Under the Fair Work Act (2009) (the ‘Act’) a number of General Protection provisions protect Australian workers against various forms of discrimination in the workplace. Under Section 365 of the Act, workers who believe they have been dismissed in contravention of these provisions can make an adverse action claim (also known as a general protections claim) against their employer. In the following we discuss what is involved an adverse action claim and highlight some recent cases.
In late 2016, the Fair Work Commission released data about adverse action claims relating to dismissal over the year 2015–2016. The aim of releasing the data and the accompanying report was to provide employers and workers with a clear understanding of the process of lodging a claim and the results that could be expected. Adverse action claims can arise from the following:
• Dismissing a person
• Not giving a person his or her legal entitlements
• Changing a person's job to his or her disadvantage
• Treating a person differently than others
• Not hiring a person
• Offering a person different (and unfair) terms and conditions, compared to other employees
Another objective of the Commission’s report was to highlight the success of its staff conciliation model, first piloted in 2014-2015 in Western Australia, Queensland and the ACT, and extended to applications lodged in all states in 2015-2016. Designed to assist the Commission in handling the volume of claims, the model involves each claim being managed by a central case management team and referred to specialist staff for private telephone conferences. The staff conciliation model has freed up Commission Members to concentrate on more complicated cases.
Of the 3,270 adverse action claims involving dismissal received by the Commission in 2015-2016, 70% were settled via mediation and 23% proceeded to court. Over 70% of cases resolved (both via mediation and court) involved a monetary settlement, with the majority (72%) of these settling for a sum of $10,000 or less; 21% settling for between $10,000 - $50,000; and 5% in excess of $100,000.
These figures indicate to both employers and employees that, while the majority of monetary awards are not excessive, there is the possibility that an employer who is responsible for a serious breach of the General Provisions could be faced with a significant financial penalty. More detailed data about adverse actions relating to unfair dismissal can be found on the Fair Work Commission’s website.
A recent case in Queensland is a good example of what can happen to an employer/business in the event of a serious breach of the General Protections in the Act. In this instance, the operator and owner of a resort restaurant, Jia Ning Wang, and his business Golden Vision Food and Beverage Services P/L, were penalised a total of $72,830 for exploiting a worker and not recognising her rights under the Act.
Over a two-week period in December 2014 a 21-year-old American student worked as a waitress at Wang’s restaurant for a total of 69.75 hours. When the student refused to accept being paid under the minimum Award rate for the work, Wang threatened to sack her, saying that “the Award was just a guideline”. Wang subsequently terminated the student’s employment by text, stating that the student was “not working out” in the role. He then refused to pay her for the hours she had already worked.
In this case, the student complained to the Fair Work Ombudsman (FWO), who contacted Wang about the complaint. After some wrangling, Wang admitted to contravening workplace laws and back-paid the student the sum of $1,963 in wages. The case did not end there, however, as the FWO pursued Wang on a number of other unlawful actions under the Act, including the adverse action taken by Wang when the student exercised her workplace rights and the false and/or misleading representation Wang made to the student about her rights.
The case was compounded by the fact that this was not the first time Wang had found himself on the end of the FWO’s investigations, having been penalised $21,000 in 2016 for paying a Chinese backpacker just $10 per hour. In his decision in the recent case, Judge Jarrett of the Federal District Court commented on Wang’s previous breaches, stating that: “I think the background is also relevant because it demonstrates that Golden Vision or Mr Wang seems to have done little to change their business practices.” He went on to say that the severity of the penalty should “serve as a warning to others that similar conduct can have serious consequences and ought not be repeated”.
Another adverse action claim is currently underway in Western Australia, where a woman alleges that she was discriminated against and had her employment terminated during her maternity leave. Again, the Fair Work Ombudsman is pursuing the case against the employer — Austrend Foods — for a number of alleged unlawful actions under the Act.
Firstly, the FWO claims that the company raised performance issues and gave the employee a written warning when she flagged her pregnancy and intention to take maternity leave. Secondly, it is alleged the company refused the employee’s request to return to work under flexible working arrangements after her maternity leave.
Subsequently, when the employee was a month away from returning from leave to full time duties, she informed her employer that she was pregnant for a second time. The employer told the woman that they would extend her unpaid leave until after the birth of her second child, however, she informed them that she was within her rights to return to work as agreed. The employer allegedly denied that any such agreement had been made and forced the employee to sign a pre-prepared letter of resignation.
Because of the seriousness of the allegations, the FWO is not only seeking penalties against Austrend and the company’s director, Denzil Rao, but also pursuing compensation for the woman for both economic and non-economic losses. The penalties alone could amount to a significant sum, with up to $10,800 per contravention against the director and $54,000 per contravention against the company.
Clearly, both the Fair Work Commission and the Fair Work Ombudsman take adverse actions very seriously, as the above two cases indicate. To avoid adverse action claims it is crucial that employers understand their obligations under the Act and ensure that their employees are treated fairly and lawfully.
At Ramsden Lawyers, we provide specialist employment law services to employers, including advising you on meeting your obligations under the Fair Work Act. Contact us today on for a confidential discussion.