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What is Adverse Action?

The Fair Work Act 2009 (Cth) prohibits people (including employers) from taking adverse action against employees because they have a workplace right, or for a discriminatory reason.

A workplace right can include:

  1. making a complaint;
  2. been involved in a proceeding;
  3. been engaged in union activity; or
  4. any workplace right arising from a workplace instrument.

A discriminatory reason can include:

  1. race,
  2. religion;
  3. union activity;
  4. parental status;
  5. sex.

Adverse Action can include:

  1. disciplinary action;
  2. dismissal;
  3. demotion;
  4. denial of a pay increase.

Having regard to the above, an employee can potentially bring a claim of adverse action if they are treated less favourably and they can allege that this treatment is linked to a workplace right or discriminatory reason. Accordingly, the scope of this cause of action is very wide. A further difficulty for employers lies in the fact that the onus of proof is reversed such that employers need to prove that the adverse action taken was not because of a workplace right or discriminatory reason.

The case heard in the Full Federal Court of Barclay v The Board of Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14 (9 February 2011) , illustrates the potential liability that can be exposed by this cause of action. This matter has been appealed to the High Court of Australia and that court has reserved its judgment.

The facts of the Federal Court case are thus:

Mr Barclay was employed by the Board of the Bendigo Regional Institute of Technical and Further Education (‘BRIT’) as well as being the President of BRIT Australian Education Union (‘AEU’).

On 29 January 2010 Mr Barclay sent an email to AEU member alleging misconduct on the part of BRIT employees, without naming his sources or the employers alleged to be involved.

The CEO of BRIT, Dr Harvey, wrote to Mr Barclay expressing concern about his failure to report the misconduct to his manager or Dr Harvey, and his failure to reveal particulars when requested by his manager. Dr Harvey suspended Mr Barclay from work pending the completion of an investigation, suspended his internet access and warned him of the possibility of facing disciplinary action.

Mr Barclay brought an Adverse Action claim to the Federal Court of Australia, alleging that BRIT had taken adverse action against him because:

  1. he was an officer of the AEU;
  2. he engaged in industrial activity; and
  3. exercised workplace rights insofar as he sought to activate clauses in his workplace agreement pertaining to dispute settlement procedures.

Mr Barclay sought penalties, compensation, interest and a permanent injunction.

FEDERAL COURT JUDGMENT AT FIRST INSTANCE

At first instance, Justice Tracey found in favour of BRIT, finding that Dr Harvey was motivated by protecting BRIT and its staff, not by the fact that Barclay’s status as being an AEU officer.

Barclay and the AEU then appealed this decision to the Full Federal Court.

THE FULL COURT’S FINDINGS

The Majority of the Full Court of the Federal Court of Australia upheld the appeal.

Justices Gray and Bloomberg preferred an objective test to determine the reason for the adverse action, as opposed to the subjective reasons submitted by Dr Harvey. In that regard, they noted that when Barclay sent the email, he was acting as an AUE officer, not an employee of BRIT. Accordingly, BRIT’s complaint was against the AEU, not an employee of BRIT. Dr Harvey took action because Barclay sent an email and refused to disclose names. As Barclay was engaging in industrial activity when he did those things, Dr Harvey took adverse action for a reason prohibited by the Act.

APPEAL TO THE HIGH COURT

BRIT has submitted the following (among other things) to the High Court:

  1. when determining the reason for an employer’s conduct, the Court should have regard to the subjective intention of the decision maker, and the factors which operated upon the mind of the decision maker when the decision to take action as made;
  2. if the Federal Court’s ruling is upheld, there will often be no ability for employers to defend adverse action claims given that employers bear the onus of proving the conduct was not taken for a prohibited reason but this is negated by the fact that an employer’s subjective intention cannot be used as evidence;
  3. the Federal Court’s ruling grants a level of immunity to a union officer in the workplace not recognised in the Fair Work Act.

The High Court has reserved its decision.

CURRENT IMPLICATIONS

Employer’s subjectively lawful intentions may not be enough to justify the adverse treatment of employment. Extreme caution needs to be exercised if employer’s wish to contemplate disciplining an employee where there is the possibility to argue that such conduct is in response to a workplace right or discriminatory reason.

All disciplinary documentation should be carefully drafted in order to ensure the employer’s adverse treatment of an employee cannot be linked to the employee’s workplace right or to a discriminatory reason.

For further information regarding the correct disciplining employees, or regarding adverse action generally, please contact Nicholas Braid on 0400 715 199 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 
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