The Folau Saga: Contractual Obligations and Freedom of Religion

Although Israel Folau recently reached a confidential settlement with Rugby Australia, the termination of Folau’s contract reinvigorated debate about religious freedom for employees and their contracts. Intuitively, perhaps, employers should only be able to restrict employees’ conduct within the workplace, whether that be an office or a rugby pitch. However, this simply is not the case!

The rise of social media

According to the principles outlined in Rose v Telstra Corporation Limited [1998] AIRC 1592, an employee’s conduct outside work could precipitate dismissal or disciplinary action by an employer if the employee’s conduct can be seen to:

• ‘cause serious damage to the relationship between the employee and employer’;
• ‘damage[s] the employer’s interests’; or
• be ‘incompatible with the employee’s duty as an employee’.

The advent of social media since this case has seen an increase in the potential for employees, particularly those with a high profile, to create ‘serious damage’ to a company’s reputation and thus the employer-employee relationship. The idea that an employee can be dismissed or disciplined for holding a different opinion to their employer has evidently struck the Australian public as confronting and controversial.

However, recent cases show that employers can, in some circumstances, discipline employees for their conduct outside of work, particularly given reasonable and lawful directions to an employee where the employment contract includes a social media policy (Renton v Bendigo Health Care Group [2016] FWC 9089). There are no overriding protections for opinions, be they religious or otherwise, if they contradict employer behavioural expectations.

Contract clauses with express rights to protection

Protections can be found, however, in employment contracts that include an express right to protection, often found in the form of an intellectual freedom clause.

In Ridd v James Cook University [2019] FCCA 997, Professor Ridd was censored by James Cook University for publicly criticising colleagues’ studies on the effect of climate change on the Great Barrier Reef. The Court considered the legal issue of whether, according to the intellectual freedom clause within his enterprise agreement, his statements could be seen to “harass, vilify, bully or intimidate those who disagree with their views” [19]. The Court found that Professor Ridd’s comments did not so harass, vilify, bully or intimidate his fellow colleagues and that Professor Ridd was merely exercising his “right to express unpopular or controversial views” within that same clause [74].

Contractual obligations v freedom of religion

The legal issue of how to resolve tensions between an employee’s contractual obligations and an employee’s right to protection from religious discrimination remains unsettled – particularly given the confidential nature of Folau’s out of court settlement.   

Whether Folau breached his employment contract with Rugby Australia (RA) depends on whether RA’s Players’ Code of Conduct were essential or intermediate terms of the contract. An essential term of a contract allows the wronged party to validly terminate the contract. However, a breach of an intermediate term allows the wronged party to terminate the contract if the breach is so serious that it goes to the root of the contract and deprives the innocent party of substantially the whole benefit of the contract.

The relevant Codes that RA said that Folau breached included:

• 1.3: Treat everyone equally, fairly and with dignity regardless of gender or gender identity, sexual orientation, ethnicity, cultural or religious background, age or disability. Any form of bullying, harassment or discrimination has no place in Rugby.
• 1.7: Use Social Media appropriately. By all means share your positive experiences of Rugby but do not use Social Media as a means to breach any of the expectations and requirements of you as a player contained in this Code or in any Union, club or competition rules and regulations. 
• 1.8: Do not otherwise act in a way that may adversely affect or reflect on, or bring you, your team, club, Rugby Body or Rugby into disrepute or discredit. If you commit a criminal offence, this is likely to adversely reflect on you and your team, club, Rugby Body and Rugby.

Although the details concerning Folau’s case have not been fully disclosed, if RA’s Players’ Code of Conduct was expressly incorporated as a term of Folau’s employment contract, then any breach of the Codes regarding RA’s social media policies would result in a breach of contract.

Nevertheless, given the settlement reached, it is likely that Folau successfully argued that RA’s termination of his employment contract breached Section 772 of the Fair Work Act 2009 (Cth) as Folau was expressing his religious beliefs when he quoted the Bible on his Instagram post. Under s772, it is unlawful for an employer to terminate an employee’s employment for reasons that include a person’s religion.

Key lessons learnt from the Folau saga  

It is important that employers and employees take the following precautions when it comes to employment contracts:

• Employers should ensure that employment contracts contain express clauses that state that breaches of workplace policies, i.e. policies regarding social media usage and inclusivity, can give rise to the employer’s right to validly terminate the contract. Employees should ensure that they are fully aware of all workplace policies and any Code of Conduct before expressly
• agreeing to any provisions and should ensure their own social media usage does not conflict with their employer’s workplace policies and Codes. 

Contact Peter McNamara if you require workplace law advice.