Adverse action claims – are we likely to see a spike?

With many businesses having considered reducing the size of their workforce, it seemed one of the most talked about topics was unfair dismissal claims. Businesses were keen to ensure that in response to the downturn in revenue their corresponding economic situation was justification alone for any dismissal being fair.

For what percentage of businesses did the Covid-19 lockdown present the ‘perfect opportunity’ to terminate the employment contracts of staff who presented as ‘difficult to manage’, ‘vocal in exercising their workplace rights’ or had requested maternity leave for the near future?

Although Mrs On Ni Liu received her termination letter on 30 November 2019, well before businesses were considering JobKeeper entitlements, this matter reveals the due diligence that management must undertake to ensure the decision has been made solely for non prescribed reasons.

However, the evidence presented must be considered by the Commission to be reliable. If the Commission finds contradictory evidence which renders the decision maker's assertions unreliable, then the decision maker could be found to be not capable of discharging the burden imposed on the employer to not act in an adverse manner.

Given the Commission iis not required to determine whether some proscribed reason had subconsciously influenced the decision maker, the need to be able to present reliable evidence is paramount. 

Meticulous documentation should be kept by the decision maker who should always be consulting with one or more Senior Executives in relation to any matters which could lead to a termination of employment.

In the matter of Mrs On Ni Liu v Compuworld Pty Ltd [2020] FWC 2569  Deputy President Asbury stated, ‘On balance, the Respondent has not discharged the onus of establishing that the reasons for termination of the Applicant’s full time employment did not include reasons which contravene the provisions in Part 3 – 1 of the Act.’ In this matter, the Deputy President found the Respondent had taken adverse action against the Applicant on the grounds of her exercising a workplace right, her pregnancy and her disability. 

While Deputy President Asbury found ‘the economic situation of the Respondent was also a reason for the termination of the Applicant’s full-time employment’ he also concluded ‘the prohibited reasons were substantial or operative factors influencing the adverse action’.

The Applicant was awarded approximately $52,000 in compensation. 

Small businesses, although offered some relief from the stringency of the Fair Work Act in relation to fair dismissal (with the Small Business Fair Dismissal Code), have not been afforded this ‘level of leniency’ in applying the Adverse Action provisions of the Fair Work Act. 

All businesses must ensure the authority to discuss changes to employment (including termination) must rest with Senior Executive members who fully understand (or seek advice to support their understanding of) the relevant sections of the Fair Work Act.

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