Facing an Adverse Action Claim From Your Employee

By Rebecca Hyde, Workplace Compliance Advisor at ClinLegal. Rebecca holds a Bachelor of Laws and Legal Practice (Hons) and a Bachelor of Behavioural Science (Psychology).

The Fair Work Act provides general protections to employees to prevent them from being subject to adverse action from their employer. If an employee brings an adverse action claim against you, it can be costly for you and your practice. In order to minimise risks, you should know what adverse action is and when the general protections apply.

What is adverse action?

Adverse action against an employee (or potential employee) refers to unlawful action by a person, or industrial association, that puts the employee (or potential employee) in a less favorable position than they were in before the action was taken. Such action is unlawful when the reason for the action is in response to either:

  1. The employee expressing a workplace right;
  2. The employee engaging or proposing to engage in industrial activities; or
  3. An attribute of the employee that is protected under anti-discrimination laws

Adverse action can include:

  • Dismissing or refusing to hire an employee
  • Injuring an employee during their employment
  • Treating an employee different to other employees to their prejudice
  • Discriminating between the employee and other employees

Adverse Action does not include any action against an employee that would be legally justified under workplace law or any other laws. For example, taking discplinary action against an employee for breaching a work, health and safety requirements (such as refusing to wear the apropriate protective clothing when treating a patient) may not be unlawful adverse action. Adverse action will be unlawful when it is taken on the basis of one of the following general protections.

Adverse action and workplace rights

Adverse action is unlawful if it is undertaken because an employee in the practice is expressing a workplace right. This includes:

  • Expressing an entitlement, benefit, role or responsibility that is provided by a workplace law (eg the Fair Work Act), workplace instrument (eg a Modern Award), or an order made by an industrial body (eg Fair Work Commission);
  • Initiating or participating in a process/proceeding under a workplace law or instrument;
  • Making a complaint or inquiry to an industrial body or person under law or in relation to employment (eg, a Fair Work claim or a workplace complaint to the Practice Manager)

For example: One of your receptionsists has inquired about her salary as it currently falls below the minmum wage requirement stated under the Health Professionals and Support Services Award. You refuse to increase her wage, and cut her work hours to “teach her a lesson”. This would be unlawful adverse action.

Adverse action and industrial activities

Adverse action is unlawful if it is undertaken because an employee is engaged in, or proposes to engage in, an industrial activity. This includes:

  • Becoming, or not becoming, a member of an industrial association (for example being part of a worker’s union);
  • Taking part in a protected industrial action;
  • Refusing to take part in an industrial action

For example: Nursing staff across the country have organised a national strike as part of a union-approved initiative to improve working conditions for nursing staff in private practice. Prior to the scheduled strike, you send out a memo to all employees threatening to dismiss any employee who chooses to be part of the workers strike. This would be unlawful adverse action.

Fair Work anti-discrimination provisions provide that it is unlawful to take adverse action against an employee on the basis of one of the following attributes: Race, colour, gender, sexual orientation, age, physical or mental disability, marital status, family or care giver responsibilities, pregnancy, political opinion, national extraction, or social origin.

An example of discrimination could include asking a female potential employee if she planned to become pregnant in the next 18 months, indiciating that you would not hire her to work in your practice if she was planning to fall pregnant.

What happens with an adverse action claim?

If one of your employees makes an adverse action claim against you, he or she will make a ‘general protections’ complaint, stating that you have taken adverse action against them based on either expressing a workplace right, involvement in an industrial activity, or on grounds of discrimination. If an employee has been dismissed as part of the action taken by you, he or she may make an unfair dismissal application.

In an adverse action claim, the onus is on the employer to prove that the reason for the adverse action was not based on one of the general protections, but rather due to another lawful explanation.

What can employers do?

  • In order to prevent an adverse action claim against you or another person in your practice, you should ensure that you are familiar with the general protections so that you are aware of when you can or cannot take action against an employee.
  • Ensure that your practice has an anti-discrimination policy and that your staff are educated on how to follow this policy.
  • Keep detailed records of decisions made against employees that may be seen to create an adverse effect on them. This will help provide evidence that there was a genuine reason for the adverse action. This may include situations where it is necessary to take disciplinary action against an employee or enact a redundancy.

Note: The adverse action rule also applies to other types of workers in the practice, such as contractors. Even an employer can make an adverse action claim against an employee (eg if an employee ceases work in the service of the employer, or takes industrial action against an employer, based on one of the general protections).

For further information or advice, contact us at [email protected] or visit www.clinlegal.com.au

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