WRITTEN BY John Wilson & Kieran Pender
What can an employee be made to do?
Controversy still lingers over the question of whether it is lawful and reasonable for an employer to require their employees to be vaccinated against Covid-19. John Wilson and Kieran Pender explore this question in light of a Fair Work Commission decision in December 2021.
In recent months, there has been much discussion about whether an employer can require an employee to be vaccinated against Covid-19. This question turns on whether such a direction is lawful and reasonable. In our view, in the ordinary case of an employee who attends a physical workplace and interacts with others, absent a valid medical reason, such a direction will be both lawful and reasonable.
Nonetheless, controversy lingers around this question — particularly following the equivocal decision of a five-member full bench of the Fair Work Commission in Mt Arthur in December 2021.[i] It is therefore helpful to unpack the law in this area, with a primary focus on Mt Arthur. In doing so, we can consider the broader principles that provide guidance and ultimately explore a wider question: what can an employer require an employee to do?
In (almost)[ii] every Australian employment contract, the law implies a term that employees are obliged to obey directions from employers, within the scope of the employment relationship, that are lawful and reasonable. Wilful disobedience constitutes a breach of this duty, and may, in certain circumstances, provide lawful justification for dismissal.
The contractual relationship between employee and employer in Australia has its basis in British common law. The common law employment relationship, in turn, has its basis in the master-servant relationships of the Middle Ages — what has been described as ‘a quasi-servile relationship between a householder and her/his menials’.[iii] Fortunately, our modern employment system is no longer predicated on ‘quasiservile’ relationships. But that history remains instructive in understanding the evolution of an employer’s ability to direct an employee.
“Whether a particular direction is reasonable is not to be determined in a vacuum, it requires consideration of all the circumstances, including the nature of the particular employment, the established usages affecting the employment, the common practices that exist and the general provisions of any instrument governing the relationship… The assessment of reasonableness and proportionality is essentially one of fact and balance and needs to be assessed on a case-by-case basis.” Fair Work Commission Full Bench in CFMMEU v Mt Arthur Coal Pty Ltd
Historically, ‘masters had complete dominion over their inferior servants.’[iv] They could physically beat servants (within limits) and disobedient conduct by a servant was criminalised by statute. Employers have no such powers — nor is it criminal to disobey an employer’s direction. Nonetheless, control remains at the centre of the employment relationship. As Mark Irving writes, ‘employment law legitimises subordination.’[v]
The implied contractual term that an employee will obey lawful and reasonable directions from an employer therefore represents a middle-ground — away from the complete dominance of a master, while retaining the control necessary for a functioning employment relationship. Just as employment law has evolved, so too has the nature of the implied term.
Consider an early English case, Spain v Arnott, from 1817. The plaintiff was engaged for a year to work on a farm. According to the law reports, ‘[t]he plaintiff usually breakfasted at five o’clock in the morning, and dined at two.’ One day, though, his master ordered him to ‘go with the horses to the marsh, which was a mile off’, before dinner, because dinner was not ready. The plaintiff was unimpressed, and is reported to have said ‘that he had done his due, and would not go till he had had his dinner’. The master prematurely ended the relationship and the plaintiff sued for his wages for the full year.
The suit was unsuccessful. ‘After a refusal on the part of the servant to perform his work, the master is not bound to keep him on as a burthensome and useless servant to the end of the year,’ held Lord Ellenborough. ‘In the present instance it might be very inconvenient for the master to change the hour of dinner; the question really comes to this, whether the master or the servant is to have the superior authority.’[vi]
Putting aside the fact that meal break entitlements are now protected by statute, it is unlikely that in 2021 a direction to work without a dinner break would be a lawful and reasonable direction, nor that failure to comply would be valid grounds for dismissal.
The law has thus evolved — but only to a point. The requirement of obedience with lawful and reasonable directions remains central to employment relationships.
Mt Arthur Coal
Fast forward two centuries and a similar question arose in Mt Arthur.
BHP operates an open cut coal mine in the Hunter Valley. Among the approximately 2,000 workers on the site, 724 are employed pursuant to the Mt Arthur Enterprise Agreement.
In October, BHP notified employees of a new ‘site access requirement’, which provided that workers would not be permitted access to the site after 10 November if they had not received a single dose of a Covid-19 vaccine, and after 31 January unless they had received both doses.
Under a dispute resolution clause in the enterprise agreement, the union commenced proceedings in the Fair Work Commission seeking resolution of the question of whether the site access requirement constituted a lawful and reasonable direction.[vii]
The Commission heard the dispute by consent, pursuant to a question stated for determination by the union, and agreed to by BHP.
We observe, as an aside, that there is a potential jurisdictional issue posed by these proceedings — which is that the Commission’s finding in relation to consultation, that BHP had failed to comply with health and safety law, arguably goes beyond the Commission’s role in relation to the enterprise agreement. The agreement sets out consultation requirements, which the Commission tentatively suggested had been met. Had BHP not consented to a wider inquiry — going beyond the four corners of the agreement to incorporate external duties under state law — the outcome might have been different.
In any event, the Commission began its substantive consideration by observing that there was no other authority — under the enterprise agreement, express contractual term or public heath order — to justify the vaccine mandate. Accordingly, it must be supported by the implied term of obedience to lawful and reasonable directions, or it would have no effect.
After canvassing some relevant case law, the Commission outlined ‘some general observations’. These are worth summarising, as they shed light on the contours of the implied term.
Firstly, a lawful and reasonable direction must fall within the scope of employment. The Commission noted: ‘There is no obligation to obey a direction which goes beyond the nature of the work the employee has contracted to perform, though an employee is expected to obey instructions which are incidental to that work.’[viii] In a footnote to this proposition, the Commission highlighted a number of cases where employees were directed to do something different to their role: an employee hired as a lace buyer was not bound to obey orders to work as a lace carder, a cook was not bound to work in a dairy, a subeditor was not bound to do lower-grade work and so on.
Secondly, directions which entail great risk to life or health are not lawful orders, ‘unless the nature of the work itself is inherently dangerous, in which case the employee has contracted to undertake the risk’.[ix] In one rather peculiar case cited by the Commission, Ottoman Bank v Chakharian, an employee was imprisoned and sentenced to death during the Turkish War of Independence. He was saved by the arrival of Greek forces. However, his employer, despite knowing of the outstanding sentence, directed him to go to (Turkish-controlled) Constantinople. Fearing for his life, the employee subsequently fled — and was dismissed for disobedience. The Privy Council ultimately held that the employee was not obliged to obey the direction, given the risk to his life it entailed.[x]
With these two qualifiers out of the way, the central test is whether the direction is (a) lawful and (b) reasonable. It is a compound question with both parts requiring an affirmative answer. The Commission noted that ‘whether expressed as a “lawful and reasonable” direction or a “lawful” direction in which the test for determining lawfulness is whether the direction is reasonable, may simply be a matter of semantics’, and endorsed the two-stage inquiry.[xi]
The first question in Mt Arthur Coal, then, concerned the lawfulness of the vaccine mandate.
The Commission explained, in general terms, that the direction must be lawful ‘in the sense that an employee cannot be instructed to do something that would be unlawful; such as a direction to drive an unregistered and unroadworthy vehicle.’[xii]
The applicant, the union, contended that BHP had failed to consult about the mandate, and that this was contrary to Work Health and Safety Act 2011 (NSW).[xiii] That law, relevantly, required BHP to ‘so far as is reasonably practicable, consult … with workers … who are, or are likely to be, directly affected by a matter relating to work health or safety.’
Speaking generally, the Commission noted that ‘[i]f the object and purpose of such a direction is to protect the health and safety at work of employees and other persons frequenting the premises then such a direction is likely to be lawful. This is so because it falls within the scope of the employment and there is nothing illegal or unlawful about becoming vaccinated.’[xiv]
Ultimately, the Commission did not express a concluded view on whether non-compliance with a statutory duty rendered the direction unlawful. That was because the Commission considered that the consultation shortcoming was ‘plainly relevant to reasonableness’.[xv] However, it was clear from the discussion that, provided consultation duties are complied with, a vaccine mandate would satisfy the first, ‘lawful’ limb of the test.
Turning then to the second question, reasonableness, the Commission began by outlining the contemporary approach:
 Reasonableness is ‘a question of fact having regard to all the circumstances’  and that which is reasonable in any given circumstance may depend on, among other things, the nature of the particular employment. The approach to the task of assessing the reasonableness of a direction to an employee was identified by Dixon J in Darling, as follows:
‘But what is reasonable is not to be determined so to speak, in vacuo. The nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument, in this case an award governing the relationship, supply considerations by which the determination of what is reasonable must be controlled. When an employee objects that an order, if fulfilled, would expose him to risk, he must establish a case of substantial danger outside the contemplation of the contract of service.’
Ai Group, an employer representative body, had intervened in Mt Arthur and submitted that the relevant test imposed ‘a high bar … for a finding that a direction is unreasonable’. They drew support for this proposition from a 2005 case, Woolworths Ltd (t/as Safeway) v Brown, where the Commission’s predecessor had held: ‘a policy will only be unreasonable if no reasonable employer could have adopted it. A policy will not be unreasonable merely because a member of the Commission considers that a better or different policy may have been more appropriate.’[xvi] However, the Commission disagreed with this restated test for reasonableness, holding it to be ‘plainly wrong’.
Ultimately, the Commission determined the direction was not reasonable because of the failure to comply with the WHS Act-mandated consultation requirements. The bench noted: ‘It seems to us that the most telling factor against a finding that the Site Access Requirement was reasonable is the failure by the Respondent to reasonably consult with the Employees … adequate consultation does not require that those consulted agree to the direction, or give them a power of veto, but in the context of this matter it should have provided the Employees with a reasonable opportunity to persuade the decision-maker in relation to the decision to introduce the Site Access Requirement.’[xvii]
Because of the narrow nature of the Commission’s finding in Mt Arthur, it is only likely to delay — rather than prevent — BHP imposing a vaccine mandate on its employees. Despite the outcome, there is much in the Commission’s decision that supports the view that a vaccine mandate will ordinarily constitute a lawful and reasonable direction.
In its conclusion, the Commission noted that ‘there are a range of considerations which otherwise weighed in favour of a finding that the Site Access Requirement was reasonable’.[xviii] These included that:
Thus the Commission concluded that, had the consultation requirements been satisfied, ‘the above considerations would have provided a strong case in favour of a conclusion that the Site Access Requirement was a reasonable direction.’[xix]
At one point in their Mt Arthur reasons, the full-bench acknowledged that ‘employers face a difficult task in managing the risks for their workers in such a dynamic environment.’[xx] This is certainly true — particularly in light of the newly-emerged Omicron variant.
Fortunately for employers wishing to implement a vaccinee mandate (or those who have already done so), there is much in Mt Arthur to suggest that they will be on firm ground, provided they satisfy any applicable consultation requirements. The decision is also helpful in clarifying the wider contours of an employer’s ability to direct employees.
Ultimately, employers will be given some lattitude in determining reasonableness. As the Commission observed, ‘[i]n any particular context there may be a range of directions open to an employer within the bounds of reasonableness. Further, to establish that a direction is reasonable it is not necessary to show that the direction in contention is the preferable or most appropriate course of action or in accordance with “best practice” or in the best interest of the parties.’[xxi]
This is consistent with the underlying nature of the modern employment relationship and the compromise that has been reached as the implied term has evolved into its current shape. Control remains a fundamental feature of employment, and so it is only appropriate that, within some limits, an employer can direct an employee as they see fit (so long as it is within the scope of employment).
But the corollary of the employment relationship now being based in contract, rather than status (as it was in master-servant times), is that an employee who disagrees with a direction can exercise their right to quit. That is particularly true in the present context.
As has been said by others, the language ‘vaccine mandate’ is somewhat misleading — employers do not have the authority to insist that employees be vaccinated.[xxii] They just have the authority, largely confirmed by Mt Arthur, to insist upon consequences for those who refuse, without valid medical reason.
This article was written for Ethos. Law Society of the ACT journal.
For all employment related queries or concerns, please contact our Employment Law & Investigations team at BAL Lawyers.