Court rules that Performance Management is not ‘adverse action’

This latest Court ruling – detailed in a recent article from ‘Workplace Express’ which we append below – finds that performance managing an employee appropriately does not equate to taking an ‘adverse action’ against them.

A company did not breach the Fair Work Act’s general protections provisions when it performance-managed and disciplined an employee after he made a written complaint about his managers, the Federal Court has ruled.

Justice Michael Barker, on appeal, upheld an earlier Federal Magistrates Court decision to reject the retail store manager’s adverse action claim saying the facts of the case “did not lead to the conclusion that the [company] contravened Section 340 (1)(a) in any of the ways alleged by the [employee]”.

He also upheld the lower court’s finding that the store manager was not constructively dismissed.

The Good Samaritan Industries employee in 2010 lodged a written complaint against his divisional operations and retail operations managers, who he believed were forcing him out of the job.

The store manager alleged that what followed – warning letters, a possible transfer, requiring him to sign a performance management contract, refusal of time-off-in-lieu, and persistent monitoring that he believed undermined his authority – amounted to adverse action.

He said the final straw was his suspension with pay in June that year. He resigned six weeks later.

Justice Barker, however, said that whatever the correct characterisation of each of the actions the employee alleged, a s340(1) contravention couldn’t be made out because “none of the alleged adverse actions is shown to have occurred by reason of or on account of the existence or exercise of the [employee’s] workplace right to make a complaint”.

Justice Barker said there was little doubt that the company, through its chief executive officer, had “real concerns” about the employee’s performance, and the actions the employee complained of had a “real management justification”.

Justice Barker said that after the employee made his written complaint (addressed to the HR manager – a position that didn’t exist) it was “appropriately” looked into -“one would expect no less from an employer”.

On the evidence presented, there was “no basis upon which the Court below or this Court on rehearing could or should draw the inference that at material times the [company] had decided to squeeze the [employee] out of his employment because he had made the complaint on 6 April 2010,” he said.

“Rather, the events culminating in the complaint of 6 April 2010 and the remedial steps taken thereafter, as noted, were designed, as [the chief executive] explained and his Honour in the Court below accepted, to achieve good management outcomes. No error is identified in this reasoning.”

And while the employee felt that he was being “forced to quit”, Justice Barker said his subjective assessment would not be the benchmark for determining whether he was constructively dismissed, continuing that “it is by no means clear that he had no other option but to quit his employment at that point”.

He said it was an error to presume, as the employee did in his submissions, that his exercise of his workplace right was “necessarily a factor that had something to do with the action or actions taken against him”.

 

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