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Employer fails to disprove adverse action claim

A recent decision of the Federal Circuit and Family Court of Australia has reaffirmed the standard of proof that is required to disprove allegations of unlawful adverse action under the Fair Work Act 2009 (Cth).

A recent decision of the Federal Circuit and Family Court of Australia (the Court) has reaffirmed the standard of proof that is required to disprove allegations of unlawful adverse action under the Fair Work Act 2009 (Cth) (FW Act).

Section 361 of the FW Act states, where an allegation of unlawful adverse action is made, it will be presumed that the action was, or is being, taken for the unlawful reason, unless the person proves otherwise.

In Lamb v RPS AAP Consulting Pty Ltd [2022] FedCFamC2G 255, the Court was tasked with determining whether an employer had sufficiently proved that it did not demote an employee because she had submitted a workplace grievance about her manager.

The employee was employed by RPS AAP Consulting Pty Ltd (the Employer) as the National Lead, Strategy and Transformation, based in its Sydney office.

In or about August 2019, the employee commenced a casual relationship with a work colleague who was based in the employer’s Brisbane office. The employee advised the work colleague on numerous occasions that she wished to keep the relationship a secret. The employee also did not wish to raise it with HR as they did not work in the same State or department and their work rarely overlapped.

The employee’s Manager, who was good friends with the work colleague, became aware of the casual relationship in or about October 2019.

The employee alleged that, particularly between October 2019 and January 2020, the Manager repeatedly asked her questions about her personal life and her relationship with the work colleague, which she considered to be intrusive and made her feel uncomfortable.

The Manager denied asking personal questions of the employee and maintained that he only asked about the relationship in meetings as he saw it as a potential conflict of interest.

At the end of January 2020, the employee flew to London for two weeks to undertake a study course on the understanding that she had obtained approval to do so from the Manager’s manager and it had been agreed that she would continue to work whilst in London.

Upon discovering that the employee was in London, the Manager rang her to advise that he was not made aware that she was in London and that she should have sought his approval.

The employee subsequently sent an email to the Manager which included a grievance that he was continually raising and enquiring into personal matters that bore no relevance to her work.

The Manager then forwarded the email to his manager with the comment “I share this with you as I am starting to get concerned that she claims all I talk about is personal matters”. The email was then forwarded to the HR Executive with the comment “I’ve asked [the Manager] to seek your counsel and how we deal with this issue, as it has the potential to go awry”.

When the employee returned to Australia at the start of February 2020, she had a meeting with her Manager and the HR Executive which she had understood was convened to discuss her complaints. Instead, the meeting raised allegations of underperformance, including her decision to go to London without approval as well as concerns that she would not be able to manage her studies and her work duties. The employee was advised that the Employer was considering a decision to step her back from her role while she was undertaking her training course.

The next day, the employee was advised by the Manager that she would be removed from her position, which she considered to be a demotion. The Employer claimed the decision was a temporary one as she had demonstrated difficulties regarding time management and believed that she would struggle in her role while studying overseas.

The employee resigned the next day and subsequently commenced proceedings alleging, amongst other things, that she had been demoted because she had made a complaint about her Manager in contravention of the FW Act.

The Court was not satisfied that the Employer did not demote the employee because she had made the complaint.

In particular, it noted that the Manager, along with his manager and the HR Executive, were responsible for making the decision to demote the employee, despite there being a clear conflict of interest in the Manager taking a lead role in that decision. The Court did not accept the employer’s justification that there was no conflict in relation to the allegations of poor performance – rather, it considered that there was a clear conflict that gave rise to a reasonable apprehension of bias in that the Manager had a serious allegation made against him and he took an active part in a process that led to her demotion.

In addition, the Court was “significantly concerned” that there was no evidence before it that the employee’s complaint was ever the subject of any investigation. It noted the Employer’s concessions that it did not follow its own Grievance Resolution Guideline in terms of responding to the employee’s email and in terms of placing her on a Performance Improvement Plan, despite the concerns about her performance.

Given the above, and the speed of the action taken by the Employer to remove the employee from her position, the Court could not be satisfied on the evidence that the complaint was not an operative and substantial part of the adverse action taken against her.

The Court therefore declared that the Employer had taken unlawful adverse action, with compensation and penalties to be determined at a later date.

Lessons for employers

There is a reverse onus of proof in claims of adverse action under the FW Act which requires those who are accused of taking unlawful adverse action to satisfactorily disprove the claim.

Therefore, in circumstances such as this matter where complaints and performance issues arise at the same time, it is best practice for employers to deal with such matters separately and avoid any potential conflicts of interest to minimise any risk that adverse action was taken for a prohibited reason.  

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable ,liability is limited by a scheme approved under Professional Standards Legislation.

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