Adverse action refers to detrimental actions 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 actions taken by an employer, prospective employer, or principal that cause detriment to an employee, prospective employee, or independent contractor because they have exercised a workplace right or possess a protected attribute.
Under Australian employment law, adverse action includes dismissing an employee, injuring them in their employment, altering their position to their detriment, discriminating between employees, or refusing to employ someone. For independent contractors, it includes terminating or refusing to engage them, or discriminating in the terms of engagement.
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
- Compensation can include reinstatement, lost wages, and penalties up to $93,900 per contravention for companies (2024 rates)
- 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.
