prejudicially alters the position of the employee. Section 340(1), this includes taking action to prevent a person exercising a workplace right; s 340(1)(b). 

Section 341 sets out the meaning of a workplace right. The High Court held that this was not a definition section and was not exhaustive. 

The High Court also held that a workplace right includes any rights that are exercisable in the present and the future; 

“A person can have a workplace right, comprising an entitlement to the benefit of a workplace law or workplace instrument, within s 341(1)(a), even though the person’s capacity to exercise the workplace right may depend on accrual over time or on the occurrence of a future event or contingency.”

“A person who takes adverse action against another person for a substantial and operative reason of preventing the exercise of a workplace right by the other person contravenes s 340(1)(b), regardless of whether that other person has the relevant workplace right at the time the adverse action is taken.”

Therefore, s 340(1)(b) applies to any future workplace rights the employee may have at the time of the adverse action. 

Section 361 provides a rebuttable presumption in relation to the reason or intent for an employer taking an adverse action. Adverse action is only unlawful and in breach of the FWA if the reason behind the action is proscribed; substantial and operative. If a reason was not substantial or operative then it would be a lawful adverse action. 

Qantas took unlawful adverse action because the reason behind Qantas’ decision was substantially and operatively to prevent the employee’s from exercising their future workplace rights. Qantas did not rebut this presumption under section 361. 

Comment

To ensure that decisions that result in adverse action being taken against employees, e.g. redundancy, are valid, they need to be for lawful reasons. It is important to document the reasons for action being taken so that the Employer can prove the basis for the decision if challenged.

If you have any issues or questions, please do not hesitate to contact us.

Audrey Mills Director Dobson Mitchell Allport T. +61 3 6210 0057

Aimee Hope Lawyer Dobson Mitchell Allport T. +61 3 6210 0057