Adverse Action claim – was he terminated for taking sick leave?

Q - Why do employees launch so many Fair Work and Federal Court actions against their former employer where they have little prospect of success

A - Mostly to leverage a large compensation settlement prehearing.

One Minute Summary

The employee is terminated on return from several days sick leave – about 3 months into their 6 month probationary period.
The employee lodges a Fair Work General Protections ‘Adverse Action’ application claiming that he was terminated because he had taken sick leave.
The matter proceeds to the Federal Court where the Court accepts Adverse Action has occurred unless the employer can prove they had legitimate reasons to terminate the employee.
The employer has had multiple undocumented discussions with the employee about their performance over the previous 3 months. Unfortunately, they have little in the way of formal evidence such as warnings etc.
The employee claims that the employer’s evidence was constructed after the termination and because he had lodged the Adverse Action claim.
The Court ultimately accepts the employer’s evidence that the employee was terminated for performance reasons and not for taking sick leave.

Mr Murphy started his employment as the new Food and Beverage Manager at a holiday resort run by Aspen Living Villages in July 2023. Three months in to his probationary period he is terminated. He then lodges a Fair Work Act ‘General Protections’ application with the Fair Work Commission. The Commission is unable to conciliate the claim which then automatically proceeds to the Federal Court. After several days of hearings in September 2025 a decision is handed down in May 2026. Aspen cannot escape this legal process unless they pay out a large pre-hearing settlement or defend the matter in the Federal Court and incurring significant legal costs.

The General Protections ‘Adverse Action’ application centred on Mr Murphy being terminated after returning from several days sick leave. The nature of an Adverse Action claim is that the employee asserts the employer treated them adversely, which in this case was terminating their employment, because they had exercised a workplace right such as taking sick leave.

In this case the Federal Court decided that because termination followed the taking of sick leave the employer had was at fault for Adverse Action. Then Court looked at whether the employer can provide legitimate reasons for the termination that do not relate to Mr Murphy taking sick leave.

An employee can make an adverse action claim and, unless the employer can prove there was another legitimate reason for the termination, the Court will uphold the employee’s claim. The employer carries ‘the onus of proof’.

In this case the employer pieced together segments of evidence to show that Mr Murphy was terminated for performance and attitude issues. This included:

Staff approaching Mr Murphy’s manager (Ms McArthur) about being bullied and undermined by him.
Staff calling in sick when they were rostered to work with Mr Muphy as manager.
Mr Murphy’s inability to find staff to work replacement shifts as staff avoided his calls.
Ms McArthur stating she had asked Mr Murphy to attempt to find a replacement for himself when he called in sick which he neglected to do.
Mr Murphy’s unavailability to work extra fill in shifts when someone else called in sick.
Leaving his area short staffed and not appearing to take any responsibility as manager.
Mr Murphy being rude and dismissive to other managers.
Not properly inducting new employees to the work area.

In Ms McArthur’s verbal evidence, she stated she had had a number of conversations with Mr Murphy about these particular issues. She also had more general discussions about building a better rapport with staff, accepting feedback from staff and generally being more encouraging and positive in his communication with staff generally.

The only documentation relating to the above issues were briefly (and somewhat vaguely) mentioned in a weekly site operations report (which pre-dated his sick leave) where Ms McArthur had discussed Mr Murphy’s behavioural issues as follows:

‘Chris Murphy seems to have checked out – not replying to emails and doesn’t seem to care. Will schedule meeting with him later in the week to discuss his suitability for the role.’

Aspen’s second witness was another manager who managed to corroborate some of the evidence of Ms McArthur and that Mr Murphy had regularly been rude and dismissive of her.

In Court proceedings Mr Murphy claimed he had done nothing wrong and that the above points of evidence had been constructed to provide a reason for termination and that the real reason was his taking of sick leave. He also claimed he was never given any type of formal warning and had no chance to respond.

The Court takes a very clinical approach in looking for hard evidence. The case relied mostly on discussions between Mr Murphy’s and Ms McArthur most of which was not formally recorded.

Ultimately the Court decided to accept Aspen’s evidence stating:

‘I do not accept Mr Murphy's contentions about his performance and the timing of performance concerns being notified to him and raised. Ms McArthur’s evidence was that from mid-August 2023, she had a number of discussions with Mr Murphy about the difficulties he was having with staff. Further, Ms McArthur reported those concerns to the weekly Darwin FreeSpirit operations meeting.’

‘I am also satisfied that Mr Murphy was told about the shortcomings in his performance and was given encouragement, direction and guidance about the areas in which he needed to improve, and the ways in which he needed to improve. I am satisfied that Mr Murphy failed to take up those suggestions.’

The Judge then confirms that the reason for the termination was Mr Murphy’s performance rather than that he had taken several days sick leave. The General Protections Adverse Action application is dismissed.

Commentary

It was clear from the decision that the Court was looking for evidence from the employer. Most of the evidence related to discussions between Ms McArthur and Mr Murphy. There was no formal disciplinary documentation such as counselling or warning letters. The only written evidence was from the weekly operations meeting with the site manager. This had stated:

‘Chris Murphy seems to have checked out – not replying to emails and doesn’t seem to care. Will schedule meeting with him later in the week to discuss his suitability for the role.’

Unfortunately, the notation is vague and does not specifically list the staffing issues that had been experienced in his area in a formal way.

Employers need to be conscious of employees making complaints where they are undertaking some kind of performance discussions – which could lead to termination. Adverse action can be triggered by the employer taking adverse (i.e. negative) action against an employee for exercising a workplace right (such as taking sick leave) OR it happens after the employee making some kind of complaint related to their employment or the workplace.

I have previously assisted an employer in the Federal Court where a new employee had complained that they had not received their first wages. On investigation the employee had given the incorrect account number for the transfer. The employer corrected this and paid them immediately without issue. When the employee was terminated a short time later he (with help from his solicitor) stated the real reason for the termination was the complaint about not receiving their wages. This was accepted at first instance in the Fair Work Commission and the matter proceeded to the Federal Court.

An employee being within their probationary period is irrelevant to whether they can lodge these types of proceedings. A General Protections application can be made immediately after the employee starts working.

Many employees are not aware of this type of action, but their solicitors are. There is no cap on the amount of compensation that can be awarded in such matters.

If you want a better understanding of Adverse Action please see click through to these previous ER Updates – Part 1 and Part 2.

Please contact Michael if you require assistance with disciplinary matters which could result in General Protections or Unfair Dismissal claims.

Kind Regards

Michael Schmidt

M 0438 129 728

[email protected]

www.hunteremployeerelations.com.au