The Fair Work Act 2009 (Cth) (Act) prohibits an employer from taking adverse action against employee because they have exercised, or might exercise, a genuine workplace right.
What is an adverse action?
An adverse action by an employer against an employee means:
- dismissing the employee;
- injuring the employee in their employment (where ‘injury’ refers to legal injury, such as loss of pay or reduction in rank; not physical injury);
- altering the position of the employee to the employee’s prejudice; or
- discriminating between the employee and other employees.
When is an adverse action unlawful?
Adverse actions are unlawful when the action is done for a prohibited reason.
Prohibited reasons include:
- where an employee:
- has a workplace right; or
- has or has not exercised a workplace right; or
- proposes or proposes not to exercise a workplace right; or
- to prevent an employee from exercising a workplace right.
What is a workplace right?
A person has a workplace right if the person:
- is entitled to the benefit of a workplace law (such as the Fair Work Act 2009), workplace instrument (such as an award, contract, or enterprise agreement), or an order made by an industrial body (such as the Fair Work Commission);
- has a role or responsibility under a workplace law, workplace instrument or order made by an industrial body;
- is able to initiate or participate in a process or proceedings (defined very broadly to include: industrial action, legal proceedings, enterprise bargaining, requesting flexible working arrangements, and more), under a workplace law or instrument;
- is able to make a complaint or inquiry to a person or body with capacity to seek compliance with a workplace law or instrument; or
- is able to make a complaint or inquiry in relation to their employment.
It is important to note that a prospective employee is taken to have the same workplace rights as if they were employed.
When can an adverse action claim be made?
An employee may bring an adverse action claim at any time during their employment. Where an employee has been dismissed, an adverse action claim must be brought within 21 days of the dismissal.
The risk for employers
The threat of adverse actions presents a considerable risk for employers because, where it is alleged that an adverse action was taken for a prohibited reason, the action is deemed to have been for that prohibited reason (and therefore unlawful) unless the employer proves otherwise. This reverses the usual burden of proof and forces the respondent employer to prove that the action was not taken for a prohibited reason
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.
Damages for adverse action claims are uncapped and the reverse onus of proof means the employer is effectively guilty until proven otherwise.
Our top tips to minimise the risk of adverse action claims
We recommend that employers should implement some of the following strategies to help mitigate the risk of claims:
- Perception is reality, employers should have transparent processes so that employees understand why and how certain decisions are made.
- HR and business managers should be trained and understand workplace rights and adverse action claims to help mitigate poor decision making.
- Employers need to have effective complaint/grievance resolution processes in place and apply them fairly when issues arise.
- Employers implement disciplinary and performance management processes consistently and be able to show that these processes are implemented for legitimate reasons.
Employers should have a good understanding of workplace rights and ensure that decisions that affect workplace rights are applied consistently and for a legitimate purpose.
If you need further information about protecting your business from adverse action claims or if you are an employee and would like advice on an employment law matter please contact us.