Fair Work Commission Upholds Worker's Right To Protest In "Undies Protest" Case

Monday 13 November 2017 @ 10.35 a.m. | Legal Research

Last Friday, 10 November, the Fair Work Commission (FWC) released their judgment in favour of David McLachlan, reinstating his employment at the Illawarra Coal Holdings Pty Ltd by reason of unfair dismissal under te Fair Work Act 2009 (the “Act”), s 394. In their judgment for this case, McLachlan v Illawarra Coal Holdings Pty Ltd T/A South32 [2017] FWC 5167 (the “Case”), the FWC reaffirmed the rights of employees to protest against the decisions of their employers.

Factual Background

McLachlan, the applicant in this case, was an employee of the respondent company for approximately 17 years leading up to his dismissal, working as an underground coal miner. During his employment, McLachlan was a member of the Construction, Forestry, Mining and Energy Union (CFMEU), and in 2016 had become president of the local CFMEU Lodge, the Appin Colliery.

In the time of McLachlan’s employment, the industrial instrument that covered the West Cliff Colliery was the West Cliff Colliery Workplace Agreement 2008. This instrument allowed for certain entitlements for employees with regards to work clothing, ensuring that all employees were provided with the appropriate attire and providing that the laundering of such work clothing was the responsibility of the Company. The Appin Colliery also had a similar industrial instrument, which didn’t include the laundry requirement, the BHP Illawarra Coal Appin Colliery Certified Agreement 2001. These instruments were merged on 5 January 2016 with the forming of the Appin Colliery & West Cliff CPP Enterprise Agreement 2015 (the EA), providing that both West Cliff Colliery and Appin Colliery were required to have a laundry arrangement under clause 12 of the EA. This stated that: “a laundry service enabling clean clothes on a daily basis will be provided at no charge to Employees for all Employees by July 2016.”

Consequent to this new agreement, the Appin Colliery made no immediate provision for establishing a laundry service and by January 2017, the company manager had sent around a number of emails providing that the laundry service was not likely to be implemented until late February 2017, with compensation of up to $450 upon supply of evidence of laundry costs.

The CFMEU was not satisfied with this proposed arrangement and, in February 2017, made an application under s 739 of the Act for the Fair Work Commission to deal with the dispute. This application was rejected by the Company which provided for a new offer of a one-off payment of $420 to each employee without evidence of laundry costs.

The offer presented by the company was rejected by the CFMEU, and as the president of that region, McLachlan decided to hold a protest at the Appin Colliery site. This protest was termed an “undies protest”, involving the employees dressing not in their work clothing, but in their underwear. This protest occurred on the 7th of March 2017 and by that afternoon was highly publicised.

As a result of the protest, McLachlan was suspended from work with full pay pending an investigation into the undies protest as well as the surrounding circumstances. The result of the investigation was the termination of Mr McLachlan’s employment at the company, with the reasons for such being that “the conduct of the applicant was held to have been unlawful and damaging to South32, both publicly and in terms of its relationship with its employees” (at [37]).

The Case for Mr McLachlan

In the argument by the representative of the applicant (Mr Slevin), it was submitted at paragraphs [42] and [43] that:

“the conduct of the applicant on 7 March 2017 was not unlawful, nor did it cause damage to South32, either publicly or in terms of its relationship with its employees. Further, it was submitted that the conduct of the applicant on 7 March 2017, could not have caused South32 to lose confidence in the applicant’s ability to abide by his obligations as an employee and in respect to the employer’s policies. Mr Slevin also noted that the applicant had an unblemished employment record and that South32 had treated others involved in the protest activity with substantially less severity than was applied to the applicant. Consequently, it was submitted that the reason for the dismissal of the applicant was not a valid reason.

It was further submitted that when the various aspects of the reasons for the dismissal of the applicant were properly evaluated, the dismissal could not be said to have been based on a reason that was sound, defensible and well-founded. In particular, it was submitted that the punishment of dismissal was disproportionate to the conduct of the applicant. Consequently, it was submitted that the disproportionality of the punishment of dismissal further reinforced that there was no valid reason for the dismissal of the applicant.”

Mr Slevin made a number of further submissions with regards to the professional conduct of the applicant as well as the surrounding circumstances of the protest, including the conduct of the company. At [53]:

"In conclusion, Mr Slevin summarised that the dismissal of the applicant was unfair as it had been based on a reason that was invalid. Further, Mr Slevin argued that even if there was valid reason for the dismissal of the applicant, various other aspects of the circumstances surrounding the events of 7 March 2017, and other factors involving the personal circumstances of the applicant meant that the decision to dismiss him was harsh. Mr Slevin urged that the Commission find that the dismissal of the applicant was unfair, and that it would be appropriate for the applicant to be reinstated to his former position, with no loss of continuity and payment of lost remuneration."

The Case for South32

In presenting the case against Mr McLachlan, the representative for the Company, Mr O’Grady QC, submitted a number of arguments on the basis that the dismissal of McLachlan was not unfair. These arguments included the unlawfulness of the protest as well as the alleged “misrepresentation” of the circumstances surrounding the laundry service dispute. At paragraphs [67] and [68]:

“In summary, Mr O’Grady submitted that the deliberate actions of the applicant, which involved a breach of his employment contract, a breach of the enterprise agreement, and a breach of the Fair Work Act in the form of organising and participating in unprotected industrial action, when coupled with his lack of frankness during the employer’s subsequent investigation, established valid reason for the dismissal. Mr O’Grady rejected that the dismissal was otherwise harsh, notwithstanding the applicant’s personal circumstances including length of service, because of the seriousness of the deliberate action and the consequences that it had upon the reputation of South32 generally and in respect to its other employees.

Mr O’Grady made further alternative submissions in respect to the question of any remedy in the event that the dismissal of the applicant was found to have been unfair. In this regard, Mr O’Grady submitted that it would not be appropriate to reinstate the applicant as there were real concerns regarding the ongoing employment relationship because of the nature of the behaviour of the applicant regarding the protest action, the media attention that followed, and which amounted to aggregating factors that operated to confirm that reinstatement would not be an appropriate remedy.”

The Judgment

In the judgment of Commissioner Cambridge, it was held that Mr McLachlan had been wrongfully dismissed under s 385 of the Act. This section stipulates 4 elements which must be satisfied by the Commission for a finding of unfair dismissal to be made out:

  1. The person has been dismissed; and
  2. The dismissal was harsh, unjust or unreasonable; and
  3. The dismissal was not consistent with the Small Business Fair Dismissal Code; and
  4. The dismissal was not a case of genuine redundancy.

With regards to section 385(b) of the Act, the criteria for what is “harsh, unjust or unreasonable” are contained in s 387 of the Act:

  1. whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
  2. whether the person was notified of that reason; and
  3. whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
  4. any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
  5. if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
  6. the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
  7. the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
  8. any other matters that the FWC considers relevant.

In holding that the applicant’s dismissal was harsh, unjust or unreasonable, Commissioner Cambridge took into account McLachlan’s position with regard to the protest as well as his position as the president of the local CFMEU. As such, a primary consideration was whether the protest was protected by section 346 of the Act, which provides for protection of industrial actions which are lawful. This argument was extrapolated in paragraph [76] of the judgment:

“An extrapolation of this general protection into the circumstances of this case can be made as follows; a person, in this case, South32, must not take adverse action against another person, in this case, the dismissal of the applicant, because the other person, the applicant, organise[d] or promote[d] a lawful activity for, or on behalf of, an industrial association, or, encourage[d], or participate[d] in, a lawful activity organised or promoted by an industrial association, or, represent[ed] or advance[d] the views, claims or interests of an industrial association, in this case, the organisation, promotion, encouragement and participation in the protest action of 7 March 2017.”

Therefore, in deciding that the protest was not an unlawful industrial action (at paragraph [81]):

“the protest action which involved both the undies protest and the meeting under the tree, had little practical impact on the performance of work, and it did not cause any loss of production. The practical impact of the protest action was largely confined to the alleged reputational damage to South32. Therefore, if the protest action of 7 March could have properly represented industrial action at all, it was industrial action of the lowest order, which would not even register a reading on any realistic scale of actual industrial action. Although the protest action could at best, represent only seemingly inconsequential industrial action, both the undies protest and the meeting under the tree have been carefully analysed in order to determine whether those actions, separately or in combination, could be properly characterised as meeting a practical interpretation of the definition of industrial action contained in s. 19 of the Act.”

Commissioner Cambridge then analysed a number of other arguments for and against Mr McLachlan, finally concluding that the dismissal of McLachlan was unfair under s 394 of the Act. The Commissioner then awarded the applicant a reinstatement to his position at the Company.

At [159] to [160]: “In the particular circumstances of this case, all of the relevant issues regarding the appropriateness of reinstatement have been considered, and I have formed the view that an injustice of particular significance would stand if the applicant was not provided with the remedy that he has earnestly sought. In addition, it is relevant to note that the particular manager that made the decision to dismiss the applicant, Mr Wheatley, has subsequently changed position and he would not have direct supervisory responsibility for the applicant.

Therefore, I have concluded that reinstatement would be appropriate in all of the circumstances of this case.”

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McLachlan v Illawarra Coal Holdings Pty Ltd T/A South32 [2017] FWC 5167

Fair Work Act 2009 (Cth) - available on Timebase's LawOne service

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