Performance management and adverse action claims by N0bd7F

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									PERFORMANCE MANAGEMENT & ADVERSE ACTION CLAIMS: Can performance still be
managed?

In the aftermath of the Full Federal Court decision in Barclay v The Board of Bendigo Regional
Institute of Technical & Further Education [2011] FCAFC 14, some employers have been asking the
question, can performance still be managed? Or has the combination of the reverse onus of proof
provisions and the breadth of the definition of 'workplace right' in the Fair Work Act 2009 (FW Act)
resulted, in practical terms, in a situation where an employer is prevented from performance managing
an employee? Certainly, the decision in Barclay leaves employers in a position where they cannot
discipline union delegates (and probably members), no matter what behaviour they engage in,
provided it is able to be characterised as 'legitimate' industrial activity. So according to the majority in
Barclay, if the conduct breaches the employer's code of conduct, for example, the employer must
simply complain to the union, on the basis that the conduct is engaged in not as an employee, but
rather as a union official or member.

Whilst Barclay is now the subject of an eagerly awaited decision from the High Court, there have been
several lower court decisions in the meantime indicating that despite Barclay it is, most certainly, still
not only possible but appropriate to manage employees' performance, provided the real, evidentiary
basis for doing so is well documented and can be established accordingly. We discussed several of
these in our October 2011 Update. But as the end of the year approaches, and there is significant
public discussion once again of industrial relations matters, it is worth revisiting this very important
issue.

To recap, the 'general protections' provisions of the FW Act are extremely broad.

They prohibit an employer taking adverse action against a range of other persons because, amongst
other things, they have a workplace right; have or have not exercised a workplace right; or propose or
propose not to at any time exercise a workplace right.

'Adverse action' is defined broadly to include threatening to or actually dismissing an employee;
injuring the employee in their employment; altering their position to their prejudice; or discriminating
between the employee and any other employee.

Whilst adverse action excludes action authorised under any other law, the breadth of these two
definitions means that if, for example, an employee asserts that they are being subjected to a
disciplinary or performance management process because they have at some stage participated in a
process under a workplace instrument such as lodging a grievance under an enterprise agreement,
then the employer has to prove that whatever were the reasons for the performance management
process that constitutes the adverse action, those reasons did not include the reason alleged by the
employee.

Workplace rights include the entitlement the employee might enjoy to the benefit of a workplace
instrument or law as well as the ability to make a complaint in relation to their employment.

The general protections provisions also operate to cover prospective employees and relationships
between principals and independent contractors.

They also cover adverse action taken by a union or member of a union against another person – for
example, injuring the person in their employment because of their exercise of their workplace right not
to join the union.

The Federal Magistrates Court in Hodkinson v The Commonwealth [2011] FMCA 171 determined that
Ms Hodkinson, a former employee of the Child Support Agency, was not subjected to a 'work
improvement plan' and ultimately dismissed, because of her exercise or proposed exercise of a
workplace right, being access to the Child Support Agency's (CSA) internal review mechanisms. It
was also held that she had not suffered adverse action because she suffered a disability. To subject
an employee to adverse action (such as discrimination) because of their physical or mental disability is
also a breach of the general protections provisions: see section 351 of the FW Act.




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Whilst the decision in Barclay was primarily concerned with section 346 of the FW Act, which deals
with the prohibition against a person taking adverse action against another because they are or are
not a member of a union or engaged in industrial activity (such as protected industrial action or other
activities in furtherance of a union's interest), Hodkinson was concerned with adverse action on the
basis of workplace rights.

Ms Hodkinson had been engaged on a 6 month probationary period and was dismissed within that
period on the basis that she had not met the requirements of her probation.

She had taken time off during the probationary period due to a back injury, unrelated to her work.

She suffered various other medical conditions and had time off accordingly.

Four months into her probationary period, after returning to work following time off due to her back
problem, she was advised she was going to be placed on a work improvement plan, for not meeting
monthly dollar, finalised cases and daily outbound telephone call targets.

She objected to this, on the basis that her targets should have been adjusted to reflect her absence
and subsequent reduced working hours under her graduated return to work.

In respect of her claim that she had been injured in her employment and ultimately dismissed for
exercising her workplace right to access CSA's internal review mechanisms, the Court held that she
had not in fact made a complaint or inquiry in relation to her employment. Rather, she had 'made
submissions' in the view of the Court. Even if the email exchange that she relied upon did constitute a
complaint or an inquiry, the Court was satisfied that CSA had discharged its onus of proof to show that
it was no part of the basis for the decision to dismiss her.

The Court recognised that it is necessary to look beyond what an employer merely alleges is the
reason for the adverse action. The real reason must be found as a matter of fact following the forensic
examination of the evidence, remembering the employer bears the onus of proof once the employee
has established the prima facie ingredients of the contravention.

The Court dealt similarly with Ms Hogkinson's allegations regarding her physical and mental disability.
The Court noted that:

           'Allegations that adverse action has been taken because of a person's disability should be
           made and particularised clearly'.

The Court found that the conceptual extensions to 'discrimination' under the Disability
Discrimination Act 1992 (DD Act) are not to be read into section 351 of the FW Act. Rather
than adopting the extended definition of 'disability' in the DD Act, the Court looked to the
ordinary dictionary meaning of disability, and the fact that section 351 of the FW Act is
limited to its terms: that is, taking adverse action 'because of' various attributes. 'Adverse
action' as defined constitutes the range of conduct which is prohibited under the FW Act,
even though the heading of the section is 'discrimination', and the section provides that any
conduct which is not unlawful under any state or federal anti-discrimination law will similarly
not be unlawful for the purposes of the FW Act.

This means that the question was simply whether CSA had engaged in adverse action
'because of' Ms Hogkinson's disability, not whether it had failed to make reasonable
adjustments to her work improvement plan or whether the plan was of itself indirectly
discriminatory.

Instead, CSA was able to discharge its onus of proof to show that neither Ms Hodkinson 's
absences on sick leave nor her injury itself formed part of the basis for its decision.

A lesson is to be drawn from this case:




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          if an employer has performance concerns, those concerns should be carefully assembled
           and documented before being put to the employee for a response under a properly
           documented, transparent and consistently applied performance management process;

          contemporaneously and comprehensively documented reasons can provide the basis for an
           employer to discharge the reverse onus of proof under the FW Act's general protections
           provisions;

          the fact that an employee may exercise workplace rights or have various attributes (such as
           union membership or activism) at the same time or prior to the employer engaging in
           'adverse action', (such as submitting the employee to a performance management process),
           does not mean the employer cannot discharge the relevant onus of proof.

Of course the converse is also true. It is much harder to prove that actions that appear capricious, or
which are unexplained and undocumented, were not undertaken for a prohibited reason.

So now, more than ever, it is imperative to document all concerns regarding employee performance;
the steps taken to address those concerns; and to thereby demonstrate a reasoned and reasonable
decision was made in accordance with a transparent, consistently applied and well documented
process.

Failure to properly and fairly manage underperformance can have an enormously
detrimental effect on productivity. Not only is the organisation 'carrying' (and paying) a
person who is failing to perform their side of the work/wages bargain, but good performers
lose motivation and engagement when confronted with underperformers that everyone
seems too scared to manage.

In the current industrial environment, it is vital to ensure your organisation doesn't become a
safe haven for 'koalas in the workplace': protected species that cannot be required to
perform adequately.



Ross Jackson




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