Employee Wins $5.2M in a Recent Case – Employee Termination

Employee Wins $5.2M in a Recent Case – Employee Termination

Why Employers Should Seek Professional Legal Advice Before Employee Termination

In a recent Federal Court case, a former senior employee of TechnologyOne has been awarded $5.2 million in damages (plus interest) under the general protections provisions in the Fair Work Act 2009 (Cth) as well as for a breach of contract with respect to incentive payments. The case, Roohizadegan v TechnologyOne Limited (No 2) [2020] FCA 1407, highlights the importance of investigating employee complaints, seeking legal advice before termination and ensuring that caution is taken when terminating employees.

Facts of the Case

Mr Roohizadegan commenced proceedings against TechnologyOne and Mr Di Marco, alleging that he was summarily dismissed on 18 May 2016 due to complaints he had made about workplace bullying.  It was noted that TechnologyOne had both an ‘Open Door Policy’ and ‘Workplace Bullying Policy’ that were included in the contract of employment, meaning that Mr Roohizadegan was able to make these complaints as he was exercising a ‘workplace right’. The Respondents contended that the Applicant’s employment was not terminated due to the complaints but rather due to competing allegations made by other employees. However, the company had failed to complete an internal investigation in relation to the allegations made against Mr Roohizadegan, as suggested by their HR department.

Decision

The court found that the ‘Open Door Policy’ and ‘Workplace Bullying Policy’ were included in the contract of employment and that the Applicant was exercising his workplace right. The Applicant was successful in proving he was terminated as a consequence of him exercising this workplace right. In other words, the Court decided that an adverse action was taken against him for exercising his workplace right in contravention of s 340 of the Fair Work Act 2009 (Cth).

Comments at trial

The Court made several comments in relation to Mr Di Marco’s actions and decisions. Justice Kerr noted that ‘he twice rejected professional HR advice that it would be unfair to dismiss Mr Roohizadegan on the basis of mere allegations’ and that ‘his choice was to stand with the bullies rather than the bullied’. Justice Kerr stated that ‘to achieve effective deterrence, CEOs in like positions need to know that such temptations as he faced are to be resisted and that there will be a not insubstantial price for failing to do so’ in his consideration of the penalties against TechnologyOne.

Implications of the Case

The case highlights the importance of conducting a proper investigation of internal complaints and the significance of ensuring that, when terminating employees, the correct procedure is followed to ensure employers do not contravene the law. Moreover, it serves as a reminder that employers should always seek and follow professional legal advice in relation to employee disputes and termination.

How can we assist?

If you need assistance in dealing with workplace conflicts or you are dealing with workplace bullying, please contact us on (02) 9963 9800 or via our contact page to speak to our employment law solicitor.

Fair Work Commission Anti-Bullying Orders Explained

Fair Work Commission Anti-Bullying Orders Explained

The Fair Work Commission has powers to make anti-bullying orders when a worker has been bullied by an individual or group and there is a risk that the worker will continue to endure workplace bullying by the individual or group.

The Commission does not have the power to order any monetary compensation – the orders are there to get workers back working in a bullying-free environment as quickly as possible, while taking steps to remove future bullying risk.

What is workplace bullying?

Under these powers, workplace bullying occurs when:

  • an individual or group of individuals repeatedly behaves unreasonably towards a worker or a group of workers at work; and
  • the behaviour creates a risk to health and safety.

The following conduct may constitute bullying:

  • aggressive or intimidating behaviour;
  • belittling or humiliating comments;
  • victimisation, isolation and ostracism;
  • spreading rumours or playing practical jokes;
  • unreasonable work expectations;
  • upwards bullying – such as where a group of employees bully a team leader.

It’s important to note that the unreasonable behaviour must be repeated to fit the definition, but it does not have to be exactly the same specific type of unreasonable behaviour. So, if an employee is subject to belittling comments in one instance, and given unreasonable work expectations in another instance, together that could be repeated unreasonable behaviour which is bullying where it causes a risk to health or safety.

The health and safety risk

Some bullying could be physically violent, or otherwise involve subjecting a worker to a physical safety risk at their workplace. However, bullying will often cause psychological and stress-related risks to health and safety. If you are a worker who is suffering stress due to bullying, it’s not necessary to have a GP’s or psychologist’s diagnosis, but that might help show the health and safety risk that could arise from continued bullying.

What’s not bullying?

“Reasonable management action” will not be held to be bullying. What is reasonable will depend on the facts:  management action like performance appraisals, giving warnings or changing a worker’s roster can be reasonable or unreasonable depending on the circumstances, and it will be the Commission’s task to balance people’s views as to what is and what isn’t reasonable.

Who and where?

Under the legislation, bullying by “an individual or group of individuals” towards a worker or group of workers is relevant. So, the bully in question doesn’t have to be employed by the same employer as the bullied worker, the important thing is that the bullying occurred “at work” – that is, at a place at which work activities are done.

Employees of some employers cannot use this process if they are not employed by corporations or certain other entities. For example, if you are employed by a sole trader, you are most likely not covered by the anti-bullying jurisdiction.

What’s the process?

A worker can make an application for an anti-bullying order to the Fair Work Commission. The Commission must start to deal with the application within two weeks.

The Commission sends a copy of the application to the employer, and anyone named as a bully in the application, and they have seven days to respond. The Commission may then deal with the application by having a conference or mediation between the parties, and then potentially a more formal hearing. After that, the Commission can make an order to stop bullying. Of course, the parties might agree on a solution or a way forward before the Commission gets to the point of issuing orders.

What sort of order?

The order will depend on the facts presented to the Commission, and the orders sought by the affected worker or workers.

The point of making orders is to prevent the bullied worker being put at a future health and safety risk arising from future bullying.

If the person who had been causing the bullying is no longer in the workplace, then it might mean that the Commission does not need to make an order to prevent bullying.

However, orders might be made such as changing people’s shifts, changing the person a worker reports to, or changing the work location of the bullied worker or the person accused of bullying.

What if an employee is sacked or resigns?

If an employee is terminated, he or she is no longer able to bring a bullying application. However, there are other applications that can be made in those circumstances, such as unfair or wrongful termination or an application under the general protection provisions.

How can we assist?

If you are an employee, we can answer your questions about the anti-bullying process, such as whether you can apply for an anti-bullying order and whether there are other applications you can make. We can prepare and make an application for you and assist you in the conciliation and hearing stage of your application.

If you are an employer, we can advise on the type of behaviour that may constitute bullying and help you to implement policies and systems to mitigate the risk of bullying in your workplace.

If you need more information, assistance, or advice on how to proceed please call us on (02) 9963 9800 or via our contact form here.

Does your employment contract measure up?

Does your employment contract measure up?

If you are entering into an employment contract, do you know what should be included? If you are an employer and using an old contract, should it be reviewed first? It is clear contracts should be individually structured to meet the needs of those involved and in reality, both employer and employee should seek legal assistance first before offering or accepting an employment contract.

This article is intended to provide a starting point only and attempts to clarify some of the important information all parties should know.

What terms should always be in an Employment Contract?

Naturally there are some preliminary matters. For example, the identity of the parties needs to be set out as well as the duration of the contract (if fixed).

The contract then needs to specify the terms.

Before the terms are considered, the application of any statutory provisions or award or collective agreement must be considered. Generally speaking, employers and employees cannot contract out of awards or collective agreements.

The following are critical to mention and the particular entitlements need to be specified, including:

  • The remuneration;
  • The frequency of remuneration reviews;
  • The period of the contract (if fixed term);
  • The basis of remuneration adjustment and performance management/appraisal;
  • Termination conditions;
  • Any professional indemnity;
  • Any applicable Awards;
  • Specific employment conditions including
    • hours of work;
    • annual leave;
    • annual leave loading;
    • public holidays;
    • long service leave;
    • superannuation;
    • reimbursement of expenses;
    • sick leave or carer’s leave;
    • parental leave; and
    • other leave.

Depending on the nature of the employment and industry it may be important also to include:

  • Intellectual property;
  • Restrictive covenants;
  • Professional development and training;
  • The location of employment; and
  • Post-termination restraints

A statement of duties should be attached to the contract. For this attachment to become part of the terms of the contract, it should be expressly incorporated into the contract by a statement which makes it part of the contract in the body of the contract itself or as an annexure.

Workplace policies

Some workplace policies will be incorporated into the contract because of the nature of their content, some will not, and it is often hard to know what matters a court will find are incorporated. If an employer definitely wants to incorporate a policy into the contract, they can expressly do so by reference in the contract.

Employees and contractors

There is often ambiguity in a worker’s status, as to whether they are a true employee or an independent contractor. Employment law differs from other law, such as tax law, on these questions.

There are also significant legal consequences of incorrectly assuming an employee is a contractor, or vice versa. The true nature of the working relationship should be considered at the time of drafting an employment contract or a contract for services.

Superannuation

The employer is responsible to ensure that appropriate superannuation contributions are paid into the employee’s nominated superannuation fund. Generally a contractor will be responsible for their own superannuation contributions. When offering employment, you should clearly state if that offer includes superannuation.

Implied entitlements

Some entitlements and obligations that exist in the employment relationship are implied. This means that they are not written down or stated, but they still exist.

The implied terms include:

  • An employee must exercise reasonable skill and care in their performance of duties;
  • A general duty exists for an employee to obey all lawful and reasonable directions by their employer;
  • There must be fidelity and confidentiality within the employer/employee relationship; and
  • If there is no provision for termination within the contract then “reasonable notice” for termination must occur unless in circumstances of “serious misconduct”.

Conclusion

When negotiating an employment contract it is essential for both employers and employees that the contractual arrangements should be specific to the individual and the terms say what you want them to mean. Parties entering into these arrangements are wise to seek legal assistance beforehand to ensure they are right.

If you want to know more or if you run a business and would like your draft employment contracts reviewed please call us on (02) 9963 9800 or via our contact form.

What you Need to Know About Restraint of Trade Clauses

What you Need to Know About Restraint of Trade Clauses

Restraint of trade clauses are often found in employment agreements and shareholder agreements. Their purpose is to protect business interests such as client information, intellectual property, employees and trade secrets. However, the extent to which a business can restrict an employee’s or a former director’s activities through such a clause is often contentious and can result in disputes.

What is a Restraint of Trade?

A restraint of trade clause in an employment contract applies when an employee leaves the organisation. Such restraint clauses can be enforced, but only to the extent that is ‘reasonably necessary’ to protect the legitimate interests of the business. Whether a provision is enforceable will therefore depend on the wording of the clause and the context of each case.

Restraint of trade clauses can be characterised as one of the following:

  • Non-competition: to prevent a former employee from competing against the company.
  • Non-solicitation: to prevent them from approaching the employer’s clients.
  • Non recruitment: to prevent the former employee from recruiting other employees from the company.
  • Confidentiality: to protect confidential information and trade secrets.

What is Reasonable Between the Parties?

If a restraint of trade clause is contentious, a court must determine what is reasonable in the context of the facts of your particular case. If the restraint clause goes beyond protecting the business’ legitimate interests to the former employee’s detriment, then a court will not enforce the clause. However, if the clause is reasonable to both parties, it is likely to be enforced.

What will a Court Consider when resolving a dispute?

In NSW, the Restraints of Trade Act 1976 governs the law surrounding restraints of trade. A court will consider a variety of factors in its determination of whether the restraint of trade clause is reasonable. Some of these factors include the:

  • Negotiation and whether parties were able to negotiate any terms.
  • Respective bargaining position of parties and whether parties were able to obtain legal advice.
  • Nature of the business and the characteristics of the role of the employee.
  • Remuneration and compensation for the restraint of trade.
  • Duration and geographical area of the restraint.

If you are an employer, what can you do to protect your business?

To ensure that your business interests are protected in the event that one of your employees leave, it is vital that the restraint of trade clauses are effective and enforceable. Employment contracts should be reviewed regularly to ensure the changing nature of the employee’s current role and the changing nature of the business. The time period of the restraint, as well as the geographical area, must be reasonable to commensurate with the employee’s position. The clauses must be drafted properly and carefully so that, in the event that certain parts of the clause are found to be unenforceable, then the clause could be severed and the employer can rely on the balance of the clause when enforcing the restraint of trade. If you believe that your employment agreement does not adequately cover your legitimate business interests, you should seek legal advice from a competent employment lawyer.

Contact Us

An employer can only enforce a restraint of trade clause to the extent that it is reasonably necessary to protect their business interests. However, whether a clause is reasonably necessary will depend on the particular facts of the case, and in any dispute, it is best to seek professional legal advice. If you would like to discuss your employment law matter with a legal professional please contact us on (02) 9963 9800 or via our contact form.

Modern Awards – An Update, June 2020

Modern Awards – An Update, June 2020

Several modern awards have been significantly varied by the Fair Work Commission (‘FWC’) to grant businesses and employees temporary measures to preserve the ongoing viability of businesses and jobs during the COVID-19 pandemic. In addition to the unpaid pandemic leave and annual leave flexibility that has varied over 99 awards since 8 April 2020, the NSW Government has inserted provisions in the Long Service Leave Act 1955 (NSW) relating to pandemic leave. Employers should become familiar with these important industry award changes which we will outline below.

Changes to Modern Awards in 2020

The Tranche 2 awards, including the following listed below, have been finalised and will come into effect from the 29 May 2020. In addition to unpaid pandemic leave, the following changes have been inserted that are temporary and will be reviewed on 30 June 2020:

1. Clerks — Private Sector Award 2010

Operational flexibility: employees can be asked by their employers to do any tasks that they have skill and competency for, even if they are not in their usual classification or normal work, given that the employee has the appropriate licenses and qualifications. If an employee is told to work above their usual classification for more than one day, they must be compensated by being paid at a higher rate.

Work from home agreements: Part-time employees can agree to have minimum engagements reduced from 3 hours per shift to 2 hours. Casual employees can agree to be paid for a minimum 2 hours’ work shift instead of 3 hours.

Ordinary hours change while working at home: Agreements can be made to allow employees to work between 6am to 11pm on Monday to Friday, and 7am to 12.30pm on Saturday.

Reduced hours: Any employee who has had their hours reduced can ask their employer for permission to find more work with another employer and/or access training, professional development and study leave through their employer.

See determination for further information.

2. Hospitality Industry (General) Award 2010 and Restaurant Industry Award 2010

Operational flexibility: An employee can perform any duties within their skill and competency provided that they are licensed and qualified to perform them. Employees engaged to perform higher duties must be compensated at a higher rate than their ordinary classification.

Working hours: An employer may direct a full-time employee to work an average of between 22.8 and 38 ordinary hours per week and be paid on a pro-rata basis. An employer may direct a part-time employee to work an average of between 60% and 100% of their guaranteed hours per week (over the roster cycle).

Annual Leave: An employer may, subject to considering an employees’ personal circumstances, direct the employee to take annual leave with 24 hours notice.

See determination for the Hospitality Industry Award and the determination for the Restaurant Industry Award.

3. Educational Services (Schools) General Staff Award

Temporary reduced hours: An employer may issue a notice of intention in writing to direct an employee to reduce their ordinary hours by up to 25%. The direction will come into effect 5 days after the notice of intention was issued and will remain in force for a period of no more than 12 weeks.

Operational flexibility: An employee can perform any duties within their skill and competency provided that they are licensed and qualified to perform them. Employees engaged to perform higher duties must be compensated at a higher rate than their ordinary classification.

Other awards that have been varied include the Rail Industry Award, Contract Call Centres Awards and Manufacturing and Associated Industries and Occupations Award. See what other awards have changed in 2020 here.

Considerations for Employers

Employers must be aware of their changing obligations surrounding unpaid pandemic leave and any other laws, such as those relating to the JobKeeper subsidy. The greater flexibility in relation to job roles and duties, work hours and leave under some awards is a positive development towards enabling businesses to meet the challenges caused by the pandemic. However, employers must proceed with caution to ensure that their work agreements comply with these award variations.

Further Information

For further assistant on any matter relating to work from home policies or any workplace matter, please contact one of our experience employment and litigation solicitors on 02 9963 9800 or law@etheringtons.com.au.

Are Casual Workers Now Entitled to Paid Leave?

Are Casual Workers Now Entitled to Paid Leave?

The distinction between casual, full-time and part-time workers appears to be relatively straightforward. Casual workers are normally not entitled to paid annual or sick leave. Instead, they are paid casual loading of 25%. Recently, the Full Court of the Federal Court made findings in relation to the characteristics of a casual employee. It is common knowledge that certain benefits apply to different types of employment. However, a recent case in the Federal Court has addressed issues regarding casual workers and their entitlement to paid leave in certain circumstances. In this article, we review the meaning of a ‘casual worker’, the outcome of this recent case and what this case means for employees and employers alike.

Who is a casual worker?

A casual worker is an employee who does not have fixed obligations in relation to the length of time they will be employed and the hours they will work. They also do not receive paid leave such as sick or annual leave. A casual employee is usually required to work based on a roster, but this roster can change weekly and shifts are not guaranteed.

To compensate for the lack of commitment and uncertainty, casual workers are paid ‘casual loading’. Casual loading means the worker is entitled to a higher rate of pay than full-time or part-time employees working in a similar role.

A recent update in the law.

On 20 May 2020, the Full Court of Federal Court handed down a decision which affirmed that the casual workers who work with a predictable shift schedule and the commitment to work for a set period of time, or indefinitely were not casual workers despite how their employment contract classified them. These workers are entitled to paid leave, such as annual, sick and carer’s leave.

In this particular case, Mr Rossato, a coal miner, was employed for three and a half years by a labour hire company called ‘WorkPac’. Mr Rossato worked on a variety of different projects as a permanent employee despite being labelled ‘casual worker’ in his employment contract. Justice Bromberg found that the fact that Mr Rossato’s work pattern was assigned well in advance under a set roster, which necessitated on-going work during “the standard work week”, revealed that his employment was ‘regular, certain, continuing, constant and predictable’. These features were not that of a casual worker.

WorkPac argued that the total amount of casual loading paid to Mr Rossato ought to be off-set against the annual and sick leave to be paid to Mr Rossato. The Full Court rejected this argument.

What does this mean for employees and employers?

It is vital that employers review the working nature of their casual employees to ensure they meet the requirements of this work classification. If your casual workers appear to be working in a manner not consistent with a casual nature, you should discuss ways to fix this with your employee, perhaps through altering their employment contract to part-time or full-time employment.

Employees should firstly discuss their concerns with their employer if they feel they do not fall within the definition of a casual worker despite their classification under their employment contract. You should also consider seeking legal advice if you feel you are not receiving the correct entitlements.

Further Information

Navigating employment law issues can often feel daunting and overwhelming. If you would like more information on how we can assist you in regards to your employment law concerns, do not hesitate to contact one of our employment law solicitors on 9963 9800 or at law@etheringtons.com.au. For more information, check out our blog here.