Adverse action

This is action taken by a person or industrial association that is deemed unlawful under the General Protections provisions of the Fair Work Act, including dismissing or refusing to employ a person, and discriminating against the person or otherwise injuring the person in their employment.

This is action taken by a person or industrial association that is deemed unlawful under the General Protections provisions of the Fair Work Act. The meaning of ‘adverse action’ is defined in s342 of the Fair Work Act and covers acting, organising or threatening to and includes:
  • (if an employer or potential employer) dismissal, refusal to employ
  • injuring an employee in his/her employment
  • altering an employee’s position to his/her disadvantage
  • discriminating between an employee and other employees in the workplace
  • terminating, refusing the services of an independent contractor or detrimentally altering a contractor’s position
  • an employee ceasing to work for an employer or taking industrial action against the employer
  • an independent contractor ceasing work under the contract or taking industrial action against the principal.

‘Adverse action’ includes acting, organising or threatening adverse action. An independent contractor has the right to claim unlawful termination under the Fair Work Act (s365). See Makram Louka v Centrelink [2010] FWA 6827 Lawler VP.

In another matter, a worker was not dismissed because of his work-related injury. Rather, the Federal Magistrates Court was satisfied the employer had sound operation reasons for making him redundant, including the fact the worker’s position had become unprofitable. That is, the dismissal was a case of genuine redundancy and not adverse action. See Winter v Ostwald Bros Civil Pty Ltd [2012] FMCA 51.
 
The High Court determined that what a decision-maker actually thinks will be decisive in determining whether adverse action had been taken against an employee, contractor or job applicant because of a prohibited reason. The High Court stated that ‘to search for unconscious elements in the impugned reasons of an employer when making a decision regarding action to be taken in relation to a worker would impose an impossible burden on them.’ See Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32.
 
What are adverse action claims?
 
In order to make a general protections claim under the Fair Work Act employees simply need to allege that they were ‘adversely affected’ by a management decision made because of their workplace rights, or because they possessed a discriminatory attribute, eg race, sex, age, etc.
 
A simple example would be where an employee alleged that her employment had been terminated because she was pregnant. From that point, a ‘reverse onus or proof’ would apply and an employer must then prove the decision-making process that followed was not for that reason, but for an acceptable reason, such as continued and well documented under-performance combined with a lack of improvement.

Advising, encouraging, inciting or coercing action

Under the Fair Work Act (s
362), if for a particular reason (the first person) advises, encourages or incites, or takes any action with intent to coerce a second person to take action, and the action if taken by the second person for the first person's reason would contravene a general protections provision, then the first person is taken to have contravened this provision.
 
What was the Barclay case?
 
Mr Barclay was the president of an Australian Education Union sub-branch and worked at Bendigo TAFE. He was disciplined by the TAFE for sending an email in his capacity as president to his fellow union members alleging instances of serious misconduct by unnamed employees. Barclay sent the email without first notifying his employer of the misconduct allegations which had potentially damaging effects on the TAFE’s reputation. Accordingly, his employer took disciplinary action by suspending him on full pay.
 
Barclay alleged that the action was taken because of his union status, to which the TAFE argued it would have acted in the same way had Barclay not been a union member. The TAFE won the case with that argument in the Federal Court, to which Barclay appealed and subsequently won in a Full Federal Court appeal. The TAFE appealed to the High Court where the appeal was upheld.
 
What are the implications of the High Court appeal in Barclay?
 
There are four implications involved:
  • It rejects the Full Federal Court’s decision that the ‘unconscious’ reasons of a decision maker can be taken into account. Following the High Court appeal, the reverse onus of proof will now be discharged if a decision maker can prove that the decision was made for legitimate reasons and a judge accepts those reasons. There is no longer a need to enquire into the employer’s ‘unconscious’ mind.
  • It is now established that union delegates are not a protected species. If they engage in activity worthy of discipline and the same disciplinary procedures would be followed regardless of union status, then the employer can exercise disciplinary action without incurring liability. This re-establishes the appropriateness of the comparative test in determining whether a decision was made for a prohibited reason.
  • Even if a decision were infected by the fact that a party is a union delegate but that was not really the substantial and operative reason for making the decision, it does not mean that the employer has contravened the provision. The trigger for the decision is what needs to be taken into account.
  • The fact that a workplace decision may involve intertwining a person’s union status and the activity in which the person has been engaged, ie sending an email in the person’s union capacity, does not of itself mean the employer is liable for any subsequent decision taken. Again, the relevant trigger for the decision needs to be assessed.
Why are adverse action claims so significant?
 
General protections present considerable risks for employers for a number of reasons. Firstly, they are open to prospective and current employees as well as contractors and other workers. When compared with the minimum employment period needed to be served before having access to unfair dismissal remedies, general protections are accessible by a wider range of people and provide broader remedies including injunctions. While time limits for lodging claims are the same as for unfair dismissal, damages are uncapped and the reverse onus of proof means the employer is effectively guilty until proven otherwise.
 
 
 

WantToReadMore

Get unlimited access to all of our content.