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Adverse action under the Fair Work Act 2009

Wed, Nov 4th, 2009

The General Protection

Section 340(1) of the Fair Work Act 2009 ("FW Act") precludes any person from taking "adverse action" against another person because that person has a "workplace right", elects to exercise or not exercise a workplace right, or to prevent that person exercising a workplace right.  This part of the FW Act applies broadly to the conduct of employees, employers, independent contractors, unions and other related parties.

What is adverse action?

Section 342 of the FW Act sets out the various types of adverse action which are prohibited under the FW Act.

For example, when dealing with actions taken by an employer against an employee, the following are considered adverse actions:

(a) Dismissing an employee;
(b) Injuring an employee in their employment;
(c) Altering the position of an employee to the employee's prejudice; or
(d) Discriminating between an employee and other employees of the employer.

Adverse action by an employee against their employer is limited to:

(a) Ceasing work in the service of the employer; or
(b) Taking industrial action against the employer.

It is important to note that a person will be in breach of the FW Act even if the adverse action is not actually carried out. The provisions will apply even if the person threatens or makes arrangements to take any of the prohibited actions.

What is a workplace right?

In order to succeed in a claim, a person must prove that one of the reasons that adverse action was taken against them was because they had a workplace right. This will include where the person has exercised or proposed to exercise a workplace right, or where the adverse action was taken to prevent the person exercising a workplace right.

A person is considered to have a workplace right under Section 341(1) of the FW Act if they:

  1. Have an entitlement, role or responsibility;

    • The entitlement, role or responsibility must be the subject of a workplace law. 
    • For example - an entitlement to maternity leave or a role as union representative.

  2. Are able to be involved in a process or proceeding; or

    • For example - taking protected industrial action, making an enterprise agreement or agreeing to cash out paid annual leave.

  3. Are capable of making an inquiry or complaint about their employment.

    • This includes making a complaint to a person or body if that person or body has the ability to enforce or seek compliance on workplace laws, for example the Fair Work Ombudsman.

Section 360 of the FW Act provides that the workplace right need not be the sole reason for the adverse action, but only needs to be one of the reasons.

It is important to note that the FW Act does not require that a person actually exercised the workplace right, only that the person had the right. This definition was made intentionally broad to prevent someone taking adverse action merely because they had a right to do something. An example would be if an employer knew that an employee was pregnant and intending to take maternity leave and demoted her in anticipation of her taking the maternity leave.

Recently, the new adverse action provisions were first sought to be tested before the Federal Magistrates Court in James Paul Benson & Anor v Airlite Windows Pty Ltd (2009).  In this case, the AMWU brought an urgent application for an interlocutory injunction to reinstate a union delegate, alleging that he was terminated (the adverse action) because he was a union representative (the workplace right). The AMWU claimed that the sacking was a breach both of Section 346(a) and 346(b) of the FW Act.

Whilst the AMWU have since withdrawn its claim, this case serves as an illustration of the potential implications from the new provisions.

Remedies

Civil remedies are available for a breach of these provisions, which would be sought by filing a claim in either the Federal Court or the Federal Magistrates Court. However, if the breach involves the termination of an employee a conference must be held between the parties at Fair Work Australia ("FWA") before seeking redress through the courts. Failing a resolution at this conference, FWA will issue a certificate allowing the dispute to proceed to the relevant court.

The Act allows a person to seek an injunction preventing the other party from taking the adverse action. This is important because it could allow a party to take pre-emptive legal action to prevent the adverse action being carried out, if that party anticipates that it is imminent.

Further, the Respondent must prove to the court on the balance of probabilities that the reason that adverse action was taken was not due to the existence of a workplace right. This is significant because it is a reversal of the normal burden of proof.

Courts have the power to award compensation, reinstatement of employment and impose a pecuniary penalty on the offending party. In the case of an individual the penalty can be up to $6,000 and for a company up to $33,000 per offence.

Conclusion

The changes in this area are significant because the protections have been expanded and the right to seek an injunction is available even before an adverse action is taken. This will empower employees to take pre-emptive action to protect their rights and allow employers to stifle the threat of illegal industrial action.

Should you require further information please contact one of the lawyers in our Workplace Relations Team

Authors: Adrian Wong & Nick Rimington

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