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Australian Federal Court Clarifies that Reasonable Performance Management is not “Adverse Action” (Sunnyvale, CA)- In a case which involved Mr. Ramos and Good Samaritan Industries (GSI), Justice Barker has upheld Federal Magistrate Rolf Driver’s earlier verdict which held that reasonable performance management would not be considered as an adverse action. The Federal Court’s verdict establishes certain principles which are crucial for employers in Australia, says Nair & Co.’s International HR Consulting Team. Ramos v Good Samaritan Industries Case: Background In March 2010, Mr. Ramos who used to work with GSI as a store manager was criticized by his senior manager for his offensive behaviour as well as on performance issues. The employee lodged a complaint against the manager for the criticism. In July, 2010, Mr. Ramos quit GSI and accused the company of taking adverse action against him for the complaint he had lodged against his senior manager. Besides, he accused the company of workplace harassment and constructive dismissal, and sought compensation for his past and future losses. However, GSI refuted the allegations. Analysis & Verdict (By Magistrate Rolf Driver) After analyzing the employee’s adverse action claims and GIS’s remarks on each complaint, Rolf Driver concluded that the employee’s allegations were baseless and could not prove any illegitimate adverse action from the company. The Federal Court’s Verdict By upholding the Magistrate’s decision, the Federal Court of Australia held that:   

Reasonable performance management is not adverse action. Adverse actions, with a good intention, taken against an employee are lawful. Documenting performance management details based on an employee's poor performance is very crucial in effectively defending any adverse action claim.

Important Lessons for Employers Employers must understand the general protection provisions and the basic workplace rights under the Fair Work Act. They must justify and document the reasons for taking action against employees in performance management situations.


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Australian Federal Court Clarifies that Reasonable Performance Management is not “Adverse Action”  

In a case which involved Mr. Ramos and Good Samaritan Industries (GSI), Justice Barker has upheld Federal Magistrate Rolf Driver’s earlier v...

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