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Adverse Action Clarified By High Court Of Australi...

Adverse Action Clarified By High Court Of Australia

The High Court has taken a common-sense approach in its decision on adverse action against a union official by his employer.

This case was about a union official who sent an email that alleged misconduct by his fellow employees and was suspended for doing so. He claimed he acted in his capacity as a union official and the employer had taken adverse action against him.

After lengthy litigation through many courts, the High Court has affirmed an employer’s right to take action against a union official where that activity could form the basis of action against a non-union delegate employee.

You will recall that adverse action is an action taken against an employee where they claim a workplace right, such as the right to award wages or the right to a safe workplace. Part of the law is that there is a reverse onus of proof, that an employer must prove positively that they terminated the employee for reasons other than the adverse action claimed.

The High Court said:

“This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in section 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.”

Employers must ensure that they document all discussions and actions that are taken in relation to employee disciplinary matters. It is also important to always have a witness to such meetings, to avoid the problem of conflicting evidence.

Finally, the High Court confirmed that what is important in determining whether the general protections in the Fair Work Act have been breached is the reason why the person decided to take the disciplinary action and not their “unconscious state of mind”.

Employee terminated for health reasons

An employer has contravened the Fair Work Act 2009 by dismissing a worker essentially for health reasons and for failing to pay termination benefits in lieu of notice. The Federal Magistrates Court ordered the worker to be paid the benefits, three month’s pay, plus interest. A penalty was also imposed.

In February 2010, an accountant with pneumonia underwent tests that exposed a serious heart condition. He was admitted to hospital in March 2010 and underwent a triple bypass operation. His recovery was lengthy because he contracted a golden staph infection in his leg. He was discharged in May 2010 and in June 2010 was declared fit to return to work.

On June 10, 2010, the accountant rang his manager about returning to work. The manager told him he had no more work for him. The possibility of the accountant conducting his own tax agent business was discussed. At a meeting on June 16, 2010, the manager made it clear that he was going to terminate the accountant’s employment, blaming the economic circumstances of the business and health-related issues. On July 12, 2010, he received his formal notice, expressed in similar words, and was dismissed.

The court found that the accountant had been the subject of adverse action because he had received notice of termination and had been dismissed on July 12, 2010. However, the court found that age had not been an operative factor in his dismissal.

The court did not accept that the economic downturn had been a valid reason for the accountant’s dismissal, because it was a matter that had not been addressed in the period before the dismissal. The manager’s true reason for terminating his employment had been a concern that his health might have an impact on the productivity of the business. This was in spite of the fact that there had been no objective evidence that the accountant had been subject to a disability when returning to work after his operation.

The manager was not able to prove to the court that the adverse action had not been taken because of the accountant’s health.

For the employer’s failure to comply with the Act, the accountant was entitled to $5418. The court further awarded the accountant $13,000 as compensation for three months lost wages and $2000 for hurt and distress caused by the inadequate notice given. Interest of $3180 was added. The employer also had to pay a penalty of $2500.


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