May 7, 2022 | Employment Law
Redundancy commonly occurs when a business is sold or restructured, and a role that has been carried out by a particular employee (or numerous employees) is no longer necessary. When this occurs, there are certain processes by which an employer must abide to legally declare someone redundant.
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.
Redundancy
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 often meet requirements under a relevant award or enterprise agreement before making an employee redundant. 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 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:
- Resigns;
- 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; or
- 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.
May 4, 2022 | Employment Law
Disclaimer: Since the publishing of this article, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 has come into force. Please use caution if you are citing legislative material from this article as laws are subject to change. We recommend that you seek the most up-to-date law.
The Federal Government is set to introduce a highly anticipated reform of industrial relations laws following a recent case 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 (2021) 392 ALR 39. In this blog, we review the changes to the industrial relations laws and outline the case that lead to this controversial decision.
What’s changing?
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.
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:
- 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
- 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:
- the employee has been employed by the employer for a period of 12 months from the day the employment started; and
- 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.
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 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.
May 2, 2022 | Employment Law
Ongoing structural shifts within the workforce have exacerbated the importance of a clear distinction between employees and independent contractors. Flexible working-from-home arrangements and the rise of the gig economy have attracted the global workforce to a non-traditional means of employment. Greater autonomy and a more sustainable work-life balance are factors which are likely to catalyse the growth of independent contractors, a sector which already accounts for 7.8% of Australia’s total employment (as of August 2021).
Although this broadens opportunities for employers, there have been frequent legal disputes in distinguishing between employees and independent contractors. Fortunately, in February 2022, the High Court handed down a decision which aided in clarifying the nature of independent contracting relationships; ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 (Jamsek).
Who is an independent contractor?
An independent contractor provides agreed services under a contract for those services. Contractors, or subcontractors, usually negotiate their own fees and working arrangements because they represent their own work, not the work that is executed by the business they are contracting for. Although there are many professions which are capable of being performed by independent contractors, the most common examples include freelance writers, graphic designers and auctioneers.
Who is an employee?
Employees on the other hand, are workers who represent the business they are working for. An employee works in the service of the employer under a contract, which establishes work duties and employee entitlements, which must be in accordance with the National Employment Standards.
How does the court differentiate between contractors and employees?
Previously, courts considered the manner in which parties conducted their relationship after the contract was signed. Courts applied a multifactorial approach in determining whether a worker was an employee or an independent contractor. The terms of the contract were relevant but not decisive.
However, in Jamsek, the High Court found that the key differentiation between contractors and employees is to be found within the terms of the contract (whether written, oral or a combination thereof). In Jamsek, the court had significant regard to the nature of legal rights and obligations held within the contracts. Specifically, the court noted that each partnership (provision of delivery services) paid for running costs and expenses of their trucks, and would invoice ‘ZG Lighting’ (the company) for the delivery services provided. By examining these features within the contract, the High Court concluded that these “partnerships” were operating as a business of their own.
How relevant are contracts in determining the relationship between contractors and employees?
The majority decision in Jamsek concluded that the way in which ‘contracts are played out in practice’ is, in most cases, no longer relevant in determining the nature of the relationship. Rather, post-contract conduct is only relevant when identifying relevant contractual terms (where the contract is not wholly in writing), or challenging the enforceability of the contract under the provisions of the Fair Work Act 2009.
It should not be assumed, however, that post-contract performance is entirely irrelevant to the categorisation of work relationships. In particular, it is crucial that parties avoid the following:
- Waiving their rights under the contract
- Varying their contracts by way of conduct; or
- Making representations which may be used to compromise their interests.
Why is it important to distinguish between independent contractors and employees?
The choice between employees or contractors will affect an employer’s tax, super and other obligations. For instance, an independent contractor is not entitled to paid leave and for the majority, pay their own superannuation. On the other hand, employees are entitled to paid leave, are covered under the National Employment Standards and are entitled to a compulsory superannuation provision by their employer. Hence, an ambiguous distinction is likely to create disputes, resulting in severe penalties for employers.
How Etheringtons Solicitors can help?
A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. If you need further advice or assistance with any employment law matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.
Apr 10, 2022 | Employment Law
Disclaimer: The directives in this article relating to the COVID-19 pandemic may no longer be in force. Please use caution if you are citing legislative material from this article as laws are subject to change. We recommend that you seek the most up-to-date law.
The Fair Work Commission has reaffirmed the importance of employers complying with consultation requirements when making employees redundant, even during Covid-19. Failure to consult with an employee about the significant changes to their employment means employers cannot rely on the genuine redundancy exception to unfair dismissal enquiries.
Legislative Requirements of Genuine Redundancies
The requirements to establish a genuine redundancy are set out under s 389 of the Fair Work Act 2009 (NSW):
- The employer no longer requires the job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;
- The employer has complied with any consultation obligation in a modern award or enterprise agreement;
- It is not reasonable in the circumstances for the person to be redeployed within the employer’s enterprise or an associated entity.
Findings of the Fair Work Commission
The consultation requirement of genuine redundancies has been highlighted in two recent cases heard by the Fair Work Commission.
In Browne v MySharedServices [2020] FWC 4445, the employee (Browne) was dismissed over the phone without prior consultation by his employer (MySharedServices). The employer relied on genuine redundancy grounds for dismissal. The Fair Work Commission found that whilst operational changes to the business had occurred as a result of Covid-19, the consultation requirement had not been met. Under the relevant modern award (Clerks Award 2009), MySharedServices were required to consult employees on any change that may have significant effect on their employment, including termination. As the consultation did not occur and there were no issues with the employee’s performance, the Fair Work Commission found the termination was an unfair dismissal.
A similar situation arose in the case Freebairn v TLJ Advisors and Accountants (2020) FWC 3915, where the employer failed to consult the employee (Freebairn) about the termination of her employment as a result of firm restructuring post Covid-19. Freebairn filed for unfair dismissal on grounds that no consultation had taken place and that if consultation had occurred she could have arranged to work reduced hours until the JobKeeper scheme kicked in shortly after. As a result, the Fair Work Commission agreed the dismissal was not a genuine redundancy because of the failure to comply with consultation requirement.
Employers must comply with the consultation requirements
Employers must remain vigilant in upholding consultation requirements when implementing redundancies, even in the wake of mass organisational shifts as a result of the Covid-19 pandemic. Consultations must be genuine discussions about the changes to employment and explain how the employer intends to mitigate such changes. In particular, consideration must also be given to how JobKeeper and other Covid-19 relief schemes impact relationships between employers and employees in relation to organizational restructuring.
We represent both employers and employees, so if you or your organisation needs further advice or assistance in relation to redundancies or dismissals, please call Etheringtons Solicitors on (02) 9963 9800 or via our contact form
Apr 8, 2022 | Business Law, Employment Law
In this article, we identify the liabilities involved in the voluntary assumption of risk and how to avoid breaching duty of care.
In March 2010, a security guard sued his employer and the owner of Lidcombe Power Centre, for PTSD resulting from an intruder threatening his life. This case, Capar v SPG Investments Pty Ltd t/a Lidcombe Power Centre (2020) (‘Capar’), sheds light on how far an employer’s duty of care extends when an employee voluntarily assumes risk of injury.
The Capar case
The plaintiff was employed as a security guard for Lidcombe Power Centre. Whilst on duty surveying the CCTV footage, he detected an intruder entering the premises. As the plaintiff left the control room to investigate, he came upon the intruder who wielded an axe and threatened to kill him. The security guard fled to the control room for safety and called the police; who arrived shortly and apprehended the intruder. The guard suffered from PTSD as a result of the incident and initiated proceedings in negligence against the owner of the shopping centre, the security company that was paid to provide security for the premises, and his own employers (the sub-contractors of the security company).
Injured persons and “obvious risks”
The plaintiff’s negligence claims were initially dismissed by the NSW Supreme Court.
In accordance with the Civil Liability Act 2002 pt 1A div 4, the Court ruled that the security guard was aware of the “obvious risk” of mental or physical harm when he chose to leave the control room and confront the intruder.
In negligence proceedings, the injured person is ‘presumed to have been aware of the risk of harm if it was an obvious risk’. This means that the injured person is assumed to be conscious of risk ‘even if the person is not aware of the precise nature, extent or manner of occurrence of the risk’.
Voluntary assumption of risk and duty of care
The Civil Liability Act 2002 states that ‘a person (the defendant) does not owe a duty of care to another person (the plaintiff) to warn of an obvious risk to the plaintiff’.
In the Capar case, the security guard’s contract did not specify that he was obligated to confront the intruder. Owing to his voluntary assumption of an obvious risk, his employer’s duty of care was found not to extend to the actions which caused PTSD.
According to the Civil Liability Act 2002 pt 1A div 2, a person is negligent in taking precautions against a risk of harm if the risk was foreseeable, not insignificant, and if a reasonable person in the injured person’s position would have taken appropriate precautions.
Owing to these conditions, neither the occupier of the premises, the contractors nor the security guard’s employers, were made liable for negligence.
How do I avoid breaching duty of care?
There are a number of steps that can be taken to help protect your business from risks of liability in negligence:
- Ensure all staff understand their duties and perform them correctly. Have a clear written guide because if staff are unclear on their responsibilities, the likelihood of risk and personal harm may increase.
- Implement security measures on your premises that reduce the risk of liability caused by the actions of trespassers.
- Communicate a clear plan to all employees in case of an invasion. In the case of an invasion, staff should not approach or confront an intruder. They should retreat to safety and contact the police immediately.
- If you are employing security personnel, have clear and explicit discussions on the extent of their role and the potential risks that may arise.
If you would like to learn more about how breaches to duty of care may affect your personal or professional life, please see our blog for more information.
How Etheringtons Solicitors can help
A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. If you need further advice or assistance with employment law or negligence matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.
Apr 8, 2022 | Employment Law
The expectation to maintain professionalism as an employee is a crucial responsibility. In the age of social media, the need to act in accordance with company policies and preserve company reputation has evolved into an assumed etiquette. The Fair Work Commission has seen an increase in employment termination due to the improper use of social media in the workplace. As such, it is crucial that employees understand how their behaviour on social media may detrimentally impact their employment contract.
Why is it important to monitor your social media posts as an employee?
It is expected that employers and employees practice appropriate etiquette on social media in order to uphold company standards.
In NSW, employers are bound by ethical codes contained within the Fair Work Act (No 28) 2009 (Cth) (‘Fair Work Act’). These codes impart values of “fairness” to prevent employers from acting in discriminatory ways. The Fair Work Act serves to protect an employee’s workplace rights. It also enforces provisions that support employees in unfair dismissal cases.
It is expected that employees act in accordance with company policies when maintaining an online presence. When an employee’s social media presence reflects negatively on their company’s reputation, their employer may terminate their contract of employment.
Folau v Rugby Australia: Codes of conduct and social media
In 2019, Rugby player, Israel Folau was fired after Rugby Australia flagged Folau’s Instagram posts for homophobia. His contract was terminated because he breached the company’s code of conduct which prohibited players from partaking in discriminatory behaviour whilst employed.
Folau argued that he was unfairly dismissed because he was only wanting to express his Christian faith on his personal social media account. He brought the dispute to the Federal Circuit Court of NSW and claimed that his employment was terminated for a prohibited reason (i.e. religion) under s772 of the Fair Work Act. Folau argued that he had a right to freedom of expression on his own social media profile. However, Rugby Australia disputed this claim by asserting that employers have the capacity to regulate an employee’s behaviour both publicly and privately to ensure that they adhere to the company’s code of conduct.
Rugby Australia argued that Folau’s Instagram posts breached his employment contract and therefore resulted in his termination. His case demonstrates how employees can jeopardise their employment if their social media posts are against the ethical codes of company policy. To better understand the consequences of making defamatory or discriminatory social media posts, please refer to our blog for more information.
How should employees behave on social media?
When posting online, it is important to be aware of the following:
- It is your responsibility to monitor and regulate your behaviour on social media platforms. Be sure to familiarise yourself with company policies and code of conduct so that you are not at risk of breaching codes of conduct.
- Never disclose personal or propriety information belonging to an employer. Always seek permission before posting on behalf of another person.
- To avoid your personal information from being revealed to your current or potential employer, check the privacy settings of your online profiles. Keep personal accounts, devices and internet searches completely separate to your work account.
- Be aware of the consequences of posting inappropriate material. Your employer can use your social media posts to take disciplinary action against you.
How can Etheringtons Solicitors help?
A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. If you need further clarification on employment law, or believe you may have behaved inappropriately on social media, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.
