The Fair Work Commission’s Penalty Rates Decision (the Decision) was handed down on 23 February 2017. The Decision dealt with the review of the weekend and public holiday penalty rates in the following awards:
The Full Bench made the following decision in relation to weekend penalty rates:
The following are proposed changes to the Sunday penalty rates:
The Sunday penalty rates for the Clubs and Restaurant Awards are under further review.
The Full Bench also varied hours for the early/late night work penalty rate in the Restaurant and Fast Food Awards:
The Full Bench also decided to reduce public holiday penalty rates:
It is important to note that these rates will not drop straight away and there will be transitional arrangements implemented and submissions are being taken from interested parties on this issue.
It is proposed that the reductions in Sunday penalty rates should take place on 1 July each year commencing on 1 July 2017 to coincide with any increases to the modern award minimum wages arising from the Annual Wage Review decisions. It is proposed that the transitional arrangements will last for a 5 year period.
The changes to the public holiday penalty rates will take effect on 1 July 2017.
The changes to the early/late night work loadings in the Restaurant Industry and Fast Food Industry Awards will take effect in late March 2017.
Employers must ensure that they are prepared for the changes to come. We will provide an update on the transitional arrangements once the Fair Work Commission has made its final decision after submissions.
In the meantime, employers must be prepared for the immediate changes that will occur in late March relating to the early/late night span of hours.
“Senate passes amendments to ABCC legislation”
Employers seeking to undertake Commonwealth funded building and construction work are now required to ensure that their enterprise agreements comply with “The Code for Tendering and Performing Building Work 2016” (the 2016 Code) by 31 August 2017.
The 2016 Code obliges all building contractors to be compliant before they are able to perform work on Commonwealth funded building projects.
The requirements of the 2016 Code include:
Importantly, the 2016 Code prohibits certain clauses from forming part of enterprise agreements, including clauses that discriminate against employees, limit the number of subcontractors that are able to work on a particular site or limit freedom of association.
The Australian Building and Construction Commission (ABCC) is now the reviewing body responsible for determining whether enterprise agreements are compliant with the 2016 Code.
When the 2016 Code commenced on 2 December 2016, employers had until November 2018 to have their enterprise agreements made compliant with the 2016 Code. The changes that have now been introduced mean that:
Failure to meet compliance with the 2016 Code could cost employers significantly in lost tenders. Accordingly, employers in the building and construction industry should begin their enterprise agreement review processes as soon as possible.
“Director and Payroll Manager held personally liable for underpayments”
Fair Work Ombudsman v WY Pty Ltd & Ors [2016] FCCA 3432
Executive summary
Background
Whilst on working holiday visas, two employees worked for a Japanese fine food outlet in Brisbane. The two employees spoke limited English, however, lodged requests for assistance with the Fair Work Ombudsman (FWO) after being paid a flat rate of $15.60 per hour.
The employees were covered by the Fast Food Industry Award 2010 (the Award) and should have been paid in excess of $23.00 per hour for ordinary hours and rates of up to $28.49 per hour for working on a Saturday and up to $52.23 per hour for working on a public holiday.
The FWO investigation found that a special clothing allowance had been underpaid and unlawful deductions were made from the employees’ wages as a “bond” for their uniforms.
In 2012, the FWO provided warnings to the employer. Despite the warning, the employer continued to recruit and underpay vulnerable overseas workers and did not change the initial flat hourly rates it paid over a period of almost four years.
As a result of its investigation findings, the FWO commenced proceedings in the Federal Circuit Court in order to secure penalties and orders against the Company, its director and the Payroll and Accounts Manager.
Decision
In relation to the Company, the Court made the following Declaration:
The Court also found that the Director and Payroll & Account Manager were “involved in” the contraventions committed by the Company, consistent with section 550 of the FW Act, which states that a person “involved in” (including, has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention) a contravention of a civil remedy provision is taken to have contravened that provision.
In addition to having to pay the employees, the Company was penalised a total sum of $116,250.00 for its contraventions. The Director was personally penalised the sum of $20,000 and the Payroll & Account Manager was personally penalised the sum of $7,000.
Comment – what can your business learn from this decision?
This decision serves as an important reminder that not only the Company but others responsible for the Company’s actions, including the Company directors, payroll managers, human resources managers, accountants and/or financial controllers could also be held personally liable if they are found to be involved in a contravention (in this decision, the underpayment) or have conspired with others in relation to the contravention.
"Dismissals unfair as employer failed to consider voluntary redundancy swaps”
Skinner; Pemberton; Ross; Lucas; Hill; Bryant and Preston v Asciano Services Pty Ltd T/A Pacific National Bulk [2017] FWCFB 574
Executive summary
The dismissals of a number of employees were found to be unfair following a finding that their redundancies were not genuine.
The redundancies were not genuine because the employer had failed to consider all reasonable redeployment options available, including voluntary redundancy (VR) swaps.
Background
This decision concerned a group of employees who made unfair dismissal applications to the Fair Work Commission (FWC) following the termination of their employment by way of redundancy.
The employees were employed in train crews mainly involved in the transport of grain and coal. Due to a downturn in business, the employer decided to reduce the number of train crew employees across multiple depots.
Several of the employees who were made redundant lodged unfair dismissal applications, which primarily argued that the employer had failed to meet its obligations under the Fair Work Act 2009 (Cth) with regards to genuine redundancy.
Decision of the FWC
A hearing was held before Commissioner Johns, who determined that the dismissals were cases of genuine redundancy.
Commissioner Johns was satisfied that the employer no longer required the employee’s jobs to be performed by anyone, the employer had met its consultation obligations and there were no reasonable redeployment options available in the circumstances.
The unfair dismissal applications were dismissed.
Seven of the employees then appealed Commissioner Johns’ decision to the Full Bench of the FWC.
Decision of the Full Bench
On Appeal, the employees submitted that Commissioner Johns erred in finding that the employees could not have been reasonably redeployed in the circumstances. In particular, the employees argued that the employer failed to adequately explore redeployment options because it removed the possibility of “VR swaps” from consideration.
VR swaps occur when an employee who is not affected by redundancy volunteers to be made redundant and an employee who is affected by redundancy fills the role left by the employee who volunteered.
The Full Bench considered VR swaps and noted that simply because an employer does not offer VR swaps as an option, this does not automatically mean that the employer has failed in its duty to explore reasonable redeployment options.
However, the Full Bench also said that whether considering VR swaps would be reasonable would depend on the circumstances of each case.
The Full Bench determined the relevant facts in this case to be:
Based on these factors, the Full Bench held that the employer had failed to do all that it was required in determining whether reasonable redeployment was possible. Specifically, it failed to consider whether it would be reasonable to allow a candidate for redundancy to swap with another employee who wished to accept redundancy.
The Full Bench referred the matter back to Commissioner Johns for rehearing.
Comment – what can your business learn from this decision?
When faced with the possibility of making employees redundant, employers should genuinely consider all alternatives and evaluate possible redeployment options.
Whilst VR swaps will not always be a reasonable redeployment option, such swaps should be considered if there are a large number of employees doing the same job and if swaps have been offered on previous occasions.
Update – “Enterprise Agreement approval and the Notice of Employee Representational Rights”
MUA v MMA Offshore Logistics Pty Ltd t/a MMA Offshore Logistics (C2016/4902); MUA v DOF Management Australia Pty Ltd (C2016/4903); MUA v Smit Lamnalco Australia Pty Ltd (C2016/4904) [2017] FWCFB 660
Background
In a previous E-Update special on the fundamentals of enterprise agreements, we covered a range of matters associated with agreement making, including the Notice of Employee Representational Rights (Notice). In that article, we highlighted the importance of correctly completing and issuing the Notice to avoid the costs and frustration of having an otherwise satisfactory agreement rejected by the Fair Work Commission (FWC) at the last hurdle. Unfortunately, the lack of discretion afforded to the FWC when it comes to dealing with deficiencies in the Notice is continuing to cause difficulties for parties to agreements.
Decision of the Full Bench
In a recent decision, the Full Bench of the FWC dealt simultaneously with three appeals to the approval of enterprise agreements. Two of the agreements were ultimately rejected by the Full Bench because, amongst other things, the Notices issued to employees during the bargaining process contained the same small error.
The Notice template, located in the Fair Work Regulations 2009 (Cth) (FW Regs), contains a number of fields that must be completed before the document is provided to employees. The last line of the Notice template reads:
If you have any questions about this notice or about enterprise bargaining, please speak to either your employer, bargaining representative, go to www.fairwork.gov.au, or contact the Fair Work Commission Infoline on [insert number].
Two of the employers had mistakenly inserted the Fair Work Ombudsman’s Infoline phone number instead of the Fair Commission’s Infoline phone number.
The Full Bench held that it had no discretion to accept the error in the Notices. The Full Bench explained that when errors occur in a Notice, employees will not be taken to have genuinely agreed to the agreement. Where genuine agreement is lacking, an enterprise agreement cannot be approved.
Accordingly, the applications for approval of these two agreements were dismissed.
Changes to the legislation
As reported in the media recently, the Federal Employment Minister has responded to this and similar decisions by promising to introduce legislative changes to correct the inefficiencies created by the current provisions of the Fair Work Act 2009 (Cth) (FW Act) associated with the content, form and issuing of the Notice.
In the meantime, employers should ensure that they are accurately completing the most current version of the Notice before issuing it to employees in accordance with the FW Act and FW Regs.
“Employer vicariously liable under anti-discrimination law for sexual assault”
STU v JKL (Qld) Pty Ltd & Ors [2016] QCAT 505
Executive summary
An employer has been found jointly and severally liable for unlawful sexual harassment committed by one of its workers in a hotel that it owned and operated.
A contractor who was engaged as an Out-of-Hours Caretaker sexually assaulted a young employee who was staying in the same employer-provided unit.
The young employee was awarded over $300,000.00 in damages.
Background
The employee worked for a large company that managed and operated a number of hotels and resorts. The employee was offered an ongoing position in Brisbane, which required her to relocate.
In Brisbane, the employer engaged a contractor to act as a Caretaker at one of its premises. The Caretaker lived free of charge and alone in a two bedroom unit at the employer’s premises in exchange for his services. The CEO of the employer contacted the Caretaker and enquired as to whether the employee could stay, free of charge, in the same unit to assist in facilitating her relocation. The Caretaker agreed. The employer’s HR department initiated contact between the Caretaker and the employee, who subsequently moved into the second bedroom.
At 5.00 am on the first night of staying in the unit, the Caretaker entered the employee’s room, naked and touched her inappropriately. The employee awoke, asked the Caretaker to stop and told him to leave her room. He later said to the employee, “this can be our little secret”.
The employee reported the Caretaker to her employer and never returned to work.
As a result of the incident, which amounted to sexual assault, the employee suffered post traumatic stress disorder with depression.
The employee lodged an application in the Queensland Civil and Administrative Tribunal against the Caretaker and the employer under the Anti-Discrimination Act 1991 (Qld) (AD Act) alleging unlawful sexual harassment. The employee claimed the employer was vicariously liable for the actions of the Caretaker because the sexual assault was committed “in the course of work”, in accordance with s133(1) of the AD Act.
The employer argued that it should not be found vicariously liable because the incident did not occur in the course of work. Specifically, the employer submitted:
Decision
The matter was heard by Member Fitzpatrick, who rejected the employer’s submissions and held that it was jointly and severally liable for the employee’s psychiatric conditions caused by the sexual assault.
Member Fitzpatrick said that the unit in which the Caretaker resided and where the assault took place was both his home and his place of work. The unit formed part of the employer’s hotel and it was provided to the Caretaker by the employer on the basis that it would enable him to respond in a timely manner to any after-hours matters that may arise. In that sense, the unit was within the workplace and was therefore connected to work.
Member Fitzpatrick rejected the argument that the Caretaker was not working at the time of the assault, making reference to Dixon J in Automatic Fire Sprinklers v Watson (1946) 72 CLR 435, who stated, “They also serve who only stand and wait” – meaning that simply because the Caretaker was not actively performing work related duties did not mean that he was not working.
In regards to the employee not working and the incident lacking the relevant nexus to work, Member Fitzpatrick noted that the employee would not have been in the unit “but for” her employment. The employee’s relocation was at the request of her employer, it was the CEO who suggested that she stay in the Caretaker’s unit and it was the employer’s HR department who put her in contact with the Caretaker. The employee’s presence in the unit was therefore relevantly connected to her work.
Finally, the employer’s defence that there was nothing it could do to prevent the assault from have occurring, failed. Member Fitzpatrick explained that this was not a defence available under the AD Act and the employer could provide no evidence to suggest that it had taken reasonable steps to prevent the Caretaker from contravening the AD Act.
Member Fitzpatrick commented that if the employer had taken steps to educate its workers about their legal obligations and provided them with training then it may have avoided responsibility for the Caretaker’s unlawful actions.
The employer’s attempts to argue that the employee had pre-existing psychiatric conditions also failed.
The employer was held jointly severally liable for payment to the employee of $313,316.10 for damages and loss.
Comment – what can your business learn from this decision?
Employers should conduct regular training with their workers about anti-discrimination laws and their obligations under such laws. The term “workers” does not just mean employees, but also includes others performing work for the employer such as contractors.
If an employer can demonstrate that it has taken reasonable steps to prevent a worker’s unlawful actions, such as developing an anti-discrimination policy and providing anti-discrimination training, then it may avoid vicarious liability for such claims.
“Dismissal for ‘tagging’ employees on Facebook was harsh”
MR v Bendigo Health Care Group [2016] FWC 9089
Executive summary
Background
The Applicant worked as a nurse who was responsible for the care of aged psychiatric patients. In August 2016 the Applicant posted a video on Facebook and “tagged” two work colleagues with the statement, “FC getting slammed by JK at work yesterday!” At the same time, the Applicant left blobs of sorbolene cream on Mr C’s desk at work.
Mr C lodged a complaint about both the Facebook post and the cream on his desk. The Applicant was issued with a letter and was asked to provide a response in relation to his conduct. At the meeting, the Applicant admitted to the conduct and after considering his explanation, the Applicant was advised that a recommendation would be made to the CEO to terminate his employment. This was confirmed and on 19 August 2016 the Applicant’s employment was terminated for serious misconduct. The Applicant was paid four weeks pay in lieu of notice.
The Applicant made an application to the FWC that he was unfairly dismissed and sought reinstatement and payment for the period between his dismissal and the date of reinstatement.
Decision
Taking into account the factors set out under section 387 of the Fair Work Act 2009 (Cth) (FW Act), the FWC determined:
In considering other matters, the FWC noted:
Taking the above into account, the FWC determined that the decision to terminate the Applicant’s employment was harsh as it was “disproportionate to the gravity of the misconduct”. The FWC also took into account the economic and personal circumstances of the Applicant, including that the Applicant had young children, with one suffering from ADHD.
The FWC determined that reinstatement was not appropriate and sought further submissions from the parties in relation to compensation.
Comment – what can your business learn from this decision?
Whilst swift and immediate action is required by an employer when disciplining an employee, it is important to provide procedural fairness and to also consider the proper disciplinary penalty for misconduct in question, including considering the employee’s employment record and personal circumstances.
“Inherent requirements of a role must also consider how duties are performed”
Stephen Martin v TNT Australia Pty Ltd T/A TNT [2017] FWC 440
Executive summary
The employer commenced a “show cause” process and sought to terminate the employee’s employment on the basis that he could not perform the inherent requirements of his role as a Bulk Delivery Driver.
The employee asked the Fair Work Commission (FWC) to arbitrate the dispute about his ability to perform the inherent requirements of his role.
The FWC held that the inherent requirements of the role asserted by the employer were different from what occurred in practice and that the employee was fit to perform the role.
Background
Mr Stephen Martin (the Employee) was employed by TNT Australia Pty Ltd T/A TNT (the Employer) as a Bulk Delivery Driver. In 2014, the Employee suffered injury to his right knee and in 2015 he underwent a knee replacement surgery. In 2005 and 2010 the Employee suffered injury to his lower back, without any ongoing symptoms.
Following surgery to his right knee, the Employee obtained a clearance from his General Practitioner to return to work. The Employer required the Employee to undergo further assessment (a functional assessment and a fitness for duties assessment with an occupational physician) to determine whether he was fit to resume his role.
In March 2016, the Employer advised the Employee of the outcome of the assessment by way of a “show cause” letter. The letter advised the Employee of the Employer’s concerns about his ability to perform the inherent requirements of his role given, his ongoing right knee and lumbar spine conditions. The Employee was advised that if suitable alternative roles were not identified, his employment would be terminated on the basis that he did not have the capacity to safely perform the inherent requirements of his role as a Bulk Delivery Driver.
Decision
The Employer relied upon a number of documents to demonstrate the inherent requirements of the role of Bulk Delivery Driver, which it alleged were the core physical demands of the role and included the ability to lift up to 40 kg from floor to waist.
The Employee argued that the inherent requirements of the role were not what the Employer had asserted them to be. The Employee submitted that the inherent requirements were to perform manual handling tasks in accordance with safety procedures and safe systems of work. The safe system of work required employees not to lift items more than 20 kg in weight on their own and to use lifting aids or assistance and if required, make other arrangements for delivery. The Employee argued that whilst the role required delivery and pick up of bulk freight, 90% of the freight was palletised and manual handling and lifting aids were available.
Commissioner Spencer explained that the determination of the inherent requirements of a role required consideration of the duties to be performed, how the duties are to be performed by the employee and the actual performance of those duties.
Commissioner Spencer determined that the ability to lift items more than 40 kg in weight was not an inherent requirement of the role of Bulk Delivery Driver. Rather, the evidence showed that employees were to self-assess what they could safely lift, take steps to safely lift and seek assistance if required, including through the use of mechanical lifting aids.
Commissioner Spencer noted that the medical evidence also showed that the Employee could lift at least 25 kg and had capacity to return to his pre-injury role with participation in a physical conditioning / work hardening program.
Commissioner Spencer was critical of the Employer’s reliance on the medical evidence, which expressed concern that the Employee could exacerbate his previous back injury. The evidence showed that the assessment was to be in respect of the Employee’s knee injury and no notice was provided to the Employee that his back would also be reviewed.
Accordingly, it was concluded that the Employer failed to demonstrate that the Employee could not meet the inherent requirements of Bulk Delivery Driver. In this way, Commissioner Spencer ordered that the Employee was fit to perform the inherent requirements of the role and could return with recommended work hardening.
Comment – what can your business learn from this decision?
The inherent requirements of a role are the critical or essential duties that must be performed by the person for the purpose of the position to be accomplished.
This decision reiterates that what the inherent requirements of a role are will be objectively determined and will take into account the critical duties, how the duties are performed and the workplace in which the duties are performed.
Due to the myriad of legal risks, including unfair dismissal, adverse action and a discrimination claim, employers should firstly seek legal advice when determining whether to terminate an employee’s employment on the basis of inability to perform the inherent requirements of their role.
“Club’s dismissal of employee for not being a ‘team player’ did not warrant summary dismissal”
Executive summary
The Employee alleged that the termination of his employment without notice was unfair.
The Fair Work Commission (FWC) held that while the reasons for the dismissal were valid, the Employee’s conduct fell short of serious misconduct and did not warrant summary dismissal.
The termination of employment was found to be harsh, unjust and unreasonable.
Background
Mr Mark Muirhead (the Employee) was employed by the Parramatta National Rugby League Club Pty Ltd t/a Parramatta Rugby League Club (the Club) as a Business Development Executive.
In September 2016, the Club dismissed the Employee from his employment without notice on the grounds of the Employee’s serious misconduct.
The Employee lodged an unfair dismissal application with the FWC and sought payment of compensation.
The Club submitted that there were three valid reasons for the termination of the Employee’s employment without notice:
The Employee claimed that his dismissal was harsh, unjust and unreasonable because the conduct did not justify termination of his employment without notice.
Decision
Deputy President Booth agreed that the Employee’s conduct in sending the emails regarding the kitchen and the payment of the late invoice was inappropriate and unprofessional and as such, were valid reasons for dismissal.
However, DP Booth did not agree that the Employee’s conduct in attempting to send a file to his personal email was a valid reason for dismissal, as he was not directed not to continue with his work and/or not to contact clients.
In considering the criteria listed in section 387 of the Fair Work Act 2009 (Cth), to determine whether the dismissal was “harsh, unjust and unreasonable”, DP Booth held that the Employee was validly dismissed for his poor attitude and failure to be a ‘team player’ and that the dismissal was procedurally fair.
However, DP Booth determined the dismissal was nevertheless harsh after taking into account the Employee’s actual conduct, which in her view was not serious misconduct and did not warrant summary dismissal and the impact the dismissal had on the Employee’s career and financial circumstances.
DP Booth made Orders for the Club to pay the Employee $9,464.42 plus superannuation as compensation.
Comment – what can your business learn from this decision?
Sporting clubs, like other employers have an obligation to ensure procedural fairness is provided to employees during the termination of employment process.
Summary dismissal should be limited to circumstances where an employee’s behaviour constitutes serious misconduct.
Serious misconduct is defined by the Fair Work Regulations 2009 (Cth) to include, wilful or deliberate behaviour that is inconsistent the employment contract, conduct that causes a serious and imminent risk to work health and safety or the reputation, viability or profitability of the employer, engaging in theft, fraud or assault at work, being intoxicated at work and the refusal to carry out a reasonable and lawful direction.
Q: What season is it when you go on a trampoline?
A: Spring time.
Q: Who earns a living driving customers away?
A: A taxi driver.
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