Adverse action refers to an unlawful, detrimental action taken against employees or contractors for exercising workplace rights or possessing protected attributes under Australian employment law.
Legislation: Fair Work Act 2009 Part 3-1 | Category: Employment Law
What is Adverse Action?
Adverse action refers to an unlawful, detrimental action taken by an employer, prospective employer, or principal against an employee, prospective employee, or independent contractor because they have exercised a workplace right or because they possess a protected attribute. Adverse action also includes plans or threats to act. In rare cases, adverse action can be taken by a contractor, employee or industrial association against an employer.
Key Compliance Points for Employers
- Adverse action claims carry a reverse onus of proof — the employer must prove the action was not taken for a prohibited reason
- Even if there are legitimate reasons for the action, the claim may succeed if a prohibited reason was a “substantial and operative” factor
- Penalties for contravention for companies can be up to $99,000 per breach (2025 rates). Compensation can include reinstatement and lost wages. Compensation for these types of breaches is also uncapped.
- Documentation of legitimate business reasons before taking action is essential
Common examples of adverse action include demoting an employee after they made a workplace complaint, reducing hours after an employee requested flexible work, or not hiring someone because they previously made an unfair dismissal claim.
Frequently Asked Questions
What is Adverse Action?
Adverse action refers to detrimental actions taken against employees or contractors for exercising workplace rights or possessing protected attributes under Australian employment law.
Why is Adverse Action important for employers?
Understanding adverse action helps employers comply with Australian employment law, avoid penalties, and maintain fair workplace practices.
