The term Adverse Action is a term contained in the Fair Work Act 2009 to identify a type of action taken by an employer against an employee or a potential employee when they exercise any one or more of a set of employee rights in the workplace, known as “General Protections”.
An adverse action claim can arise when an employee alleges that an employer took action against them (that was adverse), which was to their detriment, because of the rights afforded under the act.
These General Protections are designed to protect:
- workplace rights
- freedom of association
- from workplace discrimination
- from sham arrangements
Employers also do not have to terminate an employee for it to be considered adverse action, and as such adverse action could include any of the following:
- dismissing/terminating the employee (as already stated)
- injuring the employee in their employment (also includes injuring themselves due to their working conditions)
- altering the employee’s position to the employee’s detriment
- not giving an employee their legal entitlement
- discriminating between the employee and other employees of the employer
- treating them differently than others
- refusing to employ the prospective employee
- offering different (and unfair) terms and conditions, compared to other employees.
Adverse action also includes threatening or organising to take these actions. An example could be terminating an employee because they were on Maternity Leave (protection from workplace discrimination), or demoting an employee because they are a union official (protection from freedom of association).
Because, Because, Because…..
The word because is important here – the action needs to have a ‘because of a protected reason’ for a claim to be upheld. However – if it is proven that the action occurred and that there was a workplace right involved, it will be assumed that it is the reason the action occurred. This means employers will need to prove that they took the action for another reason (e.g. performance).
Who can put in a claim?
Adverse action claims also go beyond the traditional employer/employee relationship, and extend to prospective employees, independent contractors and prospective independent contractors or a person who has entered into or who has proposed to enter into a contract for services with an independent contractor. A claim must be lodged within 21 days of the occurrence of the action.
What happens if I receive a claim?
If you receive a claim, you will firstly need to respond to the commission in writing. They will generally then try to resolve the dispute through either mediation or conciliation. If it cannot be settled, the claim may then go to hearing or arbitration, which is where the commission will consider the evidence and determine an outcome.
What could the outcome be?
The commission may order that:
- the person be reinstated
- the person’s employment continued
- the person be paid compensation
- the person paid amount for remuneration lost
- the period of continuous service with the employer be maintained.
- Compensation is not limited to economic loss for these types of claims and may include distress, hurt and humiliation. Any compensation under an adverse action claim is not subject to a cap – so unlike unfair dismissal which is capped at 6 months the Commission has full power to determine a suitable payment.
How do I prevent a claim?
The best way to prevent an adverse action claim:
- Ensure you have effective policies and undertake reviews
- When making people related decisions ensure you clearly document your decision making process and ensure that none of the reasons are linked to any of the General Protections
If you need help with a claim or in any of these preventative measures give HR Guru’s a call – it’s what we do!
Written by resident HR Guru, Jess Davey