Adverse actions claims on the rise: Don’t land in hot water

by Stephanie Zillman04 Apr 2012

FairWork AustraliaDespite efforts to stay abreast of case law related to the highly controversial ‘adverse actions’ provision in the Fair Work Act (2009), legal experts have warned that even commonplace employer actions can result in an adverse action claim if HR doesn’t follow the letter of the law and adapt policies to avoid falling foul of the provisions.

Commonplace actions such as informing an employee their role may be made redundant, instituting a disciplinary enquiry, investigating complaints against the employee or issuing a ‘show cause’ letter, may constitute adverse actions under the Fair Work Act if the employee can claim that this action was a result of them exercising their workplace rights. The onus of proof lies with the employer, who must then prove that the adverse action was not a result of the employee attempting to exercise their workplace rights.

The general protection provisions of the Fair Work Act state that an employer must not take any “adverse action” against an employee because the employee has exercised or proposes to exercise a “workplace right”, said Shana Schreier-Joffe, partner at Harmers Workplace Lawyers. However under the act, both terms are defined very broadly.  

Schreier-Joffe said a “workplace right” includes a large range of matters, including union rights, the right to request flexible work arrangements, the right to make complaints about their employment, the right to make enquiries about pay and the right to request information about further disciplinary action.

A workplace right is defined as:

  • An entitlement, benefit, or responsibility under a workplace law, workplace instrument or an order made by an industrial body;
  • The ability to participate or initiate a proceeding under a workplace law or workplace instrument;
  • The ability to make a complaint or inquiry to a body that can enforce compliance with a workplace law or a workplace instrument.

An “adverse action” can be anything that affects an employee adversely. In simple terms this means that any disciplinary action taken against an employee, such as a suspension, or even a written warning, could constitute an ‘adverse action’.  Under the legislation, any adverse action against an employee will be deemed to have been taken for an illegitimate reason unless the employer can prove to the contrary.

Examples of ‘adverse action’ may include:

  • Dismissing the employee
  • Injuring the employee in his/her employment
  • Prejudicing the employee
  • Discriminating between employees
  • Refusing to employ; or
  • Discriminating in relation to contract terms

The Federal Magistrates Court has recently ruled on one such adverse action claim in the case of Australian Licenced Aircraft Engineers Association (ALAEA) v Qantas Airways Ltd & Anor [2011]. In this case a Licensed Aircraft Maintenance Engineer (LAME) employed by Qantas (and a Brisbane-based member of the ALAEA) exercised workplace rights by making enquiries with his manager regarding certain shift allowances whilst on an overseas roster. The employee also complained about allegedly poor assistance provided by Qantas in relation to a health issue suffered whilst on duty overseas.

Following this enquiry and complaint, the manager was said to have ordered the suspensions of all overseas rostering for Brisbane LAMEs until they confirmed in writing that they agreed with their existing shift allowances. The employee was also allegedly advised that “the guys who accept their conditions... are the ones who get asked to go away next time.” It was held that the suspension of overseas rostering for the Brisbane LAMEs was a detrimental alteration of their employment terms and constituted discrimination between them and other Qantas engineers. It was also held that the comment constituted unlawful coercion and a threat against the exercise of the employee's workplace rights, and Qantas was ordered to pay a penalty.

In another case, Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Phillips Engineering Aus (15 June 2010), an employee applied to the Federal Court to reverse a termination decision after claiming the termination had breached the general protections provision because it was related to the employee’s union activities. “In this case the court determined the evidence strongly supported a finding that the employer had terminated the worker's employment because of union activities, and that its statement that there was not enough work for the employee was made to mask its real intent,” Schreier-Joffe said.

Schreier-Joffe added that it is highly important for managers to be able to justify and document their reasons for the actions against employees, particularly in performance management situations, and warned employers to separate performance issues from other issues that an employee may bring up.

Employer protection

The Fair Work Act posits a need for employers to protect themselves against adverse action claims. To do this an employer may consider establishing a recruitment process that complies with anti-discrimination laws, equal opportunity legislation and the Act. This may include:

  • making staff involved in recruitment aware of their statutory obligations
  • Educating managers about employees’ rights
  • Introducing policies to facilitate the expression of employee concerns coupled with appropriate conflict resolution provisions
  • Training managers to maintain records of employee concerns and requests

Once a workplace right is understood by employers and employees, the likelihood of an adverse action claim being brought is significantly reduced, according to Ramsden Lawyers. It is essential for employers to ensure that systems and processes surrounding prospective, current and dismissed employees seek to prevent adverse actions claims from being brought forward.


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