Legal update: Adverse action and bankruptcy claims in employment


Legal update: Adverse action and bankruptcy claims in employmentADVERSE ACTION CLAIMS


Workplace Health and Safety Protection

Stressing the importance of workplace health and safety protections, the Federal Court has imposed heavy fines on cardboard giant Visy Packaging for taking adverse action against a union representative who sidelined two defective forklifts and resisted the company's attempts to return them to service without adequate modifications.

Justice Murphy found in May that Visy and its operations manager contravened workplace rights protections the Fair Work Act when they subjected the safety representative to an investigation and suspended him on full pay.

The company also breached the section when it issued him with a final written warning 10 days later.

The Union representative had exercised his responsibilities under s25 of the Victorian Occupational Health and Safety Act when he "tagged" the forklifts over concerns that their reverse warning beepers were not loud enough.

The decision concluded that there were two breaches for the one event, the investigation and suspension constituted one breach, and the warning letter constituted a second breach.

The agreed that the penalty range for the first breach was to be 60% and 80% of the maximum $33,000 fine for the Company and the $6,600 maximum for the operations manager, and between 70% and 90% for the Company’s second contravention.


Gaining advice from a Solicitor is a Workplace Right

The Federal Court has ruled that a betting agency employee's ability to seek legal advice about unpaid commissions was a "workplace right" and that when she threatened to exercise it, her employer, took adverse action against her by threatening to sack her.

Justice Chris Jessup found that when the employee told the company's chief executive that she would seek advice from her solicitor if she was not paid commissions owed to her under her contract of employment, he threatened to fire her.

Justice Jessup went on to rule that seeking legal advice constituted an "inquiry" within s341(1)(c) of the Fair Work Act, and that it followed that the chief executive's threat to sack the employee amounted to a contravention.

Betezy also took adverse action against the employee after her solicitors forwarded a letter of demand, by removing her computer access and suspending her without pay, the judge found.

Further submissions will be heard on appropriate penalties.



The Fair Work Commission has found that bankrupt employees can make unfair dismissal claims but that their remedy is limited to reinstatement and not compensation.

The matter came before Senior Deputy President Peter Richards and the employee was declared a bankrupt before her dismissal.

Senior Deputy President Richards had to decide whether the application concerned the employee's "property", which, under s58 of the Bankruptcy Act, was vested in the administrator of her estate.

Senior Deputy President Richards said he saw "no bar" to the employee applying for reinstatement or re-appointment to an alternative position, including with continuity of service.

However, he continued that the Commission would have no jurisdiction to hear claims for lost pay or compensation, as "the claim for lost pay or compensation would constitute after-acquired property and would vest in the [employee’s]trustee . . ."

He said he would adopt the approach of then Federal Magistrate Michael Jarrett in Brown v Premier Pet (see Related Article) and hear the claim on all matters in which the employee's creditors had no interest and for which there would be no "divisible property" in which they'd have a beneficial interest.



In an unfair dismissal case involving an employer in voluntary liquidation, the FWC has ruled that the employee needed leave from a court before she could pursue her claim.


Section 500(2) of the Corporations Act prohibits civil actions starting or proceeding against a company after a resolution for voluntary winding-up.

Matthew Waring

Managing Director at

Waring Legal and Waring Employment Advisors were both launched in 2012 as a professional and affordable option for individuals and companies seeking legal advice and industrial relations advice throughout Australia. Waring Legal and Waring Employment Advisors are a competitive alternative to large, impersonal law firms. Waring Legal and Waring Employment Advisors seeks to provide our clients with Professional and timely service as well as personal attention at reasonable prices.