Adverse action: positive action to avoid adverse consequences
Recent case law has further cemented the controversial ‘adverse action’ provisions of the Fair Work Act 2009 (‘the FW Act’) as a significant source of liability for employers.
In creating new prohibitions, removing hurdles in unfair dismissal and anti-discrimination law, as well as burdening employers with the onus of proof, adverse action is unforgiving in its demand for fair, clear and consistent dealings with employees.
What is adverse action in relation to employees?
A person must not take ‘adverse action’ against another person for a prohibited reason. Adverse action by an employer against an employee includes taking, organising or threatening to take the follow type of action:
• Dismissing the employee; or
• Injuring the employee in his or her employment; or
• Altering the position of the employee to the employee’s prejudice; or
• Discriminating between the employee and other employees of the employer.
Of course, these actions of themselves are not unlawful. However, a breach of the FW Act will occur if adverse action is taken to prevent the exercise of a workplace right or because an employee:
• Has a workplace right;
• Has, or has not, exercised a workplace right; or
• Proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right.
An employee will be deemed to have a workplace right if, among other things, they are entitled to the benefit of an industrial instrument (e.g. Award or Agreement), are able to participate in a process or proceeding under a workplace law or have the ability to make a complaint or inquiry in relation to their employment (whether internally or to an external body).
In addition to protections for ‘workplace rights’, adverse action cannot be taken for a range of other reasons. These prohibited reasons include a temporary absence from work because of illness or injury as well as a variety of discriminatory factors including an employee’s race, sex, marital status and family responsibilities.
The new unfair dismissal and anti-discrimination pathway
Adverse action is quickly developing as the preferable option for aggrieved employees who feel they have been discriminated against or that a dismissal was unwarranted. The benefits of a claim under adverse action include:
• The presence of a ‘reverse onus’ which requires an employer to prove that the adverse action was not for a prohibited reason;
• The fact that the prohibited reason need not be the sole reason for the adverse action (only has to ‘materially influence’ the decision)
• The lack of a minimum employment period such as that for unfair dismissal (6 months)
Recent Case Law: Stephens v Australian Postal Corporation [2011] FMCA 448
In Stephens, the Federal Magistrates Court found that Australia Post had taken adverse action for a prohibited reason when it dismissed an employee shortly after he had lodged a workers’ compensation claim. Not only was this the first instance in which the right to apply for workers’ compensation was deemed a ‘workplace right’, but it also demonstrated the powerful operation of the reverse onus under the Act.
Although the employer advanced clear reasons for the dismissal, which included inappropriate language toward a manager and failing to collect mail, there remained a real possibility that the decision to dismiss the employee was influenced by the employee’s compensation claim. As such, the Employer was found to have dismissed the employee because of a ‘workplace right’ as well discriminating against the Employee on the basis of a physical disability.
Positive Action for employers
Crucial to the decision in Stephens was the failure by the employer to have adequate documentation leading up to the dismissal. Therefore, employers must:
• Have clearly documented disciplinary procedures which are applied fairly and consistently across all employees;
• Undertake a thorough investigation prior to dismissal which clearly demonstrates that dismissal is proportionate in the circumstances;
• Provide clear reasons for a dismissal which are linked to the evidence arising from the investigation.
For more information on the above or how you can safeguard your business from adverse action claims, please do not hesitate to contact Nathan Lindsay, Research Consultant.
