The term Adverse Action is a term contained in the Fair Work Act 2009 to identify a type of action taken by an employer against an employee or a potential employee when they exercise any one or more of a set of employee rights in the workplace, known as “General Protections”.

An adverse action claim can arise when an employee alleges that an employer took action against them (that was adverse), which was to their detriment, because of the rights afforded under the act

In addition to termination of employment, such adverse action could include, for example, the following:

  • altering the employee’s position to the employee’s detriment;
  • not giving an employee their legal entitlement;
  • discriminating between the employee and other employees of the employer; and
  • offering different (and unfair) terms and conditions, compared to other employees.

Evidence of the Reason for Taking A Particular Action is Critical

For a claim to be upheld, the action needs to have been taken ‘because of a protected reason’ However – if it is proven that the action occurred and that there was a workplace right involved, it will be assumed that it is the reason the action occurred. This means employers will need to prove that they took action for another (lawful) purpose (e.g. performance).

In this regard, the paper trail is essential e.g. sending emails confirming the outcome of performance discussions and providing written responses to complaints or queries from employees.

How do I prevent a claim?

The best way to prevent an adverse action claim:

  • Ensure you have adequate and effective policies and undertake reviews; and
  • When making people-related decisions ensure you clearly document your decision-making process and ensure that none of the reasons is linked to any of the General Protections.

Key Takeaways

1. You can’t take adverse action because of a workplace right

 ‘Workplace rights’ is given a very broad definition – e.g. making a complaint or enquiry about employment – this means that a vast range of common day-to-day situations can give rise to an ‘adverse action’ claim. 

2. There is a reverse onus of proof

Many employers are shocked (read: seriously alarmed!) to learn that adverse action claims are subject to a reverse onus of proof. If someone claims they’re a victim of adverse action, it is the respondent’s responsibility to disprove that allegation.

3. Almost anyone can make an application

Most employers know employees are not protected from unfair dismissal until they have completed the applicable ‘minimum employment period’. This is 12 months for small businesses, and six months in all other cases, and are subject to a high-income threshold – Adverse Action Claims are not subject to these exclusions/ qualifications.