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INFORMATION BULLETINS

INDEX

1st Quarter 2012

 

Social Media Policies

A decision handed down in December by Fair Work Australia has highlighted the need for organisations to have a social media policy in place.  

 

The case involved a former Linfox employee was seeking reinstatement to his position after being terminated for comments made on his Facebook page.  Despite the size of the organisation, Linfox did not have one a social media policy.

 

The employee was terminated after an investigation into certain comments that were made on his Facebook page.  He was a truck driver and had been with Linfox for approximately 22 years and during that time no disciplinary matters had ever addressed with him.  He believed that his postings on his new Facebook account were private.  However, it turned out his Facebook wall was not as private as he believed, and it came to light that various comments, later claimed to be derogatory and offensive in nature, were seen by other employees.  

 

Linfox conducted an investigation and terminated him due to the nature of the comments made. 

 

The Commissioner reinstated the employee and also awarded him compensation for the difference in his pay for the period that he was not employed by Linfox.  

 

While Linfox labelled his actions “serious misconduct” and justification for dismissal, Fair Work Commissioner Michael Roberts likened the employee’s efforts to a conversation in a pub or café between a group of friends letting off steam.

 

During a discussion on the habits of bears, he commented about two other employees, “I admire any creature that has the capacity to rip Nina and Assaf heads off, shit down their throats and then chew up and spit out their lifeless body.”

 

The Commissioner also chastised Linfox for failing to educate staff on the use of social media. The employee says he was unaware of any policy regarding Facebook except for the proviso it should not be used during work hours.

 

Although Linfox argued an employees’ handbook outlined employee obligations, the Commissioner ruled that it was not enough.

 

The lessons for employers are to ensure they have a comprehensive social media policy, tailored to their work place, to rely on in case something like this occurs.  Employers need to be able to demonstrate that the employees are aware of the contents of the social media policy.

 

Award Review Process

All modern awards are about to be reviewed by Fair Work Australia.  Handed down two years ago, it was a requirement that this review occurs and will assess if the awards are ‘operating effectively, without anomalies or technical problems’.

 

Any submissions relating to the review need to be lodged by 8 March 2012.  If any clients are finding difficulties with an award, Ohura Consulting is able to assist with preparation of a submission.

 

Website Update

I am in the process of adding am new page on the Ohura Consulting website to promote some of the clients the company has a relationship with.  This will include your business name and website address.  Please let me know if you would like to also add your logo or alternatively prefer not to be listed.

4th Quarter 2011

 

independent contractor update

Often, you will need to determine whether or not a person you have engaged to perform work for your business is engaged as an employee or an independent contractor.  We addressed in the first Information Bulletin for this year the crackdown by the Fair Work Ombudsman on sham independent contractor arrangements. 

 

The Federal Magistrates Court has recently reinforced the parties' right to choose the basis of an engagement.

 

This generally accepted test to ascertain whether a worker is an independent contractor or an employee is a multi-indicia test.  A key factor pointing towards the person being an independent contractor is that they are providing services in the course of carrying on their own business through their own business names.  A dozen other factors to consider are:

 

• They use an ABN.
• They take out their own personal indemnity insurance.
• They negotiate their own fees.
• They advertise externally such as in newspapers.
• They are registered for GST.
• They have a business banking account.
• They operate a business-based accounting system.
• They develop goodwill (name, brand or reputation) through their work.
• They use their own standard rates and terms and conditions of trade.
• They provide services to a number of different purchasers.
• They employ or sub-contract individuals to perform the work.
• They have their own systems for invoicing and payment, debt collection systems and budgeting.

The Federal Magistrates Court considered a number of factors in relation to the relationship between the employee and the company, including that the employee was paid through invoices and used and serviced his own equipment.  However, despite there being several other aspects of the relationship pointing to an employment relationship, these aspects were considered superficial.

 

The court stated that an employment relationship could not be classified by ‘a mathematical assessment of the various indicia, or the laborious weighing of the detail of the available evidence’.

 

It decided the correct approach is to look at the form and substance of the relationship between the parties and the general weight of the available evidence.  As such, the court placed a greater emphasis on the parties being able to determine the nature of their working relationship and weight should be given that the employee and the company were trying to establish a relationship of principal and independent contractor.

 

Key Lessons for drug and alcohol policies

If an employer wishes to implement drug and alcohol policies and procedures, it is critical to ensure that the policies and procedures are tailored to meet the requirements of their business whilst balancing these requirements against the privacy concerns of employees.

 

At a minimum, employers should ensure that any such policies address the following considerations:

 

·         the method of testing that will be employed (urine testing, saliva testing, breathalyser testing or some other method).

·         how the testing will be administered (random, scheduled or for cause).

·         who will administer the testing (internally or externally).

·         whether the regime will focus on rehabilitation or punishment.

·         the consequences of refusing or failing to submit to a test (taking personal leave and counselling, or discipline).

·         the consequences of breaching the policy (suspension, discipline and/or rehabilitation).

·         the employer’s obligations under specific legislation employers in certain industries, such as mining with specific legislative obligations that apply.

 

A recent decision of Fair Work Australia has highlighted the importance of employers implementing appropriate drug and alcohol policies and testing regimes.  In finding that an employee was unfairly dismissed for a breach of a drug and alcohol policy, Fair Work Australia decided he had not been provided procedural fairness.

 

This decision is yet another reminder that the existence of seemingly compelling grounds for the termination of an employee’s employment does not override the requirement to allow the employee procedural fairness.  

3rd Quarter 2011

 

2011 fair work Australia Increase

 

Clients should be aware that that annual increase to award conditions determined by Fair Work Australia will be effective from the first pay period on or after 1 July 2011.

 

Fair Work Australia's minimum wage panel increased award minimum wages by 3.4%, lifting the Federal weekly minimum wage by $19.40 to $589.30 ($15.51 an hour).

 

Fair Work Australia rejected employer arguments to delay the increase because of recent natural disasters, and said that in the current economic circumstances a "significant increase is appropriate which will improve the real value of award wages and assist the living standards of the low paid".

 

It decided on a percentage increase to address the falling real value of award classification rates at the higher level after a series of flat-dollar increases.

 

This increase will need to be provided to all employees on minimum Federal awards rates and those who have Federal enterprise agreement that tie in award wage increases.

 

Employers who have Federal enterprise agreements that have set wage rates will not need to apply this variation.

 

Updated award rates can be accessed from the Fair Work Australia site www.fwa.gov.au/index.cfm?pagename=awardsamendments

 

national occupational, health and safety laws

New Federal Occupational Health and Safety laws come into effect on 1 January 2012.

 

These will replace the WA Occupational Safety & Health Act 1984 along with all other similar laws in other States.

 

Clients are advised to plan well in advance for the new conditions, however the Regulations containing many of the important changes have yet to be released.

 

One significant amendment relates to the broadened obligations for those conducting a business or responsible for the workplace.  As opposed to just employees under the former legislation there will be an obligation soon to ‘workers’.  Workers are a wider group than employees and include independent contractors and labour hire employees.

 

The new legislation introduces liability for ‘officers’ by creating a positive duty of care to exercise due diligence to ensure that the organisation complies with its statutory obligation.  In practical terms this may mean that officers need to ensure that adequate reporting processes are in place and followed.  They must be proactive in ensuring that the organisations they control have adequately planned for health and safety.  This includes the necessary provision for resources, both human and financial, including of course training.

 

The new penalties are substantial; including corporations now facing a maximum fine of up to $3 million with an individual facing potential fines or imprisonment for a period of up to five years.

 

Clients are advised to review their policies for Occupational Health and Safety.  

2nd Quarter 2011

significant SAFETY BREACHES WAS VALID DISMISSAL REASON 

A full bench of Fair Work Australia has recently confirmed an employer’s right to dismiss an employee for significant safety breaches.  In doing so, the full bench has highlighted the importance of having a valid reason for dismissing an employee.

The employee was engaged as a forklift operator.  The employer conducted an investigation into the employee’s conduct as a result of an alleged breach of safety while the employee was using a forklift.  After the conclusion of the investigation, the employer concluded that the employee had performed an unsafe act by raising the forklift when not properly engaged with a load and placing his arms, head and shoulders under the load.  The company also decided the answers provided by the employee during the investigation process were also inconsistent with those supplied by other employees that had witnessed the incident.

The employer considered the forklift operator’s actions to be grossly negligent and dangerous and he summarily dismissed.  He then made an unfair dismissal application to Fair Work Australia.

Fair Work Australia held that the employee’s actions amounted to serious misconduct in that he caused a serious and imminent risk to the safety of himself and others.  The Commissioner was satisfied that there was a valid reason for the termination of the employee’s employment decided the employee’s actions were not wilful or negligent, and were merely careless, with a failure to properly appreciate the consequences of his actions.  

Fair Work Australia held that the dismissal of the employee was harsh, and ordered that he be reinstated when it took into consideration his length of service, his prior disciplinary history, and the fact that the company did not have a zero tolerance health and safety policy,

On appeal however, a full bench of Fair Work Australia overturned the original decision and held that the employee’s conduct involved deliberate acts and that the characterising of his action as careless did not derogate from the seriousness of his actions, or the possible consequences to himself and other employees.

The full bench stated that ‘the finding of a valid reason is a very important consideration in establishing the fairness, of a termination'.  Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open’.

The full bench found that there were no significant mitigating factors present in the employee’s case, and held that if the employer ‘was entitled to take the action … the need to enforce its safety rules suggests that the resultant termination is not harsh’.

This case confirms the importance of having a valid and defensible reason for dismissing an employee.  It also makes it clear that in circumstances where an employee is being summarily dismissed, and the dismissal is for a valid reason, it is only significant secondary matters which may cause the dismissal to be considered unfair.

 

WHAT IS THE MISCELLANEOUS AWARD 2010?  

 

One of the new modern awards that took effect this last year was the Miscellaneous Award 2010.

The purpose of the award is to cover employees in emerging industries who are not covered by an existing modern award but should be so its coverage is very narrow.

In other words, the Miscellaneous Award is designed to serve as a temporary award, providing basic minimum conditions until an appropriate safety net is made in another modern award for those employees.

If another modern award covers the employee the Miscellaneous Award will not apply.

If the employee in a class of employees who, because of the nature or seniority, have not traditionally been covered by awards (e.g. managerial employees and professional employees such as accountants, legal, human resources and information technology specialists, then the Miscellaneous Award will not apply.

If in doubt, clients are encouraged to contact Ohura Consulting.

 

2011 FAIR WORK AUSTRALIA INCREASE  

Clients should be aware that although Fair Work Australia has yet to be handed down for 2011, as it will be effective 1 July 2011 this will be determined shortly.

1st Quarter 2011

 

 

Crackdown on Sham Contractor Arrangements

 

Clients should be aware that the Fair Work Act 2009 contains penalties for sham independent contract arrangements being entered into.

The Act outlines that if an employer employs (or proposes to employ) an individual they must not represent to the individual that the contract of employment is as an independent contractor.  Section 357 stipulates the only exclusion is if the employer was not reckless and did not know the contract was a contract of employment rather than a contract for services.

There are penalties if an employee is dismissed or threatened with dismissal in order to be engaged as an independent contractor to perform the same, or substantially the same, work under a contract for services. Also, if a person is persuaded or influenced to enter into a contract for services through a false statement by an employer, the Act is breached.  

Applying a contract for service over a contract of service has impact on a wide range of issues, including:  

• Insurance (professional indemnity, public liability and workers compensation);
• Superannuation;
• Taxation;
• Confidentiality;
• Ownership of work and inventions; and
• Control of who performs work.

In a recent matter the Court decided that a manager's unawareness that the contracts could be contracts of employment and that he did not make the decision in a reckless way allowed the organisation to avoid prosecution.

Employers that act with good will and proper intentions when engaging employees might avoid breaching the law, however may still need to defend their actions in Court.

 

Paid Parental Leave Update

 

Employers will continue to responsible for administering paid parental leave payments under the Federal Government's new scheme from 1 July 2011.

Centrelink will administer payments until that date after which employers will receive the money from the Federal Government and pay employees directly as a workplace entitlement.

 

The Federal opposition has failed in its second attempt recently by a single vote in the House of Representatives at making Centrelink’s Family Assistance Office carry out this role permanently. 

 

As a consequence, clients needed to have processes in place by the middle of the year to administer this payment.  Additional information on the scheme can be obtained from www.familyassist.gov.au.

 

4th Quarter 2010

 

 

When Casuals Can Apply for Unfair Dismissal Claims

 

Fair Work Australia has clarified the circumstances in which casual employees can qualify for protection from unfair dismissal under the Fair Work Act 2009 (‘Act’).

 

The Act as with the Workplace Relations Act 1996 continues to exclude from unfair dismissal jurisdiction those employed for a specified period of time or task or those on a training contract.  However, the Act no longer specifically excludes casual employees engaged for a short period and the six month minimum employment period for regular and systematic casuals is the same as for all other employees.

 

As a result a casual employee can have the same access unfair dismissal remedy as a full-time or part-time person.  There is now no need to prove that the employee is or is not a casual.

 

Section 4 of the Act defines long term casuals and retains the two essential tests found in the Workplace Relations Act 1996 – a sequence of periods of employment of 12 months and a regular and systematic basis:

“long term casual employee: a national system employee of a national system employer is a long term casual employee at a particular time if, at that time:

(a) the employee is a casual employee; and

(b) the employee has been employed by the employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months.”

 

For unfair dismissal claims the Act now requires that, “during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis (Section 384(2)(a)(ii)).”

 

The focus on the reasonable expectation of continuing employment is not now about the expectation at the point of termination as previously but about the expectation during employment.  The clear intention is to exclude from jurisdiction only those employed on an itinerant, occasional, non-systematic, or irregular basis.

 

As it is the employment which must be on a regular and systematic basis this does not mean that the hours or days of work must be regular and systematic.  The set of facts in each case must be examined and that, if the number of hours worked is small and the gaps between days and times worked is long and irregular this means that there needs to be other evidence that the employment of a casual is regular and systematic for the person to prove jurisidction. Conversely, if there is a clear pattern or a roster for the hours and days worked then this would be strong evidence of regular and systematic employment.

 

Contractors Now Less Attractive

 

The Fair Work Act 2009 and a recent Federal Magistrates Court case have made engaging contractors less attractive than it used to be.  Previously, people engaged contractors because it avoided much of the risk that they had with employees, whereas now it is arguable that contractors bear the same, if not more risk, in some circumstances.

 

Ohura Consulting reminds clients to take care in the way they engage contractors and ensure not only that there is proper documentation in place, but also that the relationship reflects what is in the documentation.

 

Clients need to consider the following factors within contracts:

 

1. The freedom of the contractor to perform work for other organisations;
2. This organisation is responsible for the provision of tools and equipment;
3. Insurance cover, superannuation and taxation is the responsibility of each organisation;
4. Whether the independent contractor is incorporated;
5. That the relationship is one of principal and independent contractor; and
6. Termination of the contract generally would include a provision that gives the contractor the ability to remedy any breach before the contract is terminated.

 

You can call someone a contractor and have an agreement that says they are a contractor, but you have to also treat them as a contractor, otherwise there's always scope for the court to look around what the contract says and regard them as an employee.  This would allow a person to proceed with an unfair dismissal claim or for unpaid annual leave and long service leave.  An adverse action claim can also be made by contractors under the Fair Work Act 2009.

 

In a recent matter involving the Independent Contractors Act 2007 a principal varied the contractor agreements it had in place with various truck drivers without consultation, requiring them to upgrade their trucks or face their agreements being terminated.  The Court decided that these provisions were unfair because the drivers were not compensated and ordered the principal to pay damages.

 

The Act allows both individual and incorporated independent contractors (with some exceptions) to bring a claim alleging that a contract is unfair and/or harsh.  In reviewing the particular contract, the court will consider factors that include the bargaining power of the parties, whether there was any undue influence, pressure or unfair tactics used against the contractor, and whether the contract provides for total remuneration that is less than would be earned by an employee performing similar work.

   

3rd Quarter 2010

 

Resignation Valid Despite Given in Distress

 

A decision of Fair Work Australia has reinforced the employer was right to accept an employee’s termination after she stormed out claiming her resignation to many witnesses.  The employee of a Brisbane Airport security company lost her unfair dismissal claim.

 

The resignation came after the employee was charged by the Australian Federal Police for breaching security procedures after she left her screening post with a bottle of perfume confiscated from a passenger.

 

According to witnesses the employee was in a distressed state as she told managers she wanted to resign and continued to express her intentions as she stormed off to empty her locker.  According to managers when asked to return the next day for a disciplinary meeting, the employee replied, “no, I won't be. Thank you very much. Goodbye”.  In which the manager replied “just sleep it off”.

 

A week after the incident the employee returned to work, providing medical certificates explaining her absence, and went about her business as though she had not resigned.

 

The employer dismissed the employee with the understanding that she had resigned on the 23rd November and this was the termination of her employment.

 

In response the employee launched an unfair dismissal claim as she believed she was in a depressive state and thought she was doing the right thing by her employer by taking some time off to get over the incident.

 

Before Fair Work Australia, the employee argued she had not resigned, and that her supervisor had made comments that she should take time off to get over the incident, but this was denied by the employer. The employee also gave evidence that she suffered from depression - a condition the employer was not aware of - and that this had been a factor in her behaviour that day.  Complicating the issue was that the employee had asked her supervisor that morning if she could have a week's leave.  The supervisor had verbally said she could if she completed an annual leave form which she failed to fill out.

 

Senior Deputy President Peter Richards found that the employee had quit her job, and further that the employer was entitled to hold her to the resignation.  He said, “…it appears to me that where an employee in an emotional state (which is evidenced), resigns his or her employment and departs the workplace, and has not otherwise acted in a way that has been destructive of the employment relationship, then there may be a duty upon the employer to review the employee’s employment status, if, within a reasonable period of time, the employee re-engages the employer in a positive manner.”

 

“Where there are reasonable grounds known by the employer that the employee was suffering from an medical illness or psychological condition and had resigned his or her employment in a moment of emotional intensity (barring any other circumstances) there might be reasonable grounds for the employer to assume a duty to enquire into the employees status at its own initiative in the period following the resignation before accepting the resignation (or accepting, arguably, the repudiation of the employment contract).”

 

In this case, however, the employer did not know of the employee's condition, nor had it sought to pressure or persuade the employee to resign against her better judgement.

 

The Deputy President determined the employer had made genuine endeavours to persuade the employee to desist from her course of action, but despite passing through various emotional states, she remained adamant she was resigning.  The employee had also gone on annual leave without complying with the administrative steps required by the employer of completing an annual leave form.  He decided it was therefore not open to the employee to argue she had simply gone on annual leave, particularly since she had dismissed the employer's request to attend a disciplinary meeting the following day. As a result, he said, the positive duty to clarify the employment status of the employee falls at the feet of the employee and not the employer, in the circumstantial matrix of this case.  "Despite the [employee's] state of mind, and her apparent medical history, I cannot find that she was so disconnected from social (or workplace) reality or otherwise so profoundly disempowered (noting her contact with her union immediately as she left work) that she bears no obligation to her employer to seek to remedy, or at least repair, her relationship with her employer at her own initiative," Deputy President Richards said.

 

Deputy President Richards ruled that the employee was not dismissed from her job, but resigned, and as a result that the tribunal did not have the jurisdiction to hear her unfair dismissal claim.

 

Instant (Summary) Dismissal Principles

 

If you dismiss an employee immediately and without making any payment in lieu of notice, you will dismiss them summarily.  Generally, summary dismissal is only acceptable if an employee has committed gross or serious misconduct that goes to the core of the ‘employment contract’.

 

If you dismiss an employee summarily in circumstances where the employee has not committed serious misconduct, you might expose yourself to an unfair dismissal claim.

 

That is why employers are often wise to reduce the risk of an unfair dismissal claim by paying the employee in lieu of their notice entitlement.

 

Fair Work Australia determined in a recent case that a dismissal could be considered fair if:

• a valid reason existed for termination and the reasons relied on by the employer were sound, defensible and well founded; and
• the employer had taken reasonable steps to investigate the allegations of misconduct and given the employee a fair chance of answering them.

 

However, Fair Work Australia also found that the dismissal could be considered unfair if the reasons for termination involved a combination of performance and conduct issues, which fell short of serious misconduct.  Therefore, the employer should counsel and warn the employee before dismissing them.

 

In this situation if the employer had simply paid the employee his notice entitlement instead of dismissing him summarily, they would have successfully defended the claim.

 

2nd Quarter 2010

 

Fair Work Australia 2010 Wage Decision

 

In its first minimum rates determination, Fair Work Australia has decided on an increase of $26 in all modern award minimum weekly wages. There will be proportionate increases in hourly minimum wages and annual salaries. This means that the national minimum wage in the national minimum wage order will be $569.90 per week or $15 per hour. This increase comes into operation on 1 July 2010 and also applies to all modern awards.

 

The union movement, in its submission to Fair Work Australia, had sought an increase of $27 per week.  It argued that Australia ’s low paid workers had not received an increase for the past two years and it was time that they also benefited from the improving economy.  The Australian Chamber of Commerce and other employer bodies argued that the economy could not support an increase of more than $12.50 per week.

 

In making this decision, Fair Work Australia expressed the view that ‘there was a strong case to increase the minimum wage to provide a fair and relevant safety net to protect the relevant living standards of award-reliant employees and assist the low paid in their needs’.

 

Paid Parental Leave

 

The Federal Government’s Paid Parental Leave Scheme: Supporting Working Australian Families Bill is expected to be introduced to Federal Parliament in the next few months and if passed will become effective on 1 January 2011 .

 

The Bill proposes that new parents, who are the primary carers of a child born or adopted on or after 1 January 2011, will receive up to 18 weeks paid parental leave (PPL) at the current federal minimum wage of $543.78.

 

The proposal is that the paid leave will be movable so that the primary carer can take the leave anytime within the first 12 months after the birth or arrival of the child.

 

The conditions that need to be met for a primary carer to receive this payment are the primary carer (usually the mother) must be in paid work and have:

 

• been engaged in work continuously for at least 10 of the 13 months prior to the expected birth or adoption of the child;
• not have worked between the date of birth or adoption of the child and their nominated start date for paid parental leave; and
• undertaken at least 330 hours of paid work in the 10 month period (an average of around one day of paid work a week).

 

An income test of $150,000 will apply based on the primary carer’s adjusted taxable income in the previous financial year prior to the date of birth or adoption of the child or the date of their claim, whichever is earlier.

 

Parents will be able to apply for PPL prior to the birth or adoption of their child, around the same time as they are making their leave arrangements with their employer.  Application for PPL will be through the Family Assistance Office.  Parents will be required to provide sufficient evidence to demonstrate their eligibility, including work history.

 

Parents who claim PPL must receive their PPL payments through their employer where they are eligible to do so.  Employers will make payments only to employees who have 12 months continuous service prior to the date of birth or adoption.  Other parents who claim PPL will receive their payments directly from the Family Assistance Office.

 

Where an employee is eligible to receive PPL payments direct from their employer, it is planned that the employer will claim the wages in advance of the entitlement so they are not out of pocket and will then pay the employee as the entitlements falls due.  The employer will not be required to pay superannuation on the paid parental leave.  Other entitlements like annual leave, personal leave and long service leave will not accrue during the period of paid parental leave.

 

An employee will be able to choose the Baby Bonus or Paid Parental Leave and can make that decision based on their own personal circumstances.

 

Employers should review any paid parental leave schemes they have in place to ensure that they accommodate the Federal Governments proposed payments.

 

1st Quarter 2010

 

Fair Work System Starts

 

The Rudd Government's Fair Work system began on January 1, signalling implementation of the country's first national scheme (except for WA).

 

As we get back to business after the Christmas Break, employers are reminded that the 10 National Employment Standards (NES) and all modern awards are now in place.

 

The Fair Work Act 2009 contains provisions overhauling the current unfair dismissal, enterprise bargaining provisions, right of entry laws as well as settings out the mechanism for the establishment of Fair Work Australia - the department which is designed to deal with most issues relating to the employment relationship.  A summary of the Act is below.

 

Unfair Dismissal

 

The exemption from claims of unfair termination for employers with less than 100 employees has been reduced to employers with 15 employees or less.

 

The six month qualifying period remains with a new 12 month qualifying period applying to small business employers (businesses employing 15 or less employees).

 

The exclusion of claims when the termination is due to operational reasons has been removed.

 

Enterprise Bargaining

 

There will no longer be a differentiation between union and non union agreements.  Unions will be able to apply to be a party to any agreement when they have a member and can represent that member.

 

Enterprise agreements must include a consultation clause to apply if the employer is proposing major changes in the workplace.

 

Parties will be compelled to bargain in good faith.  This may include requiring parties to meet, disclose information, consider and respond to proposals and refrain from capricious conduct that undermines freedom of association or collective bargaining.  However, parties will not be required to make concessions or sign agreements they do not support.

Replacing the No Disadvantage test is the Better Off Overall test or BOOT as it is being referred to.  The BOOT will be applied to agreements lodged by Fair Work Australia.  The BOOT retains a global test of the new instrument against the award, so employers and employees can agree to a reduction in one condition in exchange for a better improvement in others.

 

Right of Entry

 

The Fair Work Act 2009 gives unions far broader entry rights allowing union officials to enter premises to investigate suspected breaches of the Fair Work Act such as the National Employment Standards or a work instrument such as a modern award, enterprise agreement, workplace determination or Fair Work Australia order.  They will be able to look at personal records of all employees relevant to the suspected breach, including non union members.

 

They can also enter premises to hold discussions with members or potential members and to exercise rights under State or Territory occupational, health and safety laws.

 

Officials must hold an entry permit obtained from Fair Work Australia.  The permits are valid for up to three years.

 

Twenty four hours notice will still need to be given by the union of its intention to enter the workplace.

 

National Employment Standards

 

Ten minimum employee entitlements apply to all employees:

 

• ·         Maximum weekly hours of work
• ·         Request for flexible working arrangements
• ·         Parental leave and related entitlements
• ·         Annual leave
• ·         Personal/Carer’s leave and compassionate leave
• ·         Community service leave
• ·         Long service leave
• ·         Public holidays
• ·         Notice of termination and redundancy pay
• ·         Fair Work Information Statement

 

Modern Awards

 

Award modernisation involved the Australian Industrial Relations Commission reviewing all of the multiple employer federal awards as well as many state awards operating in the national industrial system as Notional Agreements Preserving State Awards. 

 

Modern Awards will not cover employees earning over $108,300 per annum, providing for limited opportunity for individual (flexible) agreements through common law contracts.

 

These awards are now in place and have replaced all previous Federal awards.

 

4th Quarter 2009

TOPICS

 

Translating to the new Modern Awards

 

The Australian Industrial Relations Commission last week published the last group of modern awards under the award modernisation process.  The award modernisation process which began in March 2008 has resulted in 1560 Federal and State awards being reduced to just 122.  Each award developed through this process will take effect from 1 January 2010 .

 

Employers should be prepared for the changes to employment conditions brought about by the new awards.  Some of these will be contained in the 10 National Employment Standards (NES) that underpin all employment conditions of employee within the Federal workplace relations system.

 

Firstly, this will involve reviewing the scope and classifications of employees covered by modern awards.  The coverage and definitions within modern awards differ from current documents.

 

Employers should also check for any gaps between the award and existing conditions of employment as contracts of employment and policies are likely to need to be updated to ensure that award and National Employment Standards conditions are not being breached.

 

There is the scope in every modern award to make an individual flexibility agreement and override certain award matters (such as overtime, penalty rates, hours of work, allowances and leave loading).  There are though restrictive conditions which apply to individual flexibility arrangements.  Some modern awards also provide for scope to offset certain award entitlements under an annualised salary arrangement.  Again, it would be wise to prepare draft contracts for employees which are complaint with the fairly rigorous award prescriptions to achieve this

 

Be aware that it will be an obligation to make the award accessible at the workplace in many awards. Failure to do so could result in a penalty for breach.

 

Fair Work Information Statement Released

 

From 1 January 2010, all employers covered by the national workplace relations system have an obligation to give each new employee a Fair Work Information Statement (Statement) before, or as soon as possible after, the employee starts employment.

 

The right for new employees to receive the Statement is one of 10 minimum standards in the National Employment Standards that apply to employment of employees.  Together with modern awards, the NES provides a new safety net for employees covered by the national workplace relations system from 1 January 2010.

 

The Statement contains information about:

 

• the National Employment Standards (NES)
• the effect on an employee’s NES entitlements when there is a transfer of business
• modern awards
• agreement making under the Fair Work Act 2009
• individual flexibility arrangements
• the right to freedom of association
• termination of employment
• right of entry (including the protection of personal information by privacy laws)
• the role of the Fair Work Ombudsman and Fair Work Australia

 

The Fair Work Regulations has set out a number of ways employers can legitimately provide the statement to employees:

 

• giving it to the employee in person;
• mailing it to the employee's home by pre-paid post;
• emailing to the employee's work or other nominated email a link to the page on the Fair Work Ombudsman's website where the statement is located, or a direct link to the statement on the employer's website; or
• faxing it to the employee's work or home number

 

Whatever method is used to give the Statement to an employee, it is recommended that the employer retain details of how the Statement was given.

 

If the employer employs the same employee more than once in any 12 months and gave the Statement to the employee commencing employment the first time, then there is no requirement to give the Statement more than once in any 12 months.

 

Any employer who does not give the Statement to a new employee before, or as soon as possible after the employee starts employment, is contravening the terms of the NES.  There are significant penalties for failing to give a Statement to a new employee and we recommend each Local Government comply with this requirement.

 

Download the Statement:

 Fair Work Information Statement - pdf 433KB

 Fair Work Information Statement - 458KB

 

3rd Quarter 2009

 

TOPICS

 

Employee Representation for Enterprise Agreements

 

Under section 173 of the Fair Work Act 2009 an employer that will be covered by a proposed enterprise agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who will be covered by the agreement; and is employed at the notification time for the agreement.

 

Under the provision, an employer has to take all reasonable steps to notify their employees of their right to be represented in bargaining, as soon as practical and no later than 14 days after the notification time for the agreement.  The Act contains a model notice which is available through Ohura Consulting.

 

With an increased focus on process, businesses will need to familiarise themselves with the agreement making process from start to finish to avoid a costly delay in having their agreements approved by Fair Work Australia.

 

Good Faith Bargaining Principles

 

A component of the recent Federal workplace relations changes has been the introduction of good faith bargaining between parties when negotiating enterprise agreements.

 

Ohura Consulting consider that, if used correctly, these guidelines will offer more benefits than disadvantages to businesses.  However, a number of Western Australian employers have received letters from unions informing them that bargaining has commenced and setting out their purported legal obligations under the Fair Work Act 2009.

 

Two different issues have emerged from these early bargaining letters.  The first is that the union is seeking to lock employers into bargaining according to rules set by the union.  Generally, the union bargaining principles set out in the letters largely reflect the good faith bargaining rules in the Act, including obligations on both parties to genuinely try to reach agreement, meet at reasonable times, respond to each other's proposals and refrain from capricious conduct.  We believe that several of the principles though overstep the requirements of the Act and would potentially impose additional duties on employers during bargaining.

 

This includes:

• Disclosing all relevant information in a timely manner, with no exemption for confidential or commercially sensitive information;
• A commitment by the employer to maintain the status quo in the workplace, and not alter the pay and conditions of employees nor make any individual or collective offers to the workforce;
• The employer allowing the union to enter the workplace and meet with employees at reasonable times, to make reasonable use of the employer's equipment (including photocopiers, noticeboards and email systems), and not interfere with employees' rights to speak to the union;
• Fair Work Australia deciding the matter in dispute if the parties become deadlocked;
• Agreement by parties that a breach of the principles entitles the other party to remedies under the Fair Work Australia and the common law;
• Agreement by the employer that the union's members are intended to be a beneficiary of the agreement and that the union can enforce it on their behalf.

 

The other issue that has emerged from the early bargaining letters is whether the information requested by unions under s.228(1)(b) of the Act is relevant, whether it's confidential or commercially sensitive, who can have access to it and the purpose to which the information can be put.

 

The information requested under the guise of under s.228(1)(b) includes:

• The latest consolidated financial accounts for the business (and all related entities);
• A breakdown of the wage and salary portion of the consolidated financial accounts from the business over the duration of the last enterprise bargaining agreement entered between [the company] and the union - including wage and salary earners and specification of the proportions paid to executive and non-executive employees;
• The budget for the business over the next four years;
• A breakdown of the wage and salary portion of that projected budget, including wage and salary earners and including specification of the proportions projected for executive and non-executive employees;
• Any proposals for changes to the way the business operates (including restructures, redundancies, outsourcing or in-sourcing plans) in the next four years;
• Any proposals for changes in the ownership or management of the business in the next five years; and
• Any information on the financial position of the competitors of the business.

Although in some circumstances the union may have a legitimate claim for such information, businesses should demonstrate caution before releasing information that may not be relevant to bargaining or commercially sensitive as this can be a is subject to debate.

 

Ohura Consulting recommend clients should seek advice and examine the union principles closely before deciding whether the request is reasonable.

2nd Quarter 2009

TOPIC

   

Fair Work ACT ONE WEEK AWAY

 

Employers have one week left to take advantage of the current employer friendly workplace relations legislation.

 

As of 1 July 2009 not only will conditions relating to enterprise bargaining agreements and union right of entry change but so will the employees excluded from unfair dismissal claims.

 

The Australian Industrial Relations Commission has to date issued nearly 100 modern awards as part of the award modernisation process with more to come in the next few months.  These cover a broad range of industries and occupations and, from 1 January 2010 , will cover most Australian employees who are on guaranteed remuneration under $100,000 per annum.

 

These modern awards typically prescribe common terms and conditions of employment for specific industries or occupations including a variety of penalty rates and loadings for overtime, evening and morning work, weekend and holiday work and a number of allowances.

 

As a result, employers generally need to review both their operational and contractual arrangements in the context of these changes to minimize cost implications.

 

With the release of the Federal Government's 142-page Fair Work Act Regulations, the final pieces of the legislation have been completed.

 

The Regulations set out the requirements for the keeping of records and the content of pay slips, as from 1 July.

 

The Fair Work Regulations also deal with:

• how employees should be notified of their representational rights when an employer commences negotiations for an enterprise bargaining agreement;
• the model individual flexibility, consultation and dispute resolution terms for enterprise  bargaining agreements;
• the methods by which employers can give employees the Fair Work Information Statement (personally, by post, email or fax);  
• the extent to which State and Territory laws on training or child labour apply to national system employers; and
• For Fair Work Australia inspectors to issue infringement notices as an alternative to court proceedings for certain types of non-compliance.

The formula for calculating the new high-income threshold, employers' record-keeping obligations and the method for deducting pay for partial work bans are all set out in the Regulations.

Ohura Consulting are available to provide presentations to clients on the main features of the new legislation, specifically the significant impact of award modernisation will have.   

1st Quarter 2009

TOPIC

   

Amended Fair Work Bill Passes the Senate

 

The Federal Government's Fair Work Bill 2008 was passed by the Senate on 20 March 2009 after the Government reached an agreement meaning its unfair dismissal and bargaining rules will apply from 1 July 2009 , while the modern awards system and the National Employment Standards will take effect from 1 January 2010 .

Key amendments that have been made to the Fair Work Bill (as explained in detail in Information Bulletin 18 in November 2008) include:

• include ensuring agreements are made with unions only where the union represents the majority of employees and where those agreements are in the public interest;
• the better off overall test can be assessed on a class of employee rather than an individual;
• not all relevant unions must sign an agreement, but the union(s) covered by the agreement must be entitled to represent the majority of the employees;
• a union official can only obtain a document such as an employee record if it is directly relevant to a suspected breach and makes it clear that an employer need not hand over a document if it would breach a state or federal law in doing so;
• a permit holder wishing to access records of employees who are not union members must apply to Fair Work Australia;
• the use of any documents or records obtained for purposes outside of investigating the breach or other limited purposes will be illegal, and;
• unfair dismissals. Time limits for lodging unfair dismissal claims have been extended from seven days after the date of the dismissal to 14 days.

Employers should get ready to deal with trade union requests to disclose company information - and determine what they can keep confidential as the Bill requires all parties involved in a workplace bargaining process to:

• attend and participate in meetings at "reasonable times";
• respond to proposals made by other bargaining representatives in a timely manner, and provide considered reasons for those responses; and
• disclose relevant, non-confidential information upon request. 

Additional information on the changes to workplace relation laws will be provided when the associated regulations are released.  Ohura Consulting are also available to provide presentations to clients on the main features of the pending legislation.  

 

November 2008

TOPIC

 

FAIR WORK BILL ENTERS PARLIAMENT

 

The Fair Work Bill 2008 was introduced into Federal Parliament by the Government last week providing the future conditions for workplace relations from July next year.

The Bill is a complete replacement of the Workplace Relations Act 1996 and is a reaction to the Howard Government’s WorkChoices legislation introduced in 2006.  Information sessions on the changes will be available from Ohura Consulting in the new year.

The Bill is a windfall for unions, handing unions a greater role in the workplace at the expense of workplace flexibility and employee privacy.

The Bill contains provisions overhauling the current unfair dismissal, enterprise bargaining provisions, right of entry laws, National Employment Standards as well as settings out the mechanism for the establishment of Fair Work Australia - the department which is designed to deal with most issues relating to the employment relationship.

Unfair Dismissal

The exemption from claims of unfair termination for employers with less than 100 employees has been reduced to employers with 15 employees or less.

The six month qualifying period remains with a new 12 month qualifying period applying to small business employers (businesses employing 15 or less employees).

The exclusion of claims when the termination is due to operational reasons has been removed.

The 21 day time limit for unfair dismissal applications has been reduced to 7 days with a 60 day time limit for certain applications alleging unlawful dismissal being introduced.

Enterprise Bargaining

There will no longer be a differentiation between union and non union agreements.  Unions will be able to apply to be a party to any agreement when they have a member and can represent that member.

Enterprise agreements must include a consultation clause to apply if the employer is proposing major changes in the workplace.  Workplace agreements are now being referred to as enterprise agreements again.

There is a step back to multi employer bargaining where the employers have a common interest.  

Fair Work Australia can have a facilitation role in the bargaining for employees in low paid industries to bargain together.  

Parties will be compelled to bargain in good faith.  This may include requiring parties to meet, disclose information, consider and respond to proposals and refrain from capricious conduct that undermines freedom of association or collective bargaining.  However, parties will not be required to make concessions or sign agreements they do not support.

Fair Work Australia can intervene if the parties are not “bargaining in good faith” and can arbitrate if the parties request this.  Fair Work Australia will be able to impose fines for breaches of good faith bargaining, and where there is a serious or persistent breach, Fair Work Australia may make a determination.

The Bill provides, as flagged, for the axing of the WorkChoices "prohibited content" rules and the return of the requirement that "substantive terms" to be included in agreements pertain to the employment relationship.

General prohibitions on engaging labour hire workers, contractors or casuals would be outlawed, as would provisions requiring an employee or employer covered by an agreement to donate to a political party or charity, or clauses requiring employers to engage or not engage clients, customers or clients who agreed to commit to certain employment, ethical or environmental standards (unless the provision directly related to employees' job security).

Union right of entry is not listed, despite speculation before today that unions would be able to bargain for enhanced rights.

The concept of formal bargaining periods was gone - parties no longer had to be within a bargaining period to take protected industrial action.

The Better off Overall Test – the BOOT

Replacing the No Disadvantage test is the Better Off Overall test or BOOT as it is being referred to.

The BOOT will be applied to agreements lodged by Fair Work Australia in much the same way the No Disadvantage test was applied by the overstretched Workplace Authority.

Fair Work Australia may approve a proposed collective agreement only if it would leave each employee better off overall compared to the relevant award under the new test.

The BOOT retains a global test of the new instrument against the award, so employers and employees can agree to a reduction in one condition in exchange for a better improvement in others.  The often inexact nature of the trade-off required in those situations is likely to mean that, in practice, delivering a better result overall will result in a stronger outcome for the employee than under the No Disadvantage test.

The current significant delays while the Workplace Authority is satisfied that no employee will be disadvantaged by the agreement will be likely to continue as every classification and roster arrangement is assessed.

Right of Entry

The Fair Work Bill 2008 gives unions far broader entry rights than they had under WorkChoices. 

The Bill allows union officials to enter premises to investigate suspected breaches of the Fair Work Bill such as the National Employment Standards or a work instrument such as a modern award, enterprise agreement, workplace determination or Fair Work Australia order.

They will be able to look at personal records of all employees relevant to the suspected breach, including non union members. 

They can also enter premises to hold discussions with members or potential members and to exercise rights under State or Territory OHS laws.

Officials must hold an entry permit obtained from Fair Work Australia. The permits are valid for up to three years.

Twenty four hours notice will still need to be given by the union of its intention to enter the workplace.

Modern Awards

Award modernisation involves the Australian Industrial Relations Commission reviewing all of the multiple employer federal awards as well as many state awards operating in the national industrial system as Notional Agreements Preserving State Awards.  Firstly, the Australian Industrial Relations Commission is to complete award modernisation in priority industries and occupations by 31 December 2008 and all other awards by 31 December 2009 .

Modern Awards will not cover employees earning over $100,000 per annum, providing for limited opportunity for individual (flexible) agreements through common law contracts.

The Australian Industrial Relations Commission will also create a modern award to cover non-managerial employees in award-free frontier industries and occupations.

 

National Employment Standards

Ten minimum employee entitlements will apply from 1 January 2010 these will replace the existing Australian Fair Pay and Conditions Standard, under which there are five minimum employee entitlements.  

 

The National Employment Standards provide 10 minimum conditions, an increase of five:

•         Maximum weekly hours of work
•         Request for flexible working arrangements
•         Parental leave and related entitlements
•         Annual leave
•         Personal/Carer’s leave and compassionate leave
•         Community service leave
•         Long service leave
•         Public holidays
•         Notice of termination and redundancy pay
•         Fair Work Information Statement

Fair Work Australia

Fair Work Australia will replace the separate bodies that currently administer the Workplace Relations Act 1996.  It will have an alarming array of powers to resolve disputes arising under the Fair Work Bill including conciliation, mediation, compulsory conferences and power to inform itself about the circumstances and make recommendations.  It will also be able to make binding decisions in respect of unfair dismissal.  The new Bill provides that one party alone may request Fair Work Australia’s involvement. 

 

The Fair Work Bill 2008 will commence on 1 July 2009 , following passage through Parliament, with the National Employment Standards and modern awards commencing on 1 January 2010 .

 

October 2008

TOPIC

 

 

Minimum Wage Increase Reminder

 

As reported in the July Information Bulletin, on 8 July this year the Australian Fair Pay Commission announced an increase to the standard Federal Minimum Wage of $21.66 per week in its 2008 general Wage-Setting Decision.

 

The increase takes effect from the first pay period on or after October 1, 2008 and applies to each Federal award.

 

From the first pay period on or after 1 October 2008 the Federal Minimum Wage increases to $14.31 per hour or $543.78 per week.

 

Businesses will need to pay the $21.66 per week increase to all employees on the Federal Minimum Wage and to all employees earning adult rates of pay in Australian Pay and Classification Scales.  The increase flows on to junior employees, employees in training arrangements, employees with a disability, casuals and piece rate employees.

 

Please contact Ohura Consulting for any pay scale summaries.  The Australian Fair Pay Commission's next decision will be announced in July 2009.

 

Small Business Guidelines for Unfair Dismissal Claims

 

The Federal Government has released further details of its proposed workplace relations system including a Fair Dismissal Code to apply to small business employers with fewer than 15 employees.  Each full time, part time and long term casual employee will count as one employee. A long term casual employee is one who has been employed on a regular and systematic basis for at least 12 months.

 

Small business employees cannot make a claim for unfair dismissal in the first 12 months following their engagement. If an employee is dismissed after this period and the employer follows the Code then the dismissal will be deemed to be fair.

 

The Code sets out the circumstances in which a summary dismissal (a dismissal without notice or warning) is warranted, including cases of theft, fraud and violence.

 

For under-performing employees, the Code requires the employer to give the employee a valid reason, based on the employee’s conduct or capacity to do the job, why the employee is at risk of being dismissed and a reasonable chance to rectify the problem.

 

Employees who have been dismissed because of a business downturn or their position is no longer needed cannot bring a claim for unfair dismissal provided the redundancy is genuine (re-filling the position with a new employee will not be regarded as a genuine redundancy).

 

It is fair for the employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify summary dismissal.  Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures.  For a dismissal to be deemed fair it will be sufficient, but not essential, that an allegation of theft, fraud or violence was reported to the police.

 

The Code is accompanied by a three page checklist for small business employers to fill in and keep in case of a future unfair dismissal claim.  It will not be a requirement of the Code that the checklist be completed.  However, completing the checklist is likely to benefit the employer if it later faces a claim.

 

The new unfair dismissal system will operate from 1 July 2009 with unfair dismissal claims must normally be lodged with Fair Work Australia within seven days.

September 2008

TOPIC

 

Drug Testing a Health and Safety Matter

 

A threat by a Rio Tinto group company to stand down employees if they refused to undergo urine tests for drugs and alcohol wasn’t industrial action, because it was motivated by the employer’s desire to comply with occupational health and safety obligations under New South Wales laws, an Australian Industrial Relations Commission (AIRC) full bench has found.

 

The AIRC rejected an appeal by the CFMEU (mining and energy division) an earlier Commissioner’s refusal to grant an order against the alleged industrial action by the employer.

 

In about November 2005 a dispute arose between the CFMEU and the Company over the implementation of a new Alcohol and Other Drugs Policy at the Company’s Mount Thorley coal mine.  The dispute centred on the method of drug screening to be used at the mine.  Prior to that time, the Company had used saliva screening tests but decided, as part of the implementation of the new Policy, to move to urine screening tests for drugs other than alcohol.

 

The CFMEU maintained that the testing method of being watched and required to urinate into a vial is “offensive and undignified”.

 

The company and union resolved the dispute in early 2006 by agreeing that the employees would continue to undergo the urine tests until an Australian Standard was developed for saliva testing.

 

An Australian Standard for saliva testing, AS4760-2006, was published on 1 November 2006 .  Thereafter, from time to time, the CFMEU raised the issue in meetings and required the Company to honour the Agreement and implement saliva testing in place of urine testing.  The Company resisted a move away from urine testing. And on 16 May 2008 the CFMEU wrote to the Company demanding that it honour its obligation under the Agreement and gave the Company until 14 May 2008 to finalise implementation of saliva testing.  The letter noted that employees would refuse to submit to urine testing after 14 May 2008 but would submit to saliva testing.

 

Matters came to a head when management informed employees at tool box meetings on 9 May 2008 and 14 May 2008 that any employee who refused a urine test required in accordance with the Policy would be stood down without pay, such refusal being treated as a positive test result.

Under the Policy multiple refusals can lead to termination of employment.

 

The CFMEU then filed an application seeking orders against the Company that this constituted industrial action.  The CFMEU contended that the threat to stand down without pay employees who refuse a urine screening test was a threat of unlawful industrial action in the form of a lockout.

 

It was common ground that the Company was required by state regulations to have an Alcohol and Drug Policy.  Section 8 of the NSW OHS Act imposed a non-delegable duty to ensure their employees’ safety, with any breaches a criminal offence.  

 

It was also common ground that an effective Alcohol and Drug Policy was essential to maintaining safety at the mine.  It was recognised the risk posed by operators of heavy plant being impaired by alcohol or drugs whilst operating that plant was very great and that such conduct must be prevented.  The Commission deemed random screening tests for alcohol and drugs may legitimately form part of a policy to maintain proper safety standards in this regard.

 

In this case the evidence before the Commissioner established that the position adopted by the Company was motivated by the Company’s concern to maximise safety at the mine and to comply with its statutory duties in relation to safety and not for the purpose of applying pressure to the union to accede to industrial demands or claims made by the Company.  The expert advice received by the Company, conveyed to employees, indicated that saliva screening tests were less reliable than urine screening tests and, significantly, produced a material level of ‘false negatives’ when compared to urine screening tests.

 

The AIRC rejected the union’s application.

August 2008

TOPIC

 

Rio Tinto Aluminium ( Bell Bay ) has been ordered to reinstate a sacked aluminium smelter process controller, after the Australian Industrial Relation Commission (AIRC) found that dismissing him wasn't justified.

 

The employee, Mr Bumford was employed as a process controller at the Bell Bay aluminium smelter located near George Town in northern Tasmania .  He was engaged in the carbon baking plant and was terminated because he walked under a suspended load, allegedly in breach of the company’s safety policy and procedure. 

 

There was no dispute that he walked under a manifold used in the company’s carbon baking operations while carrying out some minor maintenance on that manifold.

 

Mr Bumford’s evidence included the following matters:

 

·         That, on the day in question, he was assisted in the fire move by a contractor, whose previous experience had been in the operation of the crane.  Another experienced operator was operating the crane because he had a knee injury.

·         He had been advised by Mr Collins that the sock on one of the legs of the manifold needed changing.  He had proposed to Mr Collins that it be changed during the fire move. Mr Collins did not oppose that proposal and Mr Bumford took that to be his agreement to the proposal.

·         The contractor had difficulty in attaching the clip holding the sock, and as an instinctive reaction he “ducked under” the manifold to assist, then returned under the manifold to his original position.

·         During the course of fire moves it was standard practice for employees to adjust the socks on the manifold.  In doing so, they place parts of their bodies under the suspended manifold.  Senior employees of the company were aware of this practice.

·         Later in the day he was told there would be an investigation of the incident.  He was told to go home pending that inquiry.  He returned briefly at the request of the carbon plant manager to undertake a drug test, which was negative.

·         He was interviewed by Ms Mayson and Ms Coleman on 31 May 2007 and 1 June 2007 .  At the interviews he accepted that he had breached the company’s policy; that it was inadvertent; that he was under stress at the time because of his marriage breakdown; that he had 26 years employment with the company and its predecessors.

·         He had previously been disciplined for a safety breach when he stepped over an open pit in the course of a fire move.  As a consequence he was demoted, however, on appeal through the company’s internal processes, he was reinstated.

 

Cross-examined, Mr Bumford agreed:

 

·         That the company placed a high priority on safety.

·         That he had a responsibility to follow the company’s safety procedures and policies.

·         That he had substantial training in the company’s safety procedures and policies.

·         That, following an incident involving working at heights, suspended loads and confined space, as a result of which two employees were dismissed, there were briefings on the safety issues involved, including working under suspended loads.  He was aware that a breach could lead to dismissal.

 

The Commissioner believed the breach was serious, but wasn't deliberate or wilful, and on that basis it didn't provide a valid reason for terminating the controller's employment, “Was there a valid reason? It is clear from the authorities quoted that a serious safety breach can amount to a valid reason for termination. However, in this case, while the breach was a serious one, clearly in breach of the site safety rule 5, I am satisfied that it was done on the spur of the moment and was not deliberate, in the sense of being premeditated, or wilful. I am also satisfied that it did not constitute a “pattern of behaviour”. Nonetheless, it is clear that the company has devoted significant resources to developing a culture in which safe working practices were to be given a priority, and it should have been apparent to Mr Bumford that he should not have acted on the spur of the moment. Mr Bumford properly conceded that what he did was in breach of his duty as a process controller, a breach of the company’s various safety rules and procedures and a breach of his employment contract. In the circumstances, which include his long service with the company, and his “significant contribution” to the company, I do not consider that the incident for which he was terminated constituted a valid reason for that termination.”

 

He said it was relevant that the company had failed to follow the mandatory requirement to notify the state government safety regulator, which it must do for dangerous incidents, “The requirement is mandatory. It follows that either the incident was not regarded as dangerous by the company for the purpose of the Workplace Health and Safety Act 1995 (Tas) or the company did not comply with the requirements of the Act.”

 

Commissioner Simmonds also took into account that the company failed to give the controller the opportunity to respond to some of the reasons it used to dismiss him.

 

He ordered the company to reinstate him to his previous position, but allowed them to demote him.

 

July 2008

TOPIC

 

The Information Bulletin for July looks at the recent Australian Fair Pay Commission decision announced yesterday, changes in the calculation of ordinary time earnings for superannuation and highlights the risk of underpaying employees through three recent cases.

 

Australian Fair Pay Commission Decision

 

The Australian Fair Pay Commission yesterday announced its 2008 Wage-Setting Decision and delivered an increase of $21.66 per week to Australia ’s 1.3 million pay scale reliant employees.

 

The increase applies to the standard Federal Minimum Wage and to all Australian Pay and Classification Scales.  The increase will be implemented on the first pay period on or after 1st of October and will flow on to junior employees, people in training arrangements and to employees with a disability

 

This was the third increase in minimum wages made by the Commission, and follows an increase of $10.26 in July 2007.

 

Chairman of the Australian Fair Pay Commission, Professor Ian Harper, said this year’s decision has been made in a time of economic transition and uncertainty.  “The Commission notes that economic activity and employment growth are forecast to slow in the near term, while unemployment is expected to increase. These weaker conditions may place low-paid employees in a more vulnerable position.  “On the other hand, it is clear from submissions, from our research and from our nationwide consultations that households face significant pressures, including higher costs for food, fuel and housing.”

 

Underpayment Risks for Employers

 

Employers are reminded that failing to ensure the correct entitlements are paid to employees can result in large fines and back payments.

 

Three cases in various industrial relations jurisdictions over the last 18 months illustrate that even small business should obtain professional assistance on employment conditions.

 

The Workplace Ombudsman sought penalties be imposed in relation to underpayment of an employee who commenced an apprenticeship in February 2005 which was terminated in June 2005.  Breaches included underpayment for travel allowance, industry allowance, tool allowance, failure to pay proportional annual leave payments upon termination of employment and failure to pay annual leave loading in respect of annual leave payments.  The employer argued significant financial difficulties during period of employment and ignorance of correct wages and entitlements. 

 

Despite no history of prior breaches and the actions not wilful or deliberate penalties of $2500 were ordered in addition to the underpayment amount.

 

Breaches were admitted to by the employer in another matter and related to failure to pay correct rate for work on weekend evenings, failure to pay pro rata annual leave upon termination, failure to pay accrued and untaken annual leave upon termination and failure to pay leave loading on accrued annual leave.

 

The Court deemed that the underpayments were large given the relatively short period of employment involved and significant for employees in such lowly-paid positions.  Payment of outstanding amounts not made until just before the hearing and did not include component for interest.  It was consider apparent that the breaches were wilful and deliberate and the appropriate penalty to act as a deterrence was $33,000.

 

In the third matter, on 16 August 2007 the Federal Court declared an employer had failed to pay the minimum rate of pay applicable to a casual employee in six particular circumstances.  The business owner submitted that it lacked expertise in industrial relations and had no prior conduct of this nature.

 

It was not suggested the business directors had set out to deliberately flout the Award but the Court decided the penalty should not be oppressive but business must begin to ‘actually hurt’.  Penalties totalling $25,000 were ordered.

 

The constantly changing workplace relations law in Australia make it difficult to stay abreast of all employment entitlements, but the decisions demonstrate that being ignorant of your responsibilities is not an acceptable defence.

 

Ordinary Time Earning Superannuation Changes

 

Recent advice sought by a client shows there is uncertainty over the Australian Taxation Office’s introduction of standard definition of ordinary times earnings for the calculation of Superannuation contributions.

Effective from 1 July 2008 , employers will be required to use ordinary time earnings, as defined in the superannuation guarantee law, to calculate superannuation guarantee contributions for their employees.  

This is intended to ensure all employees are treated the same for superannuation guarantee purposes.

Ordinary time earnings are generally what employees earn for their ordinary hours of work, including:

•               over-award payments,

•               commissions,

•               shift allowances, and

•               paid leave.

Ordinary time earnings does not include overtime.

This means from 1 July 2008 , you cannot use an earnings base to calculate your superannuation guarantee contributions which is based on:

•               an industrial award,

•               an existing employment agreement,

•               a fund’s trust deed, or

•               a law of the Commonwealth, States or Territories.

 

June 2008

TOPIC

 

Drug and Alcohol Testing Policy not Followed by Employer

 

In a decision of the Australian Industrial Relations Commission (AI

RC) that reinforces to employers the importance of following their own policies, an interstate Truck Driver sacked by Linfox Australia Pty Ltd (Linfox) for refusing a drug and alcohol test has been reinstated, after finding the employer failed to explain the testing regime and wasn't authorised to conduct more than one test a year on each employee.

 

The company dismissed the Truck Driver with over 20 years service late last year, alleging that he had refused to undertake a saliva test that was authorised under its 2006 drug and alcohol policy. 

 

Linfox had worked with the Transport Workers Union for some time on road safety issues, and advised the AIRC that it had implemented a safety strategy known as ‘Vision Zero’.  In the last two years there had been a dramatic improvement in all statistics in regard to safety, motor vehicle accidents, lost time injuries, and frequency rates.  The policy provided for random testing of workers in safety sensitive positions such as heavy vehicle Truck Drivers and included sanctions for failing the test or refusing to undergo it.

 

Deputy President Hamilton though concluded that the former employee was not afforded a fair go all round and even if there was a valid reason for termination the penalty of termination was disproportionate in the circumstances, and a more limited remedy of a warning should have been applied.  He refused to accept that the Truck Driver had been specifically trained in the policy, had been given a copy or even a summary of the policy, knew about the detail of the policy, or even necessarily knew what might be described as the general thrust of the Linfox drug and alcohol policy.  

 

Deputy President Hamilton also threw out Linfox’s claim that the Truck Driver had refused three directions to take a test.  He said the former employee had initially refused to comply with the third direction (to turn his truck around and return to Sydney for testing), but complied when he was directed to continue on to Melbourne .

 

Deputy President Hamilton emphasised the case didn't reflect on Linfox's drug testing regime in general, saying: "This decision relates to one employee. It does not relate to the entire Linfox system of alcohol and drug testing, about which the evidence is relatively limited". 

Deputy President Hamilton said that if Linfox had been able to establish that it had followed correct procedures, his decision might have been different.  He noted that employees can't refuse to take a test that is authorised under an appropriate policy when they are properly trained in it.  “  Linfox also owed the former employee and others a duty of care, and must enforce and maintain a system of safety, which would include measures such as drug and alcohol policies for drivers, although this was not fully argued before me.  A drug and alcohol policy is a key means to make the workplace and roads a safe environment for Linfox employees and the wider community, as Linfox submitted.”

 

May 2008

TOPIC

 

Where to from here? Agreements, dismissals and awards.

 

With more legislative changes coming in a few months the recent changes to employment conditions are still confusing to most. 

 

It is widely known that no new AWAs can be lodged, but individual workplace agreements are still available to many employers and collective workplace agreements can be designed in much the same way.  

 

Award modernisation is underway with the Australian Industrial Relations Commission consulting with employer groups later this month.  Employers should not expect that this will be a quick process or that ‘modernisation’ of awards will provide any great benefits for them.

 

Restrictions on who can make unfair dismissal applications still remain for now, but expect that come July when the Federal Opposition lose the balance of power in the Senate this will also significantly change.

 

Most of the WorkChoices limitations on union access and secret ballots remain though.

 

Ohura Consulting can tailor workplace relations strategies to meet the plans for your business.  Inquiries can be made by email on simon@ohura.com.au or phone on 0432 215 247.

 

April 2008

TOPIC

 

Information Sessions

With the enacting of the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 on 28 March 2008 a range of changes to employment laws are now in place.

 

If you or your clients would benefit from an information session on these changes, Ohura Consulting is able to assist. 

Within an hour, issues such as the temporary replacement to AWAs (IEAs), award modernisation and the no disadvantage test can be explained.

 

Contact Ohura Consulting now to discuss your organisation’s needs.

 

March 2008

TOPIC

The Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 passed through the lower house of Federal Parliament today and the Federal Labor Government has released a draft of the amended minimum standards that, with its proposed new awards system, will form the safety net for employees from 1 January, 2010.

 

Transition Bill Passes Lower House

 

The Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 provides for a number changes, including award modernisation, a new no disadvantage test and the abolition of AWAs.

Employers are still able to enter into AWAs with new and existing employees until the Bill commences. Although once the Bill commences new AWAs cannot be offered.

The existing rules for the termination of AWAs will continue.  However, when an AWA is terminated, it is possible for an employee to be covered by an applicable collective agreement or award.

An employee on an AWA, which has passed its nominal expiry date, can make, approve or vary a collective agreement without the AWA having to be terminated first.

 

10 Minimum Employment Standards

 

The national employment standards will apply to all employees and be put to Federal Parliament later this year. 

 

The 10 standards are the area of the Government's proposed workplace relations changes that have most potential for unintended consequences as with the record keeping and hours of work provisions under the WorkChoices amendment creating the Australian Fair Pay Commission Standards.  As a result, the Government has committed to putting them out for public comment.

 

The 10 national employment standards are:

 

1.              Hours of work - including a standard 38-hour week for full-time employees, with provision for requiring employees to work additional hours, but not unreasonable additional hours.

2.              Parental leave - parents to have a right to separate periods of 12 months unpaid leave, up to a total of 24 months (if parents want one parent to take a further 12 months after they have taken the first 12 months, then they must make a request, with employers only able to refuse such requests on reasonable business grounds);

3.              Flexible work for parents - reinstates the former "right to request" flexible work until children reach school age, with employers only able to refuse on reasonable business grounds;

4.              Annual leave - four weeks paid annual leave for full-time employees, pro rata leave for part-time employees and an additional week's leave for shift workers;

5.              Personal, carer's and compassionate leave - 10 days a year of paid personal/carer's leave for full-time employees (pro rata for part-timers), plus two days a year of paid compassionate leave on the death or serious illness of a family member or a person the employee lives with, plus two days a year of unpaid personal leave for "genuine caring purposes" and family emergencies;

6.              Community service leave - paid leave for prescribed community service activities, such as paid leave for jury service and reasonable unpaid leave for emergency services duties;

7.              Public holidays - guarantees eight national public holidays (Christmas Day, Boxing Day, New Year's Day, Australia Day, Anzac Day, Queen's Birthday, Good Friday and Easter Monday), plus public holidays prescribed in State law (such as Labour Day, Easter Saturday and Easter Tuesday) and local public holidays such as cup days;

8.              Provision of information in the workplace - employers to provide all new employees with a Fair Work Information Statement containing prescribed information about rights and entitlements, including the right to choose whether to be a member of a union and where to seek information and help;

9.              Termination of employment and redundancy - up to four weeks notice (progressing from one week for employees with less than 12 months service to four weeks for workers with more than five years service) for all employees plus an extra week for workers aged over 45. Employees in workplaces with 15 or more employees are also entitled to severance pay of up to 16 weeks after nine years service and 12 weeks after 10 years service; and

10.           Long service leave - as a transitional step to a national standard on long service leave, entitlements will reflect arrangements in current state laws or federal awards or agreements, while employees who accrue leave under the transitional arrangements won't be disadvantaged.

 

February 2008

TOPIC

Are your employees receiving the appropriate allowances? Have your awards been kept current? Is superannuation being calculated correctly?  Provide your business with confidence that employment entitlements are being paid accurately and workplace relation legislation is being complied with.  A Human Resource Audit is an effective, convenient and quick way of getting this piece of mind.

 

Human Resource Audits

 

Financial audits are considered a necessity for most businesses, but the cost of underpaying employees can be significant with the ability for claims to go back as far as the last six years.

Ohura Consulting have launched a Human Resources Audit product which provides employers with greater confidence in knowing whether they are complying with employment conditions applicable to them from workplace agreements, industrial awards, occupational health and safety, equal opportunity, workers compensation plus various other legislation and regulations.

 

Among many other matters, even the basic Human Resource Audit will examine;

 

þ      employment instruments (awards, agreements and contracts)

þ      salary rates

þ      leave entitlements (annual, long service, personal & parental)

þ      allowances and loadings   

þ      roster limitations 

þ      payment for overtime and shift penalties        

 

A Human Resource Audit can be tailored to the size of your organisation, industry and level of security required.  If buying or selling a business a Human Resources Audit is essential to demonstrate there are no hidden liabilities.
 

Contact Ohura Consulting to request a quote for your organisation.

Human Resource Audits do not cover taxation or commercial legal issues.

January 2008

TOPIC

Rio Tinto Aluminium ( Bell Bay ) has been ordered to reinstate a sacked aluminium smelter process controller, after the Australian Industrial Relation Commission (AIRC) found that dismissing him wasn't justified.

 

Rio Tinto Sacking for Safety Breach Excessive

 

The employee, Mr Bumford was employed as a process controller at the Bell Bay aluminium smelter located near George Town in northern Tasmania .  He was engaged in the carbon baking plant and was terminated because he walked under a suspended load, allegedly in breach of the company’s safety policy and procedure.  

 

There was no dispute that he walked under a manifold used in the company’s carbon baking operations while carrying out some minor maintenance on that manifold.

 

Mr Bumford’s evidence included the following matters:

 

·         That, on the day in question, he was assisted in the fire move by a contractor, Mr Troy Collins, whose previous experience had been in the operation of the crane. Another experienced operator was operating the crane because he had a knee injury.

·         He had been advised by Mr John Collins that the sock on one of the legs of the manifold needed changing. He had proposed to Mr John Collins that it be changed during the fire move. Mr Collins did not oppose that proposal and Mr Bumford took that to be his agreement to the proposal.

·         The contractor, Mr Troy Collins, had difficulty in attaching the clip holding the sock, and as an instinctive reaction he “ducked under” the manifold to assist, then returned under the manifold to his original position.

·         During the course of fire moves it was standard practice for employees to adjust the socks on the manifold. In doing so, they place parts of their bodies under the suspended manifold. Senior employees of the company were aware of this practice.

·         Later in the day he was told there would be an investigation of the incident. He was told to go home pending that inquiry. He returned briefly at the request of the carbon plant manager to undertake a drug test, which was negative.

·         He was interviewed by on 31 May 2007 and 1 June 2007 . At the interviews he accepted that he had breached the company’s policy; that it was inadvertent; that he was under stress at the time because of his marriage breakdown; that he had 26 years employment with the company and its predecessors.

·         He had previously been disciplined for a safety breach when he stepped over an open pit in the course of a fire move. As a consequence he was demoted, however, on appeal through the company’s internal processes, he was reinstated.

 

Cross-examined, Mr Bumford agreed:

 

·         That the company placed a high priority on safety.

·         That he had a responsibility to follow the company’s safety procedures and policies.

·         That he had substantial training in the company’s safety procedures and policies.

·         That, following an incident involving working at heights, suspended loads and confined space, as a result of which two employees were dismissed, there were briefings on the safety issues involved, including working under suspended loads. He was aware that a breach could lead to dismissal.

 

The Commissioner believed the breach was serious, but wasn't deliberate or wilful, and on that basis it didn't provide a valid reason for terminating the controller's employment, “Was there a valid reason? It is clear from the authorities quoted that a serious safety breach can amount to a valid reason for termination. However, in this case, while the breach was a serious one, clearly in breach of the site safety rule 5, I am satisfied that it was done on the spur of the moment and was not deliberate, in the sense of being premeditated, or wilful. I am also satisfied that it did not constitute a “pattern of behaviour”. Nonetheless, it is clear that the company has devoted significant resources to developing a culture in which safe working practices were to be given a priority, and it should have been apparent to Mr Bumford that he should not have acted on the spur of the moment. Mr Bumford properly conceded that what he did was in breach of his duty as a process controller, a breach of the company’s various safety rules and procedures and a breach of his employment contract. In the circumstances, which include his long service with the company, and his “significant contribution” to the company, I do not consider that the incident for which he was terminated constituted a valid reason for that termination.”

 

He said it was relevant that the company had failed to follow the mandatory requirement to notify the state government safety regulator, which it must do for dangerous incidents, “The requirement is mandatory. It follows that either the incident was not regarded as dangerous by the company for the purpose of the Workplace Health and Safety Act 1995 (Tas) or the company did not comply with the requirements of the Act.”

 

Commissioner Simmonds also took into account that the company failed to give the controller the opportunity to respond to some of the reasons it used to dismiss him.

 

He ordered the company to reinstate him to his previous position, but allowed it to demote him.

 

December 2007

TOPIC

Following the change of Federal Government at the November election, Ohura Consulting has provided an overview of the Rudd Governments’ pre-election workplace relations policy as will impact on Organisations.  Although there was little focus on workplace relations policy during the election campaign, the Australian Labor Party (ALP) has been quick to announce proposed changes to key areas of workplace relations such as, minimum conditions, wage setting and individual workplace agreements (AWAs).

 

Information sessions on the changes will be available to clients when more detail is released.

 

Federal Government Changes to Workplace Relations Laws

 

The ALP Government will remove employees earning $100,000 from the awards system; retain Work Choices’ right of entry and pattern bargaining provisions; keep the secondary boycott laws in the Trade Practices Act; complete the bulk of its award simplification process in two years; allow AWAs to run their full five year-terms; and allow employers in AWA workplaces to continue to offer them to new workers during a transition period.

 

Further ALP workplace relations policy is outlined below; Ohura Consulting will provide updates as information comes to hand.

 

National/State System

 

The ALP want a uniform national system as did the Howard government, and claims they can work with the States to deliver it.  But the ALP will need the States to either refer their powers, which they are showing no signs of being willing to do, or introduce mirror or complementary legislation; given Federal Labor's decision to retain much of WorkChoices, even mirror or complementary legislation is by no means guaranteed.

 

Institutions

 

The ALP will scrap the Australian Industrial Relations Commission along with all other existing authorities and roll them into one - Fair Work Australia.

 

Fair Work Australia will have an independent judicial division, and its inspectorate will have specialist divisions that can focus unlawful behaviour in particular industries or sectors – with the first to be established in the building industry and hospitality industry.

 

Minimum Conditions

 

The Rudd Governments Forward with Fairness policy guarantees 10 statutory minimum conditions, with a further 10 conditions enshrined in awards.  The statutory minimums are: a 38-hour week (with reasonable additional hours); parental leave, which parents can take separately as 12 months unpaid leave, or with one parent requesting an additional 12 months, to total 24 months either way; a right for parents to request flexible work arrangements until their child reaches school age; four weeks annual leave (plus an additional week for shift employees); 10 days personal and carer's leave, plus two days paid compassionate leave and an additional two days of unpaid personal leave for emergencies; public holidays; a Fair Work Information Statement containing details of employees' rights and entitlements; notice of termination and, for workplaces with 15 or more employees, redundancy pay; and long service leave, reflecting existing State or Federal arrangements but working towards national consistency.

 

AWAs

 

AWAs will be the first casualty under the new Government; a transition bill will be introduced in the first sitting of the new parliament, expected in February.  Under its policy Forward with Fairness existing AWAs will run their full course – which could be up to five years.  As with Work Choices, the statutory individual contracts will only be able to be terminated either by agreement between the parties during their term or by one party giving 90 days notice after the nominal expiry date.

 

Under the ALP’s transitional provisions, businesses currently using AWAs will be able to continue offering them to new starters over the two year period until the start of 2010, but on the basis that they expire on December 31, 2009 . The new ALP AWAs will be called Individual Transitional Employment Agreements (ITEAs), and will only be able to be made between an employer who has an employee on an AWA as at December 1, 2007 , and with a new employee or an existing employee on an AWA. The ITEA cannot disadvantage the employee against a collective agreement applying to the work the new employee would perform at the workplace, or, where there is no collective agreement, the applicable award and the WorkChoices minimum conditions.

 

The ALP’s implementation plan says the $100,000 will be calculated on the employee’s guaranteed ordinary earnings, indexed to annual growth in ordinary time earnings for fulltime adult employees.  This would include the pay received for ordinary hours of work, guaranteed overtime and any other monetary allowances that are a guaranteed part of normal remuneration arrangements.

 

If an employee earning more than $100,000 was employed under award conditions rather than an AWA, they could stay under existing arrangements, or move to the new Labor system.

 

Collective Bargaining

 

The ALP says that collective bargaining is at the heart of its proposed workplace relations system.  If an employer refuses to bargain for a collective deal, Fair Work Australia will determine the level of support for it among the workforce, and if a majority of employees want to bargain collectively, the employer will be required to do so in good faith.

 

Labor will introduce an obligation on all bargaining parties to bargain in good faith, with Fair Work Australia to assist them to do so, and to have the power to make orders when they are not.

 

Unfair Dismissal

 

The ALP intends to reinstate unfair dismissal protection for all employees, with a remedy based on a "fair go all round".  The ALP will introduce particular measures for small business.  These include: extending from six months to 12 months the period employees have to be employed before they can lodge a claim; developing a fair dismissal code, with employers to be exempt from a claim if they comply with it; and guaranteeing that reinstatement will not be ordered if it's not in the employer or employee's best interest.  

 

Other Agreement Types

 

The ALP intends to scrap employer greenfields agreements although it will allow non-union collective bargaining, with no union input at all if that is what employees want.

 

No Disadvantage/Fairness Test

 

Fair Work Australia will assess an agreement against the relevant award before it approves a deal, with employees having to be better off overall against the safety net.

 

Prohibited Content

 

Labor will remove the prohibited content rules therefore there will not be any restrictions on what can be inserted into an agreement.

 

Industrial Action

 

This is one of the areas where the ALP has controversially committed to retaining key provisions of WorkChoices, including the outlawing all industrial action other than protected action (which is tougher even than under the pre-Work Choice regime, where unprotected strikes could be subject to secondary boycott or common law action but weren't outlawed by statute); the requirement for secret ballots (which Fair Work Australia will conduct) before protected action; the ban on protected industrial action during the life of an agreement; the ban on strike pay; and employers' entitlement to lock out employees.

 

Independent Contractors

 

Independent contracting is not dealt with in Labor's Forward with Fairness policy, but they have said the party has no plans to depart from the common law definition the Coalition adopted.  Labor believes unions should not be permitted to interfere in commercial arrangements involving contractors and the key tenets of freedom of association should be respected at all times.”

 

November 2007

TOPIC

The Full Court of the Federal Court has recently upheld damages awarded to an employee that suffered a psychological injury from a breach of his employment contract by his employer.  The implications resulting from the decision are that employers should carefully review their contracts and policies and ensure a prompt and thorough grievance investigation can be very important.

 

Human Resource Policies

 

By majority, the Full Court upheld Justice Wilcox’s original decision in the appeal in Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] which awarded Mr Nikolich damages of around $500,000 (plus interest) representing two and a half years pay.

 

The Facts

 

Mr Nikolich was employed as an Investment Adviser in the Canberra office of Goldman Sachs.  On the commencement of his employment Mr Nikolich was provided with several Goldman Sachs documents including a large policy document.  Mr Nikolich signed and returned a copy of his letter of offer of employment, but was not asked to sign a copy of the policy manual.  A dispute arose between Mr Nikolich and his manager, Mr Sutherland, about the reallocation of clients after the departure from Goldman Sachs of another investment adviser.

 

In July 2003, Mr Nikolich filed a grievance against his manager – asserting, amongst other things, that Mr Sutherland intimidated him.  In December 2003, there was a report by Goldman Sachs’s Human Resources section which rejected the allegations against the manager. 

 

Some time later, in August 2004, Mr Nikolich left work on sick leave and four months later Goldman Sachs advised Mr Nikolich by letter that the company regarded his employment ‘as having terminated’ with effect from 6 December 2004.  The medical evidence produced at trial generally indicated that Mr Nikolich was suffering from depression.  Most of his treating doctors agreed that this was linked to his sense of injustice at the way he had been dealt with at work, but that there was no general psychiatric incapacity to work.

 

Mr Nikolich took his employer to court where Justice Wilcox accepted that the Policy formed part of his employment contract.  He concluded this on the basis of a provision in the employment agreement that Goldman Sachs ‘expected’ Mr Nikolich to comply with ‘office memoranda and instructions’.  He also concluded that this meant that Goldman Sachs was required to comply with the Policy, as well as Mr Nikolich and they had breached various parts of the Policy.

 

The judge ruled that the breaches of the Policy caused Mr Nikolich psychological damage including a major depressive disorder.  While damages were ordinarily not recoverable for disappointment and distress, there was an exception for personal injury – which included psychiatric illness.

 

Implications for Employers

 

The Nikolich case clearly highlights the significant exposures for employers in failing to prevent or address workplace bullying or harassment.  To minimise these exposures, employers need to adopt policies that are directed to preventing bullying and harassment and that contain effective grievance procedures. They must then ensure that these policies and procedures are implemented in an effective and timely manner through measures such as provision of training, monitoring and supervision of employee (including managerial) behaviour, and prompt response to grievances and complaints.

 

The case also serves to highlight the fact that incorporation of workplace policies in contracts of employment can pose real risks for employers.  HR manuals and policies often contain terms ranging from the highly prescriptive to the merely aspirational.  The decision in Nikolich clearly shows that a lack of diligent adherence to these documents on the part of the employer can give rise to liability for breach of contract, and (potentially) substantial damages awards.

 

To minimise these exposures, express wording should be used in letters of offer or employment contracts to confirm that, although an employee is required to comply with the employer’s policies and procedures as applicable from time to time, these documents do not form part of the contract of employment.  Assistance in this area can be obtained through Ohura Consulting.

 

 

October 2007

TOPIC

 

In the second of two linked Information Bulletins, an investigative process and complaint procedure is described for the performance management of employees.  The processes of counselling and procedural fairness were explained in the September Information Bulletin, available below.

 

Employee Discipline

 

Where an employer is dissatisfied with an employee’s capacity or conduct, to the point that the employer needs to act, then there is a need to ensure that the employee is treated fairly in the process of counselling or discipline.

 

The Workplace Relations Act 1996 insists that both elements of fairness are observed:

 

1.        that there are substantive reasons to justify the action; and

2.        that the procedures followed by the employer are fair.

 

Investigative Procedure

 

To ensure that an employee is given substantive and procedural fairness (when the need arises to discipline or terminate) the following steps are of assistance:

 

1.     Ensure all relevant facts are discovered and recorded by interviewing:

·         the employee;

·         any witnesses;

·         any other appropriate person.

2.     Prior to interviewing the employee, he/she should be offered the opportunity of being represented.  This could be by a union delegate, friend, parent, solicitor, or alternatively any other person the employee may want present.

3.     Interview the employee again and present all facts and complaints to him/her.  If you consider this a serious matter, the employee must be told this, particularly if their job is at risk.  Ask for a full explanation of the employee’s side of the story and any mitigating circumstances and allow the employee the opportunity to provide any relevant information.

4.     Record the employee’s story and any explanation offered.  If time is needed to consider the matter, obtain documents and clarify issues with other people, then adjourn the interview.

5.     Give full consideration to all the facts and circumstances of the employee and the explanations and evidence offered.  Take into consideration any mitigating circumstances raised in favour of the employee eg. length of service, work record, employee’s family responsibilities.

If dismissal is being considered it is necessary to bear in mind the prohibition against dismissal in certain circumstances (such as a person’s religion, race, sex, age or disability) and the need for substantive reasons which do not result in harsh, unjust or unreasonable dismissal.

Document all factors considered and how and why the decision was made.

6.     Reconvene the interview with employee and his/her representative and advise them of the decision.

7.     Confirm the decision in writing and prepare a file note with as much detail as possible regarding the process and all relevant facts (eg. previous warnings etc).

 

The documentation should reflect that you have conducted a thorough and impartial investigation into all the facts and the employee has been accorded procedural fairness and detail the valid reasons for the action taken against the employee.

The resolution to the problem should be reflected in the documentation/letter.  This might be confirmation of termination, an agreement to undertake training, or some other arrangement agreed between the employer and employee as a final outcome.  The action that is taken may need to be reviewed at a later date, such as whether training was completed or work objectives met.

 

At any time in the disciplinary or dismissal procedure, if you come to the view that serious misconduct may have occurred, the employee should be taken off the job (i.e. suspended with pay pending the completion of enquiries and a decision).  The reason for this is to avoid any possibility of it being argued that by allowing the employee to remain on the job where the seriousness of the misconduct was known or should have been known to the employer, the employer was condoning the employee’s conduct.

 

Breach of Discipline

 

An employee is guilty of a breach of discipline if they:

 

1.     behave in a manner that is liable to bring the organisation into disrepute, or

2.     disobey or disregard a lawful instruction; or

3.     are negligent, careless, inefficient or incompetent in the discharge of their duties; or

4.     are absence from duty except:

·               on authorised leave; or

·               with reasonable cause

5.     commit any other act of misconduct, or conduct him/herself in a manner inconsistent with the duties and responsibilities of the position held by the employee.

 

Complaint Procedure

 

1.     Any complaint received that an employee has committed a breach of discipline should be forwarded to the employee to ensure they are notified of the complaint.

2.     Where the alleged misconduct or unacceptable performance is of a minor nature, the relevant manager should handle the matter and if required bring this matter to the attention of the employee and request an improvement in conduct or performance by a stated date.

3.     The manager may suspend an employee who a complaint has been made against them from employment, normally with pay.

 

Resolution Process

 

1.     A review should be conducted.

2.     Relevant information shall be collected in relation to the complaint, such as interviewing witnesses and other documentation.

3.     The employee shall be given a written copy of the complaint and/or allegation(s) against him/her together with any other material necessary to enable the employee to respond to the complaint/allegation.

4.     The employee shall be given the opportunity to make written representations or, if approved, oral representations with respect to the matter.

5.     The employee may be accompanied during any interview by a representative.

6.     A report containing the findings will be prepared for the relevant manager.

 

Report Outcome

 

1.     The manager should offer the employee an opportunity to attend an interview to discuss the report findings before the outcome is decided.

2.     The manager is to consider the findings of the report and decide on the appropriate outcome.  The outcome may include, but is not limited to the following;

·               dismissal of the complaint;

·               placing a written warning on the employee’s personal file;

·               reducing the employee’s wages or position;

·               transferring the employee to another area and/or location;

·               terminating the employee’s employment.

3.     This disciplinary procedure does not affect the power of the organisation to dismiss an employee for misconduct.

4.     Be aware that an employee whose employment is terminated may be able to apply to the Industrial Relations Commission for relief in respect of the termination.

 

To ensure a fair and robust process is followed, businesses should obtain advice from Ohura Consulting before beginning internal disciplinary investigations.

 

 

September 2007

TOPIC

 

In the first of two linked Information Bulletins, the performance

management processes of counselling and procedural fairness are explained.  An investigative process and complaint procedure are covered in the October Information Bulletin.

 

employee discipline

 

Where an employer is dissatisfied with an employee’s capacity or conduct, to the point that the employer needs to act, then there is a need to ensure that the employee is treated fairly in the process of counselling or discipline undertaken by the employer.

 

The Workplace Relations Act 1996 insists that both elements of fairness are observed:

 

1.        that there are substantive reasons to justify the action; and

2.        that the procedures followed by the employer are fair.

 

Counselling

 

Informal counselling between employees and managers is a normal part of day-to-day practice and is not generally part of the disciplinary procedure.  If informal counselling does not resolve the matter then the formal disciplinary procedures should be initiated.

 

It is important to ensure that when action is taken against an employee, whether to modify behaviour, take disciplinary action or to dismiss an employee, the procedure followed by the employer must be such as to ensure that the employee is given procedural fairness:

 

• The employee is entitled to be informed what their job is and what the employer’s standards are. This includes ensuring the employee is familiar with the organisation’s policies, code of conduct and their position description.
• He/she is entitled to be informed if, in the employer’s view his/her performance is inadequate, and where and how it is inadequate relative to the employer’s standards through the use of objective examples.
• The employee is entitled to be advised of the seriousness with which the employer views the employee’s performance/conduct, particularly if his/her job is “on the line”.
• The employee should always be given the opportunity to be represented when being interviewed or counselled.  This can be by a union delegate, co-worker, friend, family member or lawyer.
• The employee must be given an opportunity to consider any allegation against him/her and provide information in explanation of the allegation along with any mitigating circumstances.
• The enquiry by the employer into the employee’s capacity or conduct must be impartial.
• Where appropriate the employer should ensure that the employee is given an adequate opportunity to improve his/her performance and give reasonable assistance by the employer to improve his/her performance (eg counselling, training etc).  This would not be appropriate where an employee has committed serious misconduct, particularly if it is so serious as to justify summary dismissal.
• No decision should be made unless and until all the facts and circumstances of the case had been considered impartially by the employer.  There should be no prejudicing or prejudice in the treatment of the employee before all the evidence has been gathered and considered, and the employee has had the opportunity to provide an explanation of the issues.

 

Procedural Fairness

 

These are elements of procedural fairness which need to be accorded to employees.  If there is a failure to accord procedural fairness it will render the dismissal unfair and expose the employer to an adverse Industrial Relations Commission decision which could result in an order against the employer to reinstate or pay compensation, or both.

 

If procedural fairness is not observed during an investigation/inquiry, a person could apply to a relevant authority to have any decision arising from that investigation/inquiry deemed unfair, if that decision adversely affected them.

 

The duty of procedural fairness requires decision-makers to accord persons at risk a fair and unbiased hearing.  A person at risk must be afforded a reasonable opportunity to be heard before a decision is made about them.  A reasonable opportunity includes:

 

• Prompt notice and reasonable time to respond
• Disclosure of the nature of the allegations, the facts decision-makers may rely upon to make their decision and possible consequences.
• Employees must be given every reasonable opportunity to answer any complaints made.
• Consideration to be given as to whether the person can have representation or observers present during the hearing.
• Decision-makers must not be, or appear to be, biased.  This would include:
• Treating the person under investigation with appropriate respect and courtesy.
• Avoidance of prejudgement.  It is important that an inquirer avoids saying or doing anything that indicates an inclination to believe one side or the other. Even jocular remarks can damage an inquiry irreparably.
• Inquiries must not have pecuniary interests, personal friendships, animosity, social, professional, or political acquaintances that could affect their judgement.

To ensure procedural fairness, chief executive officers businesses should obtain advice from Ohura Consulting before beginning internal disciplinary investigations.

 

 

August 2007

TOPIC

 

In this information bulletin, the focus is on the content of workplace agreements, particularly what is not able to be included.

 

PROHIBITED CONTENT FOR WORKPLACE AGREEMENTS 

 

Regularly workplace agreements are being assessed that contain prohibited content. Ohura Consulting is concerned that business appear to be unknowingly exposing themselves to fines of up to $6,600 for individuals) and $33,000 (for corporations).  These can occur if when negotiating a workplace agreement (or variation to a workplace agreement) they:  

• try to include a term in that workplace agreement (or a variation to a workplace agreement) that includes prohibited content; and
• were reckless as to whether the term contained prohibited content. 

Although some of this prohibited content is being negotiated by unions, it is important to understand that the employer is normally responsible for any penalties.

 

The Workplace Relations Act 1996 prohibits certain from being included in workplace agreements. This generally means something that is not an employment conditions. A term of an agreement that contains prohibited content is void and cannot be enforced if it is included in a workplace agreement.

 

The Workplace Authority has provided examples of common prohibited content being inserted into agreements.  

 

Renegotiation

 

This commonly takes the form of a clause requiring the parties to commence negotiations for a new agreement a specified number of months before the nominal expiry date of the existing agreement. These clauses are prohibited as they establish a timetable for the renegotiation of the agreement.

 

Similarly, terms that require the parties to negotiate a particular form of replacement agreement are also prohibited. As an example, a clause specifying that an Australian workplace agreement (AWA) would continue to operate until replaced by another AWA (ie providing for no other option) would constitute prohibited content.

 

Incorporation of Other Documents

 

A common source of prohibited content arises where parties to an agreement attempt to incorporate other documents within the agreement.  The most common examples of this occur where a collective agreement seeks to incorporate an award or piece of legislation within the agreement.  Where this occurs, the secondary document must also be free of prohibited content.  This can be particularly problematic where awards and legislation are concerned, such as where the incorporation of an award contradicts the terms of the agreement.

 

Forgoing Leave

 

A term of an agreement will be prohibited content where it deals with an employee forgoing their entitlement to annual leave in a manner that does not require the employee to make a written election.

 

Similarly, a term will be prohibited content where it deals with an employee forgoing their entitlement to paid personal/carer’s leave in a manner that does not require the employee to make a written election.

 

Therefore, an agreement that seeks to ‘roll-up’ a permanent employee’s leave entitlements into the employee’s basic rate of pay will constitute prohibited content.  That is, an employee cannot agree in making an agreement that they will forgo their entitlement to take leave in return for a higher basic rate of pay or other benefits.

 

Dispute Settling Procedures

 

A term of an agreement will be prohibited content where it deals with the rights of an employer organisation or union to participate in, or represent an employer or employee under a dispute settling procedure. The only exception is where the organisation or union is the representative of the employer’s or employee’s choice.

 

In general, a dispute settling provision that specifies that a union or employer organisation, as a party to an agreement, can take certain actions will be prohibited content. For example, an agreement that allows a party to the agreement to notify a dispute, to call meetings or to refer a dispute to an independent third party will be prohibited.

 

Penalty Provisions

 

A term of an agreement is prohibited content if it allows an employer to penalise an employee for not providing the required notice or evidence substantiating their entitlement to personal/carer's leave or an absence due to illness, injury or emergency affecting either the employee or their family or household.

 

A penalty is defined to include a deduction from an employee's remuneration, a reduction in their entitlements or a requirement that the employee make a payment to their employer.

 

This form of prohibited content commonly arises where workplace agreements incorporate the terms of pre-reform awards and agreements, which include provisions that provide that an employee will not be entitled to payment for public holidays if they are absent without reasonable excuse on the day prior to, or after, a public holiday.

 

These clauses impose a penalty on employees by removing their entitlement to paid public holidays. The penalty is incurred where the employee is unable to provide a reasonable excuse for an absence from work, which could include situations where the employee is unable to meet the notice or evidence requirements to access paid personal or carers’ leave.

 

Ohura Consulting are able to guidance to organisations on what agreement content may be constituted as prohibited.

This information bulletins has been prepared for clients of Ohura Consulting.  If you are aware of anyone that would be interested in receiving these information bulletins, please forward this onto them or provide their email address.  If you do not wish to receive information bulletins, please reply as such.

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July 2007

TOPICS

 
Most clients will need to take action from each of the three topics covered, especially those currently lodging workplace agreements.  The Fairness Test and attached Workplace Relations Fact Sheet are already in operation, and the wage increase provided through the Australian Fair Pay Commission applying from 1 October 2007.

If you believe that anyone would be interested in receiving these information bulletins, please let me know of their email address.

 

Fairness test needed for workplace agreements

 

The Australian Government have introduced a new ‘no disadvantage’ test for all workplace agreements lodged from 7 May 2007 onwards.

The Fairness Test applies to workplace agreements where employees earn less than $75,000 in award-covered industries.  Many businesses may not be aware that they are ‘award covered’.  The test will guarantee that protected award conditions, such as penalty rates and public holiday pay, are not traded off without adequate compensation.

Collective and individual agreements already lodged under WorkChoices will not be affected.  However employers and employees who are currently making an agreement need to be aware of the Fairness Test, if they are considering removing or modifying any or all protected award conditions.

The Fairness Test

An agreement will pass the Fairness Test where the Workplace Authority (the new name of the Office of the Employment Advocate) is satisfied that fair compensation has been provided for modifying or removing any or all protected award conditions.  These conditions are:

 

• Penalty rates including for working on public holidays and weekends
• Shift and overtime loadings
• Monetary allowances
• Annual leave loadings
• Public holidays
• Rest breaks, and
• Incentive-based payments and bonuses.

All workplace agreements must still be lodged with the Workplace Authority (the Office of the Employment Advocate) and, as before, they will start to operate on lodgement.

 

The Workplace Authority will conduct the Fairness Test by considering both the monetary and non-monetary compensation offered, relative to what would have been payable under the relevant award. In most cases this will mean a higher rate of pay in lieu of protected award conditions that have been modified or removed.

 

If an agreement does not meet the Fairness Test, the Workplace will provide advice to the employer and employee on why the agreement is not fair, how it could be changed to make it fair, and the amount of any back pay to compensate the employee.  In these circumstances, back pay from the date the agreement was lodged will need to be made.

 

The employer and employee(s) will be given 14 days to agree on how they will vary the agreement so that it fairly compensates the employee(s) for changes to protected award conditions.  An employee will be able to be represented by their bargaining agent.  If the necessary changes are not made, the agreement will be void.

 

Clients are advised to have new workplace agreements checked by Ohura Consulting prior to lodgement.

 

 

2007 AUSTRALIAN FAIR PAY COMMISSION DECISION

 

The Australian Fair Pay Commission on 5 July 2007 announced an increase of $10.26 per week in the standard Federal Minimum Wage and in all Pay Scales up to $700 per week.  The Commission has also increased all Pay Scales paying $700 a week and above by $5.30 per week.

 

Increases will flow on to junior employees, employees to whom training arrangements apply and employees with a disability.  Both decisions will take effect from the first pay date on or after 1 October 2007.

 

The Commission considered the results of commissioned research, almost 200 submissions, 13 public consultations across the country, nine focus groups and over 100 stakeholder meetings in reaching its first decision.

 

For the complete decision, the Australian Fair Pay Commission internet site is www.fairpay.gov.au.

 

workplace RELATIONS FACT SHEET

 

All current employees in the Federal system must be given a copy of the Workplace Relations Fact Sheet by 20 October 2007.  Employers must also give a copy to every new employee starting after 20 July 2007 within seven days of their start date.

 

The Workplace Relations Fact Sheet is an information sheet mandated by the Workplace Relations Amendment (A Stronger Safety Net) Act 2007 which will come into effect on 20 July 2007.  It provides information to employees so they know where they stand in workplace relations matters such as; all full-time employees being protected by a key set of pay and conditions which cover:

 

• Guaranteed minimum wage rates;
• Maximum working hours;
• Four weeks paid annual leave;
• Two weeks personal/carer’s leave;
• One year unpaid maternity or paternity leave.

The fact sheet explains the Workplace Ombudsman has the legal power to ensure employers meet all of their obligations under the Workplace Relations Act 1996, details about the Fairness Test - what it is and who it applies to and employees’ rights when negotiating a workplace agreement.

 

Employers face a $110 fine for each employee who does not get the sheet in time.

 

This fact sheet is also available to order from www.workplaceauthority.gov.au. 

Ohura Consulting recognises the value of keeping up to date with employment issues and the limited time small and medium businesses have for researching their own technical employment information.

Ohura Consulting prepares regular information summaries on human resources and employment issues, emailed to clients.

Workplace relations law and regulations change regularly and often rapidly.  Make use of Ohura Consulting as your adviser to ensure you are acting legally and getting the most out of your employment arrangements.

Mobile 0432 215 247 Fax: (08) 9409 4139 Email: info@ohura.com.au