Reward and recognition programs are a great way to incentivise employees to work that little bit harder. Often these programs take the form of friendly, employer-sponsored competitions between employees where the winner takes home a prize.
Reward and recognition programs are a great way to incentivise employees to work that little bit harder. Often these programs take the form of friendly, employer-sponsored competitions between employees where the winner takes home a prize.
These in-house competitions are generally run at the employer’s discretion and it maintains control over the process and the outcome. However, even the most well-intentioned incentive program can come undone when employees begin treating it like an employment entitlement and feel aggrieved when things don’t go their way.
This was the case in a recent decision of the Fair Work Commission (FWC) (Ms Lynette Hart v Dominos Pizza Enterprise Ltd T/A Dominos Pizza [2017] FWC 3268) where an employee, who was a Dominos delivery driver, came second in Dominos’ 2016 Delivery Driver of the Year competition.
Having won the competition (and a new car) in 2015, the delivery driver was determined to take out the title for the second year in a row and claim the $15,000 prize. Throughout 2016, the delivery driver repeatedly complained to Dominos about the fairness of the competition including that its GPS data on deliveries was not accurate. Dominos engaged with the delivery driver about her complaints but maintained that its data was accurate and the competition was fair.
Once the competition had concluded, and the delivery driver missed out on the top spot, she made an application to the FWC under s739 of the Fair Work Act 2009 (Cth) (FW Act) to deal with a dispute. She claimed that the FWC had jurisdiction to determine the dispute under an enterprise agreement, which contained a grievance procedure stating that if a matter remained unresolved following a series of in-house attempts at resolution, the matter could be referred to the FWC.
Attached to that enterprise agreement was an undertaking specifying that the grievance procedure only applied to matters arising under the enterprise agreement or in relation to the National Employment Standards (NES).
The delivery driver asked the FWC to order that Dominos amend errors in her records, ensure that the competition scoring system was fair and accurate for everyone and reassess the results of the competition (essentially, to crown her the winner).
In response to the application, Dominos asserted that the FWC did not have jurisdiction to hear the dispute or grant the orders the delivery driver was seeking. Dominos argued that the delivery driver’s complaints were not matters arising out of the enterprise agreement or the NES and therefore, the FWC could not deal with the dispute in accordance with the grievance procedure contained in the enterprise agreement.
Furthermore, Dominos argued that the competition was not an employment entitlement but was a discretionary scheme offered by Dominos and not by the delivery driver’s actual employer, a franchisee. Accordingly, the competition did not relate to the employment relationship.
The FWC examined the issues in dispute, the terms of the competition, the enterprise agreement and its powers to settle disputes under the FW Act. The FWC ultimately dismissed the application and accepted Dominos position that it did not have jurisdiction to deal with the dispute.
The FWC commented that the competition, its rules, eligibility, methodology and outcomes sat outside any legislation, industrial instrument, contract of employment or company policy and operated at the absolute discretion of Dominos. The FWC said that to overturn the result of the competition by ordering that the delivery driver was the winner would be a “bizarre and entirely inappropriate outcome.”
There are two lessons for employers from this decision:
- Make incentive schemes and in-house competitions discretionary – an employer should be able to set the rules, change the rules, determine the outcome or completely withdraw or discontinue such schemes and competitions as it sees fit. Competitions and incentive schemes should not form part of an employee’s contract of employment and should not be capable of characterisation as an employment entitlement.
- When drafting grievance or dispute handling procedures for an employment contract or an enterprise agreement, be sure to set limitations on the types of disputes that can be referred to the FWC. In this case, referral to the FWC was limited to matters arising only out of the enterprise agreement or the NES.
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