The boundaries of adverse action

Stephen Booth

Decisions on adverse action in breach of the general protections provisions of the Fair Work Act have reinforced the importance of the evidence of the decision maker as to the matters which were operative in his or her mind at the time of making the decision to terminate employment or take whatever other action is alleged to be "adverse action".

In a case involving a lawyer in the Victorian Office of Public Prosecutions (Victoria v Grant) , the lawyer’s employment was terminated for disclosing confidential information, poor performance, disobeying directions to attend Court and other conduct issues. At the same time, the lawyer had been grappling with depression. The Federal Circuit Court awarded over $100,000 in damages and penalties, because the judge felt that the conduct and the depression were completely interwoven, and that this should have been apparent to the manager.

However, the manager gave credible evidence, which was not disputed, that he was concerned only with the poor conduct, and that the illness played no part in the decision to terminate employment. On appeal, the award of damages and penalty was overturned, because the evidence of the matters taken into account by the employer was effectively unchallenged and so the depression was not in fact part of the decision making process of the employer, whereas the misconduct was.

The evidence that can be given by the decision maker is therefore critical. It is not final, because other competing evidence which shows that inappropriate matters were indeed taken into account will undermine evidence from decision maker that the inadmissible reasons were not considered. However, clear evidence from the decision-maker should assist greatly in defending an adverse action claim.

Another decision emphasises that the evidence must also exclude illegitimate reasons for the decision. Even if the illegitimate reason for termination is only one of a number of reasons, that is enough for a finding that adverse action occurred.

In a case concerning termination of a university professor’s position (Bessant v RMIT), the Vice Chancellor gave evidence that the reason for termination was "primarily financial" – but that left open the possibility that other reasons played a part and was insufficient to preclude Professor Bessant’s complaint about her departmental head as one of the reasons for termination of her employment. As she has a "workplace right" to make that complaint, failure to exclude that partial reason resulted in RMIT losing the case.

"Adverse action" or "general protections" claims under the Fair Work Act can be tricky to understand and to contest. In any situation where an employee could argue that some exercise of a workplace right, or some sort of discriminatory behaviour, is behind the decision to terminate employment or otherwise alter work conditions in a way that adversely affects the employee, clarity about the reasons for the action being taking is essential.

If you need advice about potential adverse action issues, contact: