When considering claims of adverse action under the Fair Work Act 2009 (Cth) (the FW Act) a key focus of inquiry is the actual reasons of the decision-maker for engaging in the action.
The Federal Court of Australia recently considered this point in determining whether a major law firm engaged in adverse action in contravention of the FW Act when it dismissed a lawyer who had publicly criticised the law firm’s clients, being two Commonwealth Government agencies.
In R v The Partnership trading as HWL Ebsworth Lawyers [2019] FCA 1409, a senior lawyer employed on a casual basis was dismissed by the firm’s managing partner after he publicly criticised the Department of Defence and the Department of Veterans’ Affairs.
The lawyer made a number of public remarks expressing his view that the Government agencies had failed to adequately respond to recommendations made following a 2011 inquiry into historical sexual assault in the military, an inquiry which he had led.
The lawyer was told by the firm’s managing partner and the partner in charge of the Canberra office, that such conduct was unacceptable as the agencies were clients of the firm.
The lawyer’s conduct also prompted the firm to issue a written policy in 2014 requiring its partners and staff to obtain the prior approval of the managing partner or the national marketing manager before proceeding with any media interview. The policy also prohibited, under all circumstances, negative or critical comments being made about existing, past or potential clients, government departments or entities, regulatory bodies or any existing or proposed legislation or regulations.
Despite this policy and the warnings, the lawyer continued to make public comments about the agencies without authorisation, including in an article published in The Sydney Morning Herald in December 2016.
In February 2017, the managing partner dismissed the lawyer without providing reasons.
The lawyer claimed, amongst other things, that the firm had taken adverse action against him for making inquiries about his retainer (which he had made the day before his dismissal), and for his political opinion.
Given the timing of the dismissal, the Court conceded that the lawyer’s inquiries about his pay were, at the very least, the reason why the managing partner dismissed the lawyer when he did. However, the Court was not convinced that those inquiries were the substantial reason for the dismissal. It noted that the lawyer had been making inquiries about his retainer since July 2016 and the fact that the dismissal was not effected until many months later and this suggested to the Court that it was not the reason for the dismissal.
According to the Court, the question to be asked was “not what [the lawyer] did but rather why [the managing partner] terminated his employment”. On this point, the Court was satisfied that the managing partner, who admitted that he dismissed the lawyer because of his criticisms of the firm’s clients, was not concerned about the lawyer’s political opinion; he was concerned that the lawyer’s conduct in criticising the firm’s clients was a threat to the business, and that the lawyer was being insubordinate.
The Court also rejected the lawyer’s argument that the policy itself was indirectly discriminatory. It found that the Discrimination Act 1991 (ACT) stated that conditions or requirements that are reasonable in the circumstances will not give rise to indirect discrimination, and the firm’s policy was a reasonable one having regard to its interests in deriving revenue from those clients.
The lawyer’s claim was dismissed.
Lessons for employers
In a similar tone to the High Court’s recent decision in Comcare v Banjeri [2019] HCA 23, the Federal Court has given further support to the position that a distinction can be drawn between the reasonable requirements of an employer and the freedom of employees to publicly and strongly express their political opinions.
Employers are entitled to set reasonable rules and regulations for employee conduct where there is a legitimate business interest for doing so, such as protecting its reputation, and maintaining its relationships with clients and customers.
This decision is also a reminder that care should be taken to ensure that the reasons for any disciplinary action relating to employee conduct are clearly communicated to the employee and that the action is not for any prohibited reasons.
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