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HT for Small Biz - Newsletter

What is an Adverse Action Claim?

Adverse action is action that is unlawful due to the reasoning being of a biased or discriminatory nature. The Fair Work Act outlines several actions that are deemed to be adverse. Understanding how to avoid such actions is crucial, as the damage that an adverse action claim against your business can cause extends well beyond the immediate financial impacts.

What is ‘adverse action’?

Adverse action is action that is unlawful due to the reasoning being of a biased or discriminatory nature. The Fair Work Act defines adverse action taken by a person as doing, threatening or organising any of the following actions:

  • Dismissing an employee based on bias and discrimination
  • Injuring the employee in their employment
  • Altering an employee’s position to their detriment based on bias and discrimination
  • Discriminating between one employee and other employees when providing opportunity (eg. Promotion)
  • Refusing to employ a prospective employee based on discrimination
  • Discriminating against a prospective employee on the terms and conditions of an offer of employment (eg. Salary, non-monetary benefits etc.)

Mary is employed in a marketing firm. Recently Mary applied for a promotion for a vacant Marketing Manager position. During the interview process, Mary mentioned that she was pregnant and that she would be taking her entitlement to parental leave in the future. Although Mary is highly qualified for the job, her manager tells her that she did not receive the promotion because she would be away on parental leave. Denying Mary the position because she is pregnant is prohibited under the Fair Work Act 2009.

Companies that are confronted with an adverse action claim suffer significant financial losses and non-monetary damages such as company reputation and employee morale. To avoid such circumstances, it is crucial to ensure that a decision that is reached complies with all relevant legislation, company policy and all individuals being effected by the decision have been given equal consideration.

Feel free to contact us on (02) 8882 9694 if you have any queries surrounding adverse action.

 Suite 4.05, 5 Celebration Drive
 Bella Vista NSW 2153

Ph: 02 8882 9694 M: 0415 225 920 

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