Managing Performance in the Age of Adverse Action Claims


Posted By on 28/11/19 at 6:42 PM

This is the first in a 4 part series of posts on ‘Managing Performance in the Age of Adverse Action Claims’, and is based on a presentation and paper delivered by Michael Cochrane (Special Counsel) on the Television Education Network (TEN) on 13 November 2019.

Since their enactment a decade ago, the general protections provisions (or ‘adverse action’ provisions) under the Fair Work Act 2009 (Cth) (FW Act) have expanded the ability for employees to challenge performance management decisions which ‘adversely’ affect their employment, including dismissal.  The use of these provisions by employees has continued to increase steadily since their commencement some 10 years ago and this trend does not appear to be letting up anytime soon. The latest figures published by the Fair Work Commission (FWC) illustrate a steady increase in general protections applications involving dismissal lodged year on year.[1] In 2018–19, 4,508 general protections applications involving dismissal were lodged with the FWC after a 10% rise in 2017-18[2] and this has continued to be matched by a developing volume of case law in this area.  Applications not involving dismissal also increased by 11% to 1,005, after a 9% increase in 2017-18. [3]

Managing performance or dismissing employees is usually challenging enough but further complicating factors can (and do) arise under the adverse action provisions when performance management decisions (including dismissal decisions) coincide with the employee exercising certain workplace rights, such as lodging a workplace complaint or grievance or taking a period of extended personal/stress leave. Often, such events have the effect of muddying the waters about the real reason that adverse action was taken. This series will initially provide a refresher of the key adverse action provisions and then explore practical steps and strategies that employers can implement to safeguard their decision making and related actions during performance management (including dismissals) as well as examine the recent case law in this area.

 Adverse action – a refresher

As most employers will be aware, the FW Act prohibits the taking of ‘adverse action’ against an employee for a prohibited reason. An employer takes ‘adverse action’ against an employee if the employer threatens to, organises or takes action by:

  1. dismissing the employee;
  2. injuring the employee in his or her employment;
  3. altering the position of the employee to the employee’s prejudice; or
  4. discriminating between the employee and other employees of the employer.[4]

In the case of managing employees, ‘adverse action’ captures not only dismissals but other actions such as performance management processes with the risk of termination of employment, warnings, changes in rosters, demotions, loss of benefits or changes in reporting lines and duties. Importantly, not all adverse action taken against an employee is unlawful. It will only be unlawful if the adverse action is taken because of a prohibited reason or reasons which include a prohibited reason.

The prohibited reasons

Part 3-1 of the FW Act contains a set of ‘general protections’ for employees. Under these provisions, employees can make claims alleging that they have been ‘adversely’ affected if the management decision or action is taken (or threatened or organised to be taken) by the employer because the employee has, has exercised, or has proposed to exercise, a ‘workplace right’.[5] Relevantly, a ‘workplace right’ includes:

  1. an employee having an entitlement, role or responsibility under a workplace law, workplace instrument or an order made by an industrial body;
  2. an employee’s ability to initiate or participate in a process or proceedings under a workplace law or instrument;
  3. an employee’s ability to make a complaint or inquiry to a person or body with capacity to seek compliance with a workplace law or instrument, or
  4. an employee’s ability to make a complaint or inquiry in relation to his or her employment.[6]

In addition to being unlawful for an employer to take adverse action against an employee because of their workplace rights, an employer must not take adverse action against their employees because of their industrial activities.[7] This includes membership (or not) of a union and participation (or not) in lawful industrial activity. Adverse action taken by an employer will also be unlawful if taken for a discriminatory reason.[8] Protected discriminatory attributes include race, colour, sex, sexual preference, age, physical or mental disability, marital status, family and carer’s responsibilities, pregnancy, religion, political opinion, national extraction and social origin. Further (in the case of dismissals only), an employer must not dismiss an employee because they have been temporarily absent due to a prescribed illness or injury.[9]

Relevantly, where an employee alleges that unlawful adverse action has been taken because of one or more of the above prohibited reasons (or reasons which include the prohibited reason/s), the employer then has a ‘reverse onus of proof’ to prove that the adverse action was not taken for a prohibited reason.[10]

In the next post, we will cover why and how employees use adverse action provisions during performance management. 

If you require further information on these issues or have any questions, please contact Michael Cochrane at or on (03) 9491 8437.



[1] See the Fair Work Commission Annual Report 2018-19 at page 42.
[2] Ibid at page 41.
[3] Ibid at page 41 and 45.
[4] FW Act, s 342(1).
[5] Ibid, s 340(1).
[6] Ibid, s 341.
[7] Ibid, s 346.
[8] Ibid, s 351.
[9] Ibid, s 352.
[10] Ibid, s 361.

KHQ Lawyers - Michael Cochrane

Michael Cochrane Principal Solicitor

Michael draws on a wealth of industrial and employment law experience, together with his corporate background, to provide strategic and pragmatic advice to his clients focussed on delivering strong... Read More