Do you know about Adverse Action claims? You should!
It is not well known that the Fair Work Act provides that an employee has a “workplace right” if the employee is able to make a complaint or inquiry in relation to his or her employment. An employer contravenes the Act if the employer takes “adverse action” against the employee (for example, by disciplining or dismissing the employee) because of the employee’s exercise of a workplace right.
This is action taken by an employer that is deemed unlawful under the General Protections provisions of the Act.
What is an adverse action?
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 presumed to have been taken for an illegitimate reason unless the employer can prove to the contrary.
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.
Let us look at specific events that may be regarded as an adverse action. The events below describe the circumstances in which an employer may have taken adverse action against an employee. These circumstances include the following actions taken by an employer against an employee:
- Dismissing the employee;
- Injuring the employee in their employment;
- Altering the employee’s position to the employee’s detriment;
- Discriminating between the employee and other employees of the employer.
The risks for employers
Adverse action claims 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, so it is quite broad.
Such claims may be brought by a wider range of people than can make application for unfair dismissal and provide broader remedies including injunctions. The minimum employment period that exists before an employee can make an unfair dismissal application does not apply to an adverse action application.
Time limits apply
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 presumed to have contravened the Act until proven otherwise.
In cases where a person has been dismissed applications must be made within 21 days after the dismissal took effect. The Fair Work Commission can only grant extensions of time in exceptional circumstances.
It is unlawful for an employer to take adverse action against an employee because the employee has made a complaint or enquiry in relation to their employment.
Courts have taken differing views on what constitutes a complaint or enquiry. However, there needs to be a sufficient connection between the complaint or enquiry and the employee’s employment.
In circumstances where a person has been dismissed after making a complaint or enquiry, it is important to promptly seek legal advice to assess whether they may be entitled to make a claim.
Employers need to take care
The law in this area is presently unsettled however employers should assume that a broad range of expressions of discontentment by employees could give rise to an adverse action claim.
These could range from issues relating directly to an employee’s rights or entitlements under legislation, industrial instruments or contracts – through to matters relating to how work is performed, and even the employer’s relationships with third parties.
How employers respond to these complaints or issues when raised by employees will be of critical importance should the matter proceed to Court.
Employers need to have effective complaint/grievance resolution processes in place, and apply them fairly when issues arise.
Employers also need to be careful when instigating, or continuing, disciplinary or performance management processes in respect of employees who raise employment-related issues or concerns.
In those situations, the employer will need to be able to explain and defend its decision-making process (e.g. leading to dismissal or disciplinary action) – in order to demonstrate that any action taken against an employee was based on legitimate reasons and was not tainted by the employee having instigated a complaint.
If you are an employee or an employer you need to know about adverse action claims. 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.
If you need further information about protecting your business from Adverse Action from employees or if you are an employee and would like advice about an employment law matter please contact us on 08 9422 8111 or email firstname.lastname@example.org.