Is an investigation adverse action?

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The general protections of the Fair Work Act render it unlawful for an employer to take adverse action against an employee because he or she has exercised or proposes to exercise a workplace right. I have several employer clients which have been sued for a contravention of the Act by initiating an investigation or inquiry of an employee after the employee has made a complaint about the workplace. In each of these particular cases the employer suspected that the complaint was mischievous and disingenuous and ultimately converted the inquiry into an investigation of the complainant employee’s actions.

What is the effect of doing so in light of the general protections? The following extract from a recent decision of a Full Court of the Federal Court throws light into the issue.

“Once again, it fell to Ms Celand to prove both the existence of a workplace right and the taking of adverse action. Absent the proof of either or each of a workplace right and adverse action, there was no work to do for the presumption found in s.361 of the FWA.

The mere initiation of an investigative or even disciplinary process does not, in itself, constitute “adverse action” as defined by s.342(1), item 1 of the FWA. The following observation, made by Ryan J in in Police Federation of Australia v Nixon [2008] FCA 467; (2008) 168 FCR 340 at 354, [42], (Police Federation of Australia v Nixon), remains pertinent:

Not every disciplinary inquiry or investigation of alleged misconduct by an employee will have that effect [significant detrimental effect on his reputation or standing]. For example, the inquiry may be conducted in such a way that only the affected employee and a few other persons directly involved in it are aware that it is taking place. Likewise, the subject matter or particulars of the alleged breach of discipline may, on balance, not be reasonably capable, at least before the investigation has been completed, of damaging the reputation of the employee or adversely affecting his or her standing in the workforce or among the wider community, assuming the fact of the inquiry to be so widely known.”

And see Celand v Skycity Adelaide Pty Ltd [2017] FCAFC 222 delivered 21 December 2017