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Monday 12 th September 2016
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Cases where decision-makers got it wrong
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In today's Workplace Bulletin:
- Adverse actions are costly mistakes to make
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 | The costly consequences of making poor employment-related business decisions have been highlighted in two recent court cases.
In Heraud v Roy Morgan Research Ltd, an employer was found to have taken prohibited adverse action against an employee who was taking maternity leave. |
During the maternity leave period, the company underwent a significant restructure, including the substantive position of the employee.
The human resources director spoke with the worker on a number of occasions about the proposed changes to her role within the new structure. Following these discussions, the employee emailed the director a request for flexible working arrangements in anticipation of returning to work.
However, within a week of sending the request, the human resources director had written a proposal that the redundancy of the worker’s position be brought forward, and that the temporary worker who was filling in for the employee on maternity leave remain in that position. Further, there was no longer the opportunity to redeploy the original employee within the business.
The director, therefore, did not consider the employee’s request for flexible working arrangements on the basis that her employment was to be terminated.
This proposal was approved internally by the employer’s in-house legal counsel, and the CEO (who was the ultimate decision-maker), and the worker’s employment was terminated, by reason of redundancy.
In court, the worker successfully argued prohibited adverse action:
- the worker had exercised a workplace right to take maternity leave, the employer had taken adverse action (by injuring or prejudicing her in her employment) by not returning the employee to her substantive role, or a restructured role, at the end of her maternity leave;
- the employee had requested flexible working arrangements, the employer took adverse action by withdrawing the opportunities for redeployment; and
- the employee had requested flexible working arrangements, the employer took adverse action by terminating her employment.
Importantly, the employer did not call as witnesses two of the relevant decision-makers - the director of human resources or the CEO - to give evidence about the reasons for their decision. The Court found that the employer had not rebutted the reverse onus of proof and was ordered to pay the worker $52,000 in compensation.
Biggest compensation order so far
More recently, an employer was ordered to pay a worker more than $1.3 million in compensation for prohibited adverse action, and to pay the employee’s union a civil penalty of $50,000.
As Tiffany Campbell from Holding Redlich lawyers explains, an employee suffered a work-related spinal injury during the course of his employment. After more than a year of workplace rehabilitation, he returned to work on light duties, and was retrained as a drill rig operator.
He worked in the operator position for three years. During that time, the employee made a workers’ compensation claim and, on 15 November 2013, the employee was awarded $637,000 in common law damages. |
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| "Everyone in business should have a copy of this handbook."
Helen Bruger, IBO Global
“I refer to the Handbook for all aspects of HR. It is very user friendly, easy to understand and personally, it is my first point of reference.”
Alison Ryder, D&R Henderson Pty Ltd
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On the following Monday, the employer initiated a medical assessment of the worker under the Coal Mining Safety and Health Act 1999 (Qld). The doctor’s medical report stated that the employee was unfit to undertake his current position on the basis that there was a risk of further injury or aggravation.
The following day, the employer stood down the worker and, around April 2014, ceased paying the worker’s wages. The worker challenged the assessment in the Supreme Court, and the court found that it was invalid.
The employer initiated another assessment, from the same doctor, who first concluded that the worker was fit to perform his drill rig operator role, with some restrictions. A senior officer of the employer spoke directly with the doctor, and requested he change his assessment. The doctor did so, and issued a second assessment, which provided that the worker was unfit to perform his role. This was again challenged by the worker in court.
The claim
The employee’s union initiated an adverse action claim on the employee’s behalf alleging, among other things, that the employer had taken adverse action by failing to provide the employee with work or pay him wages, because he had exercised a number of workplace rights, including that he commenced a claim for common law damages in the District Court.
The Court:
- wholly rejected the evidence of the employer’s decision-maker, who stated that the reason for his decision to stand down the employee was because of the results of the medical assessment, and the employer’s work health and safety obligations; and
- found that the employer had not discharged the reverse onus, and determined that the employer had taken prohibited adverse action.
The reverse onus of proof
An important difference between adverse action claims, and other employed-related legal claims, is that the Act imposes a reverse onus on employers to establish that they did not take adverse action because the employee had a workplace right.
To minimise the risk of an adverse action claim, businesses should ensure that:
- officers and managers understand the adverse action provisions, and when employees have workplace rights; and
- support personnel, such as human resources, test decision-makers on the reasons for employee-related business decisions, such as:
- promotions and demotions;
- removing or reducing an employee’s employment benefits;
- suspensions or stand-downs; and
- decisions to terminate an employee’s employment.
Keep up the good work,
Jeff Salton
Editor, Workplace Bulletin
PS: Subscribers to the Employment Law Handbook, written by the legal experts at Holding Redlich, know that they can get more assistance about avoiding adverse action claims in Chapter G2 General Protections. In this chapter, there are more case studies, hints and tips and legal advice on ensuring that the actions you take against workers remain lawful under the general protections provisions of the Fair Work Act.
Order your copy today on an obligation-free trial to see how the Handbookcan work for you, leaving you to get on with what you do best – running your business.
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