The Fair Work Commission has reported a significant increase in general protections (GP) claims, with the 2024/25 financial year reporting a 27% rise above the five-year average. This surge is attributed to a combination of factors, including the use of AI tools and the rise in paid agents assisting claimants.
Employers should not treat a general GP claim like an unfair dismissal claim – many employers will handle an unfair dismissal claim in-house and resolve it at conciliation, for a modest sum. There are key differences with a GP claim which make them far more problematic for an employer, as follows:
- Uncapped damages – unlike the very limited compensation available in an unfair dismissal claim, damages in a GP claim are uncapped, and there has been at least one case with an award in excess of $1,000,000; and
- Reverse onus of proof – once a terminated employee identifies a relevant protected right and alleges that their employment was terminated because of that right, pursuant to section 361 of the Fair Work Act (FW Act), if the employee raises objective facts that are said to provide a basis for the alleged adverse action, the onus shifts to the employer to disprove that the action (termination) was taken in respect of the prohibited reason.
Providing a basis for the alleged adverse action is often a low bar for an employee (the right to make a complaint or inquiry is commonly relied upon), and once the employee has established that basis, even a case that has little prospect of ultimately succeeding at trial can be very difficult for an employer to resolve without payment of a significant settlement sum, because:
- Once the reverse onus has been triggered, that issue becomes a matter of evidence and the only way for the employer to discharge that onus is to lead evidence from every decision-maker within the business that was involved in the decision to terminate the employee;
- This creates a significant time and financial cost on the employer, and (except in very rare circumstances) the employer will not be able to recover any of its legal costs as GP claims are determined in a “no costs” jurisdiction; and
- The employee is often able to progress the GP claim without exposure to incurring legal costs, either through self-representing with AI Assistance or via Paid Agent’s operating on a “no win – no fee” basis.
Key Takeaways for Employers
- Ensure that your management understand that the management action that they are taking in relation to employees (e.g. dismissal) is adverse action and the circumstances in which employee complaints are protected by the FW Act.
- Make sure that any relevant complaints from employees are dealt with, closed out and the resolution is properly documented and communicated – make sure those complaints can be demonstrated to have been resolved a fair and impartial way and are shown to be independent from disciplinary actions and termination of employment.
- Review and document processes for disciplinary action and termination of employment so that the reasons for taking the action can be readily established and the business is protected.
- If you are subject to a GP claim, obtain legal assistance immediately – do not make the mistake of equating a GP claim with an unfair dismissal claim, as a GP claim can be far more problematic and expensive for an employer.
If you are dealing with a GP Claim or want to ensure that your disciplinary and termination processes will not expose your business to a GP claim, please contact Roger Lewis for a consultation.
