WORKPLACE RELATIONS
"Stop Press! Annual Wage Review Decision Handed Down"

On 3 June 2010, Fair Work Australia (FWA) increased all modern award minimum wages by $26 (with proportionate increases in hourly minimum wages and annual salaries).

The federal minimum wage rate was increased to $569.90 per week, an increase of $26 per week. The full decision can be viewed at:

http://www.fwa.gov.au/sites/wagereview2010/decisions/2010fwafb4000.htm

The increase will apply from the first pay period on or after 1 July 2010.

For further information, contact Workplace Law. 

"Phasing In Pay Rates In Modern Awards"

With 1 July 2010 fast approaching, we thought it a good time to provide an overview on the phasing in provisions for rates of pay contained in modern awards.

While Modern Awards came into effect on 1 January 2010, the rates of pay are subject to the transitional provisions contained in Schedule A of the Modern Awards which do not commence until the first pay period on or after 1 July 2010.

The transitional provisions in the Modern Awards are designed to provide a slow introduction period for introducing single rates of pay across Australia.

Under the transitional provisions, the difference between an employee’s minimum wage rate as at 31 December 2009 and the appropriate classification level rate under the applicable Modern Award is referred to as the "transitional amount".

The wage rates contained in Modern Awards will be phased in over four (4) instalments.

The first adjustment is to be made on the first pay period following 1 July 2010, and on the first pay period after 1 July each year concluding on 1 July 2014.

The employer must also apply any increase in minimum wages in this award resulting from an annual wage review.

Loadings and penalty rates are also subject to the transitional arrangements. We anticipate that this will be difficult given that loadings and penalty rates may not be exactly comparable in the old and new Awards.

If an employee was not previously covered by an award but is now covered by a Modern Award, the transitional arrangements still apply. However, the federal minimum wage rate as at 31 December 2009 is used instead of an award rate (as there was no applicable award).

In working with the transitional provisions – employers should be mindful that the Act includes an option for employees to pursue "take home pay" orders, which would prevent any reduction in their take home pay as the result of the introduction of Modern Awards.

Remember, underpaying employees is unlawful and can result in hefty fines from the Fair Work Ombudsman. It is best to start early and calculate the amounts payable from the first pay period on or after 1 July 2010 well before that date.

For further information and assistance with the transitional provisions, contact Workplace Law. 

"Paid Parental Leave Draft Bill"

On 5 May 2010 the Federal Government released its draft Paid Parental Leave Bill. The Bill has not been passed and may undergo many amendments before it comes into operation (if it comes into operation). The following summary of the Draft Bill is based on the information currently released.

The draft Paid Parental Leave Bill is now with the Senate Community Affairs Legislation Committee for inquiry to report back by 3 June 2010.

The draft Bill confirms that from 1 January 2011, the primary carer of a new born child or of an adopted child will be provided with 18 weeks paid parental leave at the national minimum wage, which is currently $543.78 per week.

Only employers with an Australian Business Number will participate in the scheme with the funds provided by the Government. To help employers prepare for the scheme, the role of employers in providing government-funded parental leave pay will be phased in over the first six (6) months of the new scheme.

Under the scheme, leave can be taken in addition to existing employer-funded entitlements either at the same time or consecutively.

Under the Government's scheme, casual and part-time workers, contractors, and self-employed people will also be eligible for paid parental leave.

The draft Bill also sets out the eligibility requirements in order to receive the payment. The following employees are ineligible:

1. Those who earned over $150,000 in the previous financial year;
2. Those who worked less than 330 hours over the 13 months prior to the expected birth or adoption of the child;
3. Those who are not Australian residents; and
4. Those who are undertaking paid work during the paid parental leave period.

Importantly, paid parental leave does not increase an employee’s amount of unpaid parental leave allowed to be taken under the National Employment Standards (the NES), which is 12 months with an entitlement to request an additional 12 months.

Although eligible employees may receive payment of up to 18 weeks, the period will not count as service for the accrual of other forms of leave, such as annual leave or personal / carer’s leave.

Eligible employees will need to apply to the Family Assistance Office (FAO) who will then contact the employer. An employer must be the paymaster for all employees with at least 12 months continuous service at the time of birth or placement of a child, or a casual engaged on a regular and systematic basis for a period of at least 12 months. For these employees, ordinarily FAO will deposit paid parental leave payments into the employer’s account in fortnightly blocks in advance of the employer’s obligation to pay the employee. These payments to the employer will be treated as income to the business, with payments made to the employee treated as wages and taxed accordingly.

A summary of some of the aspects of the draft Bill are as follows:

• From 1 January to 30 June 2011, employers can choose to provide parental leave pay to their eligible employees. This will become a requirement for employers from 1 July 2011 for eligible employees with more than 12 months continuous service. In all other cases parents will be paid by the FAO.
• Employers can choose to receive advances of funds from the Government in as few as three (3) instalments. Employers will only be required to pay an employee when they have received sufficient funds.
• The FAO will be responsible for paying eligible employees who take less than eight (8) weeks of paid parental leave: for example, where an eligible father takes the remainder of a mother’s Government-funded leave after more than ten weeks.
• Parental leave pay will be paid in accordance with an employer’s normal pay practices and the employee’s usual pay cycle.
• Employers will only pay employees who intend to return to work. Women who resign, but meet the work test, will be paid by the FAO.
• Parents who are no longer employed at the birth of their child, but have satisfied the work test, will still be eligible for paid parental leave. They will be paid directly by the FAO. For example, if a mother who is a contract worker meets the work test but her contract finishes a month before the baby is born, she will still receive parental leave pay (from the FAO).
• People receiving parental leave pay can stay connected to their workplace through ‘keeping in touch’ provisions. These provisions allow the parent to participate in activities at their workplace for up to ten (10) days during the period of paid parental leave, while remaining eligible for parental leave pay.

We will keep you updated on the Bill’s progress through Parliament. 

EMPLOYMENT
"What Are The Inherent Requirements Of a Role - The Modified Duties Or The Substantive Role?"

In a recent decision of the Full Bench of Fair Work Australia (FWA), Vice President Lawler, Senior Deputy President O’Callaghan and Commissioner Williams (the Full Bench) were asked to determine whether an employee’s incapacity to perform the inherent requirements of his role should be tested against the job he was originally employed to perform or his restricted duties role.

Facts
The matter came before the Full Bench as a result of the employer, J Boag and Son Brewing Pty Ltd (J Boag) lodging an appeal against Senior Deputy President Kaufman’s (SDP Kaufman) previous order that there was no valid reason for the employee’s dismissal and accordingly, the termination of his employment was harsh, unjust and unreasonable.

In summary, the employee had been employed as a Brewery technician since June 2005. The employee was born with a congenital defect in his bladder which led to the removal of it and the surgical installation of a drain when he was a child. The drain needs to be replaced every ten (10) years or so.

In about March 2008 the employee, (Mr B) was diagnosed with a hernia at the site of the drain. On 11 August 2008 Mr B was reviewed by a urology registrar who diagnosed him and concluded that Mr B should "…stop doing any heavy lifting from now on at work..." Mr B was later placed on restricted duties.

In October 2008 Mr B was assessed by Advanced Personnel Management (APM) at the request of J Boag to undergo an occupational therapy assessment. APM concluded that Mr B’s restrictions included no lifting above 5 kilograms. APM recommend that Mr B continue with the restricted duties.

In March 2009 J Boag requested a report from Mr B’s treating surgeon, Dr Brough. On 6 April 2009 Dr Brough provided a short report to J Boag which stated "…he will not be able to lift more than 5 kilograms in his occupation and I would regard this as an indefinite restriction".

On 24 June 2009 Mr B was assessed by Konekt, occupational health consultants, to determine if he could safely perform his duties.

A report from Konekt dated 1 July 2009 concluded that Mr B could not continue to safely perform his current duties. It also concluded that he could not be deployed within J Boag at that time and his transferrable skills did not match the requirements of other roles within J Boag.

On 7 July 2009 J Boag decided that as Mr B could not perform the inherent requirements of his role as a Brewery Technician, or as he could not be redeployed, his employment would be terminated. A copy of Konekt’s report was provided to Mr B on or about 21 July 2009. At a meeting on 4 August 2009 with Mr B and J Boag, it was made clear to Mr B that his employment would be terminated.

On 7 August 2009 Mr B was charged with a drink driving offence. On 11 August 2009 he was given a formal termination letter with the termination of employment effective 11 September 2009.

In the initial unfair dismissal proceedings before SDP Kaufman, he found there was no valid reason for Mr B’s dismissal as he was able to perform the inherent requirements of his job as J Boag had altered those requirements when they provided him with restricted duties. Further, Mr B worked in that manner for over eight (8) months. In the alternative, SDP Kaufman stated there was no valid reason for the termination of Mr B’s employment as, if the inherent requirements of the position included the work Mr B was not able to perform, he had been satisfactorily performing his work with the assistance of his team members. SDP Kaufman concluded that the termination of employment was harsh, unjust and unreasonable.

Outcome
The Full Bench, on appeal, stated that the decision of SDP Kaufman that Mr B was able to perform the inherent requirements of the restricted duties since October 2008 "…involved error."

The Full Bench stated that "When an employer relies upon an employee’s incapacity to perform the inherent requirements of his position or role, it is the substantive position or role of the employee which must be considered and not some modified, restricted duties or temporary alternative that must be considered."

The Full Bench concluded that Mr B’s position had important features which he could not perform due to the lifting restriction. The Full Bench found that as Mr B had an incapacity to perform all of the inherent requirements of his role, "…on balance, this constituted a valid reason for his dismissal."

J Boag was granted permission to appeal against SDP Kaufman’s decision. The Full Bench decided not to determine if the termination was harsh, unjust or unreasonable and instead referred the matter to Vice President Lawler for determination of that issue.

Comments
Although a final decision has not been made as to whether the termination of Mr B’s employment was harsh, unjust or unreasonable, the Full Bench decision is still important as it provides clarity on assessing an employee’s incapacity. The decision makes it clear that the inherent requirements of the employee’s role are not the modified or restricted duties provided after injury, but the initial role that the employee had been employed to perform.

For assistance in determining whether there is a valid reason to dismiss an employee for failure to fulfil the inherent requirements of a role, contact the team at Workplace Law.

See: [2010] FWAFB 4022 (26 May 2010) 

DISCRIMINATION / HARASSMENT
"Female Manager Awarded $25,000 in Damages for Victimisation By Work Colleague"

In this decision of the NSW Administrative Decisions Tribunal (the ADT), an employee has been successful in her application against a male work colleague in which she alleged she had been the subject of victimisation following her sexual harassment complaint.

Facts
The employee, Ms M, worked for Dairy Farmers and on 29 May 2007 she lodged a sexual harassment complaint with the Anti Discrimination Board (the ADB) against Dairy Farmers and male colleagues, concluding Mr C. The proceedings before the ADB were resolved and Ms M withdrew her complaint.

On 19 November 2007 Ms M lodged a complaint against Mr C with the ADB alleging victimisation. The complaint was declined by the ADB on 21 January 2008 as lacking in substance. On 13 February 2008 Ms M requested that the complaint be referred to the ADT. On 11 June 2008, leave was granted for the complaint against Mr C to proceed.

In her complaint, Ms M alleged that Mr C had written an anonymous letter to Ms M’s husband alleging that she had been having an affair with the writer of the anonymous letter. The letter was typed but the address was handwritten and sent to Ms M’s husband at their home address.

Ms M alleged Mr C was the author as a handwriting expert provided an expert opinion on 15 November 2007 that Mr C was the author.

Ms M claimed that Mr C was friendly with the people the subject of her sexual harassment complaint and as a result, he was "motivated" to hurt her.

Mr C denied the allegations and stated that Ms M openly discussed she had a lover.

The complaint was listed for hearing before the ADT on 7 November 2008 and later re-listed on 14 April 2009 after settlement had failed. The complaint against Mr C was eventually listed of hearing on 18 November 2009. Mr C advised he could not attend as he could not get time off work. The ADT informed Mr C that due to the history of the matter, it would proceed on that date but he would be given the opportunity to respond in writing to Ms M’s written submissions.

In her submissions, Ms M stated that she was seeking non-economic damages for the stress, humiliation, damage and strain to her marriage, fear anxiety and depression. She also sought damages for economic loss due to suffering from a moderate impairment in respect of her employability resulting from the victimisation. Ms M also sought aggravated damages as she claimed Mr C’s behaviour was pre-mediated and motivated to increase her hurt and suffering.

In response, Mr C denied the allegations and stated that Ms M openly admitted to having an affair with a man who owned a convenience store.

The transcript of proceedings from the 7 November 2008 hearing show that Mr C admitted to writing to anonymous letter. Mr C stated in his written submissions in response to Ms M’s that he sent the letter to her husband as he "…believed he was doing the right thing because …after losing my wife from her cheating on me I was very disgusted with [her] bragging of her lover and cheating on her husband."

Outcome
The ADT was required to determine if Mr Chandler had sent the letter because Ms M had made a complaint of sexual harassment to Dairy Farmers and the ADB. The ADT found that the causal link had been established.

The ADT found that a complaint was made by Ms M about her former male work colleagues, including Mr C, in 2006 regarding exchange of pornographic videos, sexually explicit emails and inappropriate text messages as well as rumours being spread that Ms M had a boyfriend. An investigation was undertaken by Dairy Farmers into the matters which resulted in the termination of some employees’ employment.

The ADT was satisfied that Mr C had sent the letter to Ms M’s husband "…in order to punish [her] for having made a complaint of discrimination."

The ADT was satisfied that the elements of victimisation set out in section 50 of the Anti-Discrimination Act (NSW) 1977 had been made out and substantiated.

Mr C was ordered to compensate Ms M for the forensic handwriting expert report fee as had he admitted to writing the letter earlier, the expert would not have been required. Mr C was also ordered to pay $7,500 representing payment of damages for economic loss. This was calculated based on the percentage the victimisation played in Ms M’s inability to return to her pre-injury employment with Dairy Farmers, which was calculated at one-fifth of $37,500, being her loss of earnings for 18 months.

Ms M was awarded $6,000 in general damages for the victimisation to cover hurt, humiliation and injury to feelings. She was also awarded a further $6,000 for aggravated damages.

Comments
Courts and Tribunals do not take victimisation claims lightly. As can be seen from this case, if victimisation is substantiated, the penalties imposed on the perpetrator can be quite significant, particularly where the perpetrator is an individual.

The penalties are high so as to deter others in the community from engaging in such conduct.

To ensure that your company has an effective anti-bullying and anti-victimisation policy in your workplace, contact Workplace Law.

See: [2010] NSWADT 120 (20 May 2010) 

LOOK WHO’S FAMOUS
In the light of so many stories about negative business outlook, it is great to see an Australian company expanding overseas!

We are pleased to report that one of our (already famous) clients, Seafolly Australia, is seeking global domination and has recently conducted an advertising campaign in London including a massive double sided billboard being displayed on the main road to Heathrow Airport.

Well done Seafolly, we wish you great success in the UK!