Understanding Adverse Action – learnings from recent cases
In this article, Kaitlyn Gulle of Lander & Rogers provides an analysis of recent adverse action decisions.
Adverse action – a recap
As most employers will be aware, the Fair Work Act 2009 (Cth) (Act) prohibits taking “adverse action” against an employee for a proscribed reason.
Adverse action includes taking, organising or threatening to take the following action: dismissing an employee; injuring an employee in their employment; altering an employee’s position to their prejudice; or discriminating against an employee.
Adverse action will be unlawful if the operative reason for the action is a prohibited reason, including if the action is taken (or organised or threatened) because the employee has, has exercised, or has proposed to exercise, a workplace right (section 340 of the Act); because of the employee’s industrial activities (section 346 of the Act) or for a discriminatory reason (section 351 of the Act).
Where unlawful adverse action is alleged, the onus is on the employer to establish, on the balance of probabilities, that the action was not taken for a reason, or for reasons which included a reason, proscribed by the Act.
Unlawful adverse action in cancelling scheduled training opportunities due to employee’s perceived lack of commitment and poor attitude – Australian Rail, Tram and Bus Industry Union v Australian Western Railroad Pty Ltd  FCCA 1954
On 20 October 2012, an employee of Australian Western Railroad Pty Ltd (AWR) was rostered to work a 12 hour shift commencing at 3pm. At approximately 11am, AWR informed the employee that his shift had been delayed by three hours to commence at 6pm (known as a “put-back shift”). The employee told AWR that he would be unable to work the put-back shift because he was caring for his newborn child immediately prior to the commencement of his shift, and would therefore likely be fatigued for the put-back shift. The employee agreed to take career’s leave to cover his absence.
The employee had been scheduled to take Operations Supervisor training on the 21st and 26th of October. The employee’s manager was directed to cancel the employee’s scheduled training session, and did not reschedule the training.
The employee brought proceedings against AWR alleging that it had taken unlawful adverse action against him (in cancelling and not reinstating his training) because the employee had exercised his workplace rights to take carer’s leave (in being absent from work on 20 October 2012) and to a system of work without risk to his health and safety (in that the reason the employee did not want to work the put-back shift was due to concerns regarding his fatigue levels).
The employee’s manager gave evidence that his reason for cancelling the employee’s training was not because the employee had exercised workplace rights to take carer’s leave or be concerned about fatigue management, but was because he believed the employee lacked commitment and had a poor attitude.
The Federal Circuit Court held that AWR had taken unlawful adverse action against the employee. The Court held that by cancelling and failing to reinstate the employee’s training, AWR had injured the employee in his employment and prejudicially altered the employee’s position because he had exercised those workplace rights. The relevant injury in employment was denying the employee the opportunity to undertake the training, and accruing skills which might assist in his employment or helping him obtain future employment.
Judge Lucev found that by taking carer’s leave instead of working the put-back shift, the employee had exercised or proposed to exercise a workplace right to take paid carer’s leave and utilise a system of work for his health and safety (pursuant to the Occupational Safety and Health Act 1984 (WA)). The Court found the employee’s manager was aware that the employee did not work the put-back shift because of his carer’s responsibilities and concerns regarding fatigue, and that these reasons were a reasonable explanation for not working the put-back shift. On this basis, Judge Lucev found that, although the decision to cancel and not reinstate the training was partly because of the manager’s belief that the employee lacked commitment and had a poor attitude, the substantial and operative reason for the decision was the employee’s failure to work the put-back shift because of the existence, and exercising of, workplace rights in relation to fatigue concerns and carer’s leave, which the manager decided (incorrectly, in the Court’s view) not to accept as being genuine.
This was despite the fact that the manager had formed a view that the employee lacked commitment and had a poor attitude prior to his refusal to work the put-back shift and the absence of any evidence the manager had ever refused or restricted any legal entitlement to carer’s or parental leave.
The Court’s finding arguably goes against previous authorities in adverse action cases, particularly the Federal Court’s decision in CFMEU v Anglo Coal (2015) 238 FCR 273, which suggests that the reverse onus will still be discharged if there is a factually mistaken reason for adverse action being taken. Applying Anglo Coal, it is the decision maker’s state of mind which is the relevant factor, even if that state of mind is incorrect. In Anglo Coal, the employer was found not to have engaged in unlawful adverse action when it dismissed an employee because the relevant manager believed the employee had dishonestly taken personal leave (in circumstances where the employee was genuinely sick). The Court held that the adverse action was not taken for a prohibited reason, but rather because of the employer’s belief that the employee was being dishonest.
This case study serves as a reminder to employers that they should carefully document their decision-making process to minimise exposure to adverse action claims. It also highlights that despite having been in their current form for over seven years, there is still uncertain as to how the adverse action provisions should be interpreted. To a large extent, this uncertainty is a consequence of judges having to engage in the difficult task of ascertaining the “real reason” a decision-maker has taken adverse action in order to determine whether the employer has discharged the reverse onus.
Termination of employee who failed to undergo medical examination following medical advice to cease communications with employer not unlawful adverse action – Laviano v Fair Work Ombudsman  FCCA 197
Mr Laviano had been absent from his employment with the Fair Work Ombudsman (FWO) for most of 2014 due to psychological illness.
The applicant alleged that the FWO took unlawful adverse action against him by dismissing on the basis of his disability and the exercise of a work place right.
FWO wrote to Mr Laviano and directed him to undergo a medical assessment for the purposes of understanding Mr Laviano’s capacity to return to work. Five different assessments were scheduled, each of which Mr Laviano failed to attend. As a result, FWO terminated Mr Laviano’s employment for failure to comply with lawful and reasonable directions.
Mr Laviano commenced proceedings against FWO alleging that it had taken adverse action against him because of his disability. Mr Laviano gave evidence that the reason he had not attended the medical examinations was because he had not been opening his mail on the advice of his treating psychologist. Specifically, had advised Mr Laviano not to have any contact with FWO or attend to any work matters in order to prevent a further deterioration in his mental health.
At no stage had Mr Laviano informed FWO of this medical advice or instructed his psychologist to inform FWO of the recommendation to cease contact.
Judge Altobelli determined that FWO had taken adverse action against Mr Laviano by dismissing him from his employment. However, his Honour held that FWO’s reasons for doing were not discriminatory, and accepted FWO’s evidence that Mr Laviano was dismissed for his failure to communicate with FWO and following directions.
The Court considered that Mr Laviano was required to communicate with FWO, either directly or through a third party, and keep FWO updated as to his progress and return to work. It was unreasonable for Mr Laviano to “shut down” all communication between himself and FWO.
The Court was satisfied that FWO’s decision to terminate Mr Laviano’s employment was not motivated by his mental disability or his exercise of his workplace right to be absent from work on personal leave. Accordingly, the adverse action taken against Mr Laviano was not unlawful.
This case study shows that an employer is permitted to contact an employee who is absent from work as a result of an illness or injury in order to enquire about their progress and return to work, and that it will be unreasonable for an employee to completely cease all communications with their employer, even where this is on the basis of medical advice.
Bringing forward date of genuine redundancy for employee due to commence paid parental leave unlawful adverse action – Power v BOC Ltd & Ors  FCCA 1868
BOC Ltd (BOC) had a paid parental leave (PPL) policy in place that provided an additional three weeks’ paid leave above the Commonwealth government scheme. In March 2015, Ms Power discovered that she was pregnant and subsequently informed BOC. BOC approved Ms Power’s PPL, which was due to commence on 6 November 2015. On 4 November 2015, Ms Power’s employment was terminated due to the redundancy of her position.
Ms Power commenced proceedings in the Federal Circuit Court of Australia alleging contraventions of the Act, including that there was no legitimate business case for a redundancy, and that BOC had brought forward the redundancy to avoid Ms Power obtaining the benefits of BOC’s PPL policy.
BOC management gave evidence that the redundancy of Ms Power’s position was genuine, and that a number of other positions were also made redundant on 12 November 2015. BOC asserted that the date of the redundancy of her position had been brought forward eight days to avoid the inconvenience to Ms Power of having to come in to work during her PPL to be informed about the redundancy.
While Judge Vasta accepted that Ms Power’s position was genuinely redundant, his Honour held that by bringing Ms Power’s termination date forward, BOC had taken adverse action against Ms Power. Terminating Ms Power’s employment prior to her commencing PPL meant that she was not entitled to the benefit of BOC’s PPL policy or the “return to work guarantee” provided for employees on parental leave in the National Employment Standards under the Act.
The Court found that the BOC’s reason for taking the adverse action in bringing the termination date forward was to prevent Ms Power exercising her workplace right to take PPL.
This case study illustrates that an employer should be mindful of the timing of their decision making to ensure that they are not inadvertently impairing an employee’s ability to exercise a workplace right. It also serves as a caution to all employers contemplating making an employee redundant while on parental leave. Judge Vasta said it would also have been unlawful for BOC to terminate Ms Power’s employment on 12 November 2015 (after she had commenced parental leave) as BOC would then have been in breach of the “return to work guarantee”.
Termination of complainant in a workplace investigation not unlawful adverse action – Ibarra Campoverde v Regional Health Care Group Pty Ltd  FCCA 1502
Ms Campoverde made a formal complaint to her employer, Regional Health Care Group Pty Ltd (RHCG), regarding a workplace incident in which she claimed to have been verbally and physically abused by other employees.
RHCG conducted an investigation into Ms Campoverde’s complaint which found that the allegations made by Ms Campoverde to be unsubstantiated. Rather, the investigation uncovered that it had in fact been Ms Campoverde who had been the “aggressor” in relation to the incident; that Ms Campoverde had been aggressive and intimidating towards other staff when attempting to report the incident and that Ms Campoverde had a history of poor performance.
On this basis, RHCG terminated Ms Campoverde’s employment for misconduct.
Ms Campoverde commenced proceedings against RHCG alleging that it had taken unlawful adverse action against her in dismissing her because she’d exercised her workplace right to make a complaint in relation to her employment (being the complaint which prompted the investigation).
Judge Cameron accepted that RHCG had taken adverse action against Ms Campoverde by dismissing her, but rejected that such action was unlawful. The Court held that the mere fact that adverse action is taken against an employee who engages in conduct involving the exercise of a workplace right is “insufficient” to establish that such adverse action was in contravention of the Act. Although Ms Campoverde’s complaint prompted a chain of inquiry which led to her termination, the Court was satisfied that RHCG’s substantive and operative reason for terminating her employment was not because she had exercised a workplace right in making the complaint.
This case provides comfort to employers wishing to take disciplinary action against an employee for reasons which have only come to light because of the employee’s exercise of a workplace right.
About Kaitlyn Gulle
Kaitlyn Gulle presented on recent adverse action and unfair dismissal cases at the HR Law Masterclass in Melbourne in September 2017.
Kaitlyn is a Senior Associate at Lander & Rogers and is a Law Institute of Victoria Accredited Specialist in Workplace Relations. Kaitlyn has experience in a wide range of areas within the field of workplace relations and employment law. She assists her clients, both private and public sector, throughout the various stages of the employment relationship, including providing initial advice through to negotiations and final hearings. Kaitlyn has been involved in a range of litigation for public and private sector clients in all jurisdictions including the High Court of Australia; Federal Court; Federal Circuit Court; Fair Work Commission; State Courts (Supreme, County and Magistrates’) and Tribunals (Victorian Civil & Administrative Tribunal; Mental Health Tribunal; Victorian Equal Opportunity & Human Rights Commission).