Employment Issues

“Employee too resistant to change for reasonable redeployment”
Wardley v Australian Red Cross [2016] FWC 8198

Executive summary
The Fair Work Commission (FWC) has dismissed an employee’s unfair dismissal claim because the termination of his employment was a case of genuine redundancy. The employee claimed he was unfairly dismissed because there was an almost identical vacant role into which he could have been reasonably redeployed. The employer argued that the employee was too resistant to change and would not accept that the vacant role contained new responsibilities, especially in regards to social media and data analytics. The FWC agreed with the employer.

Facts
The employee’s position was made redundant as the result of a costs-cutting restructure of the employer’s media, fundraising, communications and retail department.

In the new structure a new position was created that performed many of the same duties as the employee’s redundant position. However, the new position was part time, carried a higher grading and involved some additional responsibilities, which centred on strategy, data analytics and innovation.

The employee applied for the new position and was granted an interview with his manager and two other panel members. As part of the interview process, the employee was asked to perform an exercise involving the use of social media, specifically Twitter and Facebook.

The employee was unsuccessful in securing the new position and subsequently made an unfair dismissal application to the FWC on the basis that he should have been redeployed into the new position.

The employer raised a jurisdictional objection to the employee’s application on the basis that the termination of his employment was the result of a genuine redundancy.

The employer argued that redeploying the employee into the new position would not have been reasonable.

At the FWC hearing of the matter, the employee’s manager gave evidence that during the interview, the employee had failed to demonstrate the requisite social media experience and did not possess the skills or experience to measure the success of a digital media campaign. The manager also expressed concern that the employee displayed a stubborn attitude and a resistance to change that would make productive collaboration in the workplace difficult.

When giving evidence, the employee refused to accept that the new position involved any additional responsibilities different to those of his redundant position.

Decision of the FWC
Vice President Hatcher held that the redundancy was a genuine redundancy because the employee could not have been reasonably redeployed into the new position. His findings centred largely on the evidence of the employee’s manager and his impressions of the employee during the course of the hearing.

VP Hatcher found that the employee exhibited resistance to change, an unwillingness to accept the new position was different from his redundant position and “simply did not recognise that he would need to change anything in the way he had performed his work in the past”.

Furthermore, VP Hatcher noted that the employee’s resistance to change meant that any re-training would have been likely to cause unproductive conflict about work methods and objectives.

On the basis that the employee’s redundancy was genuine the application for unfair dismissal was rejected.

Comment – what can your business learn from this decision
When employers are considering candidates for redeployment during a restructure, skills and experience are certainly relevant factors but as demonstrated by this decision, so too is the employee’s attitude.

Resistance to change can be a real impediment to redeployment. Employers may be entitled to rely upon an employee’s attitude as a reason why placing an employee in a particular role is not a reasonable option.

“Roof-tiler found to be an employee and not an independent contractor”
Mr Troy Petrie v Grant Johnson Pty Ltd ATF The Grant Johnson Trust T/A Platinum Roof Coating [2016] FWC 6407

Executive summary
The Fair Work Commission (FWC) determined that a roof tiler had access to the unfair dismissal jurisdiction after determining that the relationship between the parties was that of employer and employee and not of principal and independent contractor.

Facts
In May 2015 Mr Troy Petrie (the Applicant) and Grant Johnson Pty Ltd ATF The Grant Johnson Trust T/A Platinum Roof Coating (the Respondent) entered into an arrangement where the Applicant was engaged to perform work as a roof repairer.

In May 2016 the relationship between the parties ended after the Applicant emailed the Respondent of his intention to take a leave of absence. The Respondent understood this email to be that the Applicant wanted to end the relationship and in response directed the Applicant to finish certain work by a particular date.

The Applicant lodged an unfair dismissal application with the FWC (the Application).

Decision
The Respondent opposed the Application and raised three jurisdictional objections, which were heard before the substantive claim:

  1. That the Applicant was an independent contractor and therefore not an employee protected from unfair dismissal;
  2. That the Applicant was not “dismissed” from employment; and
  3. That the Application was lodged outside of the 21 day time limit.

In relation to ground (i) – Deputy President Binet applied the indicia of employment as summarised in Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario [2011] FWAFB 8307, to determine whether the Applicant was an employee of the Respondent or an independent contractor.

DP Binet held that the Respondent’s sole director “selected, between those indicia of employment and independent contracting, which best suited his interests when determining the terms and conditions under which Mr Petrie was engaged”.

DP Binet considering the evidence and determined that the following factors indicated that the Applicant was an employee rather than an independent contractor:

  • The Respondent had determined where and what work would be performed and the Applicant did not have the genuine right to refuse work;
  • The Respondent had control over how the Applicant was to perform the work;
  • The Applicant had no control over start and finishing times, which were influenced by the job to be completed and the weather;
  • The Applicant did not have an entitlement to perform paid work for others;
  • The Applicant did not have any advertising for his business and was not entitled to advertise his services;
  • The Applicant’s tools and equipment were supplied or reimbursed by the Respondent;
  • The Applicant could not delegate or subcontract the work;
  • The Applicant was given the Respondent’s uniform and was identified as a “worker” to customers; and
  • The Applicant was provided with the Respondent’s sole director’s business cards and pamphlets to give to customers and all goodwill created went to the Respondent.

DP Binet considered that although the Applicant was paid by way of invoice, the invoice was prepared by the Respondent and appeared “to be a façade to create an illusion of an independent contractor relationship”.

Accordingly, DP Binet was satisfied that the Applicant was an employee and was protected from unfair dismissal.

In relation to grounds (ii) and (iii) – DP Binet considered that the Applicant’s email did not indicate that he wanted the relationship to end but rather that he would return to work. She determined that the relationship was terminated by the Respondent’s email and that the Applicant did make the application within 21 days of this email.

The Respondent’s jurisdictional objections were dismissed. A further hearing will be held to determine the substantive claim of the merits of the Application.

Comment – what can your business learn from this decision?
The misclassification of employees as independent contractors can have significant consequences on a business. In addition to being a breach of the sham contracting provisions of the Fair Work Act 2009 (Cth) it may also expose an employer to underpayment and unfair dismissal claims and liability for payroll tax and workers compensation claims.

“Casual labour hire employee found to have entitlement to annual leave”
Skene v Workpac Pty Ltd
[2016] FCCA 3035

Executive summary
A labour hire employee who worked regular and predictable hours was successful in his claim for payment of his accrued unused annual leave entitlements.

Facts
Mr Paul Skene (the Employee) was employed by mining labour hire company, Workpac Pty Ltd (Workpac) to work as a dump truck operator at the coal mines in Queensland.

Prior to commencement, the Employee initially agreed to a “Casual or Fixed Term & Conditions of Employment”, which provided that he was employed on a casual or fixed term assignment-by-assignment basis (paid an hourly rate of pay). The Employee’s employment could be terminated at any time on one hours’ notice.

From July 2010 the Employee agreed to employment as a fly-in-fly-out dump truck operator and was provided a “Notice of Offer of Casual Employment”. The Employee worked 12.5 hour shifts on a seven day roster, which were determined 12 months in advance. Other than a period of unpaid leave which was approved by the mine operator, the Employee worked continuously according to the roster arrangement.

In April 2012, the Employee was removed from the mine following allegations about his conduct and behaviour and his employment was terminated.

On termination of the employment the Employee claimed that he was continuously employed by Workpac and was entitled to six weeks of annual leave and annual leave loading. In this regard the Employee relied upon:

  • Clause 19.1.1 of the Workpac Pty Ltd Mining (Coal) Industry Workplace Agreement 2007 (the Agreement) and
  • Sections 87 and 90 of the Fair Work Act 2009 (Cth) (FW Act).

Workpac submitted that the Employee was not entitled to accrue annual leave or to receive any such entitlement on termination of employment as the Employee was not continuously employed but was employed on a series of separate engagements.

Decision
In relation to the Agreement – clause 19.1.1 provided the annual leave entitlements to permanent on-hire employees. In this regard, Judge Jarrett held that the assessment of the nature of the Employee’s employment must be made “as at” the commencement of his employment. This required the subjective test and the subjective intention of the parties. Clause 5.5.6 of the Agreement provided that at the time of the engagement Workpac would inform each on-hire employee of the status and terms of their engagement. Using the subjective approach, Workpac offered the Employee casual employment and as such this was enough to indicate that he was a casual. Accordingly, clause 19.1.1 did not apply to the Employee.

In relation to the FW Act – section 86 provides an entitlement to annual leave to employees “other than casual employees”. Accordingly, it had to be determined whether the Employee was “other than a casual employee”. As “casual employee” is not defined under the FW Act, whether the Employee was a casual employee was a question of fact.

Using the principles outlined in Williams v MacMahon Mining Services Pty Ltd [2009] FMCA 511, Judge Jarrett had regard to the Employee’s regular and predictable employment according to a set roster with lack of choice in work arrangements or shifts, his continuous employment, the expectation that he was to be available on an ongoing basis to perform the duties and the FIFO arrangements.

Judge Jarrett was satisfied that the Employee was to be considered as “other than a casual employee” and therefore had an entitlement to annual leave under section 86 of the FW Act as the essence of “casual employment” was missing and made Orders for Workpac to pay the Employee compensation, being the value of his accrued but unused annual leave entitlements.

Comment – what can your business learn from this decision?
Casual employees perform work on a non-ongoing basis and usually can choose to select when to work. Importantly, casual employment ends when the engagement ends and there is no guarantee of ongoing employment. A casual loading is paid in lieu of leave entitlements.

Employers should carefully consider rostering needs to ensure that casual employees are not used on a regular basis to perform the same hours and/or shifts.

Casual employees who are employed on a regular and systematic basis and have a reasonable expectation of ongoing employment may be found eligible to make a claim for unfair dismissal or for unpaid entitlements such as annual leave.

Industrial Issues

“Striking workers penalised by Federal Court for unlawful industrial action”
Director of the Fair Work Building Industry Inspectorate v Ellen (The Longford Gas Plant Case) [2016] FCA 1395

Executive summary

  • Workers (employees and contractors) covered by a current Enterprise Agreement (the Agreement) refused to perform work.
  • The refusal to perform work was found to be unprotected industrial action.
  • The workers were penalised for their actions.

Background

The Director of the Fair Work Building Industry Inspectorate (the Director) brought proceedings in the Federal Court of Australia (the Court) against 50 workers of the Longford Gas Conditioning Plant who had refused to perform work on 12 and/or 13 February 2015 because a co-worker had been terminated during his probation period.

By refusing to perform work, the workers were in breach of sub-section 417(1)(a) of the Fair Work Act 2009 (Cth) (FW Act), which provides that no industrial action can be organised or taken from when an Enterprise Agreement is approved until the day after its expiry date.

It was determined that the workers were covered by an Enterprise Agreement on the day/s they refused to perform work and that the Agreement had not passed its expiry date.

The workers admitted that they had engaged in unlawful industrial action.

The Director sought a declaration by the Court that the workers had contravened section 417 of the FW Act and that they be ordered to pay pecuniary penalties of between $500 and $1,500.

The reason for the different amounts was that the refusal of work by workers was different – some workers had failed to attend work only the afternoon of the 12 February 2015 ($500), some only on one day ($1,000) and some on two days ($1,500).

The workers submitted that they should only be required to pay one third of the proposed penalty and the remaining two thirds should be suspended for a period of six months. It was further submitted that any suspended penalties would only be payable if a worker was found to have contravened any provision of the FW Act during the period.

Decision
In determining the severity of the penalty, the Court took into account the following factors:

  • None of the workers stood to gain anything personally from the action;
  • The workers lost wages for the period where they were on the “work ban”;
  • The workers were not advised that their actions were unlawful prior to the employer lodging an application to the Fair Work Commission for orders restraining the continuation of the industrial action;
  • The workers cooperated with the Director and admitted contraventions at an early stage;
  • The workers did not submit any evidence with respect to their capacity to pay the proposed penalties;
  • The work ban had an adverse impact on productivity; and
  • The withdrawal of labour by all workers constituted unprotected industrial action.

The Court made it clear that the purpose of a penalty was to create both specific and general deterrence.

With respect to specific deterrence – the Court recognised that none of the workers had previously contravened the FW Act. However, none of the workers expressed any contrition or gave any assurance that they would in the future familiarise themselves with their legal obligations under the FW Act.

As to a general deterrence – the Court noted that there were thousands of workers covered by Enterprise Agreements and the contraventions of section 417 of the FW Act must result in a penalty so as to deter others from engaging in unprotected industrial action.

As a result, the Court ordered the workers to pay the penalties proposed by the Director. And so that they were meaningful, did not make any orders to suspend their payment.

Bullying / Discrimination / Harassment

“Reasonable test demonstrates employee’s perception of bullying misplaced”
Edwards v E & S Trading Co (Discounts) Pty Ltd T/A E & S Kitchen Bathroom Laundry; Blake; Bishop; Lake & Edwards v E & S Trading Co (Discounts) Pty Ltd T/A E & S Kitchen Bathroom Laundry; Colvin; Philipas; Baker [2016] FWC 8223

Executive summary
An employee in a sales environment made two applications to the Fair Work Commission (FWC) for orders to stop bullying in the workplace. The applications alleged that the employee was being bullied by:

  1. Her fellow employees in the sales team; and
  2. The managers of the business in which she worked.

The FWC found that although the employee genuinely perceived that she was being bullied, the evidence was not able to establish that bullying actually took place.

The applications for stop-bulling orders were dismissed.

Background
A sales consultant at a bathroom, kitchen and laundry appliance and fittings store complained that she had been bullied by her fellow sales consultants and by a group of three managers.

The employee’s complaints about the other sales consultants were essentially that they had “ganged up” on her, made complaints about her to managers and had taken sales from her.

The employee’s allegations against the managers were that they failed to take seriously (or properly investigate) her complaints about the other sales consultants, that she was treated differently by the store manager who favoured other employees and that she was issued a written warning as a result of an incident in November 2015.

The employee made two applications to the FWC for orders to stop bullying, one against the sales consultants and one against the managers.

The FWC Decision
The first question for the FWC to determine was whether the sales consultants had repeatedly acted unreasonably toward the employee, as required under the definition of bullying in the Fair Work Act 2009 (Cth) (FW Act).

The FWC found on the evidence that they had not. The evidence given by the employee sharply contrasted with the evidence given by the sales consultants and the employer’s other witnesses. The sales consultants and other witnesses were able to provide the FWC with reasonable explanations for all of the incidents of alleged bullying, including alternate and more convincing versions of alleged events.

The FWC examined the meaning of “repeated unreasonable behaviour” in this context and drew on a number of recent decisions. The FWC said that an assessment of unreasonable behaviour was an objective test, where unreasonable behaviour should be considered to be behaviour that a reasonable person, having regard to all of the circumstances, may consider to be unreasonable.

Therefore, the behaviour of the sales consultants could only be unreasonable if a reasonable person would consider it unreasonable in the circumstances in which it occurred.

The FWC found that the alleged behaviour of the sales consultants either did not occur as described by the employee, or where it did occur, a reasonable person would not consider it unreasonable.

The second question for the FWC to address was whether the actions of the managers was “reasonable management actions carried out in a reasonable manner”, which applied as an exception to bullying under the FW Act.

As with the sales consultants, an assessment of the conduct of the managers involved a test of reasonableness. The FWC said that reasonable conduct does not have to be the best or the preferable course of action. The FWC noted that some of the managers’ practices could have been carried out in a better manner and that there existed some workplace dysfunction but this did not mean that the managers’ actions were actually carried out unreasonably. Therefore, the actions of the managers were also considered to be reasonable and not bullying.

In the course of its decision, the FWC made some key comments about the employee’s perceived version of events.

The FWC did not doubt that the employee genuinely perceived that she was being bullied and honestly felt victimised and discriminated against but her feelings did not change the reality of the circumstances.

Essentially, the employee’s perception of events was not evidence that those events occurred as alleged or that those involved acted on the motives that the employee alleged they had acted.

For these reasons, the employee’s applications for orders to stop bullying were dismissed.

Comment – what can your business learn from this decision?
This decision should provide employers with some comfort that when it comes to stop-bullying applications, the FWC will apply an objective reasonableness test and look to the reality of the circumstances and not the employee’s perception of those same circumstances.

Unfair Dissmissal / Adverse Action

“Employee reinstated after employer’s investigation process was flawed”
Hedges v Wakefield Regional Council [2016] SAIRC 11

Executive summary

  • The Respondent’s failure to provide clear instructions to the investigator meant the Investigation Report (the Report) was flawed.
  • The South Australian Industrial Relations Commission (SAIRC) found that the Report had enough deficiencies to warrant the termination of the Applicant’s employment to be harsh, unjust and unreasonable.
  • As a result, the Applicant was reinstated to his position.

Background
The Applicant was employed by the Respondent in 2011 as a General Hand – Maintenance Worker and on 7 October 2015 his employment was terminated as a result the Applicant’s involvement in an incident on 28 July 2015.

On 28 July 2015 the Applicant made a comment to a co-worker who took offence and flicked a cigarette at the Applicant, who retaliated by spitting at/on the co-worker. The co-worker resigned from his employment with the Respondent the following day.

The incident was reported to the Respondent on 19 August 2015. The following day the Respondent engaged lawyers to conduct an investigation into the allegations.

The findings of the investigation included that the Applicant was guilty of a number of allegations of a bullying nature as well as having been found guilty of spitting on his co-worker. The Report recommended to the Respondent that the actions of the Applicant constituted grounds warranting summary dismissal for serious and wilful misconduct.

The Respondent subsequently provided the Applicant the opportunity to respond to the allegations as determined in the investigation. The Applicant’s responses were determined by the Respondent to be inadequate and the decision was made to terminate the Applicant’s employment.

The Applicant lodged an application for unfair dismissal on the basis that the dismissal was “harsh, unjust or unreasonable”.

Decision
The SAIRC found that the Applicant’s conduct on 28 July 2015 was serious and wilful misconduct. However, in order to make a finding with respect to whether the dismissal was harsh, unjust and unreasonable, the SAIRC considered the investigation process to determine whether the Applicant was afforded procedural fairness.

The Respondent’s instructions to the law firm conducting the investigation were considered by the SAIRC, who concluded that they were not specific enough and did not mention particular employees, nor did they contain any terms of reference or specific details of the allegations.

The instructions primarily focused on the conduct of the Applicant on 28 July 2015. The Respondent determined that the investigation was about the Applicant and no one else and the investigation was conducted on these instructions.

The SAIRC concluded that there were deficiencies in the Report. It observed that the failure of the investigator to consider whether the cigarette was lit or not was a significant omission from the Report and whether or not the flicking of the cigarette (lit or not) was a criminal offence and an assault. However, the SAIRC noted that the Report made conclusions that spitting on someone was a criminal offence and an assault. By commenting on one and not the other highlighted a deficiency in the Report.

The SAIRC found that the investigation was not a full and extensive one, which could not have had reasonable grounds to determine that the Applicant was guilty of misconduct without having considered all of the evidence.

By the Respondent determining that the investigation should be about the Applicant’s behaviour only meant that the Report contained significant omissions and some findings that, as a consequence, the decision maker did not take into account relevant mitigating circumstances when determining the appropriate remedy.

The SAIRC concluded that given the deficiencies in the Report were so significant, on the balance of probabilities the dismissal was harsh, unjust and unreasonable.

Taking into account that the Applicant had an unblemished work history and that two current field employees gave evidence they would be happy to work with the Applicant, this meant that the Applicant could work again with the Respondent. Accordingly, the SAIRC ordered that the Applicant be reinstated and for lost wages to be reimbursed to the Applicant.

Comment – what can your business learn from this decision?
This decision is a reminder to employers that it is important to have a thorough investigation process and that the investigation process must be kept separate from the disciplinary process.

If an employer decides to engage a third party to conduct the investigation, it is critical that the employer provides clear instructions about what they want to be investigated. In this case, the investigator should have been instructed to take into account the behaviour of not only the Applicant but also actions of his co-workers.

Sydney FC & Workplace Law

Australia’s and Sydney FC’s Caitlin Foord edged out compatriot Lisa de Vanna and China’s Tan Ruyin to capture the 2016 award in the women’s category. Featuring in the Olympics Games in Rio this year, Foord holds the record as the youngest ever Australian to play for the Matildas at a FIFA World Cup, having played in Germany at the age of 16 years and 230 days. She was subsequently named the first ever Best Young Footballer at the tournament.

AFC Women’s Player of the Year 2016 Caitlin Foord said: “I would like to congratulate the other nominees, Lisa and Tan, for an amazing year. I wasn’t expecting this, thank you to the AFC and congratulations to everyone in Abu Dhabi for hosting this wonderful event. I accept this award on behalf of all the Matildas.”

Need A Laugh

Q: Where do snowmen go to dance?
A: Snowballs.

Q: What do cool snowmen wear on their heads?
A: Ice caps.

Merry Christmas & Happy New Year!

The team at Workplace Law would like to wish you a very safe and happy holiday season. We thank you for reading our e-updates and hope that you enjoy them. We look forward to bringing you more e-updates on current workplace issues and trends in 2017.

Should you require any further information or assistance, please contact our Managing Director Athena Koelmeyer on (02) 9256 7500 or via email on [email protected]. Information provided in this update is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this update, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.