The Federal Government is set to introduce a highly anticipated reform of industrial relations laws following a recent case that is now set to appear before the High Court of Australia. The new reforms include arrangements in relation to casual employees that are aimed at circumventing the ‘double dipping’ concern following the case of WorkPac Pty Ltd v Rossato. In this blog, we review the changes to the industrial relations laws and outline the case that lead to this controversial decision.
On 9 December 2020, the federal Government announced the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020. The reforms include an arrangement for casual workers that could bestow upon them stronger rights for ongoing employment. However, it also limits the liability of employers for paying casual leave loadings as well as paying other benefits such as annual leave.
One key change is the introduction of a legal definition of ‘casual work’ under the Fair Work Act. It is worth noting that no definition currently exists in the Act and this definition could help clear up much ambiguity regarding the implication of casual working arrangements.
The Act will define a casual employee as a person who:
(a) is made an offer of employment by the employer on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work; and
(b) the person accepts the offer on that basis.
Moreover, the changes also mandate that an employer must make a permanent part-time or full-time job offer to a casual employee with a regular pattern of hours if:
(a) the employee has been employed by the employer for a period of 12 months from the day the employment started; and
(b) during at least the last 6 months of that period, the employee has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a permanent full-time or part-time employee (as the case may be).
However, the employer is not required to make this offer if (based on facts that are known or reasonably foreseeable at the time) they have reasonable grounds not to make the offer.
These proposed amendments will not be voted on until 2021.
WorkPac Pty Ltd v Rossato
The changes introduced by the Federal Government come after much concern for the financial welfare of Australian businesses following a recent decision by the Full Federal Court in the case of WorkPac Pty Ltd v Rossato. To read more about this case, read our article linked here.
The High Court of Australia has allowed WorkPac Pty Ltd special leave to appeal the decision of the Full Federal Court. The decision is not set to be handed down until mid-2021.
The Federal Government has said that the proposed amendments will address the ‘double- dipping problem created by the Rossato decision’, so casual workers will not be entitled to both the 25% casual loading as well as the permanent benefits package (comprising annual leave, personal leave, notice of termination or redundancy pay).
Get legal advice
With many ambiguous changes to employment law set to be introduced in the coming year, it is important to seek legal advice if you are unsure about your employment contract or concerned about your potential liability as an employer. You can contact the highly skilled employment law team at Etheringtons solicitors via our contact form or call 02 9963 9800 for a no-obligation discussion.
An employer’s potential liability for workplace discrimination arises before the first interview and exists whether or not a decision is made to hire a person.
A job interview is integral to the recruitment process and provides an opportunity for the employer to ask questions, check credentials and determine a prospective employee’s suitability for a position. It also provides reciprocal opportunities for candidates to find out more about the role and the organisation and to assess their interest in the position.
Naturally, both parties want to find the ‘right fit’ however the employer is largely in control of the interview process and may go about finding the right person in the wrong manner.
By asking a candidate certain ‘illegal’ questions during the interview process, employers risk breaching Commonwealth and / or State laws aimed to protect individuals against discrimination in the workplace.
So, what are illegal interview questions?
When interviewing a candidate for a position, the primary focus of the questions asked should be to assess the applicant’s inherent ability to perform the key functions of the role.
Employers should avoid asking questions about certain unlawful factors for which a candidate’s answer could be construed as determinative to the success, or otherwise, of his or her application. These include questions about age, gender, sexual preference, ethnicity, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion or social origin. Essentially, these matters are considered irrelevant in determining a person’s capacity to perform the role.
Even the most innocent questions (such as those that might be asked during the course of social conversation) could be considered unlawful during a formal interview. The following are some examples:
- How do you manage work with three children?
- How old are you?
- Does your disability prevent you from carrying out your job?
These questions have something in common – they are questions that might be asked of a particular category of applicants (those with children, over 50 years of age or with a disability) that would not necessarily be asked of other applicants.
Other questions that may result in a discrimination complaint include:
- What is your religion?
- Where were you born?
- Are you working at the moment?
- Have you had a workers’ compensation claim?
These questions are unnecessary when determining an applicant’s ability to carry out the duties required of the role and should be avoided. Deciding that an applicant is unsuited for the position based on an answer to one or more of these questions may result in discrimination action.
Asking the right questions
Potential claims for discrimination can be minimised by re-thinking your approach to how questions are asked and having a detailed job description to refer to during the interview process. This helps keep the interview on track and ensures only the essential requirements of the position are addressed.
Organisations are encouraged to implement a set of standard interview questions that focus on the key skills and requirements of the position. This may include asking applicants to demonstrate how their skills and personal qualities make them an ideal choice for the role. An effective way to achieve this is to ask for examples of how the applicant has achieved certain outcomes or reacted to particular situations in previous roles. For example, you might ask, ‘please explain how you managed an irate customer during your time as service representative with XYZ’.
Following are some examples of discriminatory questions, together with an alternative approach that can be used to obtain the necessary information from a candidate.
Injuries / physical disabilities
It may be necessary to discuss an applicant’s injuries or physical condition to determine objectively whether he or she would be able to safely perform, without personal risk or risk to others, the duties required.
Rather than asking directly about his or her condition, the interviewer should go through each element of the job and, where relevant, discuss what adjustments to the workplace might be required to assist the applicant perform these duties. Appropriate questions may include:
‘Are there any reasons why you may not safely be able to lift 5 kg?’
‘Are there any specific adjustments we would need to make so you could carry out the duties required?’
This demonstrates that the employer has genuinely considered the applicant who may be an ideal fit, with a few minor modifications to the workplace.
Asking an applicant his or her age is unlawful particularly if the employer is assuming that the person, due to age, lacks the energy, drive or technical ability to carry out the role. Basing questions on the applicant’s skills, experience and inherent ability to perform these tasks, rather than querying their age will help minimise a discrimination complaint. An appropriate question would be:
‘Tell me about your computer experience…what types of programs have you used?’
It is unlawful to discriminate against a candidate based on his or her family circumstances. Rather than asking applicants if they have children or family commitments, simply ask whether they are able to commit to the hours / days required of the position. For example:
‘The job will occasionally require you to work evenings and weekends – would this conflict with other commitments?’
Religion or Race
It is unlawful to rule out an applicant whom you assume will be unable to work weekends due to religion, race or culture. If the job requires weekend work, simply point out the required days and ask the applicant whether he or she would have any issues working these days.
Asking an applicant if he or she is currently working could be perceived as discrimination on the grounds of employment, unemployment or receiving a pension. Instead, ask when the applicant would be available to start work.
Avoiding workplace discrimination starts before the recruitment process and continues throughout the employment relationship (including opportunities for career progression), during workplace investigations and termination processes.
Framing questions appropriately to minimise potential action for unfair discrimination and to give candidates an opportunity to demonstrate whether they can perform the job requires sound procedures and ensuring those involved in the recruitment process are aware of their obligations.
If you or someone you know wants more information or needs help or advice, please contact us on (02) 9963 9800 or via our contact form here.
Employers can easily fall into dispute with their employees by failing to properly handle redundancies. There is often uncertainty surrounding redundancy, in terms of handling it within the law, as well as cost.
Redundancy commonly occurs when a business is sold and a new owner offers jobs to the vendor’s existing workforce. Some employees decline the offer of employment by the new owner. In this context, an issue can arise as to whether or not redundancy payments need to be made to an employee who rejects an offer of employment by the new owner.
Notice and Severance distinguished
Notice and severance payments should not be confused. The period of notice provides the employee with a chance to seek other employment while a severance payment is intended as compensation for the loss of future entitlements to long service leave and accrued sick leave.
Let’s examine what redundancy means. The best way to define redundancy is that the employer no longer wishes the duties the employee has been performing to be undertaken by anyone. Termination of the employee on this ground has therefore nothing to do with poor performance or misconduct. Essentially the work or role is no longer required to be performed by any employee. Redundancy can also happen when an employer becomes insolvent or bankrupt, or following a re-structure, in order to increase the competitiveness or profitability of a business.
The employer must meet any requirements under a relevant award or enterprise agreement regarding redundancy. This includes discussions with the employee about the prospect of redundancy in view of operational changes or restructuring.
Employers need to be aware that a redundancy which does not meet the above criteria may expose them to an unfair dismissal claim. It should also be appreciated that a redundancy does not remove the need for notice or payment in lieu of notice.
Some employers fall into the trap of going through a ‘redundancy’ and then immediately afterwards advertising the same position. From an employer’s perspective it is prudent to assume the former employee will check your advertised positions.
It is not uncommon for an employer to seek to portray what may in fact be, a wrongful termination of an employee, as a “redundancy”.
The employer needs to ensure that, on examination of the facts, whilst the employee may have no legal claim to a severance payment, there is no basis for a common law claim.
What is a ‘genuine redundancy’?
If an employee has been made redundant and that redundancy is a “genuine redundancy” as defined by the Act, then the employer will be able to defend a claim for unfair dismissal.
Under the Act, it is a “genuine redundancy” if:
- the person’s employer no longer requires the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
- the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment regarding the redundancy; and
- it is not reasonable for the employer to redeploy the person in the employer’s enterprise or an associated entity of the employer’s enterprise.
It is important that the employer who is making an employee redundant not only complies with the consultation provisions of any applicable award or enterprise agreement, but also makes enquiries to make sure that there is not a suitable alternative position available within the employer’s business or any other “associated entity” of the employer.
When should a redundancy payment be made?
When an employee is made redundant then usually a redundancy payment will be required by the employer and this is often called severance pay.
However, the employee is not entitled to redundancy pay under the Fair Work Act if the employee:
- is terminated other than due to redundancy, e.g. misconduct or performance issues;
- has been employed for less than 12 months;
- is employed in a small business with less than 15 employees;
- was employed for a fixed term and that term has ended;
- is a casual employee.
The amount of any redundancy payment is calculated by reference to the employee’s years of service. For example if the employee has worked for a period greater than one year but less than two the redundancy period payable would be 4 weeks. If the term was between 9 to 10 years the period would be 16 weeks.
However, an employer may not be required to pay the redundancy for the full length of service if the employee did not have any redundancy entitlements with the employer in question, prior to 1 January 2010. In those circumstances the period from which redundancy payments are calculated is 1 January 2010 rather than the full length of service.
In conclusion – take care
It is easy to fall into one of these employment law traps and employers should be satisfied as to the circumstances that constitute a redundancy, carefully review payments to be made and comply with the Act’s requirements in relation to a “genuine redundancy”.
Regardless if you are an employer or employee, if you feel you need assistance call us on (02) 9963 9800 or connect with us via our contact form.
Much damage can be done to a business when an executive or senior manager resigns, taking with them valuable customer and confidential information. Restraint of trade clauses, or post-employment restraints, play a crucial role in protecting the legitimate interests of the employer.
In order to protect business interests employment contracts should contain protections which operate after the employment ends.
The purpose of Restraint of Trade Clauses
Restraints of trade are included in employment contracts to protect an employer’s trade secrets, confidential information, customer connections and staff connections by restricting an employee’s activities after they have left employment.
A restraint clause is void unless it is reasonably necessary to protect the legitimate interests of the employer. The legitimate interests of a business will generally relate to confidential information, trade secrets and customer connections.
Accordingly, a restraint clause in an employment contract will only be enforceable if the restrictions imposed are no more than necessary for the protection of the employer’s legitimate business interests – this will depend on the particular clause and the circumstances of each case.
A restraint clause typically prevents an employee from:
- contacting the employer’s clients for the purposes of selling goods or services or enticing the clients away from the employer;
- setting up a business competing with the employer’s business or working in a competitive business; and
- poaching employees of the business.
When determining whether restraint clauses are reasonable, courts will consider the following:
- The negotiation process, and in particular comments made when negotiating restraint clauses.
- The bargaining position of the parties. Was there an imbalance of power between the employer and the employee at the time of agreeing to the restraint? Did the employee have the opportunity to obtain legal advice?
- The nature of the employer’s business and characteristics of the employee. The closer the employee is to the employer’s customers, the more likely the restraint may be considered reasonable.
- Whether any consideration was given for the restraint.
- The duration and geographical area of the restraint. The longer the time and wider the area, the less likely it will be reasonable.
The reasonableness of the restraint must be decided at the date of entering into the employment contract. For this reason, it is important that the parties to the contract each have an opportunity to negotiate the terms of a restraint. In addition, employees should be encouraged to seek legal advice about the length and the effect of the restraint.
The trend of Waterfall or Cascading Clauses
Restraints are often applied for a specified period, in relation to a particular geographic area.
A common device for reducing the risk of invalidity on the ground of unreasonableness is to include ‘waterfall’ or ‘cascading’ clauses. These are alternate provisions contained in an employment agreement that may enable a court to strike out a harsher (unreasonable) restraint whilst retaining a less-restrictive and reasonable clause.
The advantage to these is that each clause is severable by a court without affecting the validity and enforceability of the restraint.
How do courts enforce restraint of trade clauses?
Employment contracts and restraint of trade clauses must be carefully drafted to ensure they can be enforced through a court. In such cases, an employer must persuade the court that the clause is reasonable and therefore valid and enforceable.
When considering enforceability, the court will consider two key issues:
- whether the employer has a legitimate interest to protect; and
- whether the restraint is a reasonable protection of that interest
What are the legal remedies?
The common remedy sought by employers faced with an employee’s breach of a restraint clause is to seek an injunction to restrain an employee or former employee from acting in a way, or continuing to act in a way, that breaches a term of the former employment contract. For example, an injunction may prevent a former employee from working for a competitor for a certain period of time or from using or disclosing information confidential to the former employer and its business.
Some Tips for business owners
Some tips for drafting restraint clauses in employment contracts:
- Make sure the period of restraint is appropriate to the employee’s position and access to confidential information.
- Make sure the prohibited activities to be prevented are similar to the employee’s current activities.
- Ensure contracts are reviewed regularly and updated to reflect changes in the employee’s role.
Having an enforceable and valid restraint in employment contracts is crucial if an employer hopes to rely on it to enforce a former employee’s post-employment obligations.
This issue needs to be considered by employers when the employment contract is drafted because a court will consider the reasonableness of the restraint as at the time the contract was entered into. The courts will only find that a restraint clause is valid and enforceable where a business can demonstrate that it has a legitimate interest to protect and that the clause is reasonable.
We are able to review, draft and advise on restraint clauses and their enforceability generally. If your business needs assistance, please contact us on (02) 9963 9800 or via our contact form here.
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)  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.
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.
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.