General Protections; Inaction And Adverse Action

In Australian employment law, it is crucial to understand the boundaries of what constitutes "adverse action" under the Fair Work Act 2009 (Cth) (FW Act). A common misconception is that an employer's failure to take proactive steps can be deemed as adverse action. This misunderstanding may lead to significant legal implications for employers.

The Myth of Inaction as Adverse Action

A prevalent but incorrect belief is that an employer’s failure to actively meet an employee’s expectations—absent a specific requirement in the employer’s policies or the employment contract—can be classified as adverse action. This notion was addressed in the case of BHP Iron Ore v AWU [2003] FCAFC 47, where the Full Court of the Federal Court clarified that adverse action involves intentional conduct by an employer rather than mere inaction. The Court noted that the statutory provisions utilized active verbs such as “dismiss,” “injure,” “alter the position,” “refuse to employ,” and “discriminate,” indicating that adverse action requires a deliberate act by the employer.

Case Law: Farac v Pendal Group Limited

The case of Farac v Pendal Group Limited [2021] FedCFamC2G 25 further illustrates this understanding. In this matter, Mr. Farac alleged that his employer, Pendal, and its CEO took adverse action against him by failing to investigate his complaints of bullying and inappropriate treatment due to his exercise of workplace rights. The respondents argued that inaction could not constitute adverse action. However, the Court held that the consequences suffered by the employee could arise from inaction, affirming that adverse action can be the result of failing to act appropriately in response to complaints.

Understanding Adverse Action under the FW Act

Section 340(1) of the FW Act explicitly states that a person must not take adverse action against another person. The definition of adverse action in section 342(1) further clarifies that:

1. Dismissal: If an employer terminates an employee’s contract.

2. Injury: If an employer causes harm to the employee’s employment.

3. Alteration: If an employer changes the employee’s position to their detriment.

4. Discrimination: If an employer differentiates unfairly between employees.

The legal framework underscores that adverse action requires an active intervention by the employer, rather than passive non-interference.

Case Law Reinforcing the Principle of Inaction

The case of Unsworth v Tristar [2008] FCA 377, discussed by Gyles J, reinforces the principle that inaction does not equate to adverse action. Gyles J noted that maintaining the status quo, without taking active steps that alter or injure an employee’s position, does not constitute adverse action. This reasoning was further confirmed in Anning v Western Sydney University (No.2) [2019] FCCA 1313, where Cameron J reiterated that adverse action involves a deliberate act by the employer, not mere inaction.

Considerations for Employers

This interpretation serves as a vital reminder for employers: inaction can lead to allegations of adverse action. The critical inquiry focuses on the consequence suffered by the employee and whether it arose “because of” a prohibited reason. Therefore, employers must assess the implications of both taking action and refraining from action. They should consider the following questions:

1. If we take this step, will the consequence be one of the proscribed grounds of adverse action?

2. If we do not take a step, will the consequence be one of the proscribed grounds of adverse action?

Why You Need Expert Legal Advice

Understanding the nuances of what constitutes adverse action is essential for both employers and employees. Misconceptions about inaction leading to adverse action can result in unnecessary disputes and legal complications. Bentham Sydney Employment Lawyers offer expert advice to navigate these complexities and ensure compliance with the FW Act.

If you have concerns about potential adverse action or need guidance on employment law matters, it is imperative to reach out to Bentham Sydney Employment Lawyers. Our experienced team is dedicated to providing tailored legal solutions that address your specific needs.

For expert legal assistance and advice on adverse action claims, contact Bentham Sydney Employment Lawyers today. Protect your rights and ensure you are well-informed about your legal standing in employment matters.