When making important decisions regarding employees, it is crucial to approach the process with careful consideration. Even when all care and diligence is applied, an employee may not perceive the outcome as fair, reasonable, or just, or may suspect it was for a prohibited reason. Consequentially, managers and HR professionals should meticulously document all steps and reasoning behind decisions that will significantly impact employees. Without strong, contemporaneous records and credible testimony, businesses may struggle to convince a court that their motives were legitimate and lawful. That’s why my most often used phrase to clients is “document everything”.

REVERSE ONUS UNDER THE FAIR WORK ACT

If your business needs to defend itself against an employee’s adverse action or unfair dismissal claim, the onus of proof falls on the employer to adequately rebut the claim. This is commonly referred to as a ‘reverse onus’. Under the unfair dismissal and general protections provisions of the Fair Work Act 2009 (Cth) (the “Act”), the Fair Work Commission and the Federal Court are legislatively required to presume you terminated an employee unfairly or took the alleged adverse action against an employee for a prohibited reason, unless the employer can prove otherwise.

In simple terms, if an employee alleges they were dismissed or treated poorly, the law assumes the employer did it for that prohibited reason. This flips the usual burden of proof so that instead of the employee proving an improper motive, the employer must disprove it.

The employer must then prove, on the balance of probabilities, that none of the decision’s substantial and operative reasons for taking adverse action was for exercising a workplace right or to stop the employee from exercising that right. In unfair dismissal claims the evidence must establish the termination was fair, just and reasonable. As one court put it, decision-makers, who alone know their true reasons, “should…be made to prove” them. In practice this means simply showing “sound commercial imperatives” may not be enough unless you can demonstrate that all such reasons were untainted by any unlawful purpose.

Therefore, the clarity in the evidence required to prove ‘on the balance of probabilities’ that the decision made or the course of action taken was not for the reasons as claimed is critical. Let’s use the following case example to illustrate.

CASE STUDY: TWU V QANTAS

A notable case that exemplifies the importance of evidence in such disputes is the long-running and well-publicised Transport Workers' Union of Australia v. Qantas Airways Limited, which reached the High Court. The case underscores the significance of documentation, like file notes and emails, as evidence of the motives behind adverse action being taken. Further, this case highlighted the critical role of witness credibility and the need for strong evidence to disprove any unlawful motives.

That case related to claims made by the TWU against Qantas associated with the 2020 outsourcing of ground-handling operations at 10 Australian airports to third-party companies. This resulted in approximately 1800 jobs being made redundant. The TWU commenced proceedings in the Federal Court, with issues arising as to whether Qantas could prove it did not make the outsourcing decision to prevent the exercise of workplace rights by affected employees and whether the outsourcing decision prevented the exercise of workplace rights.

Federal Court

In 2021 the Federal Court (single judge) agreed with the TWU. The judge accepted Qantas had legitimate commercial imperatives for outsourcing but found the airline failed to disprove a prohibited motive. In other words, even if cost savings were an important factor, Qantas did not meet its evidentiary burden under s.361 of the Act to show that preventing union activity played no part in the decision. The judge therefore held that Qantas contravened s.340(1)(b) of the Act, since a substantial and operative reason for the redundancies was to pre-empt lawful industrial action. On appeal, the full bench of the Federal Court upheld this finding.

High Court

Qantas took the case to the High Court, but on a very narrow issue. It argued s.340(1)(b) could not apply because at the time of the decision the workers had no existing right to strike (the enterprise agreements had not yet expired).

In 2023 the High Court unanimously rejected this technical argument. All judges agreed the phrase “to prevent the exercise of a workplace right” in s.340(1)(b) of the Act includes future rights that will come into existence. As one judgement explained, putting “an obstacle in the way” of exercising a right that may arise later is just as prohibited as blocking a current right.

The Court emphasised it is legally permissible for employers to consider enterprise agreements and future work rules when planning decisions, but not to take adverse action with the primary purpose of stopping employees from later exercising those rights. If Qantas had shown its only motive was genuine cost savings (even with industrial action as a side-effect), the decision may have been lawful. But Qantas did not establish that; instead, the evidence raised at least a significant doubt about its motives. By the end of this process, the High Court affirmed that Qantas had acted unlawfully.

Evidence and Outcome

What sealed the TWU’s success was a combination of documentary evidence and weak witness credibility on Qantas’ part. During discovery, the TWU uncovered internal notes showing Qantas executives had been actively discussing the timing of the outsourcing with reference to enterprise agreements that were past their expiry dates. This contemporaneous documentation suggested the union’s theory was plausible.

Of course, it may be possible to claim legal professional privilege to prevent some of the documents from being disclosed. This will be the case if the dominant purpose for the creation of the document was to give or receive professional legal advice. However, the claim of privilege is not without risk. In the Qantas case, the employer claimed legal professional privilege over the content of the extensive communications in the period leading up to and coinciding with the outsourcing decision. The early involvement of lawyers suggested to the Court that Qantas anticipated litigation. That then led the Court to question the credibility of some of the non-privileged documents created at the time, noting that authors of documents or discussions often communicate more freely if they consider their comment is going to be kept confidential.

Meanwhile, Qantas’ own witnesses fared poorly in court. The Federal Court observed that Qantas witnesses seemed “unimpressive”, “less than compelling, “not entirely satisfactory”, or evasive when pressed. Their prepared statements did not persuade the judge. In short, the after-the-fact explanations and scripted testimony failed to outweigh the documentary trail.

The consequences for Qantas were significant. Qantas agreed to an unprecedented payout. It was ordered to establish roughly $120 million in compensation for affected employees and pay a civil penalty of $90 million, $50 million of which is to be paid directly to the TWU as the ‘common informer’ behind the litigation. These record sums highlight the cost of losing a reverse-onus dispute. In the Qantas case, the failure to convincingly prove its neutral business purpose (despite strong documentation of costs) meant the presumption of an unlawful motive stood.

IMPORTANCE OF DOCUMENTATION AND CREDIBILITY

Quantum of penalties aside, the Qantas litigation illustrates a simple rule of thumb: document everything. Contemporaneous emails, meeting notes, drafts and reports created at the time of a decision will be scrutinised in any later dispute, and courts tend to trust them over recollections given under pressure. For example, the handwritten notation about the status of enterprise agreements proved decisive in this case. Legal commentators have noted that when judges determine contested factual issues, what matters most are usually records created contemporaneously with the decision-making process.

Equally important is the credibility of anyone called to testify. The decision-makers or their delegates must be prepared to answer directly and consistently about why the decision was taken. Judges will view reluctance or obvious scripting with suspicion. In Qantas, the Federal Court specifically warned against “reverse engineering” evidence, in other words, manufacturing a clean explanation after the fact to fit a legal test. Employers should ensure that documentary evidence aligns with the expected testimony of decision-makers.

KEY TAKEAWAYS FOR EMPLOYERS

1. Legal principles - Workplace relations litigation can and does involve complex legal principles, and that presents evidentiary challenges and burdens on employers.

   
   

2. Document every step - Keep detailed, contemporaneous records (emails, meeting minutes, memos, etc.) and that clearly explain what and why the business decision was made. Courts and tribunals give significant weight to notes and analyses written at the time.

   
   

3. Know the legal tests - Understand that s.361 of the Act flips the burden of proof. If challenged, you must be able to prove none of the reasons were unlawful. Prepare your records as though they will be scrutinised in litigation.

   
   

4. Reliable witnesses - Ensure any managers involved can confidently explain the decision and are consistent with the documents. Watch out for prepared or evasive testimony, as it can undermine your position.

   
   

5. Anticipate industrial factors - Be mindful of timing, particularly if an enterprise agreement applies. Avoid taking action that could be seen as timed to stop employees exercising future rights, even if you have good business reasons. Courts will look sceptically at motives related to union activity.

   
   

6. Avoid post-event justifications - Do not wait until litigation is looming to suddenly document reasons. Decisions should stand on the documented facts and figures available at the time, not on ‘after the fact’ explanations. As one judge observed, cases often fail when employers “structure” evidence only to withstand a legal challenge.

A carefully documented decision-making process will not only support internal consistency but may also satisfy a tribunal or court that a termination was fair, just and reasonable, and any adverse action and outcome was driven solely by legitimate business considerations. Being proactive, transparent, and legally informed in your workplace relations decisions isn’t just good practice, it’s a safeguard against legal and reputational risk.

Charles Watson

Case References

Transport Workers’ Union of Australia v Qantas Airways Limited [2021] FCA 873

https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2021/2021fca0873#_Ref78206283

Qantas Airways Limited & Anor v. Transport Workers Union of Australia Case No. S153/2022

https://www.hcourt.gov.au/cases-and-judgments/cases/decided/case-s1532022

Transport Workers’ Union of Australia v Qantas Airways Limited (Penalty) [2025] FCA 971

https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2025/2025fca0971