WORKPLACE RELATIONS
Using the Flexibility Clause in a Modern Award
With the introduction of Modern Awards there is much to learn for employers.  One of the new provisions causing some confusion is the “flexibility clause” found in Modern Awards.

Modern Awards are required to contain a flexibility clause (see s.144 of the Fair Work Act 2009 (Cth)). 

The “flexibility clause” does not provide flexibility in the application of Award terms and conditions on the same basis that old AWAs and ITEAs did.

Generally, the flexibility clause contained in the Modern Awards allows the employer and an individual employee to vary the application of the following Award provisions:

• Arrangements for when work is performed;
• Overtime rates;
• Penalty rates;
• Allowances; and
• Leaving loading.

The key word in the clause is “vary”.  The flexibility clause allows variation, not removal of Award terms and conditions. 

Variation of Award terms and conditions can occur only in strict compliance with the provisions of the flexibility clause.  Specifically, a written agreement with an individual employee is required evidencing the variation.

The agreement must pass the “Better Off Overall Test” (BOOT).  While the BOOT is not formally administered, the agreement may be reviewed by the Fair Work Ombudsman and so a record of the agreement’s compliance should be maintained.

An agreement under a flexibility clause must:

• be in writing and signed by the employer and employee;
• be genuinely consented to by both parties;
• clearly identify the provisions varied in the Modern Award;
• pass the BOOT; and
• state how the arrangement can be terminated.

In these initial stages of exploring options under flexibility clauses, we suggest that employers seek assistance to ensure compliance.   Workplace Law would be delighted to assist you with this process.

EMPLOYMENT
Superannuation Payable on Pay in Lieu of Notice
As reported in earlier editions of the Employment Law E-update, the Superannuation Guarantee Ruling from the ATO came into effect on 1 July 2009.  The ruling explained the meaning of “ordinary time earnings” (OTE) as defined in subsection 6(1) of the Superannuation Guarantee (Administration) Act 1992 (Cth) (the SGAA).  The definition of 'ordinary time earnings' is relevant to employers for the purpose of calculating the minimum level of superannuation support required for individual employees under the SGAA.

The Ruling also explained the meaning of 'salary or wages' as defined in section 11 of the SGAA.  The definition of 'salary or wages' is relevant in calculating the superannuation guarantee shortfall of individual employees where their employer has not provided the required minimum level of superannuation support.

As part of the ruling, payments in lieu of notice on termination of employment were declared to be OTE’s.  This means that superannuation is payable on an employee’s notice period.

When Does the Minimum Employment Period End?
A recent decision of Fair Work Australia (FWA) has clarified the calculation of the minimum employment period in relation to unfair dismissal applications.

The “minimum employment period” has been referred to in prior legislation as a “probation” or “qualifying period”.

An employee “Mr P” commenced work on 26 February 2009.  His employment was terminated on 25 August 2009 at 9:00am with immediate effect and payment in lieu of notice. 

Mr P commenced unfair dismissal proceedings and the employer, Manheim Fowles Pty Ltd (Manheim), raised a jurisdictional objection stating that Mr P had not completed the minimum employment period set out in s.383 of the Fair Work Act 2009 (Cth) (the FW Act).

The parties agreed that Manheim was not a small employer and therefore, the applicable minimum employment period was six (6) months.  Section 383(a) of the FW Act states that the six (6) months is calculated from the date the person was given notice of termination of employment or the date immediately before the termination, whichever is earlier. 

Mr P submitted that he had completed the required period in order to access the unfair dismissal jurisdiction as his employment was terminated on the last day of his sixth month of employment.

However, Senior Deputy President Richards (SDP Richards) did not agree with the employee’s calculation of the minimum employment period and stated that it must be completed ”…immediately before the beginning of…” 26 August 2009, which was six (6) months from the date Mr P commenced work.

SDP Richards found that Mr P had not completed the minimum employment period as up until midnight on 25 August 2009, the employee was still within the six (6) month minimum employment period. 

Accordingly, Mr P did not have access to the unfair dismissal jurisdiction and his application was dismissed.

Comments
This case demonstrates the effective use of the minimum employment period in order to ensure that the employee could not access the unfair dismissal jurisdiction of FWA.

Employers should always be mindful of the minimum employment period and utilize it if required.  Employers are given the minimum employment period to allow them to determine whether the employee is the right person for the job.  If the employer is still not sure about the employee after six months, careful consideration should take place before permitting the employment to continue past the six month mark.

Employers should also note that while the minimum employment period provides protection from unfair dismissal, other jurisdictions exist for employees seeking a remedy.  Accordingly, employers should approach termination of employment, even within the minimum employment period with appropriate consideration.

For further information on unfair dismissal and/or other remedies available contact Workplace Law. 

See:  Prigge v Manheim Fowles Pty Ltd [2010] FWA 28 (7 January 2010)

DISCRIMINATION / HARASSMENT
Not Conduct of a Sexual Nature
A Full Bench of the NSW Administrative Tribunal (ADT) has dismissed a claim of sexual harassment when it found a doctor’s repeated requests for a massage from a nurse,  excessively phoning her at home and visiting her at work did not constitute “conduct of a sexual nature”:  Kesby v Nguyen-Dang (No 2) [2009] NSWADT 310.

The complaints to the ADB were made against the nurse’s employer and against one of its doctors.  The complaint against the employer was of sex discrimination in employment, sexual harassment in the workplace and victimisation under the Anti-Discrimination Act 1977 (the AD Act).  The complaint against the doctor was of sex discrimination in employment, sexual harassment in the workplace and victimisation.

The AD Act defines “sexual harassment” in s.22A to mean:
… a person sexually harasses another person if:
(a)    the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the other person; or
(b)    the person engages in other unwelcome conduct of a sexual nature in relation to the other person;
in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated that the other person would be offended, humiliated or intimidated.

The nurse claimed that between 2004 and 2005 she had been the focus of a doctor’s “predatory and sexual energy” – through him relentlessly pursuing her, calling her, visiting her at work and providing her with gifts.  He also requested the nurse give him a massage when he walked in on her massaging another doctor.

While the doctor admitted having romantic feelings for the nurse he denied all of the nine specific allegations of sexual harassment made against him.  To illustrate the Full Bench’s belief that romantic feelings do not always elevate conduct towards another to be sexual in nature, it said that giving another flowers in the hope that more will happen between them is not necessarily conduct of a sexual nature.

In the Full Bench’s opinion, none of the allegations either alone or in combination constituted “conduct of a sexual nature” in relation to the nurse.  The complaint of sexual harassment was thus unsubstantiated.

The complaints of discrimination on the basis of sex pursuant to s.25 and victimisation pursuant to s.50 of the AD Act were dismissed by the ADT.

Employer Fined for Sexuality Discrimination
This month a company director has been ordered to pay $2,000 in compensation to an ex-employee after the Queensland Anti-Discrimination Tribunal found the director’s conduct amounted to discrimination based on sexuality pursuant to s.7 of the Anti-Discrimination Act 1991 (Qld) (the AD Act).

It was common knowledge in the workplace that the employee was a homosexual.  The employee complained that the company’s director called him a “shirt lifter”, frequently expressed his views about homosexuals and asked him about his sexual habits and the identity of his sexual partners.

President Douglas Savage SC accepted that the banter that occurred in the workplace was unwelcome, unfriendly and offensive and indicated that it was inappropriate for a company director to refer to, or allow others within the workplace to refer to, the employee’s sexuality in such a manner.

President Savage found the company had directly discriminated against the employee in breach of s.9 and the director liable under s.114 of the AD Act.

President Savage concluded that he did not think “… [the director] really understands that to [the employee] passing remarks not said with the intention of offending can in fact profoundly offend”.

See:  Kelly v Moore and GJ & AM Moore Pty Ltd [2009] QADT 20

No Investigation Despite Claim of Bullying and Harassment
In Adam James Harley v Aristocrat Technologies Australia Pty Ltd [2010] FWA 62, Fair Work Australia (FWA) has found it “beyond belief” that a multinational company with a dedicated human resources team found claims of bullying and harassment by one of the company’s salesman against his manager to be unsubstantiated despite failing to conduct an investigation.

On 1 July 2009 after receiving a “show cause” letter the previous day, the salesman resigned and subsequently lodged an unfair dismissal application against the company claiming summary dismissal.  In the letter of 30 June 2009 the salesman was requested to respond to the allegations regarding his performance and to attend a meeting on 1 July 2009.

Commissioner Barbara Deegan noted that it was clear from the letter of 30 June 2009 that the salesman was unlikely to receive a fair hearing at the meeting on 1 July 2009.  In addition, in the letter the salesman was also requested to return to the company his laptop and mobile phone, indicating that the decision to terminate his employment had been made prior to any responses given by him.

On hearing evidence from the salesman’s manager and other witnesses Commissioner Deegan found the salesman had been subject to a course of harassment at the hands of his manager and the company had failed in its duty to deal with the salesman’s complaints concerning the treatment he was receiving from his manager.  Commissioner Deegan stated

Commissioner Deegan was particularly critical of the role of the company’s Human Resources management in not conducting a proper investigation of the salesman’s allegations concerning the behaviour of his manager and felt the Human Resources Manager was either disinterested or did not know how to conduct such an investigation.

Commissioner Deegan described the way in which the entire matter was handled by the company as “appalling”.

The company’s dismissal of the salesman was found to be unfair.  As the salesman had not found new employment since 1 July 2009 he sought reinstatement.  Commissioner Deegan felt in these circumstances reinstatement would be inappropriate and instead ordered the company to pay the salesman the maximum amount of six months in compensation.

Comments
By now, all employers should have systems in place to deal with the occupational health and safety and other issues arising from workplace bullying and/or harassment.

Employers can seek to prevent bullying by developing a bullying prevention policy and procedures and through providing appropriate workplace training. 

Investigation of reported incidents, regular monitoring, and follow-up  of proven bullying and/or harassment incidents demonstrate that the employer takes such allegations seriously.

There is, of course, the unfortunate situation where serious allegations can made which are false and are made with the intention of causing trouble for another employee or supervisor.

An investigation will usually determine whether the allegations are substantiated or not.  Unsubstantiated allegations may be dealt with on the same basis as if an employee made any other form of false report to the employer.

If you would like assistance with conducting an investigation or with drafting your company policies and procedures, contact Workplace Law on (02) 9256 7500.