A string of recent adverse action claims confirm that employers must remain vigilant when making any critical decision affecting the employment relationship; otherwise, employers risk an expensive and time-consuming adverse action claim.
The real difficulty for employers in dealing with adverse action claims is that, when a claim is made, the Fair Work Act 2009 (Cth) reverses the onus of proof. This requires an employer to ‘disprove’ that the action was influenced in whole or part by ‘unlawful considerations’. Unlawful considerations include, but are not limited to:
- freedom of association
- workplace rights.
In two recent cases analysed below, both employers were unsuccessful in discharging this reverse onus of proof.
Despite a previous High Courtdecision confirming that union officials are not immune from disciplinary action for misconduct, a recent decision has muddied the waters. In the case in question, the Federal Court determined that an employer took adverse action against an employee when the employer suspended him on full pay, subjected him to an investigation and gave him a warning following a robust discussion about a safety matter.
The employee, an elected safety representative, locked out two forklifts because of concerns about the reversing beepers. In deciding to lock out the forklift, the worker was exercising rights under state occupational health and safety legislation. The employer alleged that during the subsequent discussions to resolve the safety concern, the employee was belligerent and failed to consult. The employer then engaged an independent consultant to investigate the conduct and ultimately determined that the employee should be given a first and final warning.
Rejecting the employer’s argument that the investigation was conducted in good faith, the Federal Court found the operative reason for the employer’s conduct was the employee’s decision to lock out the forklifts. The Court noted that it is to be expected that, when advocating for important workplace rights, such as safety, it should be contemplated by the parties that there will be differences of opinion.
In another case, the Federal Court sent a strong warning to employers contemplating using redundancy to get rid of troublesome employees. In the decision, a university was heavily criticised for making a youth studies and sociology professor redundant after she had exercised or planned to exercise workplace rights, including making bullying and intimidation complaints to WorkSafe Victoria about her supervisor.
Although the university alleged that the decision to make the employee redundant was motivated by financial reasons and the Court accepted that the employee’s faculty was running at a loss, the Court was not convinced that that the university acted lawfully when it selected the professor out of a pool of possible employees as the one to be made redundant.
The Court, ordered that the employee be reinstated and imposed a penalty of $37,000. In doing so, the Court was at pains to note that employers should not succumb to the temptation of using redundancy as a pretext for getting rid of an undesired employee.
Lessons for employers
Direct evidence from the decision-maker of the reason for a decision will be the best evidence to defend a potential adverse action claim. For that reason, it is imperative that a proper analysis is undertaken to ensure the decision ‘stacks up’ and is not motivated by an unlawful consideration.
On this basis, employers should:
- always give a reason for a decision, especially terminations
- assess the decision against safety, discrimination and diversity obligations
- not rush decision-making, especially when confronted with a complaint or grievance from an employee who will be affected by the decision
- document the timeline and evidence relied upon for making the decision
- if unsure, avoid going it alone and seek professional advice.