Employee Rights – When Can an Employee Take Legal Action Against an Employer?

Summary

• Employees can bring legal claims for bullying, discrimination, unfair dismissal or breach of contract, exposing your business to financial and reputational risk.
• Termination decisions carry the highest risk, particularly where dismissals are harsh, unjust or unlawful.
• Failing to follow employment laws and workplace obligations can lead to claims before regulators, courts or tribunals.
• This article explains employee legal claims and employer obligations for business owners in Australia and provides a practical guide to managing workplace risk.
• LegalVision, a commercial law firm that specialises in advising clients on employment law and workplace compliance, outlines key risk areas and dispute pathways.

Tips for Businesses

Implement clear workplace policies, train managers to handle issues early and document all decisions carefully. Follow fair and lawful processes when managing performance or termination, and seek advice before taking action in high-risk situations. Early intervention and consistent procedures can reduce disputes and legal exposure.

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On this page

• Workplace Bullying, Harassment and Discrimination
• Unlawful Termination
• Breach of an Employment Contract
• Failure to Comply With Employment Laws
• Resolving Disputes 
• Key Takeaways 
• Frequently Asked Questions

Employee rights are an important and growing area of the law. As an employer, you must understand the rights and entitlements of an employee. If you unfairly dismiss an employee or fail to meet minimum entitlements, you ultimately expose your business to significant financial penalties, compensation and reputational damage. This article explains key circumstances where an employee takes legal actions and what you should do to reduce your risk.

Workplace Bullying, Harassment and Discrimination

You must provide a safe workplace. If you allow bullying, harassment or discrimination in your business, an employee can take legal action against you. 

Workplace Bullying

Workplace bullying occurs when a person or group of persons act unreasonably towards another employee, and creates risk to their health and safety. This includes victimising, humiliating, intimidating or threatening behaviour.

Your employee can apply to the Fair Work Ombudsman for orders to stop bullying. If you fail to address this properly, you will also face work health and safety consequences. 

To manage this risk, you should:

• implement clear anti-bullying policy;
• investigate complaints promptly and objectively; 
• document all steps taken; and
• train managers to identify and address inappropriate behaviours.

Workplace Discrimination

You must not treat an employee unfavourably due to a protected attribute. Protected attributes include race, colour, sex, sexual orientation, age or disability and other characteristics under federal and state legislation. 

Unlawful Termination

Termination creates the highest litigation risk for employers. You may face a claim if you dismiss an employee in circumstances that are harsh, unjust or unreasonable. For example, you cannot terminate an employee because of:

• temporary absence from work because of illness;
• trade union membership;
• filing a complaint; and 
• absence from work due to parental leave.

Breach of an Employment Contract

An employee can sue you for breaching their employment contract. The most common dispute involves notice of termination. If a contract specifies a notice period, you must comply with it. However, if not, minimum entitlements are prescribed under legislation. 

You may breach an employment contract if you terminate a fixed-term employee before the contract expires without a valid contractual right to do so, or if you terminate employment without reasonable grounds.

Failure to Comply With Employment Laws

Resolving Disputes 

If you dismiss an employee for any of the reasons listed above, they have 21 days from the date of dismissal to lodge an application with the Fair Work Commission. They may bring a  claim for unfair dismissal, general protections dismissal or unlawful termination.

You should attempt to resolve workplace disputes amicably wherever possible. If you cannot resolve the issue through discussion, the next step may involve legal action. Both the employer and employee rights must be respected throughout this process.

Employees can seek legal redress through several forums, including:

• external dispute resolution (e.g. mediation or arbitration);
• court or tribunals (e.g. Local Court, District Court, Supreme Court, Federal Court or Administrative Appeals Tribunal);
• Australian Human Rights Commission;
• Fair Work Commission (formerly Fair Work Australia);
• Fair Work Ombudsman.

Guide to Employment Disputes

Learn how to manage employment disputes and effectively protect your business from legal action. This guide delves into the most common employment disputes.

Download Now

Key Takeaways 

It’s important that you understand the rights employees are entitled to in the workplace and how these rights can affect you. You should consider seeking legal advice as early as possible to ensure you do not take a course which is unadvisable. Ensuring your employee rights are respected is extremely important and critical in managing workplace disputes. To better understand your obligations and rights in employee relationships, you may review your employee handbook or speak with an experienced employment law specialist at LegalVision.

LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced employment lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 1300 544 755 or visit our membership page.

Frequently Asked Questions