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Warning! Casual Employee Entitled to Annual Leave

In a major decision, the Full Bench of the Federal Court has held that a worker expressly engaged as a casual was entitled to annual leave and other entitlements upon termination.

In our view, in doing so the Court has cast doubt on decades of accepted industrial practices and the decision threatens to undermine casual employment relationships around the country.

The Facts

In WorkPac Pty Ltd v Skene:

  • the employee was employed by a labour-hire company in the mining industry as a dump-truck operator and the employment was governed by the WorkPac Pty Ltd Mining (Coal) Industry Workplace Agreement 2007 (Agreement)
  • although the letter of employment stated he was a casual, he was subject to a continuous 7 day ‘fly-in, fly-out’ pre-set roster arrangement, worked regular and systematic shifts, stayed in accommodation at/near the mine and was expected to attend each shift
  • an ‘all-in flat rate’ of pay was payable for each hour of work although WorkPac did not specify what entitlements this flat rate of pay purported to absorb
  • the annual leave provision in the Agreement stated it only applied to permanent employees
  • although no annual leave was taken during employment and the employee was not paid any annual leave or notice upon termination, a claim seeking payment of same was filed

The Issues

Whilst the Fair Work Act states paid annual leave applies to all national system employees “other than casual employees”, it does not define a “casual employee” thus the issues for the Court were: [...]  READ MORE →

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Employment Law – Couple Working From Home Employees

Employment Law – Background

Putland v Royans Wagga Pty Limited is a clear example of sham contracting. In this case, the Federal Court of Australia decided that a husband and wife who performed largely home-based clerical work for one company were employees, not independent contractors.

Employment Law – Facts

In essence:

  • The couple were employed by a truck repair company, Royans Wagga Pty Ltd
  • The couple’s relationship with Royans began in 2005, when the wife worked in the business’ offices monitoring accidents
  • In 2008, the husband helped provide the 24 hour, 7 days a week ‘accident reporting service’ which was based either at their home or in a demountable shed on the business’ premises at various times
  • However in 2015, Royans outsourced the service to an independent call centre
  • Since 2007, any contract between the parties was described as “partly oral and partly in writing”. However, Royans argued that the couple had been independent contractors at all times

Employment Law – Decision:

The Federal Court of Australia:

  • determined that the couple were not independent contractors, and had an employment relationship with Royans
  • found that the couple were employed under the Clerks Award as ‘call centre principal customer contact specialists’ on a permanent, full-time basis and that Royans breached ss 45, s357 and 536 of the Fair Work Act
  • noted there were 10 “indices” supporting the view that the couple were employees. These included the exclusive nature of their service, Royans’ payment of phone lines and bills at their home, deferential emails to the company’s managing director, provision of scanners and telephone systems and the lack of true autonomy
  • suggested that the most significant indicator was the authority to control, as the managing director has extensive and far-reaching actual control over the work done and work was only done for Royans Wagga.
  • rejected indicators in favour of an independent contractor relationship, including the possession of ABNS, the issuing of tax invoices, the couple working from home and not wearing uniforms, on the basis that these features were “largely reflective of the [couple’s] subjective understanding of the position they were in according to the wishes of Royans”, rather than “supporting an objective assessment of the true nature of the relationship”
  • held that Royans must compensate the couple for underpayments, unpaid overtime, superannuation and leave. However amounts payable and penalties for sham contracting have not yet been determined.

The decision is available for you to read through the hyperlink:

Putland v Royans Wagga Pty Limited [2017] FCA 910 (9 August 2017)

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers: [...]  READ MORE →

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Fair Work Commission – Reconsideration of Fixed Term Contract Authority

Fair Work Commission – Background and Facts

The full bench of the Fair Work Commission has taken the rare and serious step of allowing for a reconsideration of a full bench authority on fixed-term contracts. The Fair Work Commission granted the Navitas English Pty Ltd employee leave to appeal a ruling on whether employees on fixed term or “outer-limited” contracts are dismissed when their terms expire.

Fair Work Commission Decision:

The Fair Work Commission:

  • concluded that it was in the public interest to grant the employee’s appeal and reconsider the well-established 2006 decision of Department of Justice v Lunn
  • suggested this was a matter of public interest because Lunn considers old unfair dismissal provisions under the Workplace Relations Act 1996 (Cth), and thus the applicability of the reasoning in Lunn as it applies to the Fair Work Act has not been previously analysed by the Full Bench
  • stated that in their view “the first ground of appeal raises issues of importance and general application in relation to the question of the approach that should be adopted by the Commission in determining whether there has been a termination of employment at the initiative of the employer, particularly in relation to employees who have been employed on a series of fixed term or outer limit contract”

The decision is available for you to read at the following hyperlink:

Mr Saeid Khayam v Navitas English Pty Ltd T/A Navitas English [2017] FWCFB 4092 (16 August 2017) [...]  READ MORE →

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Dismissed Woolworths Worker Denied Legal Representation

Employment Law – Background

In a Fair Work Commission ruling, a warehouse team leader and Woolworths (MLDC) have both had their requests for legal representation denied, on the basis the unfair dismissal claim was “not complex enough”.

Employment Law – Facts

In essence:

  • The team leader was summarily dismissed in May 2017 for apparently engaging in serious safety breaches, such as going underneath a forklifts tyres and failing to take immediate corrective action or follow standard risk assessment procedures for workplace hazards.
  • In applying for unfair dismissal, the employee sought to be represented by a paid agent on the basis he would struggle to argue his own case or cross-examine witnesses.
  • The employee also argued that it was unfair to deny both parties legal representation because MDLC had in-house HR/IR staff with “superior legal and communication skills”. However MDLC disputed this, highlighting that their in house HR were not legally trained or skilled in advocacy
  • MDLC argued that they required legal representation as it “could not properly articulate all the issues”, and that if the team leaders request was granted, it would create an uneven playing field.

Employment Law – Fair Work Commission Decision:

The Fair Work Commission:

  • denied both parties requests for legal representation as it may create “unnecessary formality”
  • accepted that whilst that whilst there were conflicting facts, the case was one which did not “contain a level of complexity beyond that which would ordinarily be found in a routine unfair dismissal matter”
  • emphasised that refusal of both applications was necessary because it “will not lead to a situation of unfairness for either party.” It was stressed that a there would be a “significant imbalance” between the parties if one party was granted legal representation over the other
  • maintained that both parties were well equipped to represent themselves, in that whilst MDLC are not “legally trained and experienced with advocacy, they are experienced in dealing with employee relations matters”. Similarly, the former employee is an “experienced team leader who was responsible for the management of a significantly large number of employees”

The decision is available for you to read through the hyperlink:

Christian Guillemain v Woolworths Limited T/A Melbourne Liquor Distribution Centre [2017] FWC 4236 (15 August 2017) [...]  READ MORE →

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Religious Law Trumps Dismissal

The Supreme Court has confirmed the power of religious laws within employment contracts, in ruling that administrators of a Sydney synagogue wrongfully dismissed a high earning rabbi when they made him redundant. The court confirmed that his employment contract conferred lifetime tenure under Orthodox Jewish Law.

Employment Law – Facts

In essence:

  • Administrators were called in to assist the Rose Bay synagogue over concerns about finances and declining congregation.
  • In April 2017 the administrators sent the rabbi a “termination” letter after concluding they could no longer afford the rabbi’s remuneration package. The rabbi had earnt over $2million over the last three years.
  • However, the rabbi claimed that his employment contract was bound by the Orthodox Jewish law principles of Halacha, which made a guarantee of lifetime tenure (Hazakah), a contractual term by incorporation or implication.
  • The administrator argued that the principles of Halacha, including Hazakah, were not incorporated into the employment contract and they were entitled to end the rabbi’s contract.

Employment Law – Decision

Justice Brereton of the Supreme Court:

  • held that the rabbi was unlawfully dismissed
  • accepted that the rabbi’s employment contract included a guarantee of lifetime tenure (Hazakah), unless a religious court established there were reasonable grounds for dismissal under the Din Torah process of arbitration. This could include “fundamental non-performance of his rabbinical duties” under Jewish law (Halacha)
  • confirmed, citing Engel v The Adelaide Hebrew Congregation, that “the parties to a contract governed by Australian law can incorporate into the contract, as terms of the contract, provisions of another system of law, including Jewish law. Alternatively, if not incorporated, then ‘Hazakah’ is an implied term of the contract”
  • emphasised that it was “inconceivable” that the parties did not intend for Hazakah to be a term of the contract as any arrangement other than Hazakah, would have been antithetical to Orthodox Jewish life

The decision is available for you to read through the hyperlink:

In the matter of South Head & District Synagogue (Sydney) (Administrators appointed) [2017] NSWSC 823 (22 June 2017) [...]  READ MORE →

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Redundancy Consultation Cannot be ‘Hollow’

In Belinda Lee v Mission Australia, the Fair Work Commission warned against “hollow” consultation in redundancy, emphasising that it cannot be conducted for mere show and must have value.

Facts

In essence:

  • A program manager at Mission Australia alleged that she was made redundant without consultation whilst she was on parental leave
  • Mission Australia wrote to the manager stating she was going to be made redundant as they were no longer delivering their Skills for Education and Employment course and Adult Migrant English Program after Federal Government funding cuts. They stated they failed in their search for redeployment opportunities for her
  • The manager’s request to delay her retrenchment and redeployment period until after she returned from parental leave to see if any further opportunities arose, was rejected by Mission Australia

The Decision

The Fair Work Commission:

  • granted an interim order which prevented Mission Australia from retrenching the manager
  • emphasised that consultation must have a purpose, stating that “if the consultation does not provide [the program manager] the opportunity to influence the decision, it is of no value and the requirement to consult and the consultation is hollow”
  • in determining whether redundancy was undertaken without consultation, Mission Australia needed to address three main issues, including whether it had engaged in meaningful consultation, had done all it could do to mitigate any adverse effects of the redundancy and had made all reasonable redeployment efforts.
  • highlighted the importance of making interim orders as the dismissal could only be undone with significant litigation
  • The parties reached a confidential settlement after conciliation

The decision is available for you to read through the following hyperlink:

Belinda Lee v Mission Australia [2017] FWC 3557 (4 July 2017)

Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • ensure that when making an employee redundant employers have:
    • engaged in meaningful consultation
    • mitigated against any adverse effects of the redundancy
    • made all reasonable deployment efforts
    • ensure compliance with all employment laws including Fair Work Commission decisions, Awards and enterprise agreements
    • draft new/changes to employment law policies with the assistance of an employment lawyer
    • raise any employment law questions with an employment lawyer

    More Information

    Please call the leading employment lawyers in Parramatta, the Matthews Folbigg Workplace Solutions employment law team on 9635-7966 to speak with one of our employment lawyers. [...]  READ MORE →

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Employment Law – Ex-Employee Restraint Clause Unenforceable    

Employment Law – Background

The Victorian Court of Appeal reaffirmed a decision that an employer was unable to enforce a restraint clause against an employee. The accounting firm’s breach of an employment contract consequently ended its right to enforce a restraint clause against the accountant. The case highlights the importance of carefully assessing any differing views between the employee and employer in employment law.

Employment Law – Facts

In essence:

  • the employee-accountant signed an employment contract in 2012
  • the contract contained a restraint clause that operated for 12 months. Notably, the terms were found to be reasonable by judges in earlier cases
  • the accounting firm expanded its business over 2015-16
  • the accounting firm denied the accountant certain bonuses he believed he was entitled to
  • as a result, the accountant requested payment to which the employer refused
  • the accountant took a week’s leave. A few days after he returned, he informed the employer he considered the refusal to pay the bonuses as a repudiation of the employment contract
  • especially relevant, the account set up his own business. Consequently, the employer sought to enforce the restraint clause

Employment Law – Decision

The Victorian Court of Appeal:

  • concluded that the accountant-employee’s interpretation of the bonus clauses was correct
  • held that the organisational changes could not justify the refusal to pay hence he should have been paid the bonuses
  • found that in conclusion, the refusal to pay was a breach of the employment contract. Consequently, the right to enforce the restraint clause ended

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers: [...]  READ MORE →

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Employment Law – Modern Awards Reductions

Employment Law – Background

In June this year, the Fair Work Commission (FWC) announced the reductions of public holiday penalty rates for the hospitality, retail, fast food and pharmacy sectors. The reductions were decided as part of the FWC’s four-yearly review of modern awards.

As of 1 July 2017, public holiday penalty rates were reduced while Sunday rates will reduce over three to four years. Although the unions argued for the delay in reductions, the FWC agreed with employer organisations. As a result, the first transition step is smaller than later transitions. Furthermore, the retail and pharmacy sectors will have longer transition periods due to their reductions being more significant. [...]  READ MORE →

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Employment Law – The Need for Proper Workplace Investigations

Employment Law – Background

Employment claims like bullying and unfair dismissal continually on the rise in employment law. Consequently, employers are increasingly required to take pro-active steps to investigate suspected workplace incidents and disputes before they lead to such claims.

A workplace investigation is a formal investigative process into an alleged workplace incident or dispute and it may be necessary to undertake same even if the complainant objects to it (ie, because they only wish to make an informal complaint). [...]  READ MORE →

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Employment Law – Redundancy Consultation

Employment Law – Background

Currently, there are no specific guidelines on how long employers should or must conduct redundancy consultations under a Modern Award.

Different rules of course may apply to enterprise agreements, under company policies or in some cases under the terms of an employee’s employment agreement.

We understand that employers may want to rush a business restructure in order to continue running the business, however, there are a few tips employers should consider to minimise any possible adverse effects. [...]  READ MORE →

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Employment Law – s 457 Visa Entitlements

Employment Law – Background

The Australian Government announced the abolition of the Temporary Work (Skilled) visa (subclass 457 visa) in April 2017. They will be replaced with the Temporary Skill Shortage (TSS) visa in March 2018. Consequently, employment law questions have arisen regarding the entitlements afforded to such workers in this transition period.

Common questions include:

  • Could the employee successfully claim unfair dismissal?
  • Is an employee on a 457 visa entitled to redundancy pay if there is no further work when the visa expires?

Employment Law – The Fair Work Act 2009 (Cth)

s386(2) provides that an employee is excluded from claiming unfair dismissal if:

  • the employee is employed on a contract;
  • for an unambiguous specified period of time; and
  • whose employment is terminated at the end of that specified period

Employment Law – Case Decision

A decision of the Full Bench of the (then) Australian Industrial Relations Commission held that a s457 visa can be used to specify the fixed time period of an employment contract. This is provided that the parties have a sufficiently proven understanding of the terms of the visa and the contract of employment. This understanding must therefore include the period of employment and most notably, the end date. [...]  READ MORE →

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Employment Law – Landmark Sham Contracting Case

Employment Law – Background

In March 2015, the Fair Work Ombudsman (FWO) brought a case against Quest South Perth Holdings Pty Ltd (Quest) for breaches of the Fair Work Act 2009 (Cth) (the Act). In a long-running legal saga, the Federal Court found that Quest and Contracting Solutions Pty Ltd had not contravened the Act by moving employees onto independent contractor arrangements. By the end of 2015, the High Court of Australia overturned the Federal Court ruling and therefore found Quest had engaged employees in a ‘triangular’ sham contracting arrangement. [...]  READ MORE →