Recent data from the Fair Work Commission suggests that employers are settling general protections claims for record sums to avoid the risks of going to court. Of the almost 1200 cases that settled last financial year, 136 reportedly settled for more than $20k with 13 businesses paying more than $100k to settle their individual disputes.
The general protections provisions of the Fair Work Act present a significant risk for businesses. Aside from the possibility of significant damages being awarded, there are the added costs of legal expenses, time and emotional stress to consider, as well as the burden of having to overcome a statutory presumption against the employer.
What is a general protections claim?
Also known as an adverse action claim, the general protections provisions prohibit businesses from taking adverse action because of a protected reason. The protected reasons generally involve specific characteristics of an individual, including their race, disability, age as well as their right to make a workplace complaint or engage in protected industrial action.
As the name suggests, these provisions are broad. The basis for a claim is adverse action, or a threat to take adverse action. Adverse action includes dismissal, but also includes injuring a person in their employment, altering their position to their detriment or discriminating between that person and other workers.
Do you have an effective risk management system?
Many HR Assured clients are confronted by the difficult situation of undertaking performance management, only to have the person make a claim for workers compensation. Workers have a protected right to make a workers compensation claim. So does this mean that you can’t sack an underperforming employee? Absolutely not!
Adverse action that is taken for a legitimate reason is not unlawful. But it does demonstrate the value that an effective risk management system can add to your business.
HR Assured’s cloud –based solution contains a compressive workflow to assist you in managing poor performance and minimise the risk of a general protections claim. Our market leading HRA Cloud enables you to document the true reasons for undertaking the performance management and provides you with guidance on how to manage the various issues that can arise along the way.
For more information on the recommendations and what this means for you, clients should contact the HR Assured team. If you’d like more information about the benefits of becoming an HR Assured client contact us today for an informal chat.