Performance Management of Employees and the Risk of Adverse Action Claims

The adverse action provisions of the Fair Work Act 2009 (Act) have potentially wide reaching implications for employers when it comes to the performance management and discipline of employees.

The Act prohibits an employer from taking an adverse action against an employee because that employee exercises or proposes to exercise a workplace right. The Act also prohibits an employer from taking an adverse action against an employee because of race, colour, sex, sexual preference, age, disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

What is an adverse action?

An adverse action can be any of the following:

• Dismissing an employee.
• Injuring an employee in their employment or altering the position of the employee to their detriment. This includes demotion, a decrease in pay, failure to receive a promotion, etc.
• Discriminating between the employee and other employees.
• Failing to employ a person.
• Discriminating against prospective employees by offering them less favourable terms and conditions than other employees

What is a workplace right?

The Act defines workplace right broadly. In basic terms, a person has a workplace right if they are entitled to the benefit of any workplace law, process or procedure.

Some examples of workplace rights are:

• the right to join a union and to participate in industrial activities;
• the right to make a workers compensation claim for a workplace injury;
• the right to reasonably refuse a request to work additional hours;
• the right to take paid sick leave, carer’s leave, annual leave, etc;
• the right to be given procedural fairness in relation to disciplinary processes.

The Reverse Onus

If disciplinary action has been taken against an employee and the employee alleges that the action was taken because they were exercising a workplace right, then the court will presume the action was taken for the prohibited reason unless the employer can prove otherwise.
Further, if there are various reasons for the action taken, a person is presumed to take the action for the prohibited reason if the reasons include that prohibited reason.

An example of how the onus operates is where an employee who has recently had a baby continuously turns up to work late and explains to the employer that he is not getting much sleep due to the baby crying all night. The employer takes disciplinary action against the employee for his tardiness and the employee then alleges the employer took the disciplinary action due to his family responsibilities.
The court will presume the disciplinary action was taken due the employee’s family responsibilities, which is prohibited by the Act and even if it
the family responsibilities are just a small part of the reason for the discipline, the action is prohibited.

How to discharge the reverse onus

So how does the employer prove otherwise? The court will look into the ‘real reasons’ the employer took the disciplinary action. This can be demonstrated by looking at the notes of meetings, workplace policies and work processes, etc. For example, if the workplace policies do not make it clear that a person may be disciplined for lateness, then it may be difficult to discharge the onus, especially if the time is made up elsewhere,
such as at lunchtime or after work.

Remedies which can be awarded if an adverse action is proven

The Act provides for a broad range of remedies where an adverse action is proven, including compensation, reinstatement, injunctive relief, etc.

Furthermore, contraventions of the adverse action provisions of the Act can attract a civil penalty of up to 300 penalty units ($30,000.00) for
corporations.

Things employers can do to minimize the risks

It is extremely important that any decision made by an employer which affects employees in their employment are transparent, welldocumented and defensible.

Organisational policies and procedures should provide for clear grievance handling procedures. All decisions, reasons, complaints and requests should be clearly documented and clearly communicated to the affected employee.

It is also crucial to ensure that procedural fairness is afforded in relation to any processes or procedures involving employee discipline, including ensuring that the employee has the right to a support person present in any meetings held to discuss performance related issues.