High Court’s decision to reject backpay to Casual Workers

High Court’s decision to reject backpay to Casual Workers

The High Court of Australia had recently reversed the decision to grant casual workers the right to be paid leave entitlements. Dismissing these payments would force workers to be ineligible to receive payments for annual, sick or other types of leave. The unanimous ruling had been made following appeals that concluded that workers who were employed under a regular, permanent basis were not to be considered ‘casuals’ under the Fair Work Act 2009 (Cth) (“the Fair Work Act”).

The decision on Workpac v Rossato

The High Court’s decision was made after allowing the appeal of Workpac in their case against casual mine worker Robert Rossato. The courts had investigated Mr Rossato’s status as a ‘long-term employee’ for the labour-hire company but it was found that he was only employed in the capacity of a designated ‘casual-worker’.

It is known that Mr Rossato was employed by Workpac for four years. During the time, he received a total of six employment contracts which described his role as a ‘casual employee’. Mr Rossato claimed that by working on a fixed weekly roster – sometimes over several consecutive months – he was more than just a ‘casual-worker’ and that there was a discrepancy between his title and the leave entitlements that he was receiving. The Court made findings in relation to the regulation of these entitlements, and considered whether Mr Rossato should be awarded restitution as well whether Mr Rossato should be considered as more than a casual employee. On Appeal, Mr Rossato’s role was found to be ‘other than a casual employee’ under the Fair Work Act.

Fair Work Act 2009

The Fair Work Act is one of the essential Commonwealth statutes that governs employment in setting out terms, conditions, rights and responsibilities in the relationship between employers and employees. It regulates the rights of both employers and employees to request flexible working arrangements, and also deals with things such as termination and the general protection of workers’ rights.

The High Court’s decision on Workpac v Rossato necessitated a change to the definition of a casual employee under s15A of the Fair Work Act to: “employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person”.

How Etheringtons Solicitors can help

If you would like further information regarding employment issues or paid entitlements, please do not hesitate to contact one of our solicitors on 9963 9800 or via our contact form here.

The Legality of Cash in Hand Wages in Australia

The Legality of Cash in Hand Wages in Australia

Some businesses choose to pay their employees cash in hand wages rather than transferring them to a nominated bank account. Whilst this method is generally believed to be illegal, that is not necessarily the case. Employers must meet their obligations to their employees and the government, whether they make payment in cash or otherwise. This article will explain how cash in hand wages can be legal and the obligations employers must observe when paying their employees.

What is ‘cash in hand’?

Payment of wages as cash in hand means that a person is paid directly in cash rather than through a bank or with a cheque. However, in small hospitality and maintenance businesses, where this practice is common, it is an easy and efficient way to operate the business.

Employer obligations

If an employer wants to pay wages through cash in hand, it is important that they ensure their obligations are still being met by:

  • Paying your employees the correct amount under the relevant award;
  • Paying the correct amount as stipulated in the contract and allowing for any leave entitlements;
  • Taking out the relevant tax amount to ensure your employees aren’t left with the bill;
  • Contributing superannuation payments to their nominated super fund; and
  • Being covered by workers compensation should your employee ever be injured at work.

To legitimise the cash in hand payment, it is advisable to provide your employees with a pay-slip to prove that their earnings correlate with the award, the correct tax is being taken out and superannuation payments are being made. Pay slips should generally include:

  • Employer and employee names;
  • Australian Business Number;
  • Pay period (weekly or fortnightly);
  • Gross and net pay (pay before and after tax);
  • Applicable hours worked and rate of pay;
  • Any additional loadings or penalty rates; and
  • Superannuation contributions.

You can also provide your employees with a payment summary at the end of each financial year which outlines how much they have been paid throughout the year, and what amount of this is going to tax.

Once you have provided these records to your employees, it is essential to keep and file a copy for your own records. Employers are expected to keep a record of their employees and their pay and this can be as simple as keeping a physical or electronic copy of their pay slip.

It is also important as an employer that you ensure that you comply with the requirements of the Australian Taxation Office. Committing tax fraud or other tax related offences can attract severe criminal penalties. Therefore, it is important to comply with the ATO’s requirements and withhold the correct tax amount from your employees’ wages. If you are concerned about tax thresholds or understanding your reporting obligations, it is imperative that you seek the appropriate financial and legal advice.

There have been a number of high-profile cases involving the systemic underpayment of workers in restaurants, convenience stores and petrol stations. It is critical that these sorts of practices do not continue into the future.

Receiving cash in hand wages

As an employee, receiving cash in hand payments may be more convenient for you and your employer. However it is important to ensure that you are not being paid less than what you are owed under your contract or under the correct award rate. You are also obligated to declare your income to the Australian Taxation Office when completing your tax return. It is advisable to confirm with your employer that they are paying superannuation contributions to your nominated super fund. If you are concerned about the way in which you are being paid, speak to your employer or seek experienced legal advice.

How Etheringtons Solicitors can help?

We can help you by providing advice and representation in any employment law matter, whether you are the employer or employee. If you need any assistance contact one of our lawyers here or call 02 9963 9800 for a no-obligation discussion and for expert legal advice.

Scarlett Johansson Sues Walt Disney Co. For Damages

Scarlett Johansson Sues Walt Disney Co. For Damages

Scarlett Johansson sues Walt Disney Co. for damages for intentional interference in her contract with Marvel Studios

Scarlett Johansson recently filed a law suit against Walt Disney Co. (Disney) alleging that the studio engaged in the tort of intentional interference by releasing Black Widow on Disney+ at the same time as it was released in theatres. She alleges that this interference caused Marvel Studios (Marvel), a subsidiary of Disney, to breach the terms of their contract with her. She is seeking both compensatory and punitive (also called exemplary) damages. This article will provide further insight into the elements of the tort of intentional interference in Australia and how it relates to Johansson’s claim.

Background for Johansson’s claim against Disney

Johansson alleges that Disney caused Marvel to breach the terms of her contract, by releasing Black Widow on Disney+ simultaneously with the theatrical release. Her compensation for the film was “based largely on ‘box office’ receipts”. This has been common practice within the industry for decades where stars are often paid an upfront fee along with receiving a portion of the back end profits which are dependent on box office success.

Johansson’s claim exposes the current shift within the film industry towards prioritising streaming services as a result of the COVID-19 pandemic, which will impact the future cinematic experience. COVID-19 has pushed film companies to adopt a hybrid release model, where movies are released in cinemas and on streaming platforms simultaneously. While Netflix offers larger up front deals to actors who forego cinematic releases, this claim highlights that many film companies have not shifted their payment practices in accordance with this new model. This claim will potentially set a precedent for other actors contracted under the same model. Disney has accused Johansson of “callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic”, adding that there was “no merit whatsoever” to the claim.

Tort of intentional interference

Johansson alleges that Disney intentionally interfered with her contract with Marvel, thereby committing a civil wrong as they were subject to a duty not to do so. According to the influential case of Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd [1995] FCA 1368, this tort allows damages to be claimed against a defendant who induces or procures an entity to act or refrain from acting whilst being aware that doing so would result in the entity breaching their contractual obligations to the plaintiff.

The recent case of Daebo Shipping Co Ltd v The Ship Go Star [2012] FCAFC 156 outlines the elements needed to establish this:

  • There must be a contract between the plaintiff (Johansson) and a third party (Marvel).
    • In this case, Johansson must establish that her contract with Marvel specifies that Black Widow would have an exclusive theatrical screening for a period of time. Johansson will likely argue that the agreement for a ‘wide theatrical release of the picture’ will be understood to expressly or impliedly promise this exclusive release. If this is proven, Disney would have intentionally disregarded this contract by simultaneously releasing the film on their streaming platform.
  • The defendant (Disney) must know that such a contract exists.
  • The defendant (Disney) must know that if the third party (Marvel) does, or fails to do, a particular act (provide an exclusive theatrical release) that conduct of the third party would be a breach of contract.
  • The defendant (Disney) must intend to induce or procure the third party (Marvel) to breach the contract through that conduct (failing to provide an exclusive theatrical release).
    • To establish this, the defendant (Disney) must have a “fairly good idea” that the contract benefits another person in the respect which they are intervening in. Reckless indifference or wilful blindness can amount to his knowledge.
    • Knowledge of the contract can infer that there was “actual” or “subjective” intention within the state of mind of the defendant (Disney).
  • The breach must cause loss or damage to the plaintiff (Johansson).
    • Johansson will likely allege that Disney presumably released the film on Disney+ to increase the share price, at Johansson’s expense as it likely interfered with box office sales.

Johansson is seeking both compensatory and punitive damages

Compensatory damages aim to put the plaintiff (Johansson) into the position they would have been in, had the defendant (Disney) not committed the civil wrong. These damages are calculated according to the size of the plaintiff’s loss, which will be difficult to calculate in this matter given the effects of COVID-19 on the industry globally and the uncertainty of the specific revenue expected from an exclusive cinematic release.

Punitive damages are only available in the USA for tortious claims (not for breach of contract), and aim to punish the defendant (Disney) for egregious conduct, acting as a deterrent for future actions. Awards of punitive damages in the USA are often significantly larger than that of compensatory damages. However, punitive damages are rarely available in Australia, and only for very rare personal injury matters.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant law in relation to your individual circumstances. If you need further advice or assistance with contractual or tortious matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.

Dishonesty: a valid reason for termination or unfair dismissal?

Dishonesty: a valid reason for termination or unfair dismissal?

The Fair Work Commission recently handed down an interesting finding on the issue of dishonesty in the workplace as grounds for dismissal. Whilst the Commission had previously held that dishonest conduct was grounds for dismissal, the recent case discussed in this article exemplifies the need for a nexus between dishonest conduct and dismissal.

Valid reasons and unfair dismissal

Unfair dismissal claims lodged with the Fair Work Commission (FWC), including those involving genuine redundancies, can often be complex. To avoid a claim for unfair dismissal under the Fair Work Act 2009 (Cth), the termination must be made for a valid purpose and it must not be “harsh, unjust or unreasonable” or made for an unlawful reason.

Therefore, an important consideration for determining whether an employee’s termination constitutes unfair dismissal because it was harsh, unjust or unreasonable is whether there was a valid reason for that termination. We have provided examples of unlawful reasons and valid reasons for dismissal in another article concerning terminating an ex-partner’s employment.

Where the employee’s conduct is being used as a reason to justify the dismissal, it must be sufficiently connected to the employee’s employment and of sufficient gravity or seriousness to justify the dismissal as a “sound, defensible or well-founded” response. Applications to the FWC claiming unfair dismissal must be lodged within 21 days from the date the dismissal takes effect.

Previously, the Fair Work Commission has upheld that dishonest conduct in the recruitment process was grounds for dismissing an employee: see Garth Duggan v Metropolitan Fire and Emergency Services Board T/A Metropolitan Fire and Emergency Services Board (MFB) [2018] FWC 4945 (23 August 2018). In this case, the employee failed to disclose that he was subject to legal proceedings which would impact his ability to conduct work and was generally misleading during the formal interview process. The Fair Work Commission held that this dishonesty was a valid reason for dismissal, and is a timely reminder for all prospective employees to ensure they are accurately representing themselves to recruiters and employers.

Dishonesty and unfair dismissal claims

In the most recent case of Steve Newton v Toll Transport Pty Ltd [2021] FWCFB 3457, Mr Newton was dismissed by Toll Transport Pty Ltd from his employment as a truck driver after he was involved in a physical altercation outside of work. Mr Newton sought remedies for unfair dismissal with the FWC. In the initial proceedings, Deputy President Boyce found that Mr Newton had been dishonest to both Toll and the FWC, and that this, not the physical altercation outside of work, constituted a valid reason for dismissal. The Full Bench granted permission for Mr Newton to appeal this decision which was subsequently upheld.

The Full Bench held that Mr Newton’s dishonesty to the FWC could not constitute a valid reason for dismissal as this dishonesty did not occur at the time of the dismissal. Furthermore, it held that Mr Newton was not required to be honest in Toll’s investigation of his private conduct (the physical altercation), nor answer their questions, merely because these questions were asked at work. The fight had occurred outside of work and lacked a sufficient connection to his employment. However, the full bench held that an employee does have an obligation to answer their employee’s questions about private conduct honestly in some circumstances, such as if that conduct damaged the employer’s interests. In those circumstances, dishonesty would constitute a valid reason for dismissal. As the appeal was upheld, Mr Newton’s specific unfair dismissal matter is to be reheard.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant law in relation to your individual circumstances. Furthermore, Etheringtons Solicitors can assist with unfair dismissal claims or employment terminations. If you need further advice or assistance with employment matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.

Should You Be Keeping Your Pay a Secret?

Should You Be Keeping Your Pay a Secret?

Discussing salaries and remuneration is often a controversial and clandestine topic in the office. However, there has been a recent push towards greater pay transparency to allow for a more equal workplace in light of social and political changes concerning issues, such as the gender pay gap. This article will discuss whether an employer can enforce pay secrecy onto their employees, and what the potential advantages and disadvantages that having pay transparency can have.

The Legality of Pay Secrecy

The simple answer is: it is not illegal to discuss your pay. However, employers can restrict your ability to discuss your pay or remuneration within your employment contract. These clauses can be particularly common in industries where discretionary incentives are offered or where pay differentiates between employees based on performance.

Pay secrecy clauses have been banned in other jurisdictions, such as the United States and the UK, in order to reduce workplace discrimination. In 2015, Australia’s Gender Pay Gap Bill attempted to ban pay secrecy clauses, but it was unsuccessful. So whilst pay secrecy is still legal in Australia, it is important for businesses to make considerations based on their industry and business specifically, so it is important to seek personalised and experienced advice when making these decisions.

Advantages of Pay Transparency

As mentioned above, pay secrecy has been linked with actual or perceived workplace inequality. Actual inequality arises when businesses use pay secrecy clauses to unfairly differentiate the remuneration of employees based on discriminatory or unfair factors such as gender, ethnicity or age. Whereas perceived inequality occurs when employees assume that, due to the mere presence of a pay secrecy clause, that remuneration is unequal. Therefore, facilitating greater transparency can operate to quash any negative perceptions and demonstrate your business to treat all employees fairly.

Other advantages of pay transparency include:

  • Increasing employee motivation and job satisfaction;
  • Improve workplace culture;
  • Promoting flatter management structures; and
  • Improving the business’ reputation.

Disadvantages of Pay Transparency

Whilst there are clearly some advantages to abandoning pay secrecy clauses, these must be balanced with benefits that can come from enforcing pay secrecy in certain workplaces. These include:

  • Greater organisational control;
  • Less workplace conflict;
  • Protection of employee privacy; and
  • Maintaining greater employer bargaining power.

It is worth noting that pay secrecy will become more disadvantageous if competitors or the industry as a whole begin moving towards pay transparency, despite the advantages mentioned above.

How Etheringtons Solicitors can help

With over 30 years’ experience, Etheringtons Solicitors have a proven track record in providing tactical advice and representation in various contentious and non-contentious employment matters. Whether you are a business owner or an employee, our team are well placed to provide advice across a wide range of matters. If you or your business require further information in relation to pay secrecy, please contact us on (02) 9963 9800 or via our contact form here.

Employment Law Update: Casual Conversion and CEIS

Employment Law Update: Casual Conversion and CEIS

In March of this year, the government passed the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill which made significant changes to the Fair Work Act 2009 (Cth) regarding casual workers. Under the new laws, employers were given a 6-month grace period to make any adjustments to implement new rights for casual employees, and provide them with a Casual Employment Information Statement (CEIS). The deadline for this conversion is 27 September 2021, and this article will provide you with a brief guide on the legislative changes and what they mean for both employees and employers.

Changes to the Definition of Casual Employee

An employee will now be considered casual if:

  1. The employer makes no firm advance commitment to a continuing and indefinite pattern of work when offering employment; and
  2. The employee accepts the offer of employment on the basis that there is no firm advance commitment to a continuing and indefinite pattern of work.

Things to consider when determining if you have made a firm advance commitment to a continuing and indefinite pattern of work include the following:

  • Whether the employee can accept or reject work;
  • Whether the employee is entitled to casual loadings or specific rates of pay;
  • Whether the employee will work according to the needs of the employer; and
  • Whether the employment was described as casual employment.

Regular patterns of work will not in and of itself be indicative of a firm advance commitment to a continuing and indefinite pattern of work, however this may be the case in some circumstances. For example, if an employee is engaged on the basis that they will work a fixed amount of shifts on the same days each week for an indefinite period, this is unlikely to constitute casual employment under the new changes to the Fair Work Act.

Casual Conversion

Another key change relates to regular casual employees’ right to casual conversion. Essentially, a casual employee who has been employed for at least 12 months, or who has worked a regular pattern of hours in the past 6 months, has the right to be offered permanent part-time or full-time employment. Offers from employers for conversion must be in writing and given within 21 days from when the employee reaches 12 months of employment.

There are limited circumstances in which an employer is not required to make an offer for casual conversion. This will occur when there are reasonable grounds to not accept the offer based on facts that are known or foreseeable at the time of the decision. These include:

  • That the employee’s position will cease to exist within 12 months from when an offer should be made (i.e., once an employee is employed for 1 year) ;
  • The hours of work that the employee performs will significantly reduce within the next 12 months;
  • There will be a significant change to the days and times that the employee works; and
  • Making the offer would not comply with a recruitment or selection process required by law.

If an employer has reasonable grounds to not make an offer, they must provide written notice with detailed reasoning of why the offer is not being made within 21 days from which the employee reaches the 1 year mark.

In the instance an employer does not make an offer or provide notice detailing that they will not offer casual conversion, a casual employee has the right to request an offer for conversion if they meet the above eligibility requirements and:

  • The employee has not refused a previous offer of casual conversion in the past 6 months; and
  • The employer has not refused a previous request for casual conversion.

This request must be in writing and should appropriately coincide with the regular pattern of hours they have been working. Under the new legislative provisions, employers must provide a written response to a request for conversion within 21 days. If an employer chooses to grant a request, their response must detail in writing:

  • The type of employment (full-time or part-time) that the employee will be converting to;
  • The employee’s work hours after the conversion takes place; and
  • The date when the conversion will take place.

An employer can only refuse a request upon consultation with the employee and if there are reasonable grounds to refuse the request based on the circumstances known or foreseeable at the time of refusal.

Given the complexity of these new provisions, it is crucial that small business owners and employers begin assessing the eligibility of existing casual employees for conversion before 27 September 2021 to better manage their obligations to make offers or receive requests for conversion.

Casual Employees Information Statement

The Fair Work Ombudsman has introduced the Casual Employees Information Statement (CEIS) which must be given to all casual employees. The CEIS covers information about the rights of casual employees including:

  • the definition of a casual employee
  • when an employer has to offer casual conversion
  • when an employer doesn’t have to offer casual conversion
  • when a casual employee can request casual conversion
  • casual conversion entitlements of casual employees employed by small business employers
  • how the Fair Work Commission can act in dealing with disputes about casual conversion

These statements should be provided to all existing casual employees as soon as possible before 27 September and to all new casual employees moving forward. An employer can provide a copy of the CEIS to staff via:

  • mail;
  • email;
  • in person;
  • by fax; or
  • by emailing a link to a copy of the CEIS available on the employer’s intranet.

How Etheringtons Solicitors can help

Given the various legislative changes in recent times concerning casual employment, 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.