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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 – Incapacity Not a Refusal to Work

Employment Law – Background

The Fair Work Commission has criticised a company for misconstruing an employee’s extended absence on certified sick leave as a refusal to work.

Most noteworthy, the HR team dismissed the mentally unwell supervisor via email.

The decision highlights the importance of due process in the dismissal of employees while having regard to human dignity.

Employment Law – Facts

In essence:

  • the customer service supervisor was employed at Komatsu
  • the supervisor said he was “directed” to take sick leave in March 2015 due to “health and well-being”
  • he failed to meet his sales budget KPI’s. As a result, he was placed on a performance improvement plan in August 2015
  • the supervisor began experiencing mental health issues in March 2016. Consequently, he was taken off the performance improvement plan
  • furthermore, he experienced difficulties with his new manager which also contributed to his mental health problems
  • Komatsu encouraged the supervisor to participate in a return to work plan
  • additionally, Komatsu reconfigured its management structures to prevent the supervisor interacting with his previous manager
  • the supervisor was dismissed via email in November 2016

Employment Law – Decision

The Fair Work Commission:

  • held that the medical evidence confirmed the employee’s incapacity to work rather than his refusal to perform work
  • held there was no valid reason for the dismissal
  • underlined the need to establish the illness was not genuine in order to treat absence as a refusal to work
  • noted the mandatory opportunity for an employee to be provided with a ‘show cause’ meeting before any dismissal is made
  • stressed that dismissal via electronic means should be “strenuously avoided”
  • suggested Komatsu review its employee management practices
  • therefore ordered Komatsu to pay the supervisor $1,250 in compensation

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

John Finnegan v Komatsu Forklift Australia Pty Ltd [2017] FWC 2433 (10 May 2017) [...]  READ MORE →

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Employment Law – FWC Slams Poor Agreement Drafting

Employment Law – Background

A poorly drafted enterprise agreement has been criticised by the Fair Work Commission (FWC). The case was brought by the Electrical Trades Union (ETU) and the Communications Union (CEPU) against electrical contractor Kentz Pty Ltd (Kentz) in dispute of a clause requiring the purchase of particular income protection products.

The case was initially heard in February this year when Commissioner Michelle Bissett found “no ambiguity” in the wording of the contractual requirement to purchase income protection insurance. However, an appeal was permitted by the Commission because the decision was “attended with sufficient doubt” to permit a rehearing. The full bench of the FWC reaffirmed the earlier decision. Furthermore, it highlights the importance of clear drafting of enterprise agreements in employment law. [...]  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 →

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Fair Work Commission: On-Hire Worker Unfairly Dismissed

Employment Law – Background

In Tasmanian Ports Corporation Pty Ltd t/a Tasports v Mr Warwick Gee, the Fair Work Commission confirmed that labour hire companies cannot dismiss workers on the grounds that they have run afoul of a host employer.

Employment Law – Facts

In essence:

  • A shiploader was dismissed by TasPorts in 2015 after his access to a site in Tasmania was revoked by his host employer, iron ore miner Grange Resources Limited
  • Grange Resources accused the shiploader of misconduct and blocked his access to the port after he allegedly failed to follow reasonable work directions, breached reporting protocols and posted unauthorised photos of their assets on social media
  • Tasports argued that there was a valid reason to dismiss the shiploader under s387(a) of the Fair Work Act as he no longer had the capacity to do the job and access the site

Employment Law – Fair Work Commission Decision

The full bench of the Fair Work Commission:

  • Concluded that the Grange Resources removing the shiploader from a site was not a valid reason for their dismissal, utilising the principles set out in Kool v Addeco which established that the individual circumstances of the case determine whether there was a valid reason.
  • They confirmed the approach taken in the Adecco and Pettifer cases, whereby “the contractual relationship between a labour hire company and a host employer cannot be used to defeat the rights of a dismissed employee” and that “labour hire companies cannot use such relationships to abrogate their responsibilities to treat employees fairly”
  • Found that Tasports had failed to establish that the host employer had a legal right to remove the ship loader, or that it was unable to maintain his employment
  • Criticised the fact that Tasports had failed to independently investigate whether the shiploader committed the alleged misconduct. They also failed to adequately consider alternatives for the shiploader’s redeployment
  • Referred the matter back to the deputy president to consider the appropriate remedy

Employment Law – Tips for Employers

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

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Employment Law: Compensation for Unfairly Sacked Truckie

Employment Law – Background

In SR v Geelong & Surfcoast Laundry T/A Swim Alumni Pty Ltd, the Fair Work Commission ruled that a truckie involved in three accidents and an alleged road rage incident was unfairly dismissed.

Employment Law – Facts

In essence:

  • the employee was employed by Surfcoast Laundry as a casual truck driver from March 2015 until November 2016
  • the employee was dismissed for having three accidents in a year and for allegedly being involved in a road rage incident
  • however, the employee received no written warnings, was not told the reason for his dismissal at the time it occurred and was not given an opportunity to respond
  • Surfcoast Laundry claimed the dismissal was in accordance with the summary dismissal section of the Small Business Fair Dismissal Code which indicated that it was fair to dismiss an employee without notice or warning if an employer believes on reasonable grounds that an employee’s conduct was sufficiently serious to justify immediate dismissal.

Employment Law – Fair Work Commission Decision

The Fair Work Commission:

  • found that whilst intervention may have been warranted, the dismissal was disproportionate to the severity of the conduct
  • whilst the employer’s evidence that the accidents and alleged road rage incident contributed to the decision to dismiss, it was held that the operative reason for dismissal was the employer’s annoyance at the employee complaining about underpayments
  • held that the termination was harsh, unjust and unreasonable due to the lack of procedural fairness and the lack of a valid reason for dismissal
  • the employee was awarded $14,995 in compensation

Employment Law – Tips for Employers

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
  • ensure compliance with all employment laws including Fair Work Commission decisions, Awards and enterprise agreements
  • fairly, consistently and lawfully respond to breaches of employment laws including Awards and enterprise agreements
  • follow good HR practice when it comes to performance management
  • not unreasonably apply the Small Business Fair Dismissal Code
  • raise any employment law questions with an employment lawyer

The decision is available for you to read through the following hyperlink: [...]  READ MORE →

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Employment Law – Informal Approach Acceptable

Employment Law – Background

Recently, the Fair Work Commission refused an unfair dismissal claim by an employee who was terminated without receiving prior formal warnings.

The case demonstrates the flexibility of the Fair Work Commission in accepting an employer’s informal efforts to address workplace issues.

Employment Law – Facts

In essence:

  • in July 2015, the FMG Personnel Services (FMG) inventory controller and his manager discussed his work requirements for the next 12 months
  • it became evident the employee “lacked the necessary skills, capabilities and knowledge to adequately perform his role and that his manner and attitude to customers and internal personnel was unsatisfactory”
  • the manager believed the employee failed to grasp concepts required of his role or prioritise duties
  • the employee was alleged to have failed to comply with business processes. Furthermore, he was considered to be incapable of maintaining effective work relationships
  • from September 2015, a manager ‘informally’ performance managed the employee for a period of 10 months. In this period, the seating arrangement was changed to sit the employee next to the manager for daily coaching and individual training sessions
  • on one occasion, the manager conducted training for the entire team offsite despite the training being targeted only at the employee
  • in July 2016, FMG placed the employee on a performance improvement plan. Following this, the employee emailed HR denying any supposed performance issues
  • customers consequently eventually refused to communicate with the employee
  • consequently, the employee was dismissed in August 2016
  • the employee made a claim for unfair dismissal because he alleged there were no formal warnings, contemporaneous file notes or formal performance management

Employment Law – Fair Work Commission Decision

The Fair Work Commission:

  • held there was a “complete divergence” between the views of FMG and the employee
  • stated “…FMG sought to clearly communicate to [the inventory controller] what their performance expectations were and that FMG diligently endeavoured to assist [the inventory controller] to achieve these expectations”
  • considered FMG had reasonable grounds to conclude an informal approach was likely to be more successful
  • furthermore, accepted FMG had genuine and reasonable concerns about the employee’s ability to comprehend deficiencies in his performance. In addition, the employee believed training and coaching were “ordinary workplace conversations”
  • stated that such “exchanges were intended to be, and are properly characterised as, informal performance management”

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

Mr Robert Etienne v FMG Personnel Services Pty Ltd [2017] FWC 1637 (25 May 2017)

Employment law – Tips for Employers

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

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Employment Law – Unenforceable Restraints

Employment Law – Background

An ex-employee’s post-termination restraints have been deemed unenforceable by the Supreme Court of Victoria. This case highlights the impact of employer’s actions on the validity of a contract of employment. Furthermore, it highlights the limits of post-employment restraints in employment law. The failure to remunerate an employee can result in a constructive dismissal. Consequently, post-employment restraints may become ineffective.

Post-employment restraints are inserted in contracts of employment to prevent an employee working elsewhere. In addition, it prevents the ex-employee from engaging with former clients for a period of time. [...]  READ MORE →

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Employment Law – Ex-Director Restrained by IP

Employment Law – Background

Climate Change Technology P/L (‘CCT’) has sought an interlocutory injunction to restrain a former director and inventor of a thermal energy battery.  The employment law decision raises the importance of documenting relationships.

Employment Law – Facts

In essence:

  • first of all, Dr Patrick Glynn was employed by CCT between 2011 and 2016. He was its principal research officer and director. In addition, Dr Glynn was appointed its chief executive towards the end of his tenure at CCT
  • he invented a thermal energy storage device and assigned a patent to it in 2011. Furthermore, he signed an intellectual property agreement
  • CCT submitted that they spent about $5 million over the last six years on researching and developing the device and associated technology
  • when Dr Glynn quit in 2016, he allegedly retained intellectual property and confidential information in relation to the device. Furthermore, he set up another research and development company and an umbrella company
  • in addition, CCT alleged that Dr Glynn and the companies had been negotiating with third parties he had first dealt with when he was employed at CCT
  • consequently, CCT was granted an interim injunction in March
  • as a result, CCT are seeking the return of intellectual property and confidential information to stop its ‘misuse and dissemination’
  • furthermore, CCT are seeking to prevent Dr Glynn and the companies from exploiting business opportunities which arose while he was director and representative

Employment Law – Decision

Justice Nicholson:

  • noted an intellectual property agreement appeared to be the ‘only express written agreement potentially relevant to the parties’ relationship’
  • noted there was ‘no written employment agreement, no deed of confidentiality or restraint of trade regulating the parties’ relationship or [Dr Glynn’s] post-employment obligations with respect to [CCT] is in evidence’
  • accepted direct supporting evidence Dr Glynn worked full-time as a chief scientist. In addition, he devoted thousands of hours to its project and possessed a significant amount of confidential information about its intellectual property
  • was satisfied there was support for potential findings that CCT was the owner of the intellectual property. Furthermore, such support indicates a large number of digital files were transferred following Dr Glynn’s resignation
  • said it was open to the court to discern from email correspondence that Dr Glynn and the companies had been negotiating with third parties
  • was satisfied that damages would not be an adequate remedy
  • concluded CCT is entitled to an interlocutory injunction. The injunction will restrain Dr Glynn and the two companies from using, exploiting, destroying or altering the ‘project intellectual property and confidential information’
  • the injunction also names entities and individuals whom they are restrained from any dealings relating to the device. Furthermore, it requires the recording of any transactions or dealings in relation to the device

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • review this employment law decision
  • seek the assistance of an employment lawyer to understand the impacts of this employment law decision
  • engage an employment lawyer to draft a written employment agreement with a suitable restraint of trade clause relevant to the position
  • engage an employment lawyer to draft a suitable deed of confidentiality
  • update employment contracts in response to this employment law decision
  • consult an employment lawyer if you suspect company confidential information or intellectual property has been misused

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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Fair Work Commission – Minimum Wage to Increase by 3.3%

Background

On 6 June 2017, The Fair Work Commission announced a 3.3% increase to the national minimum wage and minimum award wages.

The Fair Work Commission Decision

In essence:

  • The national minimum wage will now be $694.90 per week, or $18.29 per hour
  • This is an increase of $22.20 per week to the weekly rate and 59 cents per hour to the hourly rate
  • The changes will be effective 1 July 2017

Fair Work Commission’s Reasoning – Economics & Worker Poverty

  • The Fair Work Act required the Fair Work Commission to take into account economic considerations
  • However, they were satisfied that the level of increase decided upon would not lead to inflationary pressure and would be highly unlikely to have any measureable impact on employment or lead to job losses
  • They based these conclusions on findings that productivity growth has risen sharply and profit growth had been “particularly strong” in 2016 compared to previous years. Consequently, business conditions were positive and above long-term averages
  • The Fair Work Commission concluded that increasing the minimum wage would improve the relative living standards of those employees who are reliant on the national minimum wage, lifting the lowest-paid out of poverty
  • However, they did acknowledge that the increase would not lift all-award reliant employees out of poverty, especially those households that have dependent children and a single-wage earners

Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • review these employment law changes
  • 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
  • update employment contracts in response to this employment law change
  • raise any employment law questions with an employment lawyer
  • damages can apply for breaches of employment laws including Awards and enterprise agreements (which an employment lawyer can advise on)

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 – New Financial Year Changes

What every employer MUST know for 1 July 2017

With the commencement of a new financial year, it brings with it important changes and new rates which will apply from 1 July 2017.

NEW! High Income Threshold (HIT)

With the HIT:

  • it is expected to increase to $143,500 (subject to formal confirmation by the FWC)
  • it impacts:
  • who can make a claim for unfair dismissal (for those not covered by a Modern Award or to whom an enterprise agreement does not apply)
  • the maximum amount of compensation payable in an unfair dismissal claim
  • those on a ‘guarantee of annual earnings’ (a Modern Award does not apply to an employee whilstever this guarantee is in place provided it continues to meet the relevant legislative requirements)

NEW! Modern Award Increases

With Modern Awards (including enterprise awards):

  • minimum wages increase by 3% (starting on the first full pay period on or after 1 July 2017)
  • absorption of wage increases into over-award payments is permissible (subject to the terms of the relevant employment agreement and what other amounts are being absorbed into any annualised salary)
  • increases to the minimum wages of junior workers, apprentices, trainees, piece workers and employees on the supported wage system will occur
  • expense-related allowances in Modern Awards will increase as set out in the Modern Award (eg, by the applicable CPI index figure)
  • annualised salaries will need to be checked to ensure they can still properly absorb/include all relevant minimum Modern Award amounts and that they continue to meet the technical requirements of the Modern Award

NEW! National Minimum Wage (NMW)

With the NMW:

  • this is applicable to employees to whom neither a Modern Award or enterprise agreement applies
  • the NMW increases by 3% to become $694.90 per week or $18.29 per hour
  • in addition:
  • special NMW rates apply to employees with disabilities, junior employees, apprentices, and those on training arrangements
  • the minimum casual loading remains unchanged at 25%

NEW! Impact on Enterprise Agreements

With enterprise agreements:

  • they must always meet or exceed the minimum wage of:
  • the relevant Modern Award (ie, the Modern Award that would have applied had the enterprise agreement not been in existence)
  • the NMW (ie, where a Modern Award would not apply even if the enterprise agreement was not in existence)
  • thus, pay rates in enterprise agreements may need to be increased (even if the enterprise agreement has its own wage increase regime)

NEW! The Sting

Be mindful that wage increases may have flow-on effects such as increasing:

  • the value of leave loading, penalty rates, overtime and superannuation contributions
  • the value of accrued leave entitlements
  • the cost of wage related expenses such as payroll tax and workers compensation premiums

NEW! Redundancy

The tax-free component of a genuine redundancy payment increases to be:

  • a base amount of $10,155
  • an additional amount of $5,078 for each completed year of service

NEW! Superannuation Contributions Base

With superannuation:

  • the maximum superannuation contribution base increases to $52,760 per quarter ($211,040 per annum)
  • an employer is not required to make superannuation contributions on behalf of employees on earnings in excess of that maximum contribution base

Questions/Assistance

If you have any questions or would like any assistance, please feel free to speak with or email a member of our Matthews Folbigg Workplace Solutions team on (02) 9635 7966 or jcc@matthewsfolbigg.com.au [...]  READ MORE →