Australia: Case round-up: Do your officers and managers understand the adverse action provisions in the Fair Work Act?

Last Updated: 16 September 2016
Article by Tiffany Campbell
Most Read Contributor in Australia, September 2017

The general protections provisions were introduced with the Fair Work Act 2009 (Cth) (the Act), and it was anticipated that the floodgates would open, and every business would be consumed by such claims. While that hasn't happened, we have seen a steady rise in successful general protections claims, with increasing compensation awards for applicants, and significant penalties being imposed on businesses.

This article provides a brief overview of one of the main general protection provisions, adverse action, and recent case law in this area.

Adverse Action

The Act provides that a person must not take adverse action against another person:

  • because the person has, has exercised, or proposes to exercise a workplace right; or
  • to prevent the exercise of a workplace right.

The two important concepts, or terms, in this section are 'workplace rights' and 'adverse action'.

Employees have 'workplace rights' where:

  • they are entitled to the benefit of, or have a role or responsibility under:
    • a workplace law (such as the Act);
    • workplace instrument (such as a modern award or an enterprise agreement); or
    • an order made by an industrial body (such as the Fair Work Commission)
  • the employee is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
  • the employee is able to make a complaint or inquiry:
    • to a body having the capacity under a workplace law to seek compliance with that law (such as the Fair Work Ombudsman); or
    • in relation to their employment.

Prohibited 'adverse action' by an employer against an employee takes place if the employer dismisses the employee, alters or injures the position of the employee, or discriminates against the employee, because the employee has, has exercised, or proposes to exercise, a workplace right.

The reverse onus of proof

An important difference between adverse action claims, and other employed-related legal claims, is that the Act imposes a reverse onus on employers to establish that they did not take adverse action because the employee had a workplace right.

The case law – where decision-makers get it wrong

Two recent cases have highlighted the costly consequences of making employment-related business decisions for the wrong reasons.

In Heraud v Roy Morgan Research Ltd1, an employer was found to have taken prohibited adverse action against an employee who was on a period of maternity leave. During the period of maternity leave, the employer implemented a significant restructure of positions, including the substantive position of the employee.

What happened?

On a number of occasions, the Director, Human Resources, spoke with the employee about the proposed changes, and indicated that the employee would be redeployed into a new role within the new structure. Following these discussions, the employee emailed a request for flexible working arrangements to the Director, HR, in anticipation of her impending return to work.

Within a week of sending the request, the Director, Human Resources, had put together a written proposal that the redundancy of the employee's position be brought forward, that the temporary worker who was in the employee's substantive position remain in that position, and that there was no longer the opportunity to redeploy the employee within the business. The Director, Human Resources did not consider the employee's request for flexible working arrangements, on the basis that her employment was to be terminated.

This proposal was approved internally by the employer's in-house legal counsel, and the CEO (who was the ultimate decision-maker), and the employee's employment was terminated, by reason of redundancy.

The claim

The employee alleged prohibited adverse action in a number of respects. She was successful in the following three arguments, that because:

  • the employee had exercised a workplace right to take maternity leave, the employer had taken adverse action (by injuring or prejudicing her in her employment) by not returning the employee to her substantive role, or a restructured role, at the end of her maternity leave;
  • the employee had requested flexible working arrangements, the employer took adverse action by withdrawing the opportunities for redeployment; and
  • the employee had requested flexible working arrangements, the employer took adverse action by terminating her employment.

Importantly, the employer did not call as witnesses two of the relevant decision-makers, the Director, Human Resources or the CEO, to give evidence about the reasons for their decision. The Court therefore found that the employer had not rebutted the reverse onus of proof.

The employer was ordered to pay the employee $52,000 in compensation.

Biggest compensation order so far

More recently, an employer has been ordered to pay an employee over $1.3 million in compensation for prohibited adverse action, and pay to the employee's union a civil penalty of $50,000.

What happened?

In short, an employee suffered a work-related spinal injury during the course of his employment. After more than a year of workplace rehabilitation, he returned to work on light duties, and was re-trained as a drill rig operator.

He worked in the operator position for a period of three years. During that period, the employee made a workers' compensation claim and, on Friday, 15 November 2013, the employee was awarded $637,000 in common law damages.

On the following Monday, the employer initiated a medical assessment of the employee under the Coal Mining Safety and Health Act 1999 (Qld). The doctor's medical report stated that the employee was unfit to undertake his current position, on the basis that there was a risk of further injury or aggravation.

The employer stood the employee down the following day, and in around March/April 2014, ceased paying the employee wages. The employee challenged the assessment in the Supreme Court, and the Court found that it was invalid.

The employer initiated another assessment, from the same doctor, who first concluded that the employee was fit to perform his drill rig operator role, with some restrictions. A senior officer of the employer spoke directly with the doctor, and requested he change his assessment. The doctor did so, and issued a second assessment which provided that the employee was not fit to perform his role. This was again challenged by the employee in the Court.

The claim

The employee's union initiated an adverse action claim on the employee's behalf alleging, amongst other things, that the employer had taken adverse action by failing to provide the employee with work or pay him wages, because he had exercised a number of workplace rights, including that he commenced a claim for common law damages in the District Court.

The Court:

  • wholly rejected the evidence of the employer's decision maker, who stated that the reason for his decision to stand down the employee was because of the results of the medical assessment, and the employer's work health and safety obligations; and
  • found that the employer had not discharged the reverse onus, and determined that the employer had taken prohibited adverse action.

What can businesses do to avoid such claims?

To minimise the risk of an adverse action claim, it is important that:

  1. officers and managers understand the adverse action provisions, and when employees have workplace rights; and
  2. support personnel, such as human resources, test decision-makers on the reasons for employee-related business decisions, such as:
    • promotions and demotions;
    • removing or reducing an employee's employment benefits;
    • suspensions or stand-downs; and
    • decisions to terminate an employee's employment.

If in doubt, employers should seek advice on whether a decision may fall foul of the Act's adverse action provisions.


1 [2016] FCCA 185.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Tiffany Campbell
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