Adverse Action Claims | Newcastle & Central Coast Lawyers

What is adverse action?

One of the most common situations is workplace discrimination. It is an action taken by an employer towards an employee that is considered unlawful under the Fair Work Act. It generally happens when an employer retaliates against an employee exercising a workplace right to general protection. This happens when an employer treats an employee differently from other staff members because of certain attributes and they experience a loss or change in their position. The attributes include:

  • Race
  • Colour
  • Sex
  • Sexual orientation
  • Age
  • Physical or mental disability
  • Marital status
  • Family or carer’s responsibilities
  • Pregnancy
  • Religion
  • Political opinion
  • Nationality or social origin

What are General Protections?

General protections are protections that all workers have under the Fair Work Act and the National Employment Standards. They include:

  • the right to correct pay, leave and other entitlements
  • the right to be in a union and take part in union activity (or not to do this)
  • the right to take time off work if you are sick or injured
  • the right not to be discriminated against according to State or Federal anti-discrimination laws
  • the right to make a complaint or enquiry about workplace conditions
  • the right to the benefit of an industrial law or instrument (such as an award, enterprise agreement, workplace safety law).

An employer cannot take an ‘adverse action’ against you for exercising a general protection.

What makes an adverse action?

Actions that can amount to an adverse action include:

  • Changing their job to their disadvantage
  • Discriminating against an employee
  • Injuring a worker or contractor
  • Refusing to supply to a contractor
  • A disciplinary warning
  • Dismissing an employee

An example of an adverse action is: if the owner or manager bought in 3 cupcakes for their employees, but there were 4 staff members, this could be an adverse action as the fourth employee experiences a loss of not receiving a cupcake.

Who is covered by an adverse action claim?

The scope of who is covered by an adverse action claim is broad. They could potentially include the following people:

  • Full-time employees
  • Part-time employees
  • Casual employees
  • Probationary employees
  • Apprentices and trainees
  • Contractors (refusing to use a contractor’s services)
  • Prospective employees (Failing to hire someone)

What is not considered an adverse action?

Treating someone differently does not always mean it will be an adverse action. For example, different treatment because of poor performance will not amount to an adverse action. The Fair Work Act provides circumstances that may not be considered adverse actions. These include:

  • It is permissible under State or Territory anti-discrimination laws
  • It is based on the inherent requirements of the position concerned
  • It is taken against a staff member of an institution run in accordance with religious beliefs, and the action is taken in good faith and to avoid injury to those religious beliefs

What are the remedies for adverse action?

There is currently no cap on the compensation that can be ordered if an adverse action is found. That means that the tribunal will determine the severity of the action and order compensation to address the issue adequately.

For the employers, there is, on top of any compensation ordered, a fine of $12,600 penalty per offence for an individual and a $63,000 penalty per offence for a corporation.

EMPLOYEES - Click for more information

What is the process of an adverse actions claim?

First, the employee or their solicitor will have to lodge a claim with Fair Work. The respondent (the employer) will receive the complaint and will have to lodge a response to the claim. To help resolve the matter a private conference will be organised. If the matter isn’t resolved in the conference, and all reasonable attempts to resolve the matter were made, then both parties can consent to the Fair Work Commission to resolve the matter. If both parties do not consent, an application to the Federal Court can be made to have the claim heard there.

How long do I have to lodge an adverse action claim?

If an adverse action has resulted in you being dismissed, you have 21 days to lodge a claim. If an adverse action does not involve a dismissal, the 21-day time limit does not apply.

EMPLOYERS - Click for more information

Because of the broad scope of an adverse action claim, it presents difficultly for employers. It can also be very costly if you’re found to have taken adverse action against an employee. The laws are not meant to stop employers and managers from making reasonable business decisions. They are designed to hold employers and managers accountable for their decision-making processes.

How can I protect myself from an adverse action claim?

There are several steps you can take to protect yourself from an adverse action claim. The biggest issue is to make sure you clearly explain why your reasons are valid and provide evidence of your decision-making process. It is vital that the workers understand and accept the valid reasons.

The following are some tips to help minimise your risk of an adverse action claim:

  • Having a consultation with employees to get their view on any major business decisions that may affect them. Many awards have consultation provisions. However, even if it is not required, it can be useful to explain your decision-making process.
  • Document your decision-making process. This will allow you to defend yourself in front of a court or tribunal as to the exact reason you took the actions that led to an adverse action claim. If the decision results in dismissing someone, it allows you to demonstrate the reason and not allow the employee to jump to conclusions about why they were dismissed.
  • Make sure you’re thinking clearly when you make the decision. Decisions made when you’re emotional are usually based on assumptions and not facts. This will usually lead to not being able to justify the action taken and open to an adverse action claim.

We are here to help

Our solicitors specialise in Employment Law and represent clients throughout the Hunter, Newcastle, Sydney and across the Central Coast. We have the experience to guide you through often complex workplace issues from beginning to end to ensure you get you the best possible outcome.

If you have a workplace issue or dispute, contact one of our employment law specialists on 1300 529 444 or submit a contact form to arrange a case assessment with one of our solicitors today.



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