Adverse action claims might sound like a legal buzzword, but for Australian businesses, understanding them is crucial. These claims can come up in everyday workplace scenarios, often catching employers off guard.
In this article, we'll look at what they are, why they matter, and the steps to take to protect your business against them.
What is an Adverse Action Claim?
At its core, an adverse action claim relates to situations where someone believes they’ve been treated unfairly due to a protected attribute or for exercising a workplace right under the Fair Work Act 2009.
It’s not just about terminations. Adverse action can happen when:
An employee isn’t made genuinely redundant.
Hours or shifts are unfairly reduced.
Employees face discrimination or are given unfair terms.
Protected attributes include things like race, gender, age, disability, and family responsibilities. Workplace rights could involve asking about pay, joining a union, or making a complaint.
And here’s the kicker: employers must prove they didn’t take adverse action, flipping the usual burden of proof.
Why Do Adverse Action Claims Matter?
Unlike unfair dismissal claims, which have strict eligibility criteria (like high salary threshold and probation rules), adverse action claims are accessible to almost anyone - current employees, former employees, even job candidates.
The stakes are high. Remedies can include:
Uncapped compensation.
Reinstatement of employment.
If you’re not following a fair process, you’re at risk.
Minimising the Risk
Avoiding adverse action claims isn’t about luck - it’s about preparation.
Here are some essentials steps to keep your workplace protected:
Follow Fair Processes
Every decision, from redundancies to misconduct investigations, needs to be well-documented and fair. Even in serious misconduct cases, adhere to natural justice principles.
Clear Communication
Be transparent about the reasons behind decisions. If you need to consult employees under an award or agreement, make sure you do so.
Document Everything
Keep detailed records of decisions, processes, and employee interactions. If a claim arises, this documentation can save you a lot of headaches.
Involve an Independent Party
An impartial person can help ensure decisions are unbiased and defensible.
Plan for the Worst
Always assume a decision could be challenged. This mindset ensures you’re prepared to justify actions if a claim is made.
What If a Current Employee Makes a Claim?
Handling a claim from someone still employed adds complexity. Avoid making their situation worse - this could lead to further claims.
Here’s how I recommend you handle it:
Treat the employee the same as before the claim.
Ensure a safe work environment (physically and psychologically)
Engage with the employee (or their representative) about their performance or any adjustments needed.
Consider mediation through an external mediator, or even the Fair Work Commission if necessary.
It’s also worth having open, ‘without prejudice’ discussions about the future of the working relationship - always tread carefully.
Adverse action claims don’t have to be a nightmare.
Many businesses are already doing the right thing: following fair processes, engaging with employees, and prioritising transparency.
By staying proactive, documenting thoroughly, and seeking legal advice when necessary, you’ll be better equipped to navigate these challenges and protect both your business and your employees.
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The content provided on this website serves as a general information resource on the subjects discussed, and should not be considered tailored to specific individual circumstances or a replacement for legal counsel. While we exert significant effort to ensure the accuracy of our information, HR Consulting TAS cannot ensure that all content on this website is consistently accurate, exhaustive, or current. Recommendations by HR Consulting TAS and any information acquired from this website should not be regarded as legal advice.
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