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Friday Workplace Briefing

Adverse Action Claims

What you need to understand and how to protect your organisation against a claim

Join Kim and Mathew for this week’s briefing where they discussed the rise of adverse action claims. A recent considered decision of the Federal Court has provided an insight into what you need to understand and how to protect your organisation against a claim by quarantining the decision maker.

To view the full episode and catch up with the week’s latest news and developments please visit this link.

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About the Hosts

Principal Lawyer - Head of Workplace Relations

Episode Transcript

Mathew Reiman: We’re going to breeze through every section.

Kim McLagan: We’re on to our main topic, talking about adverse action plans, but we’ve left ourselves a bit short. It’s a really important topic ’cause we are certainly seeing a rise in general protections claims over unfair dismissal claims. Especially for those people who are legally represented, because they can get more money.

Mathew Reiman: Yep.

Kim McLagan: From the general protections, generally. They’re pretty easy to bring and they’re pretty cheap to bring, but they are very difficult to defend. So, I’ll put in really simple terms. The element of a general protections claim which the employee must demonstrate is that they exercised a workplace right, which could be they exercised their right to take personal leave or they made a complaint, in relation to their employment. They then must demonstrate that adverse action occurred, whether it be they were terminated, demoted, treated differently. And also that the reason for the adverse action was because they exercised that workplace right. But then, there’s a presumption that the adverse action did occur and then the employer has the onus to prove that it didn’t or it didn’t occur for the reasons that the employee claims. So, for a termination, what we always want to demonstrate is the termination occurred because of the employee’s misconduct and for no other reason. But we’ll talk about how we can sort of protect you against that. But this latest case that we’re… We’re not really going to talk about the case, but it’s a very detailed case, but it sets out really clearly what the High Court position is and the position that the court should be taking in relation to these general protections claims.

Mathew Reiman: Yeah, that’s right, Kim. Look, the facts sort of a bit pedestrian. They’re sort of every general protections claim you’ve ever seen. Disgruntled employee caught up in an element of misconduct makes complaints or inquiries about that. The allegations that sit around that court. He found seven valid exercises of a complaint or enquiry about the employment. Look, what this decision’s really important about is that Justice Snaden, a very principled and detail-oriented judge, sat down and looked at the fact that there’s some dispute in the law, which probably isn’t really meant to be there, between what the high court says and what the full federal court says about this. And really what it comes down to is full federal court have been applying this reasoning that says, well when you are looking at the reason or the reasons including the reason that an employer or the person made a decision, in terms of general protections claim, you can look for the unconscious reason on the mind of the decision maker. So facts outside of the subjective evidence of the person, can be relied on to establish this. That’s inconsistent with the High Court’s approach, which is established in the Barclay decision. And that’s what Justice Snaden’s point is really in this one. Look, actually what it is still all about is what is the evidence and what was on the mind of the decision maker at the time they made the decision.

Kim McLagan: Yes.

Mathew Reiman: It’s not the court’s role in this claim to look at the validity of that. And in the sense it wasn’t procedurally fair, was that actually truthful? It’s not really about that. It’s what did that person who made the decision believe was the reason they were giving for the termination of the employment. And if the employer can lead that evidence and support it objectively by third party or extraneous evidence as well, that’s all you need to do here.

Kim McLagan: Yeah. So with the general protections claim, and we see it time and time again, I think you know when it… You can pick the employee who’s going to be litigious and bring a claim. So you always need to be prepared. Eventually whatever happens a claim might be brought. And so you want to set up your processes all the way through; don’t wait until the claim’s been brought. So most important thing, there must be a decision maker. The person who’s going to make the decision to terminate this employee, purely based on their misconduct. For no other reason. And when we talk about a decision maker there may have to be consultation with the board, that we really need to get rid of this person. But you don’t want any members of the board making the decision. You want to limit it to one person. The other most important thing to remember, documentation provides really fabulous objective evidence of the decision maker’s mindset at the time of termination. So we want to craft documentation to set up that process. So please no silly text messages between people and emails. And we always want the misconduct of the employee to be the focus in the mind of the decision maker at the time they made the decision that the person will be terminated.

Mathew Reiman: Yeah, exactly right, Kim. Quarantine that decision maker. That’s the rule here.

Kim McLagan: That’s the rule.

Mathew Reiman: I think that’s the big takeaway.

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