This month’s Qantas decision has attracted considerable attention, and it will no doubt attract further attention once the penalty decision is handed down.  While the High Court’s decision formed the headline, there’s a reality that much of the current attention and social and political ‘pile-on’ is really the product of broader people management decisions Qantas made in the conduct of its business over time, many of which had ongoing adverse impacts for both its employee and customer bases.  Much of the public commentary around the decision relates to the ultimate finding that the outsourcing decision breached the general protection provision within the Fair Work Act, and in that sense was found to be unlawful.  Broader business interest in the Court’s decision is also likely to have been heightened by the fact the outsourcing decision occurred within the context of the global pandemic, a fractious industrial history, and clear economic headwinds Qantas was facing at the time.

In truth, the High Court decision was about far less.

Importantly, the decision does not remove the right for an employer to make decisions about the size and composition of its work force.  The decision does not remove the right for an employer to outsource parts of its business.  Instead, the decision affirms the prior understanding that those decisions can’t be for reasons which include unlawful reasons.

For context, included within the general protection provisions of the Fair Work Act is a prohibition on a person taking adverse action against another person to prevent the exercise of a workplace right by the other person.  Lots of things can constitute adverse action.  An outsourcing decision is one of them.  Many things constitute workplace rights, including the ability for a person to participate in workplace bargaining and to take protected industrial action in support of bargaining claims.  Relevantly, taking adverse action is not unlawful, but taking it for an unlawful reason is.

In a general protections application, the employer has the legal burden of satisfying the Court that the adverse action was not taken for reasons which include the relevant workplace rights.  This is referred to as a reverse onus of proof.

The High Court’s decision represented the final step in an appeal process for Qantas.  The question for the High Court was fundamentally whether the prohibition applied to rights which did not yet exist (that is, future rights).  Somewhat predictably, the High Court found it does.

Despite this, the real damage for Qantas occurred in the original decision where the Court found:

1. the reasons for Qantas’ outsourcing decision included to prevent employees from exercising their future workplace rights to engage in workplace bargaining, and to engage in protected industrial action to support their workplace bargaining claims; and
2. Qantas had failed to discharge its reverse onus of proof, and had not satisfied the Court that its outsourcing decision was for reasons which did not include the substantive and operative reason of preventing the exercise of those future rights.

This was a failure of evidence.

Qantas didn’t lose because it was not permitted to make the outsourcing decisions.  Qantas clearly established that it had sound commercial reasons for making the decision it did, but that was not the test.  What it failed to establish was that the “other reasons” (being the unlawful reasons) were not substantive and operative reasons.

Qantas did not appeal this aspect as part of its High Court appeal (presumably because it couldn’t), and thereafter the ultimate outcome ought to have been anticipated.

So what do we all learn from this?

Firstly, employers still have the right to make decisions regarding the structure and nature of their operations, and their workforce.  Those decisions need to be made for sound, commercial reasons, and importantly those reasons must not include any unlawful reasons (such as preventing an employee from exercising a workplace right, whether current or future).

Secondly, because an employer needs to satisfy the Court that the substantial and operative reasons for the decision did not include any unlawful reasons, evidence is critical. Meeting the reverse onus of proof is not as difficult as it sounds, and many applications fail because the employer is able to readily meet this standard.  As part of doing so, it’s important for employers to:

• Be clear who their decision maker is (and is not).  An employer can’t discharge the reverse onus unless the decision maker gives clear, direct and uncontradicted evidence as to what were the substantial and operative reasons for their decision, and what were not.
• Be clear on what the reasons for the decision are, document and communicate them appropriately.  Ensure those who are involved or otherwise need to know, understand the reasons. Self-evidently, if the documentation or other evidence is ambiguous or shows that unlawful reasons were being discussed or considered, discharging the reverse onus will be very difficult.

Thirdly, a common scenario all employers face is the decision to terminate a person’s employment within a probationary period, or within the first 6 months’ of the employment relationship.  If that’s a rushed decision, with little visibility having previously been given to the employee, the employer is likely to face an evidentiary challenge when attempting to satisfy a Court that the decision to dismiss at that time, was for reasons which did not include the future workplace right of the employee to access the unfair dismissal jurisdiction.

Finally, there’s obviously a much bigger context to the Qantas discussion occurring at this time.  There’s little doubt that the High Court’s decision would have been newsworthy in the absence of everything else, but Qantas’ current fortunes are a great case study as to how the chickens always come home to roost.

Chris Oliver, Director