Australia: The long arm of adverse action: independent investigations and performance reviews

The potential for independent workplace investigations and performance reviews to constitute unlawful 'adverse action' is highlighted by the recent Federal Court decision in Perez v Northern Territory Department of Correctional Services [2016] FCA 476 (6 May 2016).

The case demonstrates how important it is for employers to be clear, in their reasons for taking any adverse action against an employee, to be able to demonstrate that it was not taken for a 'prohibited reason' - such as that the employee made a complaint in relation to their employment.

BACKGROUND

Luis Perez was a trainee prison officer working on a fixed term contract for the Northern Territory Department of Correctional Services (NTDCS) at the Alice Springs Correctional Centre (ASCC) between 11 February 2013 and 10 February 2014.

After some initial training, Mr Perez commenced on the roster at the ASCC. On 12 June 2013, there was an incident involving Mr Perez entering the main prisoner courtyard of the maximum security section in breach of ASCC protocols; he entered alone putting himself and other prison officers in harm's way. Following the incident, Mr Perez's supervisor discussed his behaviour with him and counselled him on his need to improve his vigilance in a prison setting. No further action was taken.

Three weeks later, Mr Perez was involved in his routine performance appraisal. Much of the assessment was complimentary. However, his supervisor reiterated the need for Mr Perez to improve his ability to follow procedures properly to ensure the safety of staff and prisoners at ASCC.

At the meeting Mr Perez accepted this recommendation but later the next day (28 June) sent a long email to his supervisor and Mr Tunney, the Chief Prison Training Officer, refuting the criticisms in his performance review amongst other things. Mr Tunney considered this email an unusual response to a routine appraisal and requested a formal performance management meeting (PMM) with Mr Perez, to which he also invited Mr Perez's union representative.

The PMM was held and, at the outset, it was clearly explained that its purpose was not disciplinary. The meeting addressed a variety of matters including Mr Perez's unwillingness to accept criticism.

Following this meeting other prison officers raised concerns about Mr Perez's performance with Mr Tunney and he sought to have another meeting with Mr Perez. This meeting did not take place because Mr Perez was absent from work as a result of depression and anxiety from 10 July 2013 to 12 November 2013.

While he was off work, Mr Perez lodged a formal complaint of harassment in which he requested that the 12 June incident be investigated by an independent investigator. He also requested that he be able to view all the CCTV footage for the Courtyard Area for the entire day shift on 12 June 2013.

Ms Andrews, an Audit and Investigations Officer in the Professional Standards Unit of the NTDCS, investigated the complaint. She recommended that, unless Mr Perez could provide credible evidence to substantiate his allegations of harassment, no further action be taken. She also recommended consideration be given to the termination of Mr Perez's employment contract.1

The draft investigation report was sent to Mr Perez and he was invited to make submissions on the findings. At the same time he was encouraged to complete his training and return to work at the ASCC. Mr Perez did not take up that invitation and, on 14 November 2013, Ms Andrews was advised that she could finalise the report.

Mr Perez returned to work on 12 November 2013 and following another incident was ultimately stood down from work on full pay on 23 December, after a recommendation was given that that there was a significant risk that the Mr Perez would suffer further harm if he continued in the workplace.

Mr Perez was away from work until his employment concluded on 10 February 2014. His contract was not renewed and he was not offered a position as a permanent prison officer at ASCC.

DECISION AT FIRST INSTANCE

Mr Perez made a number of claims in the Federal Circuit Court (FCC) including alleging seven different ways that adverse action had been taken against him. Relevantly, the FCC Judge found that no adverse action had been taken against Mr Perez.2

THE APPEAL

Mr Perez appealed on a number of grounds, including five instances in which the FCC had made findings that no adverse action had been taken against him. In particular, Mr Perez contended that the following should have been found to be adverse action:

  1. The formal PMM, which he alleged caused him to suffer a mental disability that had led to him being unable to complete the requisite training and thereby secure a permanent position at ASCC.
  2. Ms Andrews' recommendation that his employment be terminated.

Performance management meeting

Mr Perez contended that the PMM was in retaliation to the email he sent on 28 June, and that in the meeting he was harassed, bullied and rebuked 'like a little boy.'3

The Federal Court appeal judge (White J) rejected this argument, and supported the findings of the primary judge who held that the PMM did not constitute adverse action because there was no evidence that the Mr Perez's employment had been injured in the sense contemplated by section 342(1)(b) of the Fair Work Act 2009 (Cth). There was no decision made by anyone at that meeting to alter any incident of Mr Perez's employment (i.e. there was no 'figurative or actual' black mark placed on his employment record4).

White J noted that while performance management may constitute adverse action, it would not be so in cases like this where it had been carried out for a proper purpose and not as a form of victimisation.5 It was an ordinary incident in the employment of prison officers in training to review their progress from time to time, for deficiencies in their performance to be pointed out to them and for the officer to be counselled, encouraged or directed to take corrective action.6

Ms Andrews' recommendation

White J allowed Mr Perez's appeal on this point, holding that the recommendation constituted adverse action as it was capable of undermining Mr Perez's expectation of ongoing employment and, therefore, could injure him in his employment.7

His Honour determined that Ms Andrews' recommendation should be attributed to the employer because of the position that she occupied, the evidence that she was authorised to make recommendations of this kind and because ASCC had not otherwise attempted to demonstrate that she had exceeded her authority.8

Importantly, the following preface had been provided by Ms Andrews to her recommendation (bold emphasis added):

As it has been clearly identified that Mr Perez's workplace performance is poor and is not meeting the requirements of the Certificate III in Correctional Practice, it is recommended that consideration be given to terminating his employment contract9

While this might be argued to implicitly state her reasons for the recommendation, White J held that it was plain that NTDCS did not discharge the onus of showing that Ms Andrews had not made the recommendation because of the appellant's exercise of his workplace right to make a complaint. His Honour noted that Ms Andrews' affidavit evidence did not even advert to the question, let alone state her reasons for the recommendation.10

Accordingly, White J found that in circumstances where the recommendation was made in a report addressing a complaint by Mr Perez, this "gives rise, by itself, to a concern that the recommendation may have been made because of the making of the complaint."11 On this basis, the original decision of the FCC was set aside.

The matter was referred back to the primary judge to consider what, if any, relief should be awarded to Mr Perez. In this regard, White J noted that while it would be expected that Ms Andrews' recommendation would carry some weight, it did not appear to have been given much, if any, consideration by the relevant ASCC decision-makers in determining whether Mr Perez would be employed as a permanent prison officer.12

LESSONS FROM PEREZ

The decision in Perez highlights the following key issues:

  1. An outcome of an independent investigation or performance management process may amount to adverse action within the meaning of the FW Act.
  2. In such instances, to rebut the presumption of unlawful adverse action, the employer should carefully and clearly state (in writing) its reasons for any such outcomes, which should not include any 'prohibited reason'.

With that in mind, employers should ensure that investigators do not stray into the area of making recommendations unless expressly authorised to do so. When so authorised, investigators should expressly state their reasons for any recommendations, which should not include any 'prohibited reason'.

Similarly, those conducting performance management reviews should expressly state their reasons for any outcome that is adverse to an employee which, once again, should not include any 'prohibited reason'.

Footnotes

1 Perez v Northern Territory Department of Correctional Services [2016] FCA 476 at [102].

2 Perez v Northern Territory Department of Correctional Services [2015] FCCA 1384.

3 Perez v Northern Territory Department of Correctional Services [2016] FCA 476 [68].

4 Ibid [69].

5 Ibid [85].

6 Ibid [79].

7 Ibid [104].

8 Ibid [105].

9 Ibid [102].

10 Ibid [106].

11 Ibid [107].

12 Ibid [171]-[177].

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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