17 June 2010 Adverse action - the new unfair dismissal

By Warwick Ryan, Partner

In Brief

Employees who do not fit within the scheme of unfair dismissal, either because they are in their qualifying period or because they earn over the high income limit of $108,300, are permitted by the Fair Work Act to bring an even more serious claim related to adverse action.

What is an adverse action?

The key features of an adverse action claim are first, that there is a workplace right that the employee has undertaken, requested, queried or had withheld, such as conducting union related activities or raising concerns they might have in relation to Occupational Health & Safety (e.g. failure to issue safety eyewear). The second feature of an adverse action claim is the allegation that you, as an employer, have made a decision to take some steps to deal with the worker in an adverse way.

Adverse treatment could include things such as cutting employees’ overtime, changing their shifts from weekend to mid-week, cancelling their annual leave or forcing them to take it, demoting them, or, most obviously, terminating their employment.

Under the Act, it has to be established that there is a causal nexus, that is, that the workplace right was the motivating reason for the business taking that adverse action. From an employer’s perspective, the most alarming aspect of the legislation is that there is a reverse onus on the employer to prove that the assertion of the workplace right by the worker was not the reason that the employer took the action in question.

Bendigo TAFE and the Australian Education Union

A recent decision of the Federal Court concerns an employee in a TAFE college in Victoria, Mr Barclay, who was the sub-branch president of the Australian Education Union. There was an audit of the facility approaching and prior to the audit, Mr Barclay sent an extremely inflammatory email to all staff at the TAFE college, suggesting that management was coercing staff into “putting together false/fraudulent documentation or participating in these types of activities”.

Unsurprisingly, the CEO of the TAFE was fairly concerned that these allegations were being made immediately prior to the auditor’s arrival. She was also genuinely concerned that Mr Barclay was going to continue with this course of conduct. Consequently, Mr Barclay was stood down for the period of the audit on full pay. Mr Barclay, via the union, asserted that this amounted to an adverse action against him, as Bendigo TAFE had stood him down because, amongst other reasons, he was an officer of the union and he was engaged in legitimate union activity.

The question before the Federal Court was whether or not Mr Barclay had been stood down because he was an officer of the union and he was engaged in legitimate union activity.

The union’s position

The union argued that, ultimately, the court had an obligation to make its own independent assessment, regardless of the evidence of the CEO, of whether the two factors were the reason for the TAFE taking the adverse action. The court did not see it that way. Rather, it thought that the intentions of the employer were highly relevant. Accordingly, evidence from the CEO of the TAFE as to why she took that action was important in making that decision.

The evidence of the TAFE CEO

On this particular occasion, the CEO gave detailed evidence that she conducted an investigation of Mr Barclay’s behaviour, including giving him an opportunity to reply to the allegation. In particular, she gave evidence that her reasons at the time for excluding him from the campuses and suspending his email access were because she did not want him on the premises while the auditors were there and she did not want any other unfounded allegations to be made during the audit to the detriment of the TAFE. She went on to say that she had not even considered the fact that Mr Barclay was a union member or that he may have been conducting industrial activities.

The court accepted her evidence and made a finding in favour of the employer.

Shortcomings of the Fair Work Act

Clearly, it is a serious shortcoming of the Fair Work Act that in this situation the onus is on employers to prove their innocence, rather than their innocence being assumed until they are proven guilty. While it is encouraging that on this occasion the court was willing to accept the evidence of the employer, unfortunately there is no guarantee that another court will take a similarly sensible approach.

Lessons for employers

Employers are well advised to take heed of the potential pitfalls in the legislation. In particular, if you have an an employee who is making comments about OH&S issues, making enquiries about reporting injuries for Workers Compensation purposes or complaining that he/she is not being paid a particular allowance, be particularly careful about disciplining them - even during the first 6-12 months of employment.

If you want to take action against that person for other matters relating to performance or other forms of misconduct or, indeed, the fact that they have established a pattern of complaining, you have to be crystal clear in your documentation and in your counselling that it is those matters that are driving you to take this action. It is imperative that you avoid giving the worker the opportunity to point to you as an employer who has put up with misconduct of a similar nature on the part of other workers without taking action.

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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