Court rejects adverse action claim in context of restructuring a business and altered roles of employees

Employment Law: 18 March 2019

The Federal Court of Australia recently rejected a procurement manager's adverse action claim against its employer Dulux on the basis that his dismissal was not linked to him having taken sick leave.

The procurement manager had been working for Dulux for two years when it acquired another business.  A senior manager decided that the employee's role would necessarily expand as a result of the acquisition and that the employee did not have the requisite skills for the expanded role. 

Dulux offered the employee another role with an increased salary.  The employee initially rejected the offer and argued that it was a constructive dismissal.  Despite this, he was given a significant period of time (over 4 weeks) to consider accepting the role.  After this time, the employee was given a final deadline which he ignored and he also took sick leave on the day.

After receiving no decision by the deadline and without knowing that the employee was on sick leave, the senior manager terminated his employment.  Meanwhile, the employee's solicitor wrote to Dulux alleging that Dulux had bullied him into accepting the offer and had misrepresented his employment to him.

Adverse actions claims can be made where an employee has been subjected to adverse action (for example, by having their employment terminated) on the basis that he or she has or has exercised a workplace right.  Protected rights include the ability to take personal leave and enjoy a safe working environment.

Importantly it is the enjoyment of these rights that is protected by law rather than the right to make a complaintthat the rights have been breached.

The basis of the employee's adverse action claim was that he had been terminated for exercising his right to a "working environment that was safe and without risk to health."

The employee also claimed that termination was in breach of section 352 of the Fair Work Act on the basis that the termination was on the ground of temporary absence from work due to illness or injury. However, the court found that while the employer was aware the employee was absent, it did not know that the absence was due to illness or injury and therefore this was not a reason for the termination.

The court also found that the termination was not due to the employee having exercised his workplace right to a "working environment that was safe and without risk to health," concluding that the nature of the workplace benefit accorded by Victorian OHS legislation is the capacity to enjoy a safe working environment, and the manager needed to allege that it was the "enjoyment of that benefit, not the making of a complaint about its denial" (by way of his solicitor's letter) that was the operative reason for his dismissal.

The Court remarked that the applicant could have made an unfair dismissal claim on the basis that he was constructively dismissed, but given that the Applicant had made an adverse action claim, the Court was not required to consider the fairness or unfairness of the dismissal in that context.

The case highlights the need for careful consideration of policies and procedures when altering roles of employees.