Tuesday, 24 June 2014

How to Manage Poor Performers and the Associated Risk of an Adverse Action Claim

1. What is adverse action?

Employees can make a general protections claim under the Fair Work Act by simply alleging that they were ‘adversely affected’ by a management decision made because of their workplace rights, or because they possessed a discriminatory attribute, eg race, sex, age, etc.

Employers are required to prove that any action taken by them was not because the employee exercised a workplace right or possessed a specific attribute but rather for a legitimate reason such as the employee was not meeting performance expectations. There is a reverse onus of proof so an employer is effectively presumed ‘guilty’ unless they can prove otherwise.

2. A recent example

A sales manager was employed by Myer. Myer terminated his employment during his probation period allegedly for poor performance. Myer claimed that the employee failed to follow up on important tasks raised with him at inspections of his departments as well as unsatisfactory customer service.

The employee alleged that Myer terminated his employment because he experienced anxiety and panic attacks at work.

The Federal Court dismissed the employee’s case, because Myer could successfully prove through thorough documentation that the reason for the termination of the employee’s employment was due to his poor performance.

3. Lesson for employers

To avoid employees making adverse actions claims or being able to defend a claim successfully, when employers decide to terminate an employee’s employment, it is important to ensure:

  • Employee’s unsatisfactory conduct is clearly documented in minutes from meetings / emails / warning letters; and
  • The reasons for the termination are well documented and are clearly communicated to the employee

We recommend that employers contact us prior to terminating employees’ employment to discuss the risks associated with the termination and how best to manage and communicate the termination of employment.


This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.

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