Adverse Action, Unlawful Termination – Expensive Mistakes Can be Made

Most employers are aware of the issues involved with unfairly terminating an employee based upon their conduct or performance. Less well known are the consequences of terminating an employee’s employment unlawfully, or adversely affecting an employee in their employment, because the employee has exercised a workplace right. An adverse action may be reducing their classification or pay rate or otherwise changing the terms and conditions of their employment.

An unlawful termination is one where the employer terminates employment for an exercising a workplace right such as questioning their pay, taking sick leave, making a workers compensation claim or joining the union. It is also unlawful to terminate an employee or take adverse action on what would be discriminatory grounds, that is, race, religion, marital status, sexual orientation, etc.

In a recent Federal Court decision an employer was ordered to pay over $400,000 in penalties and damages for terminating a nurse where the Court found that the termination was based upon the employee’s race and because she had complained about bullying and harassment in the workplace.

The Court found that the employer failed to properly investigate the employee's complaints and instead turned them against her, leading to her dismissal. The Court rejected the employer’s defence, concluding the dismissal was not based on genuine concerns about the employee's conduct but was instead discriminatory.

This decision reinforces the importance of genuinely investigating employee complaints, especially those involving discrimination or workplace bullying. Employers must be cautious in how they respond to complaints and adverse action taken shortly after an employee raises concerns. The financial cost to an employer can be significant if it fails to handle employee complaints appropriately. In addition to potential civil penalties employers also need to consider the risk to reputational damage which can have a significant impact on a business.