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13 May 2011 Employer defends adverse action claim by employee dismissed during probationary period

By Warwick Ryan, Partner and Nathan Day, Law Clerk


In brief – Dismissal during probation not necessarily an adverse action

Following on from our earlier article on adverse action, a recent case has highlighted how an employer can be successful in defending a claim lodged by an employee who was dismissed during a probationary period.


Hodkinson v The Commonwealth [2011] FMCA 171

Sandra Hodkinson was engaged by the Child Support Agency (CSA) as a collections officer for a six month probationary period.

During the third month of her probation, she was absent for two days after being diagnosed with bulging discs in the spine. She was placed on a gradual return to work program which increased her daily hours from 5 to 7.24 over a four week period and required her to take regular breaks to stretch her back.

In the following month, Hodkinson was placed on a work improvement plan because of her failure to reach her performance targets, consisting of making 20 outbound calls per day, finalising six cases per month and collecting $17,500 per month.

Hodkinson encountered difficulties in balancing her return to work program with her work improvement plan. In the fifth month of her probation, she attended a meeting with her managers and was handed a report which recommended her termination.

Usual one-week extension not granted

During this meeting, Hodkinson was advised that other employees in a similar position had been offered a one week extension to prove that they could meet their targets. Unfortunately for Hodkinson, she was scheduled to have surgery relating to other medical problems in the following week and was denied the usual one-week extension.

It appears that CSA refused this extension because they did not want Hodkinson's service with CSA to extend beyond six months, as they would then have been obliged to give her notice of termination. This meant that CSA needed to act before the end of the probationary period to take advantage of its purpose, namely, to avoid Hodkinson becoming a permanent employee who would then be entitled to notice of termination.

Complaint about the impact of medical problems on meeting performance targets

After this meeting, Hodkinson raised complaints with the HR Manager that her medical problems had hindered her ability to meet her performance targets and this had not been taken into account.

In the following week, Hodkinson disputed with the CSA that she had failed to meet her performance targets because she recalculated her targets to take into account her return to work program. Notwithstanding her complaints, Hodkinson received a letter advising her of her termination for failing to meet her performance targets.

Hodkinson lodged an adverse action claim with the Federal Magistrates Court seeking reinstatement and compensation. The critical questions raised by the claim included:

  • Whether the CSA took adverse action in dismissing Hodkinson because she had lodged a complaint with the HR Manager
  • Whether the CSA took adverse action in dismissing her and/or denying her an extension of her work improvement plan because she suffered from a disability
Adverse action - dismissal based on complaint

The court acknowledged that the ability to make a complaint in relation to employment constitutes a workplace right which can form the basis for an adverse action claim, where an employer takes adverse action because an employee has lodged such a complaint.

However, the court raised doubts as to whether Hodkinson had in fact complained at all to the HR Manager in relation to her employment. Further, the conversation with the HR Manager was characterised as a submission in response to the CSA's recommendation to terminate her employment, not a complaint.

Nonetheless, the court found that even if this conversation did amount to a complaint, this did not form any part of the CSA's basis for dismissing her. Rather, the dismissal was purely the result of her failure to meet her performance targets during her probation and this was specifically articulated in the termination letter.

Adverse action based on disability

In relation to the second point, the court was particularly critical of Hodkinson's submissions because they failed to identify a specific disability which allegedly formed the basis for CSA's decision to dismiss her. Although this hindered Hodkinson's claim, it did not ultimately affect the court's decision to reject the claim because it was found that the decision to dismiss Hodkinson was solely based on her failure to meet her targets.

Limitation or consequence?

In addition, the judgment appeared to confine the scope of adverse action claims based on disability by drawing a distinction between the physical and mental limitations associated with a disability and the consequences of those limitations.

Unfortunately, this creates a considerable degree of uncertainty because of the difficulties associated with characterising a particular effect of a disability as either a limitation associated with a disability or a consequence of that limitation. For example, is the requirement to take breaks during employment because of a back injury a physical limitation of a disability or a consequence of the physical limitation? These are questions which are subject to considerable doubt and, in effect, will only act to limit the scope of adverse action claims based on disability.

In the present case, it seems that the fact that Hodkinson had to attend surgery for a disability was a practical consequence rather than a physical limitation and therefore could not form the basis of a claim based on adverse action.

Lessons for employers

This decision clearly highlights the importance of being crystal clear in your documentation about the reason for dismissing an employee, in this case being the failure to meet performance targets. This also ensures that the employee will be unable to claim that they were dismissed because of complaints they made during the course of employment or because they have a disability.

The full text of the judgment in Hodkinson v The Commonwealth [2011] FMCA 171 can be downloaded from the website of the Federal Magistrates Court of Australia.

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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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