“Pest” Control Not Culpable Adverse Action

“Pest” Control Not Culpable Adverse Action

Morrow v Tattsbet Limited [2014] FCCA 1327 (4 July 2014)

After an employer sacked a manager who had queried her superannuation entitlements, the federal circuit court found no culpable adverse action by the employer. In another in a recent series of decisions which is demonstrating that culpable adverse action is proving harder to claim, the court found that the employee had in fact not exercised, or planned to exercise, any rights at all.

The manager had asked a friend, a former employee, to check out if she, the manager, was entitled to superannuation from the company. This was because, up until that time, the manager was treated like a franchisee, an employer in her own right. However, evidence was available which suggested that the manager should be treated as an employee. This is what the court found when it examined all the issues; that on balance the manager was in fact an employee, so her entitlement (or workplace right) to superannuation was valid.

The problem for the manager was that in asking the friend to investigate, the manager had not talked to her employer but the employer found out of the manager’s actions from third parties. This was not the first time the manager had acted in a way which undermined the trust between the parties. The employer described the manager as a “pest” and considered her conduct “as underhanded and divisive”. The court agreed that the manager had in fact acted in way which meant the employer “had lost trust and confidence in” the manager.

Direct evidence was led which supported the employer’s evidence that the issue of paying superannuation was not what caused the termination of the relationship, but the manner in which the manager had gone about her enquiries and activities. In fact the employer had welcomed an approach from the managers’ association to discuss the issue at an upcoming conference.

In these cases, the court looks for the ‘real’ reasons for the adverse action taken by the employer. That is why it is so important for the decision-maker to give direct evidence. In this case, the court found no culpability (and therefore no damages) because the employer did not act for a prohibited reason, but for the reasons stated.

Adverse action claims are expensive to run because they are resolved in court and there is no cap on damages like there is for unfair dismissal. If a case is brought against an employer, the decision-maker must be involved from the very beginning and front the court if the employer is to have a serious chance of beating the claim.