June at a glance
- The final tranche of changes to the Fair Work Act 2009
(Cth) (Act) passed through parliament (including
introducing the right for an employee claiming to be bullied at
work to apply to the Commission for an order relating to the
bullying (note, these amendments will not come into effect until 1
January 2014)).
- The government's amendments to the Migration Act 1958
(Cth) were passed. Among other things, the amendments introduce a
labour market testing requirement for employers seeking to sponsor
457 visa holders and give Fair Work Ombudsman inspectors power to
monitor compliance of employers with sponsorship obligations.
- The Australian Jobs Act 2013 (Cth) was also passed
ostensibly 'to guarantee Australian businesses a share of major
infrastructure and resource projects'. Under the Australian
Jobs Act 2013 (Cth), all projects worth $500 million or more
must complete Australian Industry Participation Plans, regardless
of their location or industry sector.
- The Fair Work (Registered Organisations) Amendment Act
2012 (Cth) received royal assent. The Act seeks to increase
the financial accountability of registered organisations of
employers and employees and their office holders.
- Federal sex discrimination laws were broadened - discrimination
on the grounds of 'sexual orientation, gender identity and intersex
status' are now included as protected attributes.
- The federal government also announced that the Australian Human
Rights Commission would conduct an inquiry into pregnancy at work
and parents' experiences of returning to work after parental
leave.
-
The New South Wales government handed down its budget -
relevantly, the payroll tax threshold was increased to $750,000
(meaning a number of businesses will now be exempt from payroll
tax). However, it also announced the abolition of payroll tax
indexation (there are now no states that index their payroll tax
threshold).
No bull - $600,000 compensation for retail worker
The Supreme Court of Victoria recently ordered a company to pay
almost $600,000 in damages after it failed to act on its
observations that a manager was bullying a sales assistant. The
manager's bullying behaviour included throwing a calculator and a
book at the sales assistant, as well as subjecting her to sarcasm,
hostility and rudeness.
Background
The manager began bullying the retail worker soon after she
commenced employment at the bookshop in late 2002. In early 2003,
she telephoned a member of the board and notified him and the other
board members of 'conflict' she was experiencing with the
manager.
Having become aware of the conflict, the board informed the
worker that they would implement policies in the workplace to deal
with the problem. However, no such policies were ever implemented
and matters came to a head when a major conflict occurred between
the two workers in 2007. As a result, the worker suffered a
breakdown and became depressed and anxious.
The decision
Justice Dixon was scathing of the board's failure to act on the
worker's complaints. Minutes from a board meeting as far back as
2003 showed that the board had discussed the possibility that a
failure to provide a functional workplace would expose it to the
risk of WorkCover claims and be in breach of its obligations to
provide a safe workplace for its employees. Further, the board made
repeated misrepresentations to the worker that it was in the
process of implementing policies (when in actual fact, little or no
progress had been made).
His Honour went on to find that prior to her employment with the
company, the worker did not suffer from any pre-existing or
unrelated psychiatric condition or impairment or have any non-work
related stressors. The extent of her psychiatric injury was
extremely onerous and deleterious and would have been mitigated if
her complaints had been acted upon earlier.
The worker's pecuniary loss was assessed at $292,554.38, with
damages for pain and suffering and loss of enjoyment of life
assessed at $300,000.00.
For employers
This case serves as a reminder that employers have a positive
duty to take reasonable steps to deal with potential bullying and
harassment in the workplace and highlights the consequences of
inaction.
Employers should develop and maintain a policy regarding
bullying and harassment in the workplace, train employees on the
policy and ensure complaints of bullying are investigated and acted
upon in accordance with such policies.
Fining the loophole - director and company fines covered by
insurance
The South Australian Magistrates Court recently handed down
record fines of $200,000 each to a South Australian employer and
its director. The fines regarded a workplace incident in which a
rigger employed by the company was killed when he was struck by a
1.8 tonne steel beam. However, the fine imposed on the company and
its director was covered by an insurance policy with an excess of
$10,000.
As a matter of public policy, a term of a contract that provides
an indemnity against criminal liability is void at law, meaning
that an insurance policy purporting to cover criminal penalties
would be unenforceable against the insurer (so that if the insurer
decides not to pay out, the insured cannot enforce the invalid
contract). However, the relevant laws do not (as yet) actually
prohibit directors entering into such policies with insurers.
This case has once again enlivened the issue of such insurance
policies, and may mean authorities push for punitive options that
cannot be insured against, such as imprisonment.
The case
The company was charged with one breach of s 19(1) of the
Occupational Health, Safety and Welfare Act 1986 (SA)
(Act) for having failed to ensure, so far as was
reasonably practicable, that two riggers were safe while at work.
Its director was prosecuted for a breach of s 61 of the Act for
having failed to take reasonable steps to ensure compliance by the
company of its OHS obligations.
Industrial Magistrate Lieschke handed down a fine of two thirds
of the maximum allowable penalty of $300,000 to both the company
and the director, for a first offence involving very serious
breaches of the Act.
Despite the fines, the director ended up paying only $10,000,
which represented the excess payable under a general insurance
policy taken out by the company, which included indemnification of
its director against any fines incurred for criminal conduct.
Regarding the insurance policy, Industrial Magistrate Lieschke
noted that a key principle of acceptance of responsibility for
criminal conduct is, among other factors, an acceptance of the
court's punishment. By taking out such an insurance policy, the
company and its director had essentially taken steps to avoid
having to accept most of the legal consequences of their criminal
conduct.
Notwithstanding that the parties had entered early guilty pleas,
his Honour refused a reduction in penalty due to the fact that the
director had sought and been granted an indemnity against the fine.
Industrial Magistrate Lieschke noted, in scathing terms, that it is
not the intention of the criminal law for insurers to indemnify
offenders for fines and penalties imposed for any offences
committed. If indemnity is granted, it is doubtful whether the aims
of the criminal justice system can ever be achieved.
Implications of this case
Insurance policies that indemnify against pecuniary penalties
for breaches of occupational health and safety laws have long been
controversial. It is possible that the legality of such policies
will be reviewed in light of this case.
A consequence of having such cover can be, as it was in this
case, that more substantial penalties are imposed in addition to
penalties that cannot be insured against such as imprisonment or
adverse publicity orders.
Cases round-up
Valid dismissal of designer soliciting clients via
LinkedIn
The Fair Work Commission (Commission) has found
that an interior designer in the ACT was validly dismissed by his
employer after he attempted to actively and deliberately solicit
the employer's clients via LinkedIn in order to set up his own
commercial design business.
Commissioner Deegan accepted that the designer, who was
specifically prohibited under the terms of his employment contract,
from undertaking or providing services that competed with those of
his employer, had breached his employment obligations and engaged
in conduct that amounted to serious misconduct.
Minority rules - Commission refuses to terminate expired
EA
The Commission has rejected an application by an employer to
terminate an expired enterprise agreement despite evidence that
seven of the employer's nine employees had agreed to move to
individual agreements. The two remaining employees had both backed
the Australian Services Union's (ASU) decision to
oppose the application on public interest grounds.
Commissioner Lee ruled that terminating the agreement would not
be against the public interest. However, the legislation also
required him to consider the interests of each employee and not
just the majority.
Although one of the two employees had subsequently withdrawn
their support for the ASU's position, the ninth employee had not.
Commissioner Lee stated that terminating the agreement would
disadvantage this employee and that this weighed against a decision
to terminate the agreement.
New cabin crew union does not fly
The Commission has ruled that a range of communications,
including Facebook 'likes', did not constitute 'expressions of
support of the requisite kind'. Vice President Watson rejected
iCabin Crew Connect's (iCCC) bid to obtain union
registration to represent Virgin Australia's domestic cabin crew.
His Honour also rejected iCCC's decision to exclude Virgin
employees on maternity and long-service leave from its calculation
of the number of eligible employees required to attain 51% cabin
crew support of its registration. iCCC had argued that the
employees were excluded on the basis that they would be difficult
to contact; however, Vice President Watson held the majority
support requirement was based on all eligible employees.
Proportionate response to picketer throwing
projectile
The Commission has found that a decision by a company to
summarily dismiss an employee after an internal investigation found
that the employee throwing a projectile at a car carrying non-union
members through a union picket line was a 'proportionate'
response.
Senior Deputy President Richards held that, on the balance of
probabilities, the employee had thrown a projectile at the car in
breach of the company's charter of conduct. His Honour said the
charter's reference to the requirement to maintain a workplace free
from bullying and harassment also 'extended to freedom of
association matters'.
Privacy Act is not a 'workplace law'
The Federal Circuit Court has ruled that the Privacy
Act 1988 (Cth) (Privacy Act) is not
a 'workplace law' within the meaning of the Fair Work Act
2009 (Cth) (FW Act).
The court considered the Privacy Act in the context of a general
protections claim. The employee argued that her employment had been
terminated because she had exercised a workplace right under the
Privacy Act when she refused to provide a copy of her passport and
electronic signature to a third party engaged by the employer to
conduct pre-employment background checks.
In dismissing her claim, Judge Riley held that the Privacy Act
imposed obligations on prospective employers, which were incidental
to, but which did not 'primarily concern the regulation of the
relation between employers and employees'.
Leave without pay or just leave
The Commission has ruled that an employee who took leave without
pay, rather than resigning, to travel overseas was not unfairly
dismissed when there was no position available for her on her
return.
In rejecting her unfair dismissal application, Deputy President
Gooley accepted the manager's evidence that the employee had been
informed, in accordance with the company's leave without pay
policy, that the availability of her position on her return could
not be guaranteed and that, if the position was not open, she would
not be entitled to a redundancy payment.
Firefighter's mental illness was a 'mitigating
factor'
A full bench of the NSW Industrial Relations Commission has
overturned the finding that the dismissal of a NSW firefighter (who
shoved a colleague against a cupboard in an unprovoked attack) was
not unfair because he suffered from a mental illness at the time of
the incident.
The firefighter and his union had chosen not to rely on the
mental illness, which had not been diagnosed at the time of the
incident, in their response to a workplace investigation. However,
the full bench concluded that the member should have considered
what part the illness played in the firefighter's actions once the
evidence was before her. It found that, in considering the
potential harshness of the dismissal, the member should have taken
mental illness into account as a 'mitigating factor'.
Public holiday work request was reasonable
The Commission has held that a company complied with the FW Act
in rostering workers to work on public holidays, despite union
arguments that the request was not reasonable. In making its
determination, the Commission said there was nothing in the FW Act
to support a proposition that employees can only be requested to
volunteer to work on public holidays or that work on public
holidays is prohibited.
Watch this space
The federal government is supporting an application by the Shop,
Distributive and Allied Employees' Union to vary the General Retail
Industry Award (Award) and abolish lower rates of
pay for 20-year-old retail workers as part of the Commission's
two-year interim review of modern awards. Under the Award, wages
for 20-year-olds are currently 90% of those of adult workers.
However, almost 93% of 20-year-old retail sector workers are
covered by enterprise agreements and are already entitled to a full
adult wage. No decision has yet been handed down by the
Commission.
The federal opposition has promised to cut the regulatory burden
on the Australian economy as part of a plan to boost productivity.
A policy statement, released in early July, commits a coalition
government to achieving cost savings of $1 billion a year by using
a public sector deregulation model developed by the Victorian
government. Under the proposal, model cuts would be achieved
by:
- linking the remuneration and re-appointment of senior federal
public servants to proven reductions in red tape;
- allowing small businesses to make superannuation payments
directly to the ATO, rather than individual superannuation funds;
and
- moving the administration of the paid parental leave scheme
from employers to the Family Assistance Office.