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Fair Work Commission: High Earner Can Pursue an Unfair Dismissal Claim

Employment Law – Background

In Mr James Kaufman v Jones Lang LaSalle (Vic) Pty Ltd, the Fair Work Commission ruled that a regional director of a multibillion dollar real estate business could purse his unfair dismissal claim despite earning over the high income threshold as his duties indicated he was actually a sales representative under an Award.

Employment Law – Facts

In essence:

  • the former capital markets regional director claimed that he was unfairly dismissed when he was made redundant by Jones Lang LaSalle (Vic) Pty Ltd (JLL)
  • JLL made a jurisdictional objection to the application claiming that the employee was not a person protected from unfair dismissal within the meaning of s382 of the Fair Work Act
  • JLL argued the employee was a senior manager with significant leadership, mentoring and business generation responsibilities which went beyond the classifications in the Real Estate Industry Award 2010 (Award)
  • JLL also claimed the employee wasn’t protected from unfair dismissal due to his earnings surpassing the high income threshold

Employment Law – Fair Work Commission Decision

The Fair Work Commission:

  • held that the employee could pursue his unfair dismissal claim despite earning well-over the high income cap as the duties he undertook fell “squarely within the role definition of a property sales representative’ set out in the Award
  • formed this view because the question of Award coverage is determined not by a person’s title, rather “it is the duties performed that will be of significance”
  • noted the employee’s title of “regional director” was merely a “rank or accolade”
  • held the employee’s position in the hierarchy said little about his role “other than that he was a high performing successful employee”
  • disagreed that the employee was a senior manager as there was nothing in his regular duties which could be described as a managerial function and he had no direct reports – whilst he had general leadership expectations, it was found that these would be common amongst “most employers in the real estate industry
  • ultimately, it was held that the “fundamental or principal purpose” for which the employee’s position existed was to sell real estate, which fell under the Award
  • the employee was therefore protected from unfair dismissal

Employment Law – Tips for Employers  [...]  READ MORE →

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Fair Work Commission – Social Media Posts

Fair Work Commission – Background

The Fair Work Commission found an employee dismissal to be unfair. Mr Somogyi was dismissed because of vulgar social media misconduct. However, a fair dismissal procedure must be followed by employers.

Fair Work Commission – Facts

In essence:

  • Somogyi was employed as a merchandiser at LED Technologies Pty Ltd
  • on 24 August 2015, he posted on Facebook: “I don’t have time for people’s arrogance. And your not always right! Your position is useless, you don’t do anything all day how much of the bosses c*** did you suck to get where you are?”
  • the post was seen by several of Mr Somogyi’s colleagues before he removed it after five minutes
  • his employer dismissed Mr Somogyi in a sixty second telephone call. The employee was told: “it doesn’t matter. You’re fired”
  • the employer failed to provide the employee an opportunity to explain his conduct
  • furthermore, the employer mistakenly interpreted that the post was referring to employees of LED Technologies Pty Ltd
  • the employee reposted a ‘clarification’ explaining his original post. He was referring to a hostile employment situation his mother was facing elsewhere

Fair Work Commission – Decision

The Fair Work Commission found:

  • the Facebook post was ‘crude and immature’
  • the post did not constitute a valid reason for dismissal
  • offensive and vulgar language are increasingly part of the common vernacular
  • there was no evidence the post was directed at the business or its employees
  • no evidence that Mr Somogyi was provided a social media policy
  • there was no sufficient connection to the workplace to justify legitimate action against Mr Somogyi
  • Mr Somogyi was to be compensated with the difference in his earnings from another role for a period of six months

Employment Law – Tips for Employers

Unfair dismissal claims must be confined to their own facts. Therefore, our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • review this Fair Work Commission decision
  • seek the assistance of an employment lawyer to understand the impacts of this Fair Work Commission decision
  • prepare new social media policies as required
  • update employment law policies in response to this Fair Work Commission decision
  • draft new/changes to employment law policies with the assistance of an employment lawyer
  • train and consult with staff about social media in the workplace and the impact it can have on employment
  • fairly, consistently and lawfully respond to breaches of employment contracts and employment law policies
  • penalties can apply for breaches of employment laws including Awards and enterprise agreements (which an employment lawyer can advise on)

Employment Law – 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 – Payroll Company Liable for Client’s Award Breach

Employment Law – Background

The decision in Fair Work Ombudsman v Blue Impression Pty Ltd & Ors serves as a warning to payroll and accounting companies, as the court held an accounting company liable for its client’s breaches of the Fair Work Act.

Employment Law – Facts

In essence:

  • Blue Impressions, a Japanese restaurant chain, engaged EZY Accounting to do its data entry, bookkeeping and payroll processing for its employees
  • Blue Impressions sent data to EZY Accounting who uploaded it to MYOB for calculating and processing the payroll for employees
  • the relevant employees were covered by the Fast Food Industry Award 2010
  • the employees were being paid approximately $16.50 an hour, when they should have been receiving at least $19.44 an hour
  • the restaurant was audited by a Fair Work inspector
  • it was determined that the Fast Food Industry Award 2010 applied to the business and the Ombudsman sent a letter to Blue Impressions to that effect
  • the restaurant then engaged a workplace relations specialist to provide employment related advice
  • due to the audit and the specialist’s advice, EZY Accounting became aware of the details of the Fast Food Industry Award 2010 and the correct rates to be paid to employees, however, it failed to change the pay rates because they claimed they had no authority to do so
  • EZY Accounting argued that it was the responsibility of its client, Blue Impressions, to ensure its employees were paid correctly
  • further underpayments occurred

 

Employment Law – Decision

The Federal Circuit Court of Australia found:

  • EZY Accounting was an accessory to its client breaching the Fair Work Act
  • EZY Accounting had the requisite knowledge of the employment underpayments because of the audit and because it produced workers’ payslips through its payroll system, yet “deliberately shut its eyes” to what was going on
  • this employment related conduct “amounted to connivance in the contraventions” by the restaurant of the Fair Work Act as EZY Accounting had “had at [its] fingertips all the necessary information that confirmed the failure to meet the Award obligations by [the restaurant] and nonetheless persisted with the maintenance of its (payroll) system with the inevitable result that the Award breaches occurred”
  • paying less than the employment law rates in the Fast Food Industry Award 2010 is a breach of the Fair Work Act
  • under the Fair Work Act a person who is involved in a breach of the Fair Work Act is deemed to be in the same position as the person who actually breached the Fair Work Act
  • a person is considered to be “involved” if they aided, abetted or procured the breach, or if they were in any way, by act or omission, directly or indirectly, knowingly concerned in, a party to, or a conspirator with others to, the breach
  • EZY Accounting breached the Fair Work Act under these ‘accessorial liability’ provisions
  • that is, EZY Accounting was ‘involved’ in the contraventions of the Fair Work Act by the fast food restaurant chain
  • the penalty to be imposed on EZY Accounting will be determined later

Employment Law – Tips for Employers

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

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Employment Law – Redundancy and Job Swaps

Employment Law – Background

The Fair Work Commission decision in Skinner v Asciano Services Pty Ltd serves as a warning for employers to consider all redeployment possibilities, including voluntary job swaps, before making an employee redundant.

Employment Law – Facts

In essence:

  • Pacific National was experiencing a reduction in workload due to reduced export grain demand, client loss and the closure of a key site
  • consequently, its national operational requirements changed in its bulk haulage division
  • Pacific National Bulk (PNB) made multiple positions redundant, both voluntarily and forced
  • PNB followed a redeployment process for affected employees, specifically those whose employment was involuntarily terminated, whereby they held consultation meetings and advised of available internal transfer opportunities
  • despite the redeployment process, in the original decision, nine employees who were train drivers before being made redundant filed unfair dismissal applications, arguing that their redundancies were not genuine under the Fair Work Act
  • the Fair Work Commission was initially satisfied that there was a genuine redundancy in each case, and it was not reasonable for PNB to deploy the employees
  • seven employees appealed the original decision of the Fair Work Commission by primarily arguing that the PNB had failed to comply with its redeployment obligations under the Fair Work Act

 

Employment Law – Decision

The Fair Work Commission on appeal:

  • overturned the initial decision of the Fair Work Commission
  • found that PNB had breached its statutory obligation under the Fair Work Act to explore redeployment options by failing to consider the possibility of job swaps for the affected employees
  • stated that whilst there is not an obligation on an employer to implement job swaps, they should still consider whether it is reasonable in the circumstances of the workplace
  • considered the following five factors in coming to decision that PNB should have offered job swaps
  • one – PNB was a large company with a large amount of employees who undertook the same role to those who were made redundant
  • two – numerous employees performed the same role of train driving which meant that in allowing swaps PNB would not face onerous training requirements
  • three – there were potentially job swaps available in depots that were reasonably close to depots where some of the affected employees worked. This meant PNB would not have costs associated with transferring the employees
  • four – PNB had already canvassed job swaps as a possibility to mitigate the effects in the round of redundancies which resulted in the employees dismissal
  • five – PNB had previously allowed job swaps in similar circumstances

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • carefully consider the impact of this Fair Work Commission decision when considering redundancies
  • consult with employees as to all possible options for redeployment before terminating their employment for redundancy reasons
  • this includes exploring whether the employee can swap their employment position with another employee who wishes to accept a voluntary redundancy of their employment position
  • update employment law policies, especially those relating to termination of employment and redundancy, in response to this Fair Work Commission decision
  • seek the assistance of an employment lawyer to understand the impacts of this Fair Work Commission decision
  • ensure employment contracts and employment law policies comply with relevant employment laws, Fair Work Commission decisions, common law employment law principles and contractual obligations
  • raise any employment law questions with an employment lawyer

Employment Law – More Information [...]  READ MORE →

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Employment – Personal Liability for Directors and Managers

Cause for Vigilance!

A string of recent employment cases involving the Fair Work Ombudsman have clearly illustrated the risk posed by the ‘accessorial liability’ provisions within the Fair Work Act.

In essence:

  • accessorial liability is a legal doctrine used to extend legal responsibility for an unlawful act to those involved in or associated with the act
  • in employment claims, accessorial liability can also render a director and/or manager liable for an employer’s contravention of the Fair Work Act

Accessorial Liability under the Fair Work Act

Under the Fair Work Act a person who is ‘involved’ in a contravention of the Fair Work Act is taken to have contravened that provision, where the person:

  • has aided, abetted, counselled or procured the contravention; or
  • has induced the contravention, whether by threats or promises or otherwise; or
  • has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
  • has conspired with others to effect the contravention.

Founding Employment Decision

The foundation for such claims brought under the Fair Work Act was the decision of Guirguis v Ten Twelve Pty Ltd & Anor where the court held that in order for a person to be liable under the accessorial liability provisions of the Fair Work Act the person must: [...]  READ MORE →

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Fair Work Commission – Stop Bullying Order Rejected

Background
In B v Park Beach Bowling Club Limited [2017], the Fair Work Commission rejected an application for a stop bullying order on the basis that there was no evidence of repeated unreasonable conduct by the employer.

Facts/Findings
• The complainant was employed as a casual food and bar attendant at a club
• She alleged that the administration and events manager and the CEO had bullied her within the meaning of bullying under section 789FD of the Fair Work Act 2009. She applied to the Fair Work Commission for a stop bullying order
• The bullying related to four incidents, and the findings were as follows: [...]  READ MORE →

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Fair Work Commission – Employer Restrained

Background

An interim order has been issued by the Fair Work Commission to restrain an employer, Bendigo Kangan Institute t/a Bendigo TAFE, from taking disciplinary action against an executive director. The executive director had filed an anti-bullying application against her employer prior to the allegations of misconducted directed at her.

The interim order is the first of its kind in the Fair Work Commission anti-bullying jurisdiction.

Facts

In essence:

• the executive director filed a bullying complaint against other directors in March this year with the Fair Work Commission
• Bendigo TAFE alleged misconduct on behalf of the executive director. The employer used a third party to conduct an investigation into her alleged misconduct under the supervision of the board with the exception of the directors named in her bullying complaint
• Bendigo TAFE stood her down on full pay on March 28 and required her to attend a management meeting on April 3 for her to respond to the investigation’s draft findings
• the executive director was diagnosed with depressive illness and was on sick leave since March 30
• she was certified medically unfit until April 23 and did not attend the meeting on April 3
• the executive director sought an interim order from the Fair Work Commission to restrain Bendigo TAFE from potentially dismissing her because her anti-bullying application would fail otherwise
• Bendigo TAFE argued the prospective injunction restraining disciplinary action against the executive director was beyond the Fair Work Commission’s powers [...]  READ MORE →

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Deed of Release prevented claim against Employer

Background

In a recent Federal Circuit Court decision, a college teacher who claimed she was suffering from a psychological disability attempted to render her Deed of Release – signed in 2007 – invalid. However, due to a lack of medical evidence her claim was unsuccessful.

The Facts [...]  READ MORE →

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Consultation – Essential for a ‘Genuine Redundancy’

Most employers are generally aware that a ‘genuine redundancy’ is a complete defence to an unfair dismissal claim. However, a redundancy is not rendered ‘genuine’ simply because the redundancy is justified or necessary. The Fair Work Act 2009 (‘the FW Act’) requires employers to undertake a consultation process prior to the implementation of redundancies.

The consultation process requires employers to give employees adequate notice of potential workplace changes (i.e. redundancies), and discuss what steps can be taken to mitigate the effects of the workplace changes. [...]  READ MORE →

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Q&A – Dismissal of employees whilst on leave

A common question raised by employers is whether an employee can be dismissed whilst the employee is absent on personal/carer’s leave or annual leave. The question is common because employees often retreat onto leave when the employment relationship becomes dysfunctional, due to stress arising from disciplinary action, or to delay their dismissal.

There is no universal statutory prohibition on dismissing employees who are absent on personal leave or annual leave. However there are significant risks for doing so. [...]  READ MORE →

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Fair Work Commission – Penalty Rates Decision

Background

The:

  • four-yearly review of employment law modern awards has been conducted by the Full Bench of the Fair Work Commission
  • Fair Work Commission received over 5,900 submissions, and heard from 143 lay and expert witnesses over 39 days of hearing throughout 2015 and 2016
  • purpose of the review was to ensure that the modern awards continue to achieve their objective to provide ‘a fair and relevant minimum safety net’ and, of course, remain consistent with relevant workplace laws

Rationale for Penalty Rates

With respect to penalty rates:

  • the original rationale for penalty rates was to compensate employees for working outside ‘normal hours’ and to deter employers from scheduling work outside these hours
  • however, this rationale has shifted in more modern times and the Fair Work Commission has concluded that deterrence is no longer an objective of the modern awards in relation to weekend and holiday penalty rates
  • this means the primary objective of the modern awards is now compensation of employees
  • the hospitality and retail sectors made applications to vary (and ultimately reduce) the penalty rate provisions in relation to weekend and public holiday rates
  • employers have been pushing for these changes, with many asserting that they have had to reduce labour costs on Sundays and public holidays by restricting trading hours and limiting staff levels, leading to restrictions on the type and range of services provided

Affected Awards

The employment law decision of the Fair Work Commission relates only to businesses under the following modern awards:

  • Fast Food Industry Award 2010 (Fast Food Award)
  • General Retail Industry Award 2010 (Retail Award)
  • Hospitality Industry (General) Award 2010 (Hospitality Award)
  • Pharmacy Industry Award 2010 (Pharmacy Award)
  • Registered and Licensed Clubs Award 2010 (Clubs Award)
  • Restaurant Industry Award 2010 (Restaurant Award)

Weekend Rates

In respect of the weekend rates aspect of the Fair Work Commission decision:

  • they reviewed Saturday rates for the Fast Food, Hospitality, Restaurant, and Retail Awards and were satisfied that the rates achieved the modern award’s objective and did provide a fair and minimum safety net
  • the Clubs and Pharmacy Awards are subject to further consideration in this regard
  • in relation to Sunday rates, the Fair Work Commission decided that the Fast Food, Hospitality, Retail and Pharmacy Awards did not provide a fair and relevant minimum safety net consistent with workplace law
  • except for the Fast Food Award, Sunday rates for these awards were not simply reduced to Saturday rates
  • it was recognised that there remains a higher level of disutility in working Sundays rather than Saturdays, although the extent of that disutility is much less than in times past and hence some reduction is warranted
  • for the Fast Food Award, Sunday rates were levelled with Saturday rates for casual, part-time and full-time employees but career employees went unscathed
  • the Fair Work Commission has expressed a provisional view that the reductions should take place with a series of annual adjustments on 1 July each year (starting 1 July 2017) in conjunction with any increases to modern award minimum wages from Annual Wage Review decisions
  • casual employees can rest at ease knowing that their applicable rates will (currently) remain an extra 25% over other employees

Early/Late Loading rates

In respect of the early/late loading rates aspect of the Fair Work Commission decision:

  • some provisions concerning early morning/late night work were changed in the Restaurant and Fast Food Awards, winding back the clock from 7am to 6am as most cafes open at that time in capital cities
  • work performed between midnight and 6am will attract a 15% additional payment
  • these employment law changes will be in effect as of late March 2017
  • the Fair Work Commission was not persuaded to make changes proposed to Pharmacy Award, Clubs Award and Restaurant Award loadings

Public Holiday Rates

In respect of the public holiday rates aspect of the Fair Work Commission decision: [...]  READ MORE →

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Getting money out of straw

By Hayley Hitch a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

What do you do when the unsuccessful party, who has just dragged you through the court for no reasonable cause, appears to be a company made of straw? Is it possible to seek costs orders against the director, even though the director is not a party to the proceedings? The Full Court of the Federal Court has recently held that in certain circumstances it will consider such an application.

In Trustee for the MTGI Trust v Johnston (No 2) [2016] FCAFC 190, the Court considered what costs orders should be made where it had previously found the application before it had no merit. The Respondent, Mr Johnston, had been awarded compensation by the Fair Work Commission. Two applications by MTGI, as trustee for the MTGI Trust (“MTGI“), for leave to appeal the original decision had been refused by the Full Bench of the Fair Work Commission, and MTGI had also lost the application to the Federal Court for a review of the Full Bench’s decisions. [...]  READ MORE →