Unfair Dismissal V. Adverse Action

When an employee’s employment has been terminated, they can choose to lodge an unfair dismissal claim or a breach of general protections rights claim under the Fair Work Act.

It is important that you, as an employer, have some understanding of their respective statutory requirements and framework as an employee will have to choose one or the other if they are going to lodge a claim. In addition, an employee has 21 days within which to lodge a claim with the Fair Work Ombudsman.

An unfair dismissal claim is the most popular option because it is quick, cheap and easy for the employee (relatively speaking in legal terms). The existence of a valid reason for termination by the employer is a relevant factor but so is procedural fairness and whether the dismissal was otherwise harsh, unjust or unreasonable. In short, almost everything is relevant in an unfair dismissal claim.

In an unfair dismissal claim, the employee has to prove the dismissal by the employer was unfair, harsh, unjust or unreasonable.

A general protections claim lodged by the employee is not about unfairness but unlawfulness. The question here will be whether a matter related to a workplace right was one of the reasons for termination. It is often useful to use the analogy of retaliation – e.g. was the dismissal a retaliation or “get even” for something to do with the employee’s workplace rights (as defined by the Fair Work Act)?

Workplace rights include the right to engage in industrial activities, workplace rights, to be free from unlawful discrimination and free from undue influence or pressure in negotiating individual arrangements.

Workplace rights are broadly defined as:

• Entitled to a benefit or has a role or responsibility under a workplace law, workplace instrument (such as an award or agreement) or an order made by an industrial body
• Able to initiate or participate in a process or proceedings under a workplace law or workplace instrument
• The capacity under a workplace law to make a complaint or inquiry:
• To a person or body to seek compliance with that workplace law or workplace instrument
• If the person is an employee, in relation to their employment.

The unlawful actions that have protection include:

• adverse action
• coercion
• misrepresentations
• undue influence or pressure in relation to:
• individual flexibility arrangements under modern awards and enterprise agreements
• guarantees of annual earnings
• deductions from wages.

Adverse action includes action taken by a person includes doing, threatening or organising any of the following:

• an employer dismissing an employee, injuring them in their employment, altering their position to their detriment, or discriminating between them and other employees
• an employer refusing to employ a prospective employee or discriminating against them in the terms and conditions the employer offers
• a principal terminating a contract with an independent contractor, injuring them or altering their position to their detriment, refusing to use their services or to supply goods and services to them, or discriminating against them in the terms and conditions the principal offers to engage them on
• an employee or independent contractor taking industrial action against their employer or principal
• an industrial association, or an officer or member of an industrial association, organising or taking industrial action against a person, or taking action that is detrimental to an employee or independent contractor
• an industrial association imposing a penalty of any kind on a member.:

Coercion is where it is unlawful for a person to organise or take action (or threaten to) with the intent to coerce another person or third party to:

• use or not use a workplace right, or use it in a particular way
• take part in industrial activity
• employ or not employ a particular person
• engage or not engage a particular independent contractor
• allocate or not allocate certain duties or responsibilities to a particular employee or independent contractor
• give a particular employee or independent contractor certain duties and responsibilities.

In a general protections claim, it is a reverse onus of proof on the employer where the employer has to disprove that the workplace right was an operative reason in the decision to terminate the employment. Whilst not exhaustive, the following questions should be asked when dismissing an employee:

1. Does the employee hold any legislative role – e.g. an Occupational Health and Safety Representative?
2. Has the employee been involved recently in any enterprise bargaining, industrial or OHS activity?
3. Have there been any issues recently involving the National Employment Standards (e.g. taking leave, requests for flexible working arrangements, refusal to work overtime)?
4. Are there any facts that might raise issues of unlawful discrimination (e.g. age, race, political affiliations, disability etc)?
5. Has the employee had any recent workers compensation claim?
6. Has the employee made a complaint or enquiry about employment recently.

What about remedy? 

Akyra’s Key Takeaways  

• When an employee’s employment is terminated, they have the option to file either an unfair dismissal claim or a breach of general protections rights claim under the Fair Work Act. It’s crucial for employers to understand the differences between these two types of claims as employees must choose one or the other within 21 days of the termination.
• Unfair dismissal claims focus on whether the employee’s termination was unfair, harsh, unjust, or unreasonable, considering factors like procedural fairness and the validity of the reason for termination. On the other hand, general protections claims revolve around the unlawfulness of the termination, particularly whether it was in retaliation for the employee exercising workplace rights.
• In unfair dismissal claims, the statutory remedy typically includes reinstatement (if feasible) and compensation capped at six months’ pay. In general protections claims, there is no compensation cap, and remedies may include compensation for economic loss, pain and suffering, and medical expenses. The legal process for general protections claims is usually more time-consuming and legalistic compared to unfair dismissal claims.