Cases and Legislation April 2020 NEWS ALERTS Temporary amendments to the Long Service Leave Act 1955 (NSW) In response to the COVID-19 pandemic, the NSW Parliament passed a set of temporary amendments to the Long Service Leave Act 1955 (NSW) to introduce greater...
Temporary amendments to the Long Service Leave Act 1955 (NSW)
In response to the COVID-19 pandemic, the NSW Parliament passed a set of temporary amendments to the Long Service Leave Act 1955 (NSW) to introduce greater flexibility in how and when long service leave can be taken in NSW.
Specifically, the amendments allow for:
- Long service leave to be taken in smaller periods than one month. For example, single days at a time.
- Less than one month’s notice of taking long service leave, enabling an employer to agree to the employee to taking long service leave on short notice.
Further information about the amendments to the Long Service Leave Act 1955 (NSW) can be found here.
Variation to the coverage of the Miscellaneous Award 2010
In February 2020, the Fair Work Commission (FWC) expressed a provisional view that the coverage clause of the Miscellaneous Award 2010 (Miscellaneous Award) should be varied. You can read our summary of that decision here.
On 25 March 2020, the FWC issued its final decision on the matter and confirmed its view that the coverage clause of the Miscellaneous Award should be varied (4 yearly review of modern awards – Miscellaneous Award 2010  FWCFB 1589).
The variation will remove the current subclause 4.3 of the Miscellaneous Award and will amend the current subclause 4.2. The purpose of the variation is to align the coverage clause with the modern awards objective and improve the useability of the Miscellaneous Award.
The variation confirmed in the FWC’s decision will take effect on 1 July 2020.
FWC’s annual wage review decision 2019-2020 delayed
The current COVID-19 pandemic has impacted on the timetable for the Fair Work Commission’s (FWC’s) annual wage review decision.
Each year, the wage review decision sets the national minimum wage and the minimum wages set out in the modern awards, effective from the first pay period on or after 1 July that year.
Usually, the FWC’s decision is handed down in May each year. However, this year the FWC has extended its timetable in order to consider material about the impacts of the COVID-19 pandemic, including the Federal Government’s budget and the National Account statistics.
At present, final consultations for the annual wage review decision are due to take place on 10 June 2020.
General Protections and Political Opinion
“Full Court upholds sacking of lawyer for expressing criticism of government client”
GR v The Partnership Trading as HWL Ebsworth Lawyers  FCAFC 37
The Full Court of the Federal Court of Australia has dismissed the appeal of a lawyer who claimed that he was dismissed in contravention of the Fair Work Act 2009 (Cth) (FW Act) for holding and expressing his political opinions.
The employee was a consultant at a law firm in Canberra specialising in constitutional law.
In 2011 he was appointed as a member of a three-person independent panel tasked with conducting a review into allegations of sexual and other abuse in the military. Later that year, the panel delivered its review to the Government and made a number of recommendations.
The Government, though a number of its agencies, was a client of the law firm that employed the employee.
Following the release of the review, the employee began publicly criticising the Government for not adopting the review’s recommendations.
In 2014, the employee participated in a television interview in which he criticised the Government. That interview came to the attention of the firm’s managing partner who sought an undertaking from the employee that he would not speak to the media without the firm’s permission.
Shortly after, the firm implemented a new media policy which said that employees, partners and consultants were not to give media interviews without the permission of the managing partner, and any permission granted would be conditional upon the employee not making negative or critical comments about clients.
In 2015 and 2016, the employee continued to contact politicians expressing his concerns that the Government was not doing enough or was not responding appropriately to the review.
In October 2015, the employee wrote to the firm’s managing partner requesting permission to speak to the press regarding his concerns about the review. The managing partner denied this request and said that if the employee wanted to speak to the media, he should resign. The employee maintained that he had a right to express his views to the media.
In November 2016, the Sydney Morning Herald published an article that quoted the employee. In December 2016, the Sydney Morning Herald and the Canberra Times published an article written by the employee.
The managing partner was highly displeased with the employee’s conduct and the employee was, in essence, uninvited from the firm’s Christmas party later that month.
In January 2017, issues with the employee’s rate of remuneration arose and his employment with the firm once again came to the attention of the managing partner.
In February 2020, the managing partner dismissed the employee by email.
The managing partner would later claim that the reasons for dismissing the employee were his defiance of the media policy and the fact that there was insufficient demand for his services.
First Instance Decision
Following his dismissal, the employee bought a claim before the Federal Court of Australia alleging the firm had taken unlawful adverse action against him, being that he was dismissed for holding and expressing his political views.
The firm argued that the employee was not dismissed because of his political views, but rather because of his defiance of the media policy (and its potential commercial impacts for the firm) and because there was little demand for his services.
The primary judge who heard the matter in the first instance found in favour of the employer.
You can read our summary of the first instance decision on our blog, here.
Full Court Decision
The employee appealed the first instance decision and argued that the employer’s conduct in dismissing him for breaching the media policy could not be severed from his expression of his political views. The employee claimed that the primary judge had erred in the first instance decision in drawing such a distinction and therefore the decision should be quashed.
The Full Court found that, consistent with authoritative cases, where a decision-maker can provide evidence of their reasons for taking the action that they did, that evidence can displace any presumption in favour of the employee’s stated reasons for the action.
In this case, the managing partner gave evidence of the reasons for his decision to dismiss the employee, namely that he acted in defiance of the media policy and directions not to engage in media interviews.
The managing partner also acknowledged in his evidence that the employee’s political stance was irrelevant, it was his actions in criticising a client in defiance of directions that was the reason for his dismissal. The employee was entitled to hold whatever political views he wanted and was able to express them in other ways, but was acting against the directions issued to him by the firm when he engaged in media interviews.
The Full Court found that, although the employer’s reasons for dismissing the employee did have a connection to his political views it did not mean that those reasons were prohibited reasons for dismissal – there is no requirement that reasons for dismissal be entirely disassociated from prohibited reasons.
Further, the Full Court commented that it would be incongruous if the employee could be dismissed for criticising a non-government client but could not be dismissed for criticising a Government client.
The Full Court (with Justice Flick issuing a separate decision) did not find any reason to disturb the findings of the primary judge and dismissed the employee’s appeal.
What can your business learn from this decision?
Employers can issue reasonable and lawful directions to employees where those directions are reasonably necessary to protect the legitimate interests of the employer.
In this case, the media policy and the firm’s directions not to engage in interviews without permission were intended to preserve the firm’s relationships with its clients and potential clients. Accordingly, they were reasonable and lawful directions intend to protect the firm’s interests.
Reliance on a breach of such directions as a reason for dismissal will not be a contravention of the FW Act where a decision-maker can provide evidence of their reasons for dismissal. Including where the reasons are connected to, but not because of, a prohibited reason for adverse action under the FW Act.
Adverse Action and Workplace Rights
“Full Court confirms broad interpretation of the general protections provisions”
PIA Mortgage Services Pty Ltd v King (No 2)  FCAFC 53
The Full Court of the Federal Court of Australia (the Full Court) has confirmed that the general protections provisions of the Fair Work Act 2009 (Cth) (FW Act), which protect employees who exercise workplace rights from adverse action should be read broadly, and should not be limited to those rights that are specifically conferred by a contract, agreement or policy.
Mr King (the Employee) was employed as the Chief Executive Officer of PIA Mortgage Services Pty Ltd (PIAMS), a newly created part of the Property Investors Alliance (together, the Employer) from 25 August 2016 to 21 April 2017.
In addition to the Employee’s role as the CEO of PIAMS, he was also given responsibility of an already existing mortgage brokering service of the Employer, known as Zenik Finance Solution Pty Ltd (Zenik). Zenik was known to the Employee from his previous employment, Vow Financial Pty Ltd, as Zenik used Vow’s Australian Credit Licence (ACL) to provide mortgage brokering services.
Prior to the commencement of his employment, the Employer sought the assistance of the Employee to address concerns from many banks that Zenik was engaging in suspicious conduct such as lodging questionable finance applications which had led to the suspension of some of its brokers. By the time the Employee commenced employment with the Employer, Zenik was running suspension-free.
However, almost immediately after he commenced employment, the Employee received complaints about Zenik’s brokering practices, which ultimately resulted in the termination of Zenik’s ability to use Vow’s ACL, and a refusal by the banks to receive mortgage applications from the Employer (as a whole).
In April 2017, just prior to the Employee commencing a pre-approved period of annual leave, the Employer advised the Employee that it would be “parking” its mortgage brokering services and offered to terminate the Employee’s employment upon payment of four months’ salary.
The Employee rejected this offer, and subsequently advised the Employer by email that he believed he had been misled into believing that the business was a profitable business, and that he was not advised of the pattern of unlawful behaviour. The Employee also advised the Employer that he believed that the Employer was unlawfully terminating his five-year, fixed-term contract, and that he should be more appropriately compensated.
The Employer did not respond to this email, and accordingly, the Employee caused his lawyers to write to the Employer alleging a breach of the employment contract, as well as a contravention of the Australian Consumer Law.
The Employer ultimately responded by summarily dismissing the Employee. The purported reason for the Employee’s dismissal was that it believed he had no intention of complying with the employment contract, as he had been absent, without authorisation, from work for ten days following the completion of his annual leave, and had made unreasonable demands.
The Employee commenced proceedings against the Employer alleging that it engaged in adverse action in contravention of s 340(1) of the FW Act, by terminating his employment because he exercised a workplace right to make a complaint or inquiry in relation to his employment.
The Employee claimed that the complaints he had made were:
- that the Employer did not intend to honour the employment contract by employing him for five years, or paying him a sum in lieu thereof; and
- that he had been misled about the potential that existed to grow the mortgage brokering service.
First Instance Decision
At first instance, the Court was satisfied that the Employer had engaged in adverse action in contravention of s 340(1) of the FW Act, in that it terminated the Employee’s employment because he exercised a workplace right to make a complaint in relation to his employment.
In support of this finding, the Court noted that the Mr Wang, the sole director and shareholder of the Employer and the individual who effected the dismissal, did not give evidence as to his reasons for the dismissal. Instead, the Employer relied on its letter to the Employee advising that the reason for the dismissal was the Employer’s belief that the Employee had repudiated the contract by failing to attend for work for 11 days and making demands of the Employer (in his email). The Court was not satisfied that this was enough to discharge the Employer’s onus of proving that the reasons did not include the Employee’s complaints.
It ordered the Employer to pay the Employee $100,000.00 as compensation.
The Employer appealed this decision, arguing that the Court had erred in finding that the Employee had exercised a workplace right to make a complaint in relation to his employment, and that this was the reason for the Employee’s dismissal. The Employer argued that the Court should have found that the Employee was dismissed because he had repudiated his contract by not attending for work.
Full Court Decision
The majority of the Full Court affirmed the trial judge’s decision that the Employer had engaged in adverse action by terminating the Employee’s employment because he exercised a workplace right to make a complaint or inquiry in relation to his employment. It agreed that the Employer had not discharged its onus of proof in large part because Mr Wang had failed to give any evidence.
The majority of the Full Court (with Justice Snaden dissenting) also confirmed that the protection afforded to employees who have a workplace right to make a complaint or inquiry in relation to their employment should be read broadly.
According to the majority, s 341(1)(c)(ii) of the FW Act should be read so that an employee is able to make a complaint or inquiry under general law, that is, an employee has a right to sue his or her employer for an alleged breach of the contract of employment, or for an alleged breach of a statutory provision. It would be incongruous with the intention of the FW Act if the protection was limited to only those employees who had a right to make a complaint or inquiry if that right was made out in a contract, award or other industrial instrument, or some workplace policy or procedure.
In this case, the Employee’s right to make complaints arose in the general law of contract and in the Australian Consumer Law. The majority of the Full Court therefore found that the trial judge had not erred in this respect of the decision, and upheld the order for compensation to the Employee.
What can your business learn from this decision?
The general protections provisions of the FW Act prohibit an employer from engaging in adverse action against an employee because that employee has a workplace right to make a complaint or inquiry in relation to their employment, and has chosen either to exercise or not to exercise that right.
The Full Court in this decision has confirmed that the right to make a complaint or inquiry is a general one and should be read broadly. It should not be limited to only those entitlements that exist in a contract, award or industrial instruments, or in workplace policies and procedures.
Employers should be mindful of this provision when engaging in any action that might be detrimental to an employee, particularly when the employee has made a complaint or inquiry about their employment.
Unfair Dismissal and Reinstatement
“Full Bench upholds reinstatement of employee who breached drug policy”
Sydney Trains v Gary Hilder  FWCFB 1373
The Full Bench of the Fair Work Commission (the Full Bench) has upheld the reinstatement of a Customer Service Attendant who was dismissed for presenting for work with cannabis in his system, finding that there were mitigating factors that made his dismissal harsh.
Mr Hilder (the Employee) was employed by Sydney Trains (the Employer) as a Customer Service Attendant. His duties included ensuring the cleanliness and security of his designated train station, as well as ensuring the safety and convenience of commuters.
On 4 October 2018, the Employee had caught up with an old friend and smoked a marijuana joint. As he had no ill-effects that night, he considered himself capable of attending for work the next morning. That morning, he was subject to a random drug test. He continued working on that day (and for the next three days) without incident.
On 10 October 2018, the Employee was advised that he had returned a positive result for cannabis (78ug/L). He was placed on suspension while an investigation took place into whether he had breached the Employer’s Drug & Alcohol Policy. The policy had recently been amended in 2017 to advocate a “zero tolerance” approach to drugs and alcohol and stated that test ratings must be below the cut-off level stipulated by the relevant Australia & New Zealand Standard (50ug/L).
The Employee was ultimately dismissed for serious misconduct. He then commenced proceedings against the Employer claiming that his dismissal was unfair.
First Instance Decision
At first instance, the Fair Work Commission (the FWC) held that there was no valid reason for dismissal, and that the dismissal was harsh and unreasonable.
The FWC was not satisfied that the Employee had engaged in serious misconduct, considering that the conduct was rather a serious error of judgment that was a one-off incident, was not reckless, deliberate or intentional, and did not lead him to be incapable or incoherent at work.
The FWC also considered the Employer’s reasoning to be significantly flawed insofar as it relied on the Drug & Alcohol Policy, noting that the policy was inconsistent and not properly communicated to employees. He considered that it was not open for the Employer to rely on a “zero tolerance” approach to drug and alcohol use when the cut-off was 50ug/L. To the extent that the Employer intended the “zero tolerance” approach to mean that any breach would automatically result in dismissal, the FWC considered this to be inconsistent with its position that it would take into account personal and mitigating circumstances when it came to breaches of the policy.
The FWC was therefore not satisfied that there was a valid reason for dismissal.
The FWC also considered that the dismissal was harsh in circumstances where it was agreed that:
- the Employee had an otherwise unblemished work record since commencing employment with the Employer in 2012;
- the Employee was not a habitual drug user and had not smoked marijuana for thirty years prior to this incident;
- the Employee had at all times expressed contrition and remorse for his conduct; and
- the Employee was 64 years old, had poor prospects of obtaining alternative employment and had nothing by way of retirement savings.
The FWC therefore ordered that the Employee be re-instated to his employment, and ordered compensation for 50% of the Employee’s lost earnings.
Full Bench Decision
The Employer appealed the first instance decision, largely on the basis that the FWC had failed to consider the actual reason for the Employee’s dismissal, and that the FWC had taken into account extraneous matters such as the inconsistency of the Drug & Alcohol Policy.
The Full Bench found that the FWC had erred in finding that there was no valid reason for dismissal. Noting that there was no dispute that the Employee’s conduct was in breach of the policy, the Full Bench considered the appropriate question to be whether the breach was of sufficient gravity to be a valid reason for dismissal. The Full Bench said that it was a valid reason for dismissal, particularly noting the safety-critical nature of the Employee’s role.
However, the Full Bench pointed out that there did appear to be some confusion about the Policy and that the Employer ought to have clearly communicated the terms of the “zero tolerance” approach to its employees by training them in the policy and providing them adequate warning that the policy would be implemented.
The Full Bench was also satisfied that the dismissal was harsh, noting that there were mitigating factors in favour of the Employee. It therefore upheld the initial decision to re-instate the Employee to his employment.
What can your business learn from this decision?
The Full Bench re-affirmed in this decision the views of Deputy President Sams in the initial decision in relation to workplace policies – that they should be clearly communicated to employees, and that the application of those policies should be consistent, particularly when it comes to matters of disciplinary action.
Modern Award Coverage and the Better Off Overall Test
“Substantial character of business determinative of modern award coverage for the purposes of the BOOT”
Compass Group (Australia) Pty Ltd & Compass Group Healthcare Hospitality Services Pty Ltd v Health Services Union  FWCFB 504
The Full Bench of the Fair Work Commission (Full Bench) confirmed that the substantial character of the employer’s enterprise meant that the Health Professionals and Support Services Award 2010 (HPSS Award) was to be used for the purposes of the better off overall test (BOOT) in assessing a new enterprise agreement.
Compass Group (Australia) Pty Ltd and Compass Group Healthcare Hospitality Services Pty Ltd (the Employer) provide foodservices and hospitality as well as other support services such as security and facilities management to clients, including the Royal Victorian Eye and Ear Hospital (the Hospital).
The Employer negotiated a new enterprise agreement to cover employees who performed worked at or in connection with its hospitality and other services at the Hospital.
The Employer applied to the Fair Work Commission (FWC) for approval of the enterprise agreement, to be known as the Compass Group – Medirest (Royal Victorian Eye & Ear Hospital) Enterprise Agreement 2018 (the Agreement).
In its application, the Employer named the Hospitality Industry (General) Award 2010 (Hospitality Award) as the relevant modern award against which the Agreement should be compared and which covered the Employer and its employees.
The Health Workers Union (HWU) disagreed that the Hospitality Award was the correct modern award and instead submitted that the appropriate modern award was the Health Professional and Support Services Award 2010 (HPSS Award).
First Instance Decision
At first instance, the Commissioner was required to determine the appropriate award coverage for the BOOT assessment.
The Commissioner considered evidence from the Employer as to the services it provided, and the type of services to be performed at the Hospital by employees covered by the Agreement. These included food, cleaning, distribution and patient support services. The Employer argued that these services were similar to what would be performed at a hotel.
The Commissioner did not agree with the Employer’s contention. The Commissioner found that the “substantial character” of part of the Employer’s business was in the hospital industry. As the coverage clause of the Hospitality Award explicitly provides that it does not cover employers in the hospital industry, he found that the Hospitality Award did not apply to the Employer and its employees.
The HPSS Award covers employers in the health industry and employees in the classifications of that award. The Commissioner found that the hospital industry was in the health industry and accordingly, the HPSS Award applied to the Employer.
The Commissioner also considered the classifications in the HPSS Award and determined that this award was more appropriate for the work to be carried out by employees covered by the Agreement. Accordingly, he found that the HPSS Award was the relevant modern award which covered the Employer and the employees covered by the Agreement and was to be used for the purposes of the BOOT.
After reaching this conclusion, the Commissioner expressed concern that the Agreement did not pass the BOOT and questioned whether the Agreement was genuinely agreed to as the incorrect comparator award was used when explaining the terms to employees.
The Employer appealed against the decision of the Commissioner, essentially claiming that the Commissioner erred in his findings and his conclusions that the substantial character of part of the Employer’s business was in the “hospital industry” and that the HPSS Award was the appropriate modern award.
The Commissioner’s decision was stayed pending the outcome of the Employer’s appeal.
Full Bench Decision
The Employer submitted that the Commissioner misconstrued the exclusion in the coverage clause of the Hospitality Award. It argued that the proper construction was limited to businesses which operated as a hospital. As the Employer did not operate as a hospital, but rather provided services to hospitals, it was not excluded from the Hospitality Award.
The Full Bench did not accept this narrow interpretation, reasoning that the carve out in the coverage clause must have work to do and was not confined only to businesses which operated as hospitals.
The Full Bench noted that to determine the industry of an employer, an assessment of the substantial character of the employer’s enterprise was necessary. The Full Bench held that to do this, the focus needed to be on the part of the enterprise which would be providing services under the Agreement. The Full Bench held that the Commissioner correctly completed this assessment and did not err in his finding that the Employer’s enterprise was in the hospital industry.
Specifically, the Commissioner correctly considered evidence about the services the Employer provided to the hospital which included food catering for patients, cleaning of inpatient wards and operating theatres, transporting patients and medical equipment, patient support services and that employees in certain classifications were required to hold qualifications in health care and correctly came to his conclusion that the Employer operated in the hospital industry.
The Employer’s submission that the Commissioner mistook evidence in relation to the services provided to the Hospital, and did not consider the offsite catering services provided was also rejected. In this regard, the Full Bench stated:
“In our view the focus of the examination of the substantive character of the enterprise must include that part of the business that is providing services to the RVEEH. The Commissioner undertook the analysis in this manner, and we discern no error in his approach.”
Accordingly, the Full Bench dismissed the Employer’s appeal.
What can your business learn from this decision?
The BOOT requires the FWC to undertake an overall assessment of whether each employee is better off overall under a proposed enterprise agreement versus the terms of the relevant modern award.
For the Commission to do this, the terms of the proposed agreement must be assessed against the terms of the applicable modern award. It is therefore essential that employers correctly identify the relevant modern award at the outset of the bargaining process. Incorrect award coverage may mean that the terms of the agreement are less beneficial in comparison to the applicable award terms and the agreement will not be approved, sending the parties back to the beginning of the bargaining process
Should you require any further information or assistance, please contact our Director Shane Koelmeyer on (02) 9256 7500 or via email on firstname.lastname@example.org.
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.