Professional Updates: Employment Law
Freedom of speech and
employees: A new application
for section 298?
By Jason Harris, Associate Lecturer in Business Law and Taxation,
University of New South Wales*
Distinguishing between the roles of an
employee and a union representative
Judging employee misconduct
Defamation
I
n an age where businesses are eager to
promote and preserve their commercial
brand, an interesting issue is arising as to
what extent employees are able to exercise
freedom of speech about employment related
issues without facing disciplinary action from
their employers.
In a recent Federal Court case, Finance Sector
Union of Australia v Australia and New Zealand
Banking Group Ltd1 (ANZ case), Wilcox J found
that actions by the ANZ bank (the bank) in
disciplining a branch manager who had made
comments in Sydney newspapers constituted a
breach of s 298K of the Workplace Relations Act
1996 (Cth).
This article considers how the freedom of
association provisions in the Workplace
Relations Act 1996 (Cth) (the Act) may be used
to protect an employee’s freedom of speech
relating to workplace issues.
The conflict between the bank and the
employee, Ms Buckland, concerned several
incidents including Ms Buckland’s role as
branch manager during a stop work meeting
and several newspaper articles that had featured
her comments. This article concentrates on the
impact that the newspaper articles had on the
employment relationship between the bank and
Ms Buckland.
Facts
The ANZ case involved a Sydney branch
manager of the ANZ Bank, Ms Joy Buckland,
who was at the time, and continues to be, the
MARCH 2003
national president of the Finance Sector Union
(FSU). The case concerned disciplinary action
taken by the bank that included formal and
informal counselling sessions of Ms Buckland
by senior bank management and a formal
written warning to Ms Buckland about her
performance as an ANZ manager and
employee.
At the time of the disciplinary action Ms
Buckland was a well known figure in the
Padstow community as the manager of the
Padstow branch of the ANZ. Ms Buckland had
been an employee with the bank for 23 years.
The tensions between Ms Buckland and the
bank centred on what the bank saw as an
apparent conflict between Ms Buckland’s duties
to her employer and her role as an elected
union official (that is, FSU president). This
conflict became evident when the bank
appointed a new manager to oversee an area
that included Ms Buckland’s branch. The new
manager (Mr Inglis) reportedly informed Ms
Buckland that they would ‘never see eve to eye
... about the Union’.
Newspaper interviews
In 1999, Ms Buckland gave an interview to
the Sydney Morning Herald, in her capacity as
president of the FSU, concerning a union rally
at which she had given a speech. The article
referred to Ms Buckland as ‘a branch manager
for the ANZ Bank’ although she had requested
that the article not refer to her employer
specifically. The article spoke about the
increasing pressures placed on bank employees.
In 2000, Ms Buckland gave an interview to
the Sun-Herald in her capacity as president of
the FSU, where she spoke about work related
stress in the banking sector and the demands of
the banking industry’s excessive working hours.
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Employment Law cont.
if that’s where your beliefs lie ... [i]f
you want a retrenchment, I’ll fix it
up for you’. Ms Buckland declined
the invitation for voluntary
retrenchment.
Ms Buckland’s photograph was
published in the article, although no
mention was made of Ms Buckland’s
employment with the ANZ bank.
The bank responded to the article
by telephoning Ms Buckland and
stating that the article was
inappropriate and formal action
would be taken against her if the
incident was repeated. The bank
requested that she not participate in
any media interviews where she may
be recognised as an ANZ employee.
During his testimony in the case, a
senior ANZ manager explained that
he ‘didn’t think [that the articles]
would help the business at all’.
In 2001, Ms Buckland gave
another interview for the Sydney
Morning Herald during which she
spoke about job insecurity and
female bank employees. In the
article, Ms Buckland was identified
only as a ‘bank manager at Padstow’
and it stated that she ‘did not want
her bank to be named’.
The bank responded to the article
by making a verbal complaint to Ms
Buckland during a meeting, which
was identified in the meeting’s
minutes as follows:
FSU’s claims
The FSU made a number of claims
against the bank under the Act. The
FSU claimed that the letters and
counselling sessions given by the
bank’s senior managers had breached
s 298K because the actions by the
bank had injured Ms Buckland’s
employment or altered her
employment position to her
prejudice.2 The FSU claimed that the
actions were taken because of Ms
Buckland’s role with the FSU, which
were prohibited reasons under the
freedom of association provisions.3
ANZ’s submissions
[It was stated to Ms Buckland by a
senior bank manager] that it was
against bank policy for staff other
than those approved by head office to
make statements to the media, and
[who] once again reminded her that
she had been warned regarding this
issue 12 months ago ... In future she is
not to talk to any media publication
in her capacity as or where identified
as branch manager. Any further
noncompliance with this directive
may result in her dismissal.
Ms Buckland received a further
written warning from a senior bank
manager soon after the meeting
which stated that she was ‘advised
that any future breach of [the media]
policy may result in the termination’
of her employment. The senior
manager advised Ms Buckland that
‘[i]f you don’t believe in the
direction ANZ’s heading in, why
don’t you go and work for the Union
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MARCH 2003
The bank’s submissions centred
on the duties of faithful service owed
by employees to their employers.4 It
was submitted by the bank that in
conducting unauthorised media
interviews relating to banking sector
employment issues, Ms Buckland was
failing to provide faithful service to
the bank. The bank ventured so far
as to contend that a branch manager
stands in a fiduciary relationship
with their bank employer, with the
result that branch managers should
at all times act in the best interests of
the bank.
The bank’s submission
was that Ms Buckland
had been disciplined
for failing to perform
her duties as an
employee rather than
as a result of her role
as a union official.
KEEPING GOOD COMPANIES
Mr Inglis, the ANZ senior
manager involved in the formal
counselling of Ms Buckland, testified
that his opinion was that all branch
managers should actively promote
the bank’s position on a range of
topics related to the bank’s work. The
bank’s submission was that Ms
Buckland had been disciplined for
failing to perform her duties as an
employee rather than as a result of
her role as a union official. This
submission therefore relied on the
bank proving that Ms Buckland’s
media interviews constituted
misconduct sufficient to justify
disciplinary action.
After the FSU commenced
proceedings, the bank sent a letter to
Ms Buckland in an attempt to clarify
the issues involved in her situation.
In the letter the bank justified the
restriction on her ability to speak
with the media on the basis that, as
an ANZ branch manager, Ms
Buckland would have access to
confidential information which, if
disclosed, would constitute a breach
of her duties to her employer as an
employee.
Freedom of association
provisions
It is now appropriate to set out
the relevant portions of the
provisions of the Act relied on by the
FSU:
298K. Dismissal etc of members of
industrial associations etc
(1) An employer must not, for a
prohibited reason, or for reasons
that include a prohibited reason,
do or threaten to do any of the
following:
…
(b) injure an employee in his or
her employment
(c) alter the position of an
employee to the employee’s
prejudice
…
298L. Prohibited reasons
Employment Law cont.
(1) Conduct referred to in subs
298K(1) is for a ‘prohibited reason’
if it is carried out because the
employee, independent contractor
or other person concerned:
(a) is, has been, proposes to
become or has at any time
proposed to become an officer,
delegate or member of an
industrial association; or
…
(1) in the case of an employee, or an
independent contractor, who is a
member of an industrial
association that is seeking better
industrial conditions — is
dissatisfied with his or her
conditions; or
…
(n)as an officer or member of an
industrial association, has done, or
proposes to do, an act or thing for
the purpose of furthering or
protecting the industrial interests
of the industrial association, being
an act or thing that is:
(i) lawful and
(ii) within the limits of an
authority expressly conferred
on the employee, independent
contractor or other person by
the industrial association under
its rules.
Decision of Wilcox J
Wilcox J dismissed the bank’s
claim that their branch managers
were fiduciaries, stating that ‘the
doctrine of fiduciary relationship has
no application to negotiations
between an employee and employer
regarding contractual or industrial
matters’.5 Wilcox J found the
fiduciary concept inapplicable
because employees and employers
were knowingly, in relation to
industrial matters, engaged to
maximise their own benefit, perhaps
at the expense of the other party.6
In relation to the bank’s
submission that their employees
were under a duty to the bank’s
position on a range of topics related
Freedom of speech
If ... an employee is not
a fiduciary in relation
to industrial matters,
then the employee is
entitled to take a
position about
industrial matters that
is different from their
employer’s position.
to the bank’s work, Wilcox J stated
that Ms Buckland ‘was entitled to her
own view’ about contentious issues
between the FSU and the bank and
was entitled to ‘maintain her
integrity in relation to them’.7 This
follows on from his Honour’s
rejection of the fiduciary nature of
the relationship between Ms
Buckland as branch manager and the
bank. If, as Wilcox J decided, an
employee is not a fiduciary in
relation to industrial matters, then
the employee is entitled to take a
position about industrial matters that
is different from their employer’s
position.
Wilcox J rejected the FSU’s
submission that the informal
counselling injured Ms Buckland’s
employment or altered her position
as an employee to her prejudice. The
basis of this finding was that
counselling was conducted over the
telephone and did not result in a
formal written warning.8
In relation to the formal
counselling by Mr Inglis and the
formal written warning, Wilcox J
dismissed the claims based on
s 298L–(1)(l) and 298L–(1)(n) because
of a deficiency in the evidence
(s 298L–(1)(l)) and because the
nature of the FSU president’s media
role under the governing rules of the
union could not bring the media
interviews under the requirements of
s 298L–(1)(n).9
MARCH 2003
The interesting point about the
ANZ case concerns the probability of
the freedom of association provisions
being used to protect an employee’s
freedom of speech. In order to bring
the claim within the prohibited
reasons provisions,10 the FSU claimed
that the bank’s conduct in giving a
formal written warning and
counselling to Ms Buckland had been
carried out because of her position as
an elected union official.
Wilcox J agreed with the decision
of Merkel J in Australian Municipal,
Administrative, Clerical and Services
Union v Ansett Australia Ltd where his
Honour stated that: ...
in a case in which the dismissal of a
union official or delegate occurs in
circumstances that are closely
associated with the activities of the
employee in that capacity, the
employer carries the onus of rebutting
the very real possibility that the
dismissal was associated with the
circumstance that the employee was
an official or delegate. A failure to do
so can result in the Court determining
that, under the statutory scheme, the
dismissal was for a proscribed reason.11
Merkel J went on to state that:
If [the dismissed employee’s
unauthorised use of their employer’s
IT equipment] had constituted
misconduct or was otherwise an
unauthorised use, then her dismissal
for those reasons may be sufficient to
exclude the possibility that she was
being dismissed for the reason that
she was the ASU delegate. Further, in
such circumstances it would not have
been part of her duties or functions as
a delegate to misuse Ansett’s IT
system. Any such use might, to that
extent, be disassociated from the
circumstance that she was an ASU
delegate. However, the corollary also
applies. If [the dismissed employee’s]
use was an authorised use and in so
using Ansett’s email system she was
discharging her duties and functions
as a delegate, it becomes
commensurately more difficult to
conclude that Ansett has excluded the
possibility that her dismissal was
associated with the circumstance that
she was an ASU delegate.12
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Employment Law cont.
It was clear in the ANZ case that,
even when Ms Buckland was
reported as being a branch manager
with ANZ, while giving media
interviews on a range of topics Ms
Buckland was acting in her capacity
as a union representative and,
indeed, one of the interviews was
conducted at the express request of
an FSU official. Once the media
interviews were seen as being carried
out because Ms Buckland was a
union official, the onus, applying
Merkel J’s test quoted above, rested
on the bank to establish that they
had disciplined Ms Buckland because
of misconduct, rather than as a result
of her actions as a union official.
In considering whether the
unauthorised media interviews by
Ms Buckland constituted misconduct
so as to exclude the operation of
s 298L(I)(a), Wilcox J considered at
length an article by GJ McCarry,13
including a range of principles that
McCarry proposed in assessing the
situation surrounding an employee’s
freedom of speech. The principles
quoted by Wilcox J were:
(1) the way in which the employee
obtained the facts or data on
which his comment is based
(2) the employee’s position with the
employer
(3) whether or not the employee is
bound by a code of professional
ethics
(4) the employee’s motives
(5) the extent of dissemination of the
employee’s comment.14
In assessing whether an
employee’s free speech constitutes
misconduct, Wilcox J considered
situations where an employee’s
speech discloses confidential
information or is defamatory.15 It is
submitted that each of these
situations are evidence of a breach of
the contract of employment by the
employee which justifies disciplinary
action or dismissal.
MARCH 2003
Where an employee exercises
their free speech in disclosing their
employer’s confidential information,
they may be guilty of misconduct.
Any action taken against an
employee who discloses confidential
information may be justified on the
basis of misconduct and will be less
likely to be for a prohibited reason
under s 298L(I)(a). In the ANZ case,
Ms Buckland’s media interviews
related to general workplace issues
and did not disclose any information
specifically related to the ANZ. There
was therefore, no disclosure of the
bank’s confidential information.
Defamation
When could free
speech by employees
constitute misconduct?
102
Confidential information
An employee will be engaging in
misconduct where they use their
freedom of speech to commit
defamation against their employer. It
is submitted that this conduct would
come within the comments of Dixon
and McTiernan JJ in Blyth Chemicals
v Bushnell:
Conduct which in respect of
important matters is incompatible
with the fulfillment of an employee’s
duty, or involves an opposition, or
conflict between his interest and his
duty to his employer, or impedes the
faithful performance of his
obligations, or is destructive of the
necessary confidence between
employer and employee, is a ground
of dismissal. But the conduct of the
employee must itself involve the
... the onus ... rested on
the bank to establish
that they had
disciplined Ms
Buckland because of
misconduct, rather
than as a result of her
actions as a union
official.
KEEPING GOOD COMPANIES
incompatibility, conflict, or
impediment, or be destructive of
confidence. An actual repugnance
between his acts and his relationship
must be found. It is not enough that
ground for uneasiness as to its future
conduct arises.16
The law of defamation, however,
makes the distinction between fact
and comment by offering a defence
of fair comment on matters of public
interest.17 This allows employees to
make personal comments about their
employer without being sued for
defamation provided that the
comments are fairly based on an
adequate knowledge of the relevant
facts, such that an honest or fair
minded person could hold such an
opinion.18
Result
Wilcox J found that the ANZ had
disciplined Ms Buckland because she
was a union official in breach of
s 298K of the Act. The bank had
demonstrated by their actions and
comments that they failed to
appreciate the distinction between
Ms Buckland’s role as an employee,
and her role as a union official. This
made it very difficult for the
disciplinary conduct by the bank to
be seen as anything other than an
attack on Ms Buckland because of
her union affiliation. The bank could
have avoided this result if they had
proved misconduct to justify the
disciplinary action. Following a
consideration of the bank’s oral and
affidavit evidence, Wilcox J found
that the bank had failed to meet its
evidentiary onus to prove
misconduct.19
Lessons for employers
In light of the decision in the
ANZ case, the position seems to be
that employees who are union
members or representatives may, in
their capacity as union members or
representatives, make comments
about their employer that are fairly
based on an adequate knowledge of
relevant facts, and that do not
Employment Law cont.
disclose their employer’s confidential
information without prior consent. If
an employer takes disciplinary action
against such an employee because of
the employee’s exercise of their
freedom of speech in connection
with their union affiliation, then the
employer may face legal action
under s 298K.
Part of the bank’s difficulties in
this case stemmed from the fact that
senior management displayed a lack
of understanding about the nature
and requirements of Ms Buckland’s
role as FSU president. The bank, in
taking disciplinary action, also failed
to distinguish between Ms
Buckland’s role as an employee and
as a union official. The ANZ case
should send a strong warning to
employers that they should maintain
an appreciation about the media
opportunities that union officials
may take advantage of.
Employers may also justify
discipline for misconduct by
implementing and enforcing a clear
media policy that is limited to the
employee’s capacity to act as an
employee, rather than attempting, as
the ANZ did, to limit an employee’s
role as a union official. Ms Buckland
only breached the bank’s directives
because she was acting in a capacity
as a union representative, not an
employee. The freedom of
association provisions in the Act
protect employees from discipline
under these circumstances.
Possible restriction on
scope of decision
It is important to note that ANZ
case concerned a situation where the
employee did not make comments
about her employer specifically, but
rather about the banking industry in
general. The case did not specifically
decide that union members or
representatives may, using the
freedom of association provisions,
attack their employers through the
media with protection.
Wilcox J hinted in his judgment
that an appellate court may choose
to follow McCarry’s
recommendations that:
• any comment or analysis by an
employee be based on an
adequate knowledge of the
relevant facts
• such comment be couched in
moderate and temperate language
• any comment be subject to the
general law with regard to such
matters as defamation and
• in the event of a dispute as to
whether the first condition has
been met, the onus should lie on
the employee.20
It remains to be seen whether the
protection given to Ms Buckland will
be given to an employee who
specifically attacks his or her
employer in the media. It is
submitted that such conduct is
capable of constituting a repudiation
of the contract of employment to
justify dismissing the employee.21
Conclusion
The union’s use of the freedom of
association provisions in the ANZ
case to protect their president’s
media role represents an innovative
method of preserving an employee’s
freedom of speech. At a time when
businesses are becoming increasingly
protective of their corporate image
and community perceptions about
how businesses are run generally, it is
submitted that a reasonable balance
has been struck between these
commercial interests and the public
interest in allowing union members
and representatives to exercise their
freedom of speech in performing
their functions without facing
disciplinary action.
Notes
2 Section 298K(1)(b) and 298K(1)(c)
of the Act.
3 Section 298L(1)(a), 298L(1)(l) and
2981L(1)(n).
4 See for example Wessex Dairies Ltd
v Smith [1932]2 KB 80; Hirvac Ltd
v Park Royal Scientific Instruments
Ltd [1946] 1 Ch 169.
5 Finance Sector Union of Australia v
Australia and New Zealand Banking
Group Ltd [2002] FCA 631 (17 May
2002); BC200202424 at [96].
6 At [96].
7 At [98].
8 At [157]–[158].
9 At [161]–[163].
10 Workplace Relations Act 1996 (Cth)
s 298L(1)(a).
11 (2000) 175 ALR 173 at 190–191.
12 At 191.
13 GJ McCarry ‘The contract of
employment and freedom of
speech’ (1981) 2 Syd LR 333.
14 See Finance Sector Union of
Australia v Australia and New
Zealand Banking Group Ltd [2002]
FCA 631; BC200202424 at
[177]–[184].
15 At [177]–[184].
16 (1933) 49 CLR 66 at 81–82.
17 See for example Defamation Act
1974 (NSW) Pt 3 Div 7. This
distinction is also made by
McCarry in his article and is
quoted by Wilcox J in [2002] FCA
631 (17 May 2002) at [178].
18 See Defamation Act 1974 (NSW)
s 30.
19 Finance Sector Union of Australia v
Australia and New Zealand Banking
Group Ltd [2002] FCA 631;
BC200202424 at [185]–[191].
20 At [182]–[184].
21 See further J Macken, P O’Grady,
C Sappideen and G Warburton
Law of Employment (5th ed)
Lawbook Co 2002 at pp 220–229.
* This article originally appeared in
the October issue of Employment
Law Bulletin and is reprinted with
permission.
1 [2002] FCA 631 (17 May 2002);
BC200202424.
MARCH 2003
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