adverse action

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Since the enactment of the ‘adverse action’ provisions under the Fair Work Act 2009 (Cth) (FW Act) some 10 years ago, it is far more difficult for an employer to lawfully dismiss an executive or senior manager. Why? Because adverse action claims:

  • are relatively easy to bring;
  • can include compensation for hurt, distress and humiliation (and damages are uncapped);
  • can be difficult to successfully defend (due largely to a reverse onus of proof); and
  • expose the employer to considerable financial, legal and reputational risks – even when there was a good reason to remove the executive and the terms of the employment contract were complied with.

It is therefore not surprising that the number of senior, and highly paid, individuals commencing adverse action claims to challenge their dismissal is continuing to trend upwards. So, what are adverse action claims and how can an employer protect itself against these risks?

The U.S. Equal Employment Opportunity Commission (EEOC) has issued its final “Enforcement Guidance on Retaliation and Related Issues” following a six-month public comment period. The guidance replaces the EEOC’s 1988 Compliance Manual section on retaliation.

Workplace retaliation claims have been on the rise in recent years and have been the focus of several…

On March 1, 2016, the EEOC filed two cases with one clear goal: to expand the meaning of “sex” under Title VII. In EEOC v. Scott Medical Health Center, P.C., Case No. 2:16-cv-00225-CB (W.D. Pa.),  the agency alleges that the defendant harassed an openly gay male employee because of his sexual orientation, thereby committing…

In a majority decision, the Full Court of the Federal Court of Australia has rejected a claim of unlawful adverse action brought by an employee who was summarily dismissed for improperly claiming sick leave – notwithstanding that, in fact, the sick leave was justified.  The decision emphasises the centrality of the employer’s subjective reason for the action as the basis for determining liability.

Numerous federal, state, and local laws in the United States prohibit employers from making employment decisions based on an employee’s or job applicant’s sex and thus protecting employees from being discriminated against based on their “sex”. Title VII of the Civil Rights Act of 1964 is the principle federal law which prohibits discrimination based on…

In previous posts we have examined the “workplace rights” limb of the adverse action jurisdiction in the Fair Work Act 2009 (Cth) (the Act) – specifically the protection given in relation complaints.  The issue has been considered again in a recent decision of the Federal Circuit Court.

The Federal Court of Australia has held that the decision of an employer to subcontract a particular type of work, rather than have it performed by an employee, did not constitute unlawful adverse action.

The decision applies the relatively restrictive approach to the question of causality adopted in two earlier decisions of the High Court of Australia (the Barclay case and BHP case).

The Federal Circuit Court has ruled a senior executive who was investigated, following anonymous allegations of misconduct was not the victim of unlawful adverse action, finding that among other things, the investigation itself was not “adverse” and that other action taken by the employer was not taken for a prohibited reason as alleged.

What does this mean for employers?

Any disciplinary action which the employer proposes to take against the employee needs to be based on strong, direct evidence of relevant misconduct, which needs to come from the decision-maker in order to displace the assumption that the adverse action was taken for a prohibited reason.

Employers should also take note of the fact that in some cases the institution of an investigation could in or of itself constitute adverse action, in that it could injure an employee in their employment. As such, care should be taken when instituting investigations, in particular, only those individuals who need to be aware of the investigation should be advised of it and investigations should remain as confidential as is practicable.