$1.27 Million Judgement for Adverse Action/Workplace Rights

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The complexities around adverse action claims are gradually becoming clearer as we get more and more decisions dealing with the issue.

Adverse action/workplace rights claims can arise is a range of areas, but for small and medium businesses the areas we are most commonly asked about is in the area of personal/sick leave, pregnancy and flexible working hours.

Whilst there are many areas where claims can arise, the top 5 areas where we often provide advice are summarised below.

  1. Employers often want to take action against employees for taking excessive sick leave long before the statutory protections for employees have been exhausted.
  2. Employers sometimes want to change employment arrangements or terminate the employment of employees returning from maternity leave without having adequate reasons for doing so or not following the required procedures.
  3. Employees returning from maternity leave may want to work different hours or change their employment status to part time. Employers sometimes inadequately deal with these requests and this can result is claims arising. 
  4. Employers often misunderstand their obligations where employees have a disability which could be either a physical or mental impairment or illness, and do not understand their obligation to make reasonable adjustments for this employee to be able to undertake their duties.
  5. Employees make complaints to government agencies or to the employer about various matters including entitlements and they have negative consequences for making such claims.

We are often cautioning clients in relation to their intentions in these areas and a recent case demonstrates why such care is required in this area.

In CFMEU v Hail Creek Coal Pty Ltd [2016] FCA 1032 the Court ordered compensation of $1.27 million in compensation and interest.  Furthermore the Court ordered the Respondent to pay a civil penalty of $50,000.00 to the CFMEU who brought the claim.

In this article I am not going to go into the specifics of the case, however, the lessons are clear.

  1. There is a reverse burden of proof in adverse action claims meaning that once the basics are established by the employee, the employer is required to prove that they did not breach a workplace right or take adverse action against the employee. This is not easy to do and is particularly difficult to defeat if the employer has attempted to construct events to justify the dismissal or other adverse consequences towards an employee.
  2. Damages in adverse action claims are uncapped. Unlike unfair dismissal claims there is no upper limit on compensation so if the employee suffers a significant loss then the order for compensation can be devastating on the business.  In Sagona v R & C Piccoli Investments Pty Ltd & Ors [2014] FCCA 875 the employer, a small family business, was ordered to pay $174,079.00 compensation for economic loss and distress and $61,000.00 in civil penalties which was also made payable to the employee.

When we advise caution for our clients in dealing with these issues we are doing it for good reasons.  If you are unsure in relation to your obligations it is critical that you get advice before you act.  After can be too late.