Case Note: Adverse Action and the Right ‘Not to Work’

Swanson v Monash Health [2018] FCCA 538

Introduction

The Applicant lodged an application with the Federal Circuit Court of Australia, alleging that the Respondent took adverse action against her in breach of section 340 of the Fair Work Act 2009 (Cth) when it threatened to terminate her employment and then terminated her employment whilst she was on paid personal leave.

The Applicant alleged that the Respondent terminated her for the reason that she exercised her workplace right not to work during her period of paid personal leave. The Applicant submitted that she exercised this right when she refused to attend an independent medical examination arranged by the Respondent.

Facts

On 4 March 2002, the Applicant commenced employment with the Respondent as a Personal Assistant. During the course of her employment she worked as a personal assistant to various persons within Monash Health’s Education Department. In 2013 she began as Personal Assistant to the Director of Nursing (the DON). From 27 October 2015, the Applicant began a period of personal leave under section 97 of the Fair Work Act 2009 (Cth) (the Act). The reason for her taking personal leave was expressed in a report of her treating doctor, which stated that, although she had full capacity to return to pre-work duties, she was unable to work in the vicinity of the DON for an indeterminate period.

The Applicant also filed a bullying allegation against the DON, that was subsequently investigated by the Respondent. The Respondent reached the conclusion that there was insufficient evidence to establish that the DON had engaged in “inappropriate conduct”.

On two separate occasions, the Respondent made offers of alternative positions to the Applicant, designed to facilitate her request to avoid further contact with the DON. On both occasions the Applicant refused the offers.

In light of her refusals, her protracted period of leave, and what the Respondent perceived to be insufficient evidence to establish a grounding for her continued period of absence, the Respondent directed on 8 April 2016, that the Applicant attend an independent medical examination (IME). The Applicant (through her solicitor) refused the Respondent’s direction, claiming that she was exercising her workplace right, which encompassed her right not to work, by taking personal leave in accordance with section 97 of the Act.

The Respondent’s legal counsel contacted the Applicant on two further occasions, directing her to attend an IME, stipulating in the letter’s that failure to attend at the IME would constitute a failure to follow a lawful and reasonable direction of her employer, and that such failure could have serious implications, including termination of her employment.

The Applicant refused to comply with the additional directions, alleging in her correspondence that the Respondent had taken adverse action against her, by threatening to terminate her employment, in breach of her workplace right not to attend work when on personal leave.

After giving the Applicant an opportunity to Respond in writing to the allegation that she had failed on three occasions to comply with a lawful and reasonable direction, the Respondent terminated the Applicant’s employment summarily, justifying the dismissal on the basis that she had engaged in serious misconduct under the Act.

Issues

Did the Applicant’s workplace right conferred by the Act include the right “not to work”?

Judge Jones found that the workplace right to take personal leave under section 97 of the Act, properly construed in accordance with Project Blue Sky Inc v Australian Broadcasting Corporation [1998] HCA 28, is conditional on the employee evidencing that he or she is unfit to attend work due to illness or injury. Identifying that the contract of employment remains on foot whilst an employee is on paid personal leave, Judge Jones concluded that the conditional right, does not confer an “overarching right” not to work, explaining that the employer’s right “to direct their employees what to do” is the “essence” of the employment contract.

Was the Respondent’s direction to the Applicant to attend an independent medical examination whilst she was on paid personal leave lawful? Was the direction reasonable?

After considering the respective judgments of Rares J in Australian and International Pilots Association v Qantas Airways Ltd [2014] FCA 32 and Goldberg J in Thompson v IGT (Australia) Pty Ltd [2008] FCA 994 (both citing the decision of Madgwick J in Blackadder v Ramsey Butchering Services 118 FCR 395), her Honour considered that it is an implied term of a contract of employment, that the employer can require an employee to attend an IME in circumstances that are reasonable. Her Honour asserted that the reasonableness of the requirement will always be a question of fact based on an assessment of the circumstances and stipulated that the implied contractual right is derived from the onerous obligations imposed on employers by Work Health and Safety legislation. The term is implied to ensure the “business efficacy” of the contract.

Judge Jones regarded the direction of the Respondent that the Applicant attend an IME as lawful, in that it was within the scope of the employment contract. Her honour also concluded that the direction was reasonable. For this proposition, her Honour gave a list of grounds in support of her finding, which included the fact that the treating doctor’s explanation for the Applicant’s failure to return to work was “obscure and unhelpful”, particularly as his original report of 10 December 2015 stated that the Applicant was fully capable of returning to work on the condition that she was not able to work in the vicinity of the DON.

Did the Respondent take adverse action against the Applicant for exercising a workplace right?

The bulk of Judge Jones’ decision focuses on the above questions: this final question was dealt with straightforwardly. The Act prohibits employers from taking adverse action against employees or prospective employees, for a proscribed reason, including the exercise of a workplace right. Her Honour therefore considered whether the Respondent terminated the Applicant for the reason that she exercised her workplace right to take paid personal leave under the Act.

Under section 361 of the Act, the Court must presume that the employer acted for the alleged proscribed reason in breach of the Act unless the employer proves otherwise. Following analysis of the relevant decision maker’s affidavit, Judge Jones concluded that the adverse action (terminating the Applicant’s employment) was taken for the sole reason that the Respondent sought information about the state of the Applicant’s health, so that it could properly arrange its affairs, given her extended absence from work.

Compliance Impact

This case makes it clear that organisations can (in appropriate circumstances) direct employees to attend independent medical examinations – a power that is not circumvented by employee’s that take paid personal leave. In exercising their right to do this, organisations should ensure that such directions to employees are only made in circumstances that are reasonable.

Share this post

Ready to get in touch?