Workplace Relations: CFMEU v Pilbara Iron Company

Construction, Forestry, Mining & Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 3) [2012] FCA 697 (29 June 2012)

The Federal Court of Australia recently handed down a significant decision in relation to the protections afforded to employees against adverse action. The employer, a subsidiary of Rio Tinto, engaged the employee, Daryl Lamberth as a trainee car examiner (associated with its rail operations in the Pilbara) on a twelve month contract in accordance with its usual practice. Shortly prior to the expiration of the contract, the employer advised Mr Lamberth that it would not be renewing his contract, contrary to its usual practice for trainee car examiners.

The evidence disclosed that the parties had had a difficult relationship over the course of the contract. Whilst Mr Lamberth's work performance appeared satisfactory, Mr Lamberth engaged in confrontational behaviour about workplace health and safety matters, including six verbal and written complaints made to management about safety matters, incidents and procedures, sometimes about matters he was not directly involved in. Mr Lamberth had also joined the CFMEU during the course of the contract and was an open, active and vocal union member in relation to safety matters as well as a prospective enterprise agreement. Approximately 9 months into the contract, the employer conducted a performance review. Whilst the original performance review, conducted by Mr Lamberth's immediate supervisor, was acceptable, it was revised by higher management to an unacceptable level and criticisms included of Mr Lamberth's conduct, particularly his communications with peers and management.

Mr Lamberth also nominated for the safety and health committee. Although it had no power to refuse nominations, the employer did not accept the nomination and failed to include his name on the ballot.

The employer argued that its reason for not offering Mr Lamberth a job was his engagement style with management which was abrupt and aggressive. The Court largely found that Mr Lamberth's style was aggressive and the Court noted the frequent use of expletives (which the Court accepted was largely routine in the industry). The Court also found that Mr Lamberth was difficult to placate, possibly caused embarrassment for his supervisors and was 'too big for his boots'. In particular, the employer was concerned that Mr Lamberth failed to comply with the communication practices outlined in its document 'The Way We Work'.

The Court upheld Mr Lambert's claims, determining that:

  1. Mr Lamberth was a 'prospective employee' with respect to potential permanent employment (and therefore protected against proscribed adverse action) even whilst he was employed under the 12 month contract.
  2. The employer's failure to offer Mr Lamberth a permanent position, the poor performance review and the employer's refusal to accept Mr Lamberth's nomination for the safety and health committee each constituted adverse action.
  3. The adverse action which the court identified was proscribed because it was taken because of Mr Lamberth's complaints and/or inquiries (primarily regarding safety matters) and (in relation to the safety and health committee issue) because of active canvassing for the CFMEU.
  4. That to not order the employer to employ Mr Lamberth would be to reward the employer for its unlawful action.

The case outlines the potentially harsh operation of ss. 360 and 361 of the Fair Work Act 2009, which provide that (in summary) if an action occurs for a prohibited reason (such as Mr Lamberth making complaints or inquiries in relation to his employment), but there are other reasons, the court must effectively ignore those other reasons, unless the employer is able to demonstrate that the 'real' reason did not include that prohibited reason. In this case, the employer was largely successful in demonstrating that Mr Lamberth's conduct was difficult and objectionable. However, the court found that the employer failed in its evidence to dissociate its concerns about Mr Lamberth's method of communication (which would not have been a prohibited reason) from its concerns about the content of his complaints and inquiries (a prohibited reason) and then prove that the latter was not a reason at all for taking the adverse action.

This demonstrates that employers, particularly, must separate the substance of complaints made by employees from the method of their delivery. Employers must be very careful in taking action based on communications conveying complaints even where the style of those communications is objectionable or difficult.

 

* PCC Lawyers are a team of employment practitioners based in Sydney, with many years of combined knowledge and experience in workplace law, industrial relations, workplace investigations and training.  They provide a high standard of excellence and an exceptional level of personal service to a variety of clients in the Sydney metropolitan area, Central Coast, regional NSW and interstate.