Performance Management or Constructive Dismissal?

Litigation and Dispute Resolution

 

The Federal Court of Australia heard the matter of Ramos v Good Samaritan Industries, in which Agustin Ramos (“the Applicant”) alleged that his employer, Good Samaritan Industries (“the Respondent”) took adverse action against him in contravention of the Fair Work Act 2009 (“the Act”) for a prohibited reason, namely “because” the applicant exercised a workplace right.

The Applicant’s Case

The Applicant particularised that after he submitted a complaint to Human Resources (“HR”) against two Managers of the Respondent, the Respondent took a number of actions which the Applicant alleged amounted to an adverse action leaving him with no option but to resign, including:

  • The Respondent threatened the Applicant with disciplinary action without any sufficient reason.
  • The Respondent decided to demote the Applicant from a level 1 store to a level 3 store and transfer the Applicant to the Armadale store (which was inconvenient to the Applicant).
  • The Respondent required the Applicant to sign a Performance Management Framework contract in order for the Applicant to retain his position of employment as the Daniella Store Manager.

The Applicant alleged that the Respondent took adverse action, because the Applicant had a workplace right, that is, the ability to “initiate, or participate in, a process or proceedings under a workplace law or workplace instrument” which he exercised when he made a complaint to HR.

The Respondent’s Case

The Respondent submitted that the various actions taken were not motivated by the complaint, but rather every action had a justifiable basis, namely performance management and thereby the Applicant’s decision to resign was not a constructive dismissal.

Judgement

Justice Barker of the Federal Court determined that the Applicant’s characterisation of adverse action “cannot 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 appellant’s workplace right to make a complaint”.
Justice Barker further considered the High Court of Australia decision of Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 (“Barclay”) and the approach taken by the joint judgments which “emphasised that the question whether an adverse action was “because” of a proscribed reason is a question of fact which requires a careful analysis of the evidence adduced by the employer and the overall facts and circumstances of the case.
Ultimately, Justice Barker found that the Respondent, through its witness Mr Knowles (senior representative of the Respondent) was able to demonstrate that the Respondent had acted on concerns with the performance of the Applicant and thereby the actions taken by the Respondent were not because of the prohibited reason.

Overview

This case serves to demonstrate that evidence by decision-makers can be crucial to uncovering the “because”; that is, was the action taken “because” of a prohibited reason. Thereby performance management in a relevant context (as demonstrated by this case) did not amount to an adverse action.

Performance Management or Constructive Dismissal?


Ben Thompson

CEO at Employment Innovations (EI)

Ben Thompson is CEO of EI (thinkei.com) and Employment Hero (employmenthero.com), established to provide small and medium sized businesses with the type of legal, HR and payroll services that big business take for granted. He is a solicitor with an excellent success record defending clients in State and Federal jurisdictions, winning several Full Bench appeals. Ask him about employment law, and HR strategy.


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