General protections update: developments in adverse action

The Fair Work Act provides a number of important ‘general protections’, including a prohibition on taking ‘adverse action’ against a person because they have exercised a ‘workplace right’.

Adverse action claims are one of the most likely sources of workplace litigation, so understanding the risks should be a high priority for all employers. Claims can be made by employees, employers and even prospective employees and contractors. They can be based on different protections, but this article focuses solely upon claims made by employees based on workplace rights.

Crash course: adverse action in a nutshell

Workplace right: An employee must establish that he or she had exercised or proposed to exercise a ‘workplace right’. The precise legal meaning of this term can be difficult in some borderline cases, but common examples include:

  • lawfully taking or requesting leave;
  • making a complaint about underpayments; or
  • acting as a workplace delegate for a union.

Adverse action: The next element of a claim is that ‘adverse action’ has been taken. This encompasses anything which “alters the position of an employee to their prejudice”. Common examples include:

  • termination
  • reduction of pay; or
  • loss of status.

Crucially, adverse action is not unlawful unless it is done for a prohibited reason.

Motivation: The final part of the claim is that the circumstances surrounding the workplace right caused the adverse action (eg “you fired me because I asked to take annual leave”). If the workplace right and the adverse action are established, then the onus shifts (‘reverses’) to the party responding (i.e. the employer) who must affirmatively prove a lawful reason for the adverse action.

The Why

The reverse onus is one of the main reasons that adverse action claims are so popular among aggrieved employees. It is that question of motivation which most commonly becomes the focus of a dispute, and the recent decision of the Federal Circuit Court in ARTBIU v Australian Western Railroad Pty Ltd [2017] FCCA 1954 has again raised questions about the relevant legal principles.

In that case, the employee was given an opportunity to attend training that would improve his prospects of promotion. He had previously been turned down for promotion based on unsatisfactory commitment and attitude.

Shortly after his training was approved, he was lawfully directed to work a pushed back shift (i.e. one that starts and finishes later), which is common in the rail industry. He responded that he was unable to work the altered shift because he was required to care for his infant son up until the start of the shift and so would become fatigued by the end of it. His wife was suffering from postpartum complications which greatly restricted her ability to care for the child. The employee took, and his manager approved, carer’s leave to cover the employee’s absence from the pushed back shift (the workplace right).

The employee undertook his first training session the day after his carer’s leave, but his manager cancelled the second planned training session (the adverse action). The manager claimed that the cancellation was based on feedback citing the employee’s lack of commitment and poor attitude, and his disbelief of the employee’s justification for not working the pushed back shift. The employee argued that the carer’s leave motivated the decision (the disputed motivation).

The court found that the manager’s doubts about the legitimacy of the employee’s request for leave were mistaken and that a “substantial and operative reason” for cancelling the training was the refusal to work the delayed shift. The court accepted that the manager had already formed his views about the employee’s poor attitude before the adverse action and that those views were a part of the reason for the decision. However, this was not enough to defend the claim.

Significance of the decision

It is well established that an unlawful motivation doesn’t have to be the only reason for taking adverse action, or even the main reason for a claim to succeed. It is enough for a court to conclude that a prohibited reason was a “substantial and operative reason”. But in this case, the court revealed another grey area by concluding that a mistaken but genuine belief (i.e. that the carer’s leave was not taken for legitimate reasons) did not excuse the employer’s conduct.

This is contrary to at least one previous decision, which supports the view that a mistaken belief can be relied upon if it provides an answer to a claim. For example, in this case, if the manager’s belief was correct, then the unauthorised absence would be a justification for discontinuing the training because the employee wouldn’t have a workplace right to rely upon.

Lessons for employers

It is possible that the reasoning in this case will be rejected in future decisions (or that the decision will be appealed). However, as a matter of best practice, employers should:

  • be aware that they may be unable to rely on a mistaken but genuine belief about an employee’s exercise of workplace rights as a basis for adverse action;
  • make sure they get all their facts straight, for example, by conducting a workplace investigation before they take any actions against an employee; and
  • ensure that they can articulate a lawful reason for any adverse action taken once a decision has been made and consider whether it has been contaminated by a prohibited reason.

If you have any queries or would like further information, please contact:

Joe Mullavey
M: 0416 794 061

Published: 15 November 2017

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