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Articles and legal news from the Atkinson Vinden Team.

Avoiding Adverse Outcomes in the Workplace

Commercial Law, Employment Law

Employers should be vigilant about how they manage the discipline and termination of staff. Not only is there the risk of unfair dismissal proceedings, but now under the Fair Work Act, there is also a risk of facing an adverse action claim.

The recent case of Bayford provides a good example of how this area of the law works. Bayford had been terminated because of poor performance and consistent lateness for work. The employee brought adverse action proceedings, arguing that his lateness for work had been caused by him having to attend to family responsibilities, especially in relation to his small child, who was teething. He argued his family responsibilities, which were known to the employer, were the real reason for his termination, and this constituted an adverse action.

The protections under the adverse action jurisdiction render it unlawful for an employer to subject an employee to “adverse action” because the employee possesses or has exercised a “workplace right”. A “workplace right” can include any entitlement arising from an industrial instrument, to something so general as the right to make a “complaint or inquiry with respect to (the employee’s) employment“. “Adverse action” can include anything from termination to demotion to simply altering the employee’s position in a manner which they consider to be detrimental.

In Bayford, the employer provided detailed evidence about the counselling and warnings undertaken with the employee. The court held that it was necessary to find the real reason for the employer’s conduct, by looking at all of the surrounding circumstances as well as the employer’s subjective reasons for making the relevant decisions. On this basis, the court found that the real reason for the termination of the employee’s employment was his poor performance and lateness for work, and that the suggestion that it was really about penalizing someone for trying to exercise their care responsibilities for a child was misguided.

Employers need to be conscious of the fact that once an allegation is made, the onus rests with them to prove that the alleged action taken was not due to the exercise of a workplace right. For an employee to succeed, the exercise of a workplace right does not need to be the sole or dominant reason for the adverse action. It only needs to be one of the reasons.

The case demonstrates to employers the importance of following a transparent and comprehensive disciplinary process, particularly if there is a suggestion that the employee might rely on grounds for an adverse action claim. The fact that the employer is required to show that the prohibited reasons set out in the Fair Work Act were not the reason for termination places even more importance on these practices.

Employers can take solace in recent decisions which have demonstrated that employers can successfully defend these claims in circumstances where the action taken is based on a legitimate workplace change (ie restructuring, redundancy etc). However, employers should note that, in light of the reverse onus, they will need to justify each decision they make with respect to which employees are selected for redundancy. This is made easier by keeping written records of the reasons for decisions.

These protections now form a crucial part of the workplace relations landscape.  If you are an employer, then there are policies which you could implement to limit your business’s exposure under these relatively new laws.

Please contact any member of our employment team on (02) 9411 4466 if you would like further assistance in this area.