My recent post regarding adverse action claims generated quite a few questions from concerned employers. One question that came up time and time again was ‘so what exactly is the difference between unfair dismissal and adverse action?’ In fact, there are a number of very important differences, so I thought this deserved a blog post all of its own.
Nature of the claim
An unfair dismissal claim arises when an ex-employee alleges their dismissal was ‘harsh, unjust or unreasonable’ in the circumstances. This is quite different from an ‘adverse action’ claim, where (generally) a person alleges their employment was terminated because of a ‘workplace right’. For example, they might have complained to the Fair Work Ombudsman (FWO) about their wage, only to then be fired when their employer finds out.
It’s important to note there are many different protected workplace rights and a person doesn’t necessarily need to be fired in order to bring an adverse action claim.
Who can bring a claim?
Only employees who have completed the applicable ‘minimum employment period’ are protected from unfair dismissal. The minimum employment period is determined by the number of employees working in the business. If it’s fewer than 15, the minimum employment period is 12 months. In all other businesses, it’s six months.
In contrast, adverse action claims can be filed by a person at any stage, even if they’ve never actually been an employee! For example, prospective employees (such as those who have only applied for a vacancy) are eligible to bring an adverse action against their prospective employer if they feel they were denied employment because of a workplace right.
Importantly, it’s not just employees who can bring an adverse action claim. These provisions of the Fair Work Act also extend to independent contractors, principals, industrial associations, and even employers (yes, in some circumstances, employers can bring adverse action claims against their employees!).
Who has the burden of proof?
If an employee claims they were unfairly dismissed, it’s up to them to prove this allegation. In sharp contrast, adverse action claims involve an unusual reversal of the ‘onus of proof’, meaning the employer is the one who needs to disprove the allegation. In practice, this can very tricky indeed.
What compensation/penalties are available?
If an employer is found to have unfairly dismissed an employee, the maximum compensation that can be awarded is capped at whichever is the lesser of either six months’ pay or half of the current High Income Threshold.
In comparison, there is no maximum cap in adverse action claims, and employers can also face penalties if they’re found to have taken unlawful adverse action because these parts of the Fair Work Act are what are known as ‘civil remedy provisions’.
In summary, this all means adverse action claims can prove very expensive and extremely time-consuming.
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