Welcome note
Despite it being early into the New Year, the ball has started
rolling at a great pace in human resources and the employment
sphere generally. In this newsletter, we discuss a number of the
very significant amendments to the Fair Work Act
2009 (Cth) (FW Act), Facebook faux-pas,
employee spending on company credit cards, employees behaving badly
and a round-up of the decisions that the Fair Work Commission
(Commission) has been making.
We ran a successful Workplace Bullying Forum at the end of last
year; not long after, the Commission commenced its new bullying
jurisdiction. Further information is included in the 'E&IR at a
glance' section of this newsletter. There will certainly be more to
report on this area in the coming months.
Lastly, our most recent HR Forum on exiting employees involved
collaboration with PPB Advisory's forensics team. We wish to extend
our sincerest thanks to Barry Foster and Peter Morris of PPB
Advisory, our co-presenters. Our next HR Forum will be on the FW
Act reforms and will be held on Thursday 8 May 2014.
For more information on any aspect of this newsletter or for
general queries, please contact any member of our E&IR team
on
+61 3 9608 2233.
E&IR at a glance
- The Fair Work Amendment Act 2013 (Cth) took effect in
its entirety on 1 January 2014. The changes this instrument makes
to the FW Act are significant and are discussed in the first
article below. Further changes have been heralded with the
introduction of the Fair Work Amendment Bill 2014 late last month
(see here: /sharing-knowledge/legal-updates/fair-work-act-reforms.aspx).
- In the first month of the Commission's new anti-bullying
jurisdiction, it received a total of 44 bullying complaints.
Commission President Iain Ross J said that typically the Commission
receives fewer applications for individual-based rights disputes
such as unfair dismissals and general protections in the first two
months of the year. The FW Act dictates that the Commission has
only 14 days to start to deal with applications once they have been
lodged. Justice Ross confirmed the Commission's intention of
'progressing matters promptly and in a practical, efficient and
fair manner'. The first substantial order was also made this month,
further details of which are included in this newsletter.
- The Australian Bureau of Statistics has announced that
unemployment in December 2013 rose by 0.1 per cent, an increase of
8,000 people to a national total of approximately 722,000 people.
The rise in unemployment is attributed to a decrease in the demand
for male and female full-time employees and male part-time
employees.
- According to new Canadian research, 'presenteeism' (the act of
employees attending work when they are unwell) costs employers
significantly more than absenteeism. According to the research,
employees do not operate at the normal rate of productivity and are
generally disengaged from their place of work. Other potential
indirect costs include exacerbating their health problem/s, making
other employees sick and making customers and/or clients sick.
- Safe Work Australia reported that the number of infringements
issued by work health and safety regulators has decreased by 37 per
cent in the last year. The number of prohibition and improvement
notices issued has also dropped by approximately 13 per cent. Safe
Work Australia also warned employers and workers against common
work-related injuries and reminded labourers, transport workers and
tradespeople (who had the highest incidence of serious injury) to
remain vigilant and aware of their obligations.
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Getting healthy in 2014!
WorkSafe Victoria is distributing Healthy Workplace
Kits with a view to enhancing the health and wellbeing of
Victorian workplaces. Participant workplaces can sign in as guest
users and utilise the free resources to establish goals, design and
implement a program, and evaluate and improve that program. Further
information can be accessed at: http://healthyworkplacekit.com.au/
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Facebook faux-pas
With over 350 million members worldwide, Facebook is a force
that every employer must reckon with. In December last year, two
cases about employees who were dismissed following derogatory
comments posted on their Facebook profiles were decided with
differing outcomes. As a result, further guidance was given to
employers about the criteria that should be taken into account when
considering action after an employee's derogatory social media
comments.
Case 1: appeal of 'the Linfox case'
The Full Court of the Federal Court of Australia dismissed an
appeal by Linfox Australia Pty Ltd (Linfox),
ruling in favour of a truck driver who was dismissed for serious
misconduct after he posted deprecating comments about his managers
on his Facebook profile page. In his defence to the claim, the
employee likened his Facebook comments about two managers at Linfox
to those that he would express in a café or pub conversation.
Commissioner Roberts (with whom the Full Bench of the Commission
and the Federal Court at first instance agreed) held that comments
posted in an electronic form leave a permanent written record
'which can be read at any time into the future until they are taken
down by the page owner'. For this reason, they are not the same as
comments made among friends in a pub.
Despite this, the Full Bench of the Commission (with whom the
Federal Court agreed) held that even if the truck driver's Facebook
comments were a valid ground for his dismissal, in the
circumstances of this case the dismissal was harsh, taking into
account:
- his long period of employment at Linfox;
- his age and limited job prospects;
- the circumstances of the publication of the comments, in
particular his belief that his profile on Facebook was protected by
maximum privacy settings, that only his 'friends' could view the
comments and that he never intended the comments to be communicated
to his managers;
- that the conduct occurred outside the workplace and work
hours;
- that some of the derogatory comments made on his Facebook
profile were not actually made by the employee, but by his
'friends';
- that Linfox didn't take action against other employees who took
part in the conversations; and
- that the employee was remorseful and acknowledged how 'foolish'
his actions were.
While this case turned on its own facts, there will be instances
where such conduct will provide a valid reason for termination (as
was the case below).
Case 2: status update lands employee in hot
water
The Commission upheld the decision of an employer to dismiss a
customer relationship manager for making 'grossly offensive and
disgusting' comments on his Facebook profile page about an employee
who had not yet begun work at the company. In his post, the manager
likened his employment at the company to anal rape and spoke about
sexually harassing the new employee. The manager had received
warnings from the company in the past for inappropriate comments on
various organisations' websites.
Deputy President Sams condemned the employee's very 'warped'
rationalisations for his conduct and held that no policies or codes
of conduct need to be consulted to appreciate how inappropriate his
comments were and that they were likely to cause the target
employee hurt and humiliation. Deputy President Sams also stressed
that while the manager was perfectly entitled to hold and express
views about any organisation he pleased, he was not free to do so
in a manner that negatively impacted on his employer's business.
The manager's application, along with his defence that he did not
understand how Facebook worked, was rejected by the Deputy
President due to his youth and the frequency with which he used the
social media site.
For employers
The appropriate response to employees who post derogatory
comments about their employment or fellow employees on social media
is not always clear. It is very useful to have policies in place
that detail the employer's expectations of staff with respect to
social media, because these policies can guide an employer's
response to an incident and help protect the employer in the face
of an unfair dismissal claim.
Legislative changes in effect as of 1 January 2014
Four major changes to the FW Act came into effect on 1 January
of this year, briefly summarised below.
1. The consultation requirement
All modern awards must now contain a provision requiring
employers to consult employees about any changes to their regular
rosters or ordinary hours of work. The Commission has issued a
decision varying all modern awards as described in our January
Alert (
/sharing-knowledge/legal-updates/new-consultation-requirement.aspx).
Employers are now required to:
- provide the employee/s affected and their representative/s (if
any) with information regarding the proposed change (for example,
information about the nature of the change and when that change is
expected to commence);
- invite the employee/s and their representative/s (if any) to
express their views about the impact of the proposed change/s on
their lives, including on their family and caring responsibilities;
and
- consider any of the views put forth by the employee/s or their
representative/s (if any) about the impact of the proposed
change/s.
2. Bullying claims at the Commission
A worker who reasonably believes that he/she is being bullied at
work is able to apply to the Commission for an order to 'stop the
bullying'. Significant points to note about this amendment are:
- the definition of worker is very broad and extends beyond the
traditional employer/employee relationship;
- the bullying must be a repeated action and there must be a risk
that it will continue;
- the Commission has 14 days from when the application is bought
by the worker to 'start to deal' with the application; and
- the Commission cannot award compensation.
Bullying claims may also still be dealt with under the federal
and state work health and safety regimes.
We recommend that employers review and update their
anti-bullying policies in the wake of these significant changes. It
is also essential that managers are well-trained in implementing
company procedures to handle complaints of workplace bullying.
3. Right of entry
A number of changes were made to the union right of entry
provisions in the FW Act. However, the government has introduced
new legislation seeking to repeal the changes made and introduce
further amendments (more information can be found at /sharing-knowledge/legal-updates/fair-work-act-reforms.aspx,
so watch this space).
4. General protections claims
Changes introduced also enable the Commission to hear a general
protections claim by way of arbitration where an initial conference
at the Commission does not resolve the dispute involving a
dismissed employee. However, a hearing by way of arbitration will
be conditional on the employer's consent. The remedies available to
the employee include reinstatement, compensation and damages for
lost remuneration.
General manager dismissed after spending on the company credit
card
Background
The Federal Circuit Court of Australia has found in favour of a
general manager of a hardware company who was summarily dismissed
for personal spending on his company credit card while on a work
trip to Europe and North America. The manager was employed on a
verbal contract and no notice period was specified in his
agreement. He had been with the company for 13 months before his
summary dismissal. His employer also withheld his final week of
wages.
The decision
Justice Simpson held that this decision came down to a question
of fact. His Honour found that there was no basis for the summary
dismissal of the manager because the owner of the company had
informed him that the credit card was for his personal use during
the trip and that he would be reimbursed on his return. Justice
Simpson held that, because the contract was verbal, its terms were
to be found in conversations between the parties leading up to the
manager's engagement, and included those terms that would be
implied as a matter of law (such as a reasonable notice term).
His Honour held that six months was a reasonable termination
notice period based on:
- the manager's $60,000 salary;
- the length of his employment;
- the manager's age;
- his seniority;
- his duties; and
- the likelihood of him finding other suitable employment.
The manager was awarded $35,808 in damages, which comprised his
unpaid salary, superannuation, annual leave and the six months'
notice he was due.
For employers
Notably, Simpson J stated that 'reasonable notice' for senior
managers would generally be at least six months' notice even when
they have been in their job for only a short period of time. His
Honour also stated that it is 'not permissible at common law' to
suspend employees without pay, even when it is thought that the
employee may have breached their contract of employment. Justice
Simpson also held that if an employer suspends a worker, 'it must
be on the basis that the employee continues to be paid their full
entitlements'.
Employers should be aware that in the absence of an express
notice term in the employment contract, the courts are prepared to
imply much longer notice periods for dismissed senior employees
than the statutory minimum notice periods. In determining what a
reasonable notice period is, the factors listed above will
generally be taken into account. It is critical that employers
maintain up-to-date written contracts of employment with all
employees, but particularly for more senior employees. We recommend
that employers seek advice prior to standing down an employee as
part of an investigation into potential misconduct.
Employer awarded costs due to bad behaviour of former
employee
A former employee of a shipping company was ordered to pay his
former employer $9,782.93 in costs due to the 'exceptional
circumstances' of the case following his failed unfair dismissal
application.
Facts
In May and June 2013, the employee was one of several employees
of the company who was made redundant and who subsequently
initiated a blockade at the company's shipping terminal at Port
Melbourne lasting a fortnight. He later challenged the redundancy.
However, among other things, the employee did not comply with the
Commission's orders to produce documents. It was also alleged that
the employee abused the processes of the Commission.
The decision
Commissioner Bissett rejected the unfair dismissal claim, but
did not make a ruling on the question of the abuse of Commission
process question. Despite this, Commissioner Bissett held that this
was an exceptional case due to the employee's 'persistent failure'
to comply with, or demonstrate some form of compliance with, the
rules of the Commission. She awarded costs to the employer for the
unfair dismissal claim only.
Comment
Commissioner Bissett stressed in her order that the awarding of
costs by the Commission 'should not be an ordinary occurrence', but
rather one that is reserved for cases where a party shows great
disdain for the Commission's processes and/or the other party.
For employers
Ordinarily, the Commission is a no-cost jurisdiction and it is
very unusual for the Commission to make orders on costs. However,
this case demonstrates that where an applicant seriously undermines
the Commission's processes, the Commission may be prepared to do
so.
Cases roundup
First substantial anti-bullying order made
The Commission has handed down its first substantive order under
its new anti-bullying jurisdiction, ordering - among other things -
that the employee (the subject of the application) have no contact
with the complainant alone, make no comment about the complainant's
clothes or appearance and not send any emails or texts to the
complainant (except in emergency situations), as well as
prescribing the times that both employees are to be at the
employer's premises (specifically, the complainant was ordered not
to arrive at work before 8.15am, while the other employee was
ordered to complete any exercise at the employer's premises before
8.00am).
Victorian government wins appeals on Building
Code
The Full Court of the Federal Court upheld both of the Victorian
government's appeals against Federal Court decisions which found
that it had breached the general protections provisions of the FW
Act by requiring contractors to comply with the Victorian Building
Code and Guidelines. Having been fined $53,000 in total for the
contraventions, the Victorian government appealed both cases. The
Full Court set aside the penalties and held that a state's building
code does not 'authorise, forbid, or mandate any particular conduct
by anyone'.
Putting your back into it - $1.4m damages for
injury
The Supreme Court of the Australian Capital Territory has
awarded a workshop manager damages of $1.4m for injuries sustained
while lifting heavy machinery into a van. In November 2007, the
manager was loading a pressure cleaner weighing over 100 kilograms
into a van with two co-workers when it rolled towards him and he
was forced to take the full weight of the machine. He damaged his
back and subsequently suffered a psychological injury. The company
accepted that with regard to the use of weight bearing machinery,
there had been no meetings with staff, no written policies at the
time, no process of induction for trainees and no risk assessment
carried out. The court held that the company had breached its duty
of care to the manager in not employing these processes and awarded
damages on the basis of out-of-pocket expenses, past and future
economic loss and other damages.
Worker's dishonesty justified their dismissal - further
case law on trust and confidence
A Hunter Valley mine operator was dismissed by his employer due
to his dishonesty following a positive drug test where traces of
methamphetamines were discovered in his sample. When the mine
operator was questioned about the positive result, he lied and
claimed he had only taken 'cold and flu' tablets. Later he admitted
to having taken a recreational drug at a party on the weekend
before he was tested. He was dismissed because of his dishonesty,
which 'destroyed the relationship of trust and confidence' between
the parties. Deputy President Lawrence upheld the company's
decision, stating that the employee's dismissal was appropriate due
to the serious breach of the relationship of trust.
Calling your manager a w**ker - not a valid reason for
dismissal
The financial controller of a property company who referred in
an email to all staff that his manager was a 'w**ker' and attached
a mock-up of his manager's resume, listing 'excessive masturbation'
under the 'hobbies and interests' section of the document, has had
his unfair dismissal application accepted. Deputy President Asbury
held that, while such conduct would generally be considered serious
misconduct resulting in termination, the employee's conduct was
consistent with the culture of this workplace. The Commission heard
that the company's employees, including and in particular
management, regularly disseminated highly offensive material
including hardcore pornography. Such behaviour from staff had never
resulted in dismissal before and despite the fact that the
financial controller was earning more than the unfair dismissal
cap, he was covered by an enterprise agreement and thus able to
bring the claim. Since reinstatement was not a viable resolution,
Deputy President Asbury awarded compensation to the employee of
$62,000.
Cleaning up your act: employment contract
scams
A very significant penalty was recently imposed on a company and
its director for employing unfair employment contracts. The company
was alleged to have deliberately underpaid a South Korean citizen
by classifying him as a contractor rather than as an employee.
Justice Lloyd-Jones held that the employment contract must have
been prepared by someone with a 'deliberate intention to circumvent
the legislative framework'. His Honour ordered that the company
repay the employee what he was owed and fined the company $47,520
for breaching the FW Act. A personal penalty of $9,504 was also
imposed on the director of the company.
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Sham contracting
Businesses that engage contractors, particularly for lengthy
periods of time, should periodically review the nature of the
relationship to assess whether the arrangement remains appropriate.
Businesses that incorrectly classify (intentionally or not) an
employment relationship as a contractor relationship may be in
breach of taxation laws, superannuation laws, workers' compensation
laws and employment laws.
The FWO is increasingly prepared to prosecute businesses that
engage in sham contracting arrangements.
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Watch this space
Employee's LinkedIn accounts held to be employer's
property
In the United Kingdom, a former employee who had set up her
LinkedIn account while working at a publishing company was ordered
by the court to hand her login details to her former employer. In
this case the employee was a long-term employee of the company and
was required by her employer to set up a LinkedIn account. However,
she was also able to use the account for personal reasons. When she
left the company with two other employees to begin a rival company,
her former employer accused her of trying to solicit its clients,
using its confidential material to her advantage and promoting her
own business. The High Court held that the employee's LinkedIn
account was the property of the employer. This is also an
increasing issue in Australia and we recommend that employers think
through how social media like LinkedIn will impact on their
business - particularly in the case of departing employees - and
put in place appropriate policies and comprehensive restraints to
protect themselves.
App-tastic for small businesses!
The Australian Taxation Office (ATO) is
launching an app for small businesses in an effort to reduce the
compliance burden on employers when trying to work out the
superannuation obligations they owe to their employees. This app
may be downloaded on Googleplay, the AppStore and from the Windows
Phone Store.
Anti-picketing laws
New anti-picket laws have been passed in Victoria. The laws
expand section 6 of the Summary Offences Act 1966 (Vic) to
provide that picketers will be subject to the power given to police
and protective services officers (PSOs) to direct
individuals to move on if they are breaching the peace or
endangering the safety of others in a public place. This provision
previously excluded individuals involved in pickets, demonstrations
or protests. The laws are set to default commence on September 1
2014 (if the amendments are not proclaimed earlier).