On 28 March 2023, the Federal Court ruled in Construction, Forestry, Maritime, Mining and Energy Union v OS MCAP Pty Ltd  FCAFC 51 that employers must notify employees that they “have the option to either accept or reject a request to work on a public holiday.” This judgement was made against OS MCAP Pty Ltd for being unreasonable and unlawful for requiring 85 mineworkers to work on Christmas Day and Boxing Day in 2019.
Why was this decision made?
In CFMMEU v OS MCAP Pty Ltd  FCAFC 51, the Federal Court ruled that OS MCAP Pty Ltd were in breach of section 114 of the Fair Work Act 2009 (Cth).
Section 114 asserts that “if an employer requests an employee to work on a public holiday, the employee may refuse the request if:
(a) the request is not reasonable; or
(b) the refusal is reasonable.”
Although OS MCAP Pty Ltd contended that they were not breaching s114 as an employee’s refusal is contingent on a request and not a requirement, this submission was dismissed by the Court. The Court determined that OS MCAP Pty Ltd “was not permitted to require employees to work on Christmas and Boxing Day, unless, as the Union submitted, it had made a [reasonable] request.” As such, “given a requirement does not comprise a request” and OS MCAP Pty Ltd admitted they “did not make a request in the ordinary sense,” the Court ruled that the company had breached the Fair Work Act 2009 (Cth).
The Court therefore ruled that OS MCAP Pty Ltd contravened s114 because the company did not inform its employees that they were allowed to object working on Christmas Day and Boxing Day if their refusal was reasonable.
How does this decision impact rostering of employees on public holidays?
As a result of this decision, employers must be cautious when using automatic rostering software. Automatic rostering precludes employees from choosing “whether he or she will agree or refuse to work on the public holiday”.
An employer must frame their request for an employee to work on a public holiday in the form of a question to which the employee can then respond. It is only after discussion or negotiation that an employer may “require an employee to work on a public holiday if the request is reasonable and the employee’s refusal is unreasonable”.
What should I do if my employer has requested I work on a public holiday?
If your employer has requested that you work on a public holiday, it is prudent that you know what constitutes a reasonable request.
The National Employment Standards stipulate that the following conditions should be considered when determining if an employer’s request is reasonable:
- the nature of the workplace
- the role and type of work of the employee does
- employee’s personal circumstances (including caring responsibilities)
- employment status (full-time, part-time or casual)
- an expectation that they might be asked to work on the public holiday
- any overtime, penalty rates or other payment the employee might receive.
It is important to note that if you are working in the emergency services, you may be required to work on public holidays. In these instances, employers must ensure that they make a reasonable request and only roster employees if they have not provided a reasonable refusal.
For more information about your entitlements such as pay and leave when working, or not working, on a public holiday, please refer to the Fair Work Ombudsman website or seek legal advice.
If you believe your employer is not complying with The Fair Work Act 2009 (Cth) or the National Employment Standards, it is best to seek professional legal advice. If you would like to discuss your employment matter with a legal professional, please contact us on (02) 9963 9800 or at [email protected]
Unfair dismissal matters can be complex and frustrating for both employers and employees alike. Since the commencement of the Fair Work Act (‘the Act’) in 2009, employers have responsibilities to correctly terminate employees. More employees are commencing unfair dismissal claims, and it is important to understand for both employers and employees to understand how these claims work.
Terminating a person’s employment is usually stressful and upsetting for everyone concerned, so it’s crucial to understand when and how termination an be done in a fair and appropriate manner.
The issues can be complex
Unfair dismissal claims may incorporate far-reaching issues including the employment type of the employee, award and enterprise agreement coverage, and time limits for claims.
In addition, the definition of ‘dismissal’ can include a situation where a person resigns but was forced to do so because of their employers conduct. This is commonly referred to as ‘constructive dismissal’.
A dismissal must be harsh, unjust or unreasonable for it to be an unfair dismissal under the Act. The primary remedy in the Act is reinstatement (where an employee is returned to their position), but in practice this is the exception rather than the rule. More often than not, compensation is ordered instead – the Fair Work Commission can order compensation of up six months of the employee’s salary.
Who is covered by the unfair dismissal provisions of the Fair Work Act?
- In a small business (with fewer than 15 employees), an employee is covered if they have worked for at least 12 months. However, even if an employee has worked at the business for 12 months, a dismissal will not be unfair where the small business has complied with the Small Business Unfair Dismissal Code.
- For larger businesses, employees are covered after six months
- Under the Act, a dismissal will not be unfair if an employer can show that it was a “genuine redundancy”.
What is a “genuine redundancy”?
There are three elements to a genuine redundancy
- The employer no longer requires the employee’s job to be done by anyone because of changes in the employer’s operational requirements; and
- The employer has complied with any consultation obligations that it might have in an enterprise agreement or award; and
- It would not have been reasonable for the employer to redeploy the employee within the employer’s business or the enterprise of an associated entity of the employer.
Small businesses – don’t be caught out
Research by Benoit Freyens, assistant economics professor at the University of Canberra, and Paul Oslington, economics professor at the Australian Catholic University, found that in the change from the Workplace Relations
Act 1996 to the Fair Work Act:
- Claimant success rates have lifted from 33% under Work Choices to 51% under the current Act.
- Claims under the Act against businesses with more than 100 employees have a 41% success rate, versus the 33% rate under the Workplace Relations Act.
- Claims lodged under the Act have jumped to 17,000 per year, from 6000 under Work Choices.
- Payouts were steady, averaging about 12 weeks’
Employers need to be vigilant in conforming to proper process when dismissing somebody, even when the employer believes they have sufficient reasons to justify dismissal. Employers need to follow the correct process – such as providing warnings and collecting documentary evidence. In the absence of this process it’s very easy to formulate an unfair dismissal claim on the basis of a lack of fair process.
For employers the best way to avoid claims of unfair dismissal is to make sure that your organisation and your employees really understand their obligations under the Fair Work Act when terminating someone’s employment. It also means there should be an internal review of the firm’s policies.
We represent both employers and employees so if you or your organisation needs assistance or advice on how to proceed please call on (02) 9963 9800 or via our contact form.
It’s important for all businesses to determine whether their workers are classified as employees or independent contractors, as tax, super and other government obligations are different depending on the working arrangement present.
- Employees generally have PAYG withholding, superannuation (and occasionally fringe benefits tax) paid by the employer.
- Contractors generally look after their own tax and superannuation obligations.
If you as an employer fail to meet your obligations, you risk being liable to pay penalties.
Employee or Contractor: What factors do you need to consider?
There are a number of factors to take into account when determining whether a worker is an employee or an independent contractor. No single factor can determine this, you need to look at the whole working arrangement.
A worker isn’t automatically a contractor just because they have an ABN or specialist skills, or you only need them during busy periods.
Courts will look at the whole relationship between the parties when determining the status of a person’s employment.
The Fair Work Ombudsman has produced a table of common indicators that may contribute to determining whether a person is an employee or independent contractor:
|Degree of control over how work is performed||Performs work, under the direction and control of their employer, on an ongoing basis.||Has a high level of control in how the work is done.
|Hours of work||Generally works standard or set hours (note: a casual employee's hours may vary from week to week).||Under agreement, decides what hours to work to complete the specific task.
|Expectation of work||Usually has an ongoing expectation of work (note: some employees may be engaged for a specific task or specific period).||Usually engaged for a specific task.
|Risk||Bears no financial risk (this is the responsibility of their employer).||Bears the risk for making a profit or loss on each task. Usually bears responsibility and liability for poor work or injury sustained while performing the task. As such, contractors generally have their own insurance policy.
|Superannuation||Entitled to have superannuation contributions paid into a nominated superannuation fund by their employer.||Pays their own superannuation (note: in some circumstances independent contractors may be entitled to be paid superannuation contributions).
|Tools and equipment||Tools and equipment are generally provided by the employer, or a tool allowance is provided.||Uses their own tools and equipment (note: alternative arrangements may be made within a contract for services).
|Tax||Has income tax deducted by their employer.||Pays their own tax and GST to the Australian Taxation Office.
|Method of payment||Paid regularly (for example, weekly/fortnightly/monthly).||Has obtained an ABN and submits an invoice for work completed or is paid at the end of the contract or project.
|Leave||Entitled to receive paid leave (for example, annual leave, personal/carers' leave, long service leave) or receive a loading in lieu of leave entitlements in the case of casual employees.||Does not receive paid leave.
A simple way to help tell the difference between employees and contractors
The Australian Taxation Office on its website uses the following simple descriptions:
- Employees work in your business and are part of your business.
- Contractors run their own business and provide services to your business.
Why is the distinction important?
Employment relationships are regulated by specific labour protection laws and various awards/workplace agreements. These laws typically provide a higher degree of protection to employees than the general commercial laws that regulate contractor relationships.
This protection includes minimum conditions and standards of employment for employees, including minimum entitlements for leave, public holidays, notice of termination and redundancy pay.
Adopt good business processes
Business owners need to keep records of any decision on whether a worker is an employee or contractor and the factors relied on to make that decision.
Most of the information needed to support this decision can be found in a service contract for independent contractors or an employment contract for employees, which should accurately reflect the actual conditions of the working arrangement.
All contracts should:
- Be in writing;
- Specify whether it is a contract for services or an employment contract; Set out the period of engagement and the remuneration;
- Include dispute resolution provisions; and
- Specify if/how the relationship can be terminated.
It is illegal for an employer to misrepresent an employment relationship or a proposed employment arrangement as an independent contracting arrangement or make a knowingly false statement to persuade or influence an employee to become an independent contractor.
Under the Fair Work Act inspectors can:
- Seek the imposition of penalties for contraventions of sham contracting arrangements
- Apply to the courts to grant an injunction or an interim injunction if an employer seeks (or threatens) to dismiss an employee for the purpose of engaging them as an independent contractor. The purpose of the injunction would be to prevent the dismissal from occurring, or otherwise remedy the effects. Courts can also make other orders to have the employee reinstated or compensated.
If you need more information or if you need assistance or advice on how to proceed please contact us on (02) 9963 9800 or via our contact form.
Significant damage can be done to a business when an executive or senior manager resigns, taking with them valuable customers and confidential information. Restraint of trade clauses, or post-employment restraints, play a crucial role in protecting the legitimate interests of the employers when senior employees resign.
In order to protect business interests, employment contracts should contain protections which operate after the employment ends.
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 – however 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.
- 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. An injunction may restrain a 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
When drafting restraint clauses in employment contracts, it is important to:
- 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.
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 this bullying if there is no intervention.
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 risks.
What is workplace bullying?
Under these powers, workplace bullying occurs when:
- An individual or group of individuals repeatedly behave 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 for it to fit the definition, but it does not have to be the same specific type of unreasonable behaviour every time. 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.
The health and safety risk
Some bullying could be physically violent, or involve subjecting a worker to a physical safety risk at their workplace. However, bullying may also involve 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 doctor or psychologist’s diagnosis, but that might help show the health and safety risk that has arisen 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 these factors.
Who and where?
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 begin work on the application within two weeks.
Once received, the Commission sends a copy of the application to the employer, and anyone named as a bully in the application. These parties have seven days to respond to the allegations. The Commission may then deal with the application by having a conference or mediation between the parties, or a more formal hearing. If necessary, the Commission can make an order to stop the 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.
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 employee’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, they are 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.
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 ought to be specified:
- 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;
- 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;
- Location of the 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.
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 should expressly do so by reference in the contract.
Employees and contractors
There is often ambiguity in a worker’s status, such as 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.
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.
Some entitlements and obligations that exist in the employment relationship are implied. This means that even if they are not written down or stated in the contract they still apply.
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”.
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.