Adverse action - implications for employers

Adverse action - implications for employers

Adverse action is a new concept introduced by the Fair Work Act 2009 (FW Act), which will have significant ramifications for employers. Employers should be particularly aware of the adverse action provision because they have the potential to give rise to claims by prospective, current and former employees in a wide range of circumstances, including in respect of discrimination, an area traditionally confined to Federal and State anti-discrimination laws.

What is adverse action?

If an employer takes action against an employee or prospective employee because the employee has or exercises a workplace right, then the employee may bring a claim for adverse action.

Adverse action is taken by an employer against an employee, if the employer:

• dismisses the employee;
• injures the employee in his or her employment;
• alters the position of the employee to the employee’s prejudice; or
• discriminates between the employee and other employees of the employer.

Adverse action can also be taken by an employee against an employer. This will occur if the employee:

• ceases work in the service of the employer; or
• takes industrial action against the employer.

For employers to appreciate the concept of adverse action it is important to understand what is meant by the protection of “workplace rights”.  A person has a workplace right if the person:

• is entitled to a benefit of or has a role or responsibility under a workplace law, instrument or order made by an industrial body. For example, an employee’s right to be absent from work during parental leave;
• is able to initiate or participate in a process or proceedings under a workplace law or instrument. For example, making, varying or terminating an enterprise agreement;
• is able to make a complaint or inquiry to a person or body having the capacity under a workplace law to seek compliance with that law or in relation to an employee’s employment. For example, an employee making a complaint under an internal bullying policy.

Adverse action and discrimination

One of the most significant developments to accompany the introduction of the adverse action provisions is the protection against discrimination in employment. Employers are prohibited from taking adverse action against employees or prospective employees because of their race, sex, colour, sexual preference, age, disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin. This offers a much broader scope for action than under the previous Workplace Relations Act 1996. For example, the list of discriminatory grounds includes the additional ground of family and carer’s responsibilities, meaning an employer’s willingness to accommodate flexible work practices will likely become a greater issue.

Reverse onus of proof and remedies

Claims under these new provisions have a reverse onus of proof, meaning that it will be presumed that an action was taken for the alleged reason (i.e. a discriminatory reason or because the employee exercised a workplace right) unless the employer can prove otherwise.