"New Fair Work laws protecting vulnerable workers commence"
On 15 September 2017 the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 came into effect.
These new laws amended the Fair Work Act 2009 (Cth) (FW Act) in a number of key ways.
Introduction of the “serious contravention”
The amendments introduce s557A which deals with a new concept – the “serious contravention.”
A “serious contravention” will carry a maximum penalty of 600 penalty units (currently $126,000) for an individual involved in a “serious contravention,” or 3000 penalty units for a corporation (currently $630,000) that commits a “serious contravention”.
Section 557A states that a contravention of the FW Act is a “serious contravention” if it is committed knowingly and is part of a systematic pattern of conduct relating to one or more persons.
Subsection 557A(2) sets out the matters a court may consider when determining whether a contravention was part of a systematic pattern of conduct. These considerations include, but are not limited to:
Bodies corporate may be held liable for a “serious contravention” if the body corporate expressly, tacitly or impliedly authorised the contravention.
These amendments are intended to address concerns that the existing penalties under the FW Act are viewed as “the cost of doing business” by some businesses, rather than as genuinely deterring penalties.
Additional liabilities for franchisors and holding companies
Franchisors and holding companies face liabilities under the amendments that were not previously contemplated by the FW Act.
The new provisions operate to impose penalties on franchisors and holding companies if a franchisee or a subsidiary contravenes a civil remedy provision of the FW Act and the franchisor or holding company could have reasonably known that the contravention would occur or was likely.
However, a franchisor or holding company can be absolved of responsibility in relation to a franchisee’s or a subsidiary’s contravention if they take reasonable steps to prevent the contravention in the first place.
According to the Minister’s Second Reading Speech, these amendments are intended to address community concern that franchisors were exempt from consequences when they would have reasonably known about the contraventions of their franchisees. In this regard, the Minister makes particular reference to the 7-Eleven case.
Requirements for employees to pay their employer
The amendments also include provisions aimed at preventing “cash back” schemes where employees are required to pay back a portion of their wages in cash to their employer – also raised in the 7-Eleven case.
The new provisions state that an employer cannot require an employee, or a prospective employee, to spend or pay money to the employer for the employer’s benefit.
Penalties apply for contravening these new provisions.
Increase in the powers of the Fair Work Ombudsman
The Fair Work Ombudsman (FWO) has been granted new powers to request that the Administrative Appeals Tribunal issue notices to persons compelling them to provide information or documents to, or attend an examination by, the FWO or a member of its staff during the course of an investigation.
If a person is required to attend before the FWO to answer questions, that person can have legal representation and the FWO may require that the person swear an oath or affirmation to tell the truth.
A person will not be excused from giving information on the basis that it would be self-incriminating.
Civil remedy provisions have also been introduced for:
Key aspects of the Fair Work (Protection Vulnerable Workers) Act 2017 (Cth)
“Jewish law incorporated into Rabbi’s contract”
In the matter of South Head & District Synagogue (Sydney) (Administrator appointed) [2017] NSWSC 823
Executive summary
The Supreme Court of NSW has determined that administrators wrongfully dismissed a Rabbi whose contract incorporated Orthodox Jewish law.
Under Jewish law, the Rabbi had lifetime tenure at the Synagogue and his employment could only be terminated by agreement or in accordance with Jewish law.
Background
In 1985, Rabbi Milecki (the Defendant) was appointed as the Chief Rabbi of the South Head & District Synagogue (the Company). The most recent contract between the parties stated that the Defendant’s remuneration included an annual base salary together with payments for living expenses including telephone and utilities, motor vehicle and housekeeping. For the 2017 financial year, the Defendant’s remuneration was estimated to be $641,000.
In April 2017, voluntary administrators (the Administrators) were appointed to the Company. The Administrators determined that there were insufficient funds to continue to meet the payments due to the Defendant, estimated to be $31,666 per month. The Administrators notified the Defendant that his employment was terminated as a result of redundancy.
The Defendant denied that his employment could be terminated by the Administrators. He argued that under Jewish Law (Halacha) he has life tenure as the Rabbi (Hazakah).
The Defendant argued that under Halacha his employment could only be terminated by a judgment of a Din Torah for exceptional circumstances, such as where there was a fundamental failure to perform his duties.
The Administrators commenced proceedings in the Supreme Court seeking a number of declarations, including that Halacha was not the law applicable to the Rabbi’s contract, that Halacha or life tenure was not incorporated into the contract and that the Defendant’s employment was validly terminated.
The Defendant filed a cross summons and sought declarations that the termination of his employment was invalid and that his contract remained in force. As the Defendant affirmed his contract, he sought an injunction to restrain the Administrators and the Company from terminating his contract unless it was done so in accordance with Halacha.
The questions for the Supreme Court to decide were:
Decision
In relation to issue (1) – Judge Brereton had regard to evidence regarding the meaning and effect of Halacha and Hazakah. Brereton J held it was “inconceivable” given the objects of the Company, the purpose and terms of the contract and the nature of Halacha, that the parties did not intend for Hazakah to be a term of the contract.
Brereton J referred to the decision in Engel v The Adelaide Hebrew Congregation Incorporated [2007] SASC 234, which provided authority that under Australian law, Jewish law could be incorporated by parties as terms of the contract.
In the alternative, Brereton J was satisfied that Hazakah was an implied term of the contract arising from the express terms of the contract and from custom. In Brereton J’s view, it would be “antithetical” to the parties’ Orthodox Jewish adherence to have any other arrangement in mind.
On this basis, the Defendant had life tenure at the Company unless his employment was terminated in accordance with the Halacha. As the Defendant’s employment was terminated by way of redundancy, it followed that the termination of his employment was unlawful.
In relation to issue (2) – Brereton J noted that although the matter was complicated as the Company was in administration, the Defendant was nevertheless entitled to injunctive relief.
Orders were made declaring the decision to terminate the Defendant’s employment as void and granting an injunction, which restrained the Administrators from giving effect to the termination of the Defendant’s employment, unless and until the termination of employment was in accordance with Halacha.
What can your business learn from this?
For most employers, the issue of whether religious laws, in particular, those which provide for life tenure, are incorporated into a contract of employment will not arise.
This decision does serve as a reminder of the importance of having properly drafted contracts making the terms of the contract clear – especially as to whether any other law or policy is incorporated.
“Broker ordered to pay damages after breaching post-termination restraints”
Dargan Financial Pty Ltd ATF the Dargan Financial Discretionary Trust (trading under “Home Loan Experts”) v Nassif Isaac [2017] NSWSC 1077
Executive summary
The Supreme Court of NSW has found a mortgage broker in breach of the post-termination confidentiality and non-compete clauses of his contract. The Court ordered that, in addition to paying damages, the broker be restrained from using the client list or contacting previous clients.
Background
Mr Nassif Isaac (the Defendant) was a specialist mortgage broker for Home Loan Experts (the Plaintiff). As a broker the Defendant assisted customers in obtaining loans.
The relationship between the Plaintiff and the Defendant was governed by a Sub-Originator Agreement (SOA). The SOA contained a number of post-termination restraint clauses, including that the Defendant:
Shortly after the parties mutually consented to the termination of the SOA, the Defendant commenced work at RAMS, a mortgage brokering service operating a similar business to that of the Plaintiff.
The Plaintiff commenced proceedings against the Defendant alleging the Defendant had breached the SOA restraint clauses by:
The Defendant admitted to engaging in the conduct, however, he argued that the “clients” referred to in the SOA were his clients (and not the Plaintiff’s) and further, the client list was not “confidential information”.
Decision
Justice Sackar found that the heart of the dispute lay in the construction of the particular clauses of the SOA, namely the definition of the terms “clients” and “confidential information”.
In determining the meaning of those terms, his Honour referred to the approach taken by the High Court in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Ltd (S99/2015; S102/2015) (2015) 256 CLR 104:
… it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.
His Honour noted that the structure of the Plaintiff’s business was such that, even though the Defendant had exercised almost complete autonomy over the client portfolio and the loan applications, the Plaintiff, the Defendant and the lender shared a “joint commercial interest” in each client.
The existence of that interest meant that the clients had always belonged, in part, to the Plaintiff. Once the SOA had been terminated, the Defendant no longer had any interest in the clients and they were therefore no longer his clients.
As to whether the client list was “confidential information” under the SOA, his Honour rejected the Defendant’s argument that their names and contact details were readily available on Facebook and therefore not confidential.
His Honour stated it was plain that details of clients would include not only their identity and contact details but more intimate information such as their financial status. Such information did not “lose its necessary quality of confidence by reason of certain clients being identified on the [Plaintiff] or the [Defendant]’s Facebook page”.
The Defendant had therefore engaged in conduct in breach of the restraint clauses of the SOA and his Honour granted injunctive relief as well as an order for damages.
What can your business learn from this decision?
It is well-known that the purpose of post-employment restraints is directly related to the protection of legitimate business interests.
Justice Sackar confirmed as much in this case, stating:
The confidentiality and non-compete clause are not an assignment of the [Defendant]’s goodwill but rather an acknowledgement he is not going to conduct his own private practice, engaging clients exclusively of his own.
When seeking to identify legitimate business interests:
“Moving a redundancy date forward found to be adverse action”
Power v BOC Ltd & Ors [2017] FCCA 1868
Executive summary
The Federal Circuit Court has found that an employer took adverse action against a pregnant employee – not by making her redundant but by moving her redundancy date forward.
Background
Ms Caroline Power (the Employee) was employed with BOC Ltd & Ors (the Employer) for approximately three and a half years as a Customer Accounts Manager.
Two years into her employment, the Employee discovered she was pregnant. Being mindful of her workload, she advised the Employer that she intended to work the full term of her pregnancy with her last date of work to be 27 November 2015.
At about the same time as the pregnancy, the Employer was undergoing a business restructure. The result was that eight jobs were being made redundant, including the Employee’s role. These redundancies were scheduled to take effect on 12 November 2015.
The Employer had two policies that would have applied to the Employee in these circumstances:
Upon receiving medical advice that she had a high risk pregnancy and being unaware that her position was being made redundant, the Employee elected to start her parental leave earlier than expected – on 6 November 2015.
The General Manager decided, despite advice to the contrary from the Employee’s immediate supervisors, to move the Employee’s redundancy date forward to 4 November 2015 in an effort to avoid having to bring the Employee back to work on 12 November 2015 to tell her that her position was being made redundant. The Employee attended a meeting on 4 November 2015, at which time she was advised of the redundancy.
The Employee then commenced proceedings claiming that:
Decision
Judge Vasta found that, whilst there will often be contrary opinions when a business decision is made, in this case there had been a genuine redundancy and that the Employee had not been singled out.
His Honour also found that the Employer had not unlawfully discriminated against the Employee. On the contrary, his Honour explained that the Employer “had done all in its power to ensure that the Applicant’s rights were not just respected, but encouraged”. The managers had thought it was in the Employee’s best interests to make her redundant before she went on maternity leave.
However, the crucial element was the decision to move the date of her redundancy forward as a result of her pregnancy and her taking of parental leave. The effect was that the Employee was no longer entitled to:
The Employer’s decision to bring the redundancy date forward constituted unlawful adverse action in breach of section 340 of the FW Act.
His Honour commented that the “indecent haste” with which the Employer had affected the redundancy meant that its HR Department could not intervene.
What can your business learn from this decision?
In this case, the “indecent haste” demonstrated by the Employer had the effect of depriving the Employee of the protection of the return to work guarantee – as well as a significant paid parental leave entitlement under the Employer’s policy.
Section 84 of FW Act provides a guarantee for employees that their position or a similar, suitable position will still be available to them when they return from parental leave. It states: On ending unpaid parental leave, an employee is entitled to return to:
Redundancy decisions affecting pregnant employees or employees on parental leave must be approached with caution and a good working knowledge of statutory obligations – including the section 84 return to work guarantee and also the specific consultation obligations imposed on employers requiring consultation during parental leave when an employee’s pre-parental leave role is affected by change.
“Employer found to have dismissed employee because of pregnancy, not as a result of document formatting errors”
Mahajan v Burgess Rawson & Associates [2017] FCCA 1560
Executive summary
An administrative assistant in a commercial real estate agency was dismissed because she was pregnant and took annual and personal leave due to pregnancy related appointments and illness.
The dismissal of the administrative assistant was adverse action in contravention of the Fair Work Act 2009 (Cth) (FW Act).
Background
The employee was an administrative assistant who worked as part of a property valuations team in a commercial property real estate agency.
Having commenced employment on 7 December 2015, the employer dismissed the employee on 3 June 2016, within the last hour of the last working day of her probationary period. In March 2016, the employee had informed her manager and another senior member of her team that she was pregnant.
In the weeks preceding and following the pregnancy announcement, the employee was absent from work on a number of occasions (some full days and some part days) due to morning sickness and/or to attend medical appointments.
Following the termination of her employment, the employee made a general protections application to the Federal Circuit Court, claiming that her former employer dismissed her because:
Under the general protections provisions of the FW Act, the reasons for adverse action alleged by an employee are presumed true unless an employer can prove otherwise. Rebutting this presumption usually requires direct evidence of the decision-maker who decided to take the alleged adverse action.
In this case, the relevant decision-maker was the employee’s team leader.
The employee alleged that during the meeting that resulted in the termination of her employment, the team leader said, “Due to your current circumstances, your employment has become unreliable and we have decided not to continue with your employment”.
The team leader gave evidence that he did not say the words “due to you current circumstances” and that any reference to the employee’s unreliability was reference to her being late for work on several occasions (which she attributed to transport issues) and to formatting inconsistencies in her work.
The team leader denied that termination of the employee’s employment was in any way related to her pregnancy or the taking of sick leave.
Decision
The Court considered the evidence available to it, including the presentation of the team leader and a board member (who was at the termination meeting) in the witness box.
The Court found the denials of the team leader and the board member, “seemed too vehement and somewhat rehearsed” in relation to the use of the words “due to your current circumstances”. Ultimately, the Court found the employer’s evidence on that point to be unconvincing and that those words could have only referred to the employee’s pregnancy.
The Court held that the employee’s pregnancy was a significant and substantial reason for the employer dismissing her.
The Court also held that the employee’s absences due to pregnancy related illness or medical appointments were a significant and substantial reason for the employer dismissing the employee.
The employer attempted to argue that the absences were not a factor, that the only factors were the employee’s punctuality and her formatting mistakes. The Court commented that it did not find this credible in the circumstances.
Ultimately the Court held that the employer had taken adverse action in dismissing the employee because of her pregnancy and absences from work.
What can your business learn from this decision?
Employers and decision-makers should be clear on their reasons for dismissal, even during the probation period, so as not allow any inference to be drawn that they are concealing some other reason, which may be a prohibited reason.
Being clear on the reason for taking action before actually acting it will enable a decision-maker to provide clear evidence on the matter should the need arise.
“Alert – Queensland to introduce ‘Industrial’ Manslaughter Offence”
On 22 August 2017, the Queensland Government introduced legislation to bolster work health and safety after a recent record of tragic workplace incidents in the State.
If passed, the proposed Work Health and Safety and Other Legislation Bill (the Bill) will create the new offence of ‘industrial manslaughter’ with two new offences for a ‘person conducting a business or undertaking’ (PCBU) and ‘senior officer’.
A person will commit this offence where the conduct negligently causes the death of a worker.
Industrial manslaughter will also be a criminal offence and the standard for criminal negligence in Queensland will be applied.
For a PCBU, the offence of industrial manslaughter will attract maximum penalties of 20 years imprisonment for an individual or a fine of $10 million for a body corporate.
For a senior officer, the maximum penalty for the offence is 20 years imprisonment.
The Electrical Safety Act 2002 and the Safety in Recreational Water Activities Act 2011 will also be amended to include the industrial manslaughter offence.
Other changes that the Bill proposes include:
The proposed amendments are based on the recommendations from the “Best Practice Review of Workplace Health and Safety Queensland” report recently presented to the Queensland government.
Amendments proposed to work health and safety legislation in Queensland include the new offence of gross negligence causing death, with serious penalties to apply for PCBUs and senior officers.
“Employer fined under WHS laws following a fatal forklift accident”
SafeWork NSW v Macleay River Protein Pty Limited [2017] NSWDC 204
Executive summary
An employer has been fined $375,000 following the death of an employee in the workplace.
The employee was a trainee forklift operator who was left to drive a forklift unsupervised. The employee was tragically killed when the forklift, which was parked on an incline, rolled forward and pinned him against a wall.
Background
Macleay River Protein Pty Limited (the Employer) operates a facility that processes non-edible animal by-products.
Many of the products it processes are moved from an adjacent abattoir to the Employer’s facility using large steel bins conveyed on forklifts.
At the end of each day, the steel bins are washed out and left to drain in a designated area against a workshop wall.
Mr Noble (the Employee) was a trainee forklift driver employed to perform general duties around the Employer’s rendering plant. On the afternoon in question, he was driving a 30-year-old forklift unsupervised, moving the large steel bins to the area where they were to be washed and left to drain.
The area was at the bottom of an incline of 4.43 degrees.
Towards the bottom of the incline in front of the workshop wall, the Employee stopped the forklift, applied the handbrake and got out. He positioned himself between the forklift and the workshop wall and kicked and pushed the bin on the forklift.
After about 37 seconds, the forklift quickly moved forward and pinned the Employee against the workshop wall.
About 10 minutes later, the incident was discovered by the Employee’s brother (who was also an employee) who was leaving the Employer’s premises for the day.
Tragically, the Employee died of asphyxiation due to the pressure on his chest from the accident.
The Employer was charged with an offence under s19 of the Work Health and Safety Act 2011 (NSW) (WHS Act) for failing to comply with its health and safety duty by exposing the Employee to a risk of death or serious injury.
The Employer pleaded guilty at the first opportunity.
The District Court of New South Wales was tasked with establishing the degree of culpability and determining the appropriate penalty.
Decision
In reaching its decision the Court considered the following factors:
The Court found that the offence was mid-range because the risk was likely and foreseeable and the consequences of the risk occurring were serious. One the most significant contributing factors to the Court’s finding regarding the seriousness of the offences was the failure to promote the use of wheel chocks or even include reference to the use of wheel chocks when a forklift was parked on an incline in the Employer’s safe work procedure.
The maximum penalty of $1,500,000 was reduced to $375,000. An Order was also made for the Employer to pay SafeWork NSW’s costs of $32,000, as agreed.
What can your business learn from this decision?
Sometimes the simplest forms of safety prevention are the most critical ones. In this case, the use of simple, inexpensive wheel chocks might have prevented what turned out to be a fatal incident.
“Managerial inaction and mistreatment caused psychiatric injury”
Robinson v State of Queensland [2017] QSC 165
Executive summary
An employee who suffered psychiatric injury as a result of breaches of duty of care was awarded nearly $1.5 million in damages.
The Queensland Supreme Court held that that the employer was also vicariously liable for the conduct of the District Chief Executive Officer.
Background
Ms Robinson (the Plaintiff) was employed as the District Director of Nursing for the Cape York Health Service (the Defendant).
The Plaintiff alleged that the Defendant owed her a non-delegable duty to take reasonable care to avoid psychiatric injury in her employment. The Plaintiff alleged that she was subject to management treatment in which she was harassed, mistreated, devalued and undermined. The Plaintiff also alleged that the Defendant was vicariously liable for the conduct of its Chief Executive Officer (CEO) whose omissions caused the breaches of duty of care.
Prior to the CEO commencing employment in January 2010, the Plaintiff was managing a workplace dispute between two employees, which continued into 2010. In March 2010, one of the employees to the dispute lodged eight workplace incident forms (WIF), alleging the Plaintiff had bullied and harassed her. In May 2010, the Plaintiff discovered that WIFs had been lodged against her and despite repeated requests, did not receive copies of them until July 2010. In the meantime, the Plaintiff became increasingly distressed and vulnerable. In September 2010 the Plaintiff lodged a WIF complaint against the employee.
Against this background, the Plaintiff alleged that she was subject to unacceptable behaviour from the CEO, including:
The Plaintiff ceased work on 17 January 2011 and on 22 May 2014 was compulsorily retired from her employment with the Defendant.
Decision
The Court noted that the Defendant’s systems required some action taken in response to a WIF complaint and held that there was a “clear onus” on the Defendant to deal with the complaints and “not let them drift on unresolved”.
The Court found that the Defendant took no action in response to the WIFs when they should have been the subject of “timely and determinative action”, particularly in light of the Plaintiff’s heightened emotional state. Given the Plaintiff’s concern and distress about being the target of complaints, the Court held that the risk of injury to the Plaintiff was reasonably foreseeable and that a reasonable employer would have realised its response to the complaints would have impacted on the probability of the injury occurring.
Accordingly, the Court concluded that the Defendant had breached its duty to take reasonable care to avoid psychiatric injury by failing to take timely and determinative action in relation to the complaints against the Plaintiff.
The Court also held that the CEOs omissions were a substantial cause of the failure for which the Defendant was vicariously liable.
The Court considered the conduct of the CEO as alleged and described it as a “course of managerial mistreatment”. The Court held that the conduct of the CEO raised a foreseeable and significant risk of psychiatric injury, explaining, “The probability of potentially serious psychiatric injury from such behaviour is sufficiently well known that a reasonable employer would take precautions against such conduct occurring.”
The Court found that the Defendant breached its duty to take reasonable care to avoid psychiatric injury by failing to prevent the CEOs course of management mistreatment.
The Court held the Defendant to be vicariously liable for the CEO’s conduct.
The Court held that but for the breaches, the Plaintiff’s psychiatric injury would not have occurred and ordered the Defendant to pay damages in the sum of $1,468,991.11 to the Plaintiff.
What can your business learn from this decision?
This decision emphasises the importance of responding to complaints in a timely manner in accordance with adopted policies and procedures.
In the matter above, the employer was negligent because of its delay and lack of action in responding to workplace complaints. Similarly, as recognised by the Court, it is now “well known” that psychological injury claims are more prevalent as the result of allegations of workplace bullying and harassment such that employers must take measures, including adopting workplace anti-bullying and harassment policies and procedures to prevent that conduct.
“Alert – New pay deal for players in the W-League”
Football Federation Australia and Professional Footballers Australia have agreed to a new two year Collective Bargaining Agreement (the Agreement) for the W-League.
Under the Agreement, W-League players will now receive a minimum salary of $10,000 for the 2017/2018 season, up from $2,500 for the 2016/2017 season.
Each W-League Club now has a minimum player spend of $180,000 for the 2017/2018 season, which is to be increased to $221,166 for the 2018/2019 season.
Under the Agreement, W-League players will receive income protection up to $1,500 if they are injured and unable to work and a new maternity policy, which includes funding for airfare and accommodation for players travelling with a child aged three years or younger.
Workplace Law welcomes the new Agreement and wishes the Sydney FC W-League squad all the best for the upcoming 2017/2018 W-League Season.
'The Big 10' – Get To Know The NES
with Athena Koelmeyer
Find out if your business score a perfect ‘10’ when it comes to the 10 minimum employment entitlements covered under the National Employment Standards (NES).
Join our FREE^ webinar on 10 October 2017 at 10 am.
^Workplace Law reserves the right to decline registrations at its discretion.
Q: Why did the melon jump into the lake?
A: It wanted to be a watermelon!
Q: What's the definition of a will?
A: It's a dead giveaway.
Should you require any further information or assistance, please contact our Managing Director Athena Koelmeyer on (02) 9256 7500 or via email on sydney@workplacelaw.com.au.
Information provided in this update is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this update, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.
