Adverse Action – What Employers Need to Know

Under provisions in the Fair Work Act 2009 (FWA), an employer cannot take adverse action against an employee because they possess, or are exercising, a ‘workplace right’. These provisions are found in Chapter 3, Part 1 of the Fair Work Act and are referred to as the ‘general protections’ provisions. General protections included workplace rights, industrial activities and other protections. These general protections are designed to protect freedom of association in particular.

The meaning of a workplace right includes the situation where a person is;

“(a) is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or

(b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or

(c) is able to make a complaint or inquiry:

(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or

(ii) if the person is an employee—in relation to his or her employment.”

A practical example of this may be where an employee has made a complaint regarding a bullying or harassment issue. Under the general protections provisions, there must be no adverse action taken against that employee as a result of them exercising their right to make such a complaint. Another example is where an employee may have a complaint about a Manager, and then the employee is demoted. This would constitute adverse action under the Act.

Importantly for employers, a claim by an employee under adverse action provisions will succeed where it can be shown that the holding or exercising of a workplace right was just one of the reasons for the action, it does not have to be the dominant reason. The onus of proof in showing that the adverse action did not take place is also placed on the employer.

Also important for employers is that, unlike unfair dismissal actions, adverse action claims are not limited by the high income threshold and compensation to the applicant can exceed 6 months wages.

To date, the remedies available to an employee that have been awarded by the courts have included fines for the offending employer, injunctions preventing the adverse action, payment of lost wages and entitlements as a result of the adverse action or reinstatement of the employee.

A recent decision of the Federal Court, however, has awarded an employee damages of $85 000. Of this, a $7500 portion of this payment was actually awarded for “hurt and humiliation” which is a new development in terms of compensation awarded in this area of the law.

In this case, an aircraft mechanic queried the non-payment of overtime for himself and another employee via an email to the Managing Director, Maintenance Manager, Legal/HR Manager and a Perth Supervisor. The Managing Director then emailed the Legal/HR Manager, inadvertently copying in the two employees in question, and stated “"I hope this is the last time I see anything from [the aircraft mechanic] like that otherwise WE HAVE A PROBLEM with [the aircraft mechanic] not with anyone else.” Not long after this, the Perth Supervisor confirmed via email with the two employees that they would be paid accordingly for the overtime hours they were questioning. Soon after this, overtime was required to be worked again on a plane, but as the employee could not get a clear confirmation form his supervisor as to whether overtime would be paid on this instance, he left work. Thereafter he was suspended on full pay whilst the incident was investigated. During the investigation period, certain actions that the employer took, such as not recognising the employees right to be represented, resulted in the employee being hurt and humiliated. He was eventually reinstated, but only lasted two months before he was made redundant.

This being said, there is still no reason for employers to shy away from undertaking disciplinary proceedings against an employee where the situation warrants. Another ruling handed down by the Federal Magistrates Court yesterday can give employers some comfort on this. In this situation, a call centre operator was consistently late for work. He was dismissed for this and other poor performance issues. In his application to Fair Work Australia, the employee argued that his employee had taken adverse action against him because he had family commitments which caused his lateness. The employer had kept records, and was able to show that on 10 out of 22 working days over a month, the employee had been late for periods of between 3 and 30 minutes and was able to convince the Magistrate that this form of lateness was well beyond reasonable.

Employers need to be vigilant in terms of record keeping in relation to any decisions that are taken in the workplace that could be construed as adverse action. If there is no documentation which illustrates the real reason behind a decision, an employer may find it difficult to defend any legal action against them.

Post by Danica Leys, Solicitor. Please note, this post is general in nature and does not consitute legal advice.

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