ADVERSE ACTION – THIS IS REALLY SCARY!!

Adverse Action: The sleeping giant of the Fair Work Act is slowly waking up and will soon be terrorising SMEs everywhere!

Adverse action means that just when you think you’ve dealt with an employee and that a workplace problem has been finalised, it hasn’t.

Adverse action means that just when you think the termination for poor performance has been finalised, it hasn’t.

Adverse action means that just when you think you’ve selected your best candidate and that the recruitment process has now been finalised, it hasn’t.

Adverse action means that just when you think all your managers have been trained effectively in how to treat their staff, they haven’t.

In effect, adverse action can result from any situation where an employee has a workplace right and the exercise of that right is impacted in some way or other by decisions of the employer. More significantly, it can occur when decisions are made on behalf of the employer by staff who don’t fully understand the implications of their decision or have not adequately followed a process which led to the particular decision.

The Fair Work Act contains general protection provisions which state that an employer must not take any adverse action against an employee, or contractor or prospective employee or contractor, because that person has exercised or proposes to exercise a workplace right.

Workplace rights are very broad and include, for example, rights as a union member, the right to make complaints about their employment, the right to enquire about terms and conditions of employment, the right to request flexible work arrangements.

An action is adverse if it affects the employee adversely. Any reasonable or normal action taken by the employer in exercising their role, such as instituting performance management or disciplinary procedures, or implementing a work change, or refusing overtime or TOIL, could be adverse if the employee believes the action was taken because they were exercising a workplace right.

Some examples:

Recent cases heard by Fair Work Australia or dealt with in other jurisdictions have covered situations where managers failed to adequately train staff; where overtime was required without any additional payment; where termination resulted from union activities.

Adverse action claims can be lodged up to 6 years after the event! And the penalties are not limited to, for example, 6 month’s pay for an unfair dismissal. Each breach can result in fines of $33,000 for the organisation and $6,000 FOR INDIVIDUALS.

Oh, and an HR Manager who acts in a way that leads to the adverse action, can also be fined!

Protecting yourself from adverse action complaints requires a disciplined culture of HR and IR compliance: a culture that acknowledges and supports the role of the HR Manager in ensuring line managers adhere to policies and procedures; a culture that trains and supports managers in their decision making and which rewards them accordingly.

Policies and procedures need to be updated and enforced and record keeping needs to be maintained.

HR Managers will need to be especially diligent in ensuring the actions of managers do not lead to claims of adverse treatment: the penalties and consequences are too great.