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Cases and Legislation December 2020

In response to the COVID-19 pandemic, the Full Bench of the Fair Work Commission amended the Clerks – Private Sector Award 2020 in March 2020 to include temporary measures to facilitate working from home arrangements.

NEWS ALERT – Clerks Award - Work from home case

In response to the COVID-19 pandemic, the Full Bench of the Fair Work Commission (the Full Bench) amended the Clerks – Private Sector Award 2020 (Clerks Award) in March 2020 to include temporary measures to facilitate working from home arrangements.

Schedule I – Award Flexibility during the COVID-19 Pandemic (Schedule I) provides temporary flexibilities in relation to the implementation of working from home arrangements, the reduction in ordinary hours of work and annual leave during the COVID-19 pandemic.

The period of operation of Schedule I has since been extended on two occasions. Most recently, the Full Bench handed down a decision on 6 October 2020 to extend the operation of Schedule I until 29 March 2021.

The Full Bench is now looking at whether the Clerks Award should be varied on a permanent basis to include provisions to facilitate working from home arrangements. At this stage, the Full Bench is seeking further information about the extent and incidence to which the temporary measures have been utilised. 

We will keep you posted as this matter progresses. Employers seeking more information can refer to the Commission’s major case page here: Clerks - Private Sector Award 2020 - Work from home case.

 

Unfair Dismissal - The Minimum Employment Period

“Full Bench confirms that employee’s regular and systematic casual employment formed part of the minimum employment period”

Greene v Floreat Hotel Pty Ltd [2020] FWCFB 6019

Executive Summary

The Full Bench of the Fair Work Commission (FWC) has upheld an employee’s appeal against a single member decision of the FWC to dismiss her unfair dismissal application on the grounds that she had not completed the minimum employment period of six months.

Background

The employee was employed as a Food and Beverage Attendant for Floreat Hotel Pty Ltd (the Employer). The employee commenced her employment on a casual basis in February 2019.

The employee was allocated a ‘basic roster’ which consisted of approximately 36 hours per week and she was given first choice of any additional shifts that became available.

In or about January 2020, the employee accepted an offer to move to full-time employment.

In or about March 2020, the employee was stood down from her employment as a consequence of a Government COVID-19 directive to close hospitality venues. In or about April 2020, the employee was informed that her position had been made redundant. 

The employee subsequently submitted an application to the FWC alleging that she was unfairly dismissed by the Employer. The Employer raised a jurisdictional objection to the application, arguing that the employee’s casual employment from March 2019 to January 2020 did not form part of her period of employment and, as a result, the employee did not meet the minimum employment period to be protected from unfair dismissal.

The employee submitted that she had a reasonable expectation of ongoing work given that she worked a ‘basic roster’ each week and it was only her additional hours that were worked on an ‘as required’ basis.

First Instance Decision

At first instance, the issue before the FWC was whether the employee’s service as a casual employee counted when considering whether she had served the minimum employment period, in accordance with s 384(2)(a) of the Fair Work Act 2009 (Cth) (FW Act). This required consideration of whether:  

  1. The employee’s casual employment was on a regular and systematic basis; and
  2. During her casual employment, the employee had a reasonable expectation of continuing employment on a regular and systematic basis.

Deputy President Binet found that the employee taking agreed time off for holidays suggested that her casual employment was not regular and systematic. In addition to this, the Deputy President was of the opinion that the irregularity in the employee’s hours did not support a reasonable expectation of regular and systematic work.

It was therefore held that the period of service as a casual employee was not consistent or predictable from week to week and as such could not be counted toward the minimum employment period.

The employee’s application was dismissed on the grounds that she was not eligible to make an unfair dismissal application as she had not completed the minimum employment period.

Full Bench Decision

The employee appealed the first instance decision to the Full Bench on the grounds that the Deputy President did not apply the relevant principles for construing “regular and systematic” in determining the nature of her casual employment.

On appeal, the Employer maintained that the employee worked irregular hours and she had a choice as to what hours she would work on a weekly basis.

The Full Bench found the Deputy President’s interpretation of regular and systematic employment to be inconsistent with the proper construction of s 384(2)(a) of the FW Act, and that this had been “… a fundamental error of principle which has unfairly denied [the employee] the opportunity to pursue her unfair dismissal application (at [17]).”  

The Full Bench considered the correct interpretation of regular and systematic employment to be the approach taken in Chandler v Bed Bath N’ Table Pty Ltd [2020] FWCFB 306, which provided that while the employment had to be regular, the pattern of work did not need to be regular or predictable.

On this interpretation of “regular” employment, the Full Bench was satisfied that the employee was regularly employed as she was consistently engaged to work approximately 36 hours per week. The pre-arranged leave that the employee took off did not alter the regular nature of her employment.

The Full Bench held that the employee’s casual employment was also systematic because she worked in accordance with a roster that was established in consultation with the Employer. The rostered hours made up a large majority of the employee’s roster, with additional hours only being added to cover the Employer’s business needs.

The Full Bench was satisfied that there was a reasonable expectation by the employee that she would be given weekly shifts and this arose from the fact that she was involved in the preparation of the roster and was able to choose her days and hours worked. 

In having regard to the above, the Full Bench held that the employee’s period of service as a casual employee from March 2019 until she became a permanent full-time employee in January 2020 formed part of her period of employment. Accordingly, the employee satisfied the minimum employment period and was protected from unfair dismissal.

The Full Bench upheld the appeal and referred the matter back to Deputy President Binet for final determination.

What can your business learn from this decision?

In order to access the unfair dismissal jurisdiction under the FW Act, an employee must have served the minimum employment period. For small business employers, the minimum employment period is 12 months, and for other employers, the minimum employment period is 6 months.

Periods of service as a casual employee may count toward the minimum employment period if the service is regular and systematic and there is a reasonable expectation of continuing employment on a regular and systematic basis. As this case demonstrates, the hours of work do not need to be consistent or predictable for it to be considered regular and systematic.

 

Serious Contraventions and Underpayments

“Court imposes $230,000 penalty for underpayment of employees in first serious contravention case”

FWO v Tac Pham Pty Ltd & Anor [2020] FCCA 3036

Executive Summary

An employer and its General Manager have been the first to be penalised under the “serious contraventions” provisions of the Fair Work Act 2009 (Cth) (FW Act) after the continued underpayment of vulnerable employees.

Background

Tac Pham Pty Ltd (the Employer) operated a café in Perth and employed the General Manager who was at all times responsible for the management of the business.

In or about January 2017, the Fair Work Ombudsman (FWO) conducted an audit and found that between December 2014 and December 2015 the Employer underpaid 25 employees (initial contraventions).

The FWO commenced proceedings in the Federal Court of Australia against the Employer and the General Manager in June 2017 for the initial contraventions. They were both penalised and ordered to attend training in relation to compliance.

In or about May 2018, the FWO attended the café again and issued the Employer with a notice to produce documents.

The documents produced by the Employer identified that, between September 2017 and April 2018, the Employer had continued to underpay 11 employees, a number of which were junior employees (further contraventions).

It was found that the Employer had continued to underpay employees during the initial contravention proceedings and after the penalty had been handed down.

The FWO commenced proceedings in relation to the further contraventions in the Federal Circuit Court of Australia (FCCA) against the Employer and the General Manager as accessorily liable pursuant to s 550 of the FW Act.

The Employer admitted to multiple contraventions of s 45 of the FW Act, the Restaurant Industry Award 2010 (the Award) and the Fair Work Regulations 2009 (Cth) (the Regulations) by:

  • failing to pay the required minimum rate of pay under the Award;
  • failing to pay Saturday, Sunday, public holiday and late-night penalty rates under the Award;
  • failing to pay split shift allowances under the Award; and
  • failing to provide employees with pay slips which included information as required by the Regulations.

The FWO submitted that failure to pay minimum rates of pay under the Award and failure to provide employees with pay slips pursuant to the requirements of the Regulations were serious contraventions under s 557A of the FW Act.

The Employer agreed to a statement of facts in which it admitted to the serious contraventions. The General Manager also admitted that she was involved in the serious contraventions.   

Given that there was an agreed statement of facts, and that the Employer and General Manager admitted liability, the FCCA proceeded straight to a penalty hearing.

Decision

During the hearing, the Employer and General Manager sought to have the "serious contraventions" deemed only as contraventions. The FCCA rejected this submission on the grounds that they had already admitted liability to the serious contraventions in the statement of agreed facts.

The FCCA considered that the Employer made no effort to improve its compliance and deliberately continued to engage in the same behaviour as demonstrated in the initial contraventions. The FCCA held that this demonstrated a “completely unacceptable” and “nonchalant approach” given the Employer’s history of contraventions.

Accordingly, the FCCA found that the Employer had no intention of changing its conduct and would have continued had the FWO not intervened in May 2018.

The FCCA accepted the need for specific deterrence as the Employer continued to underpay junior employees, which were notably the same group of vulnerable workers it had underpaid in the initial contraventions. The FCCA stated that specific deterrence should be at a level that was meaningful in order to deter future conduct.

The FCCA stated:

"Junior employees, and even those employees who were family members of the [General Manager], were in a position where raising concerns about wages or other matters would have been confronting. Any risk of exploitation in this context is particularly serious" (at [149]).

The FCCA also accepted the need for general deterrence given that the Employer and General Manager had contravened the same provisions of the Award which they had previously. The FCCA noted that there was a need to ensure the rights and entitlements of the particularly vulnerable junior employees were protected.

The FCCA stated that the need for general deterrence must be high in order to deter other employers from engaging in similar conduct.

The FCCA ordered the Employer to pay $191,646.00 and the General Manager to pay $38,394.00.

What can your business learn from this decision?

Exploitation of vulnerable workers and the underpayment of wages will be considered seriously by the Courts. This is the first time the FWO has secured penalties under the serious contravention provisions of the FW Act.

A “serious contravention” occurs where an employer (or person involved) knowingly contravenes provisions of the FW Act and their conduct was part of a systematic pattern of conduct. The serious contravention provisions attract maximum penalties which are tenfold and can result in significant penalties against the employer and persons involved in the contraventions.

 

Sports Law - Genuine Redundancy and Unfair Dismissal

“Commission finds redundancy to be genuine while having regard to the impacts of COVID-19 at the time of termination”

Cross v Brisbane Broncos Rugby League Club Limited [2020] FWC 6259

Executive Summary

The Fair Work Commission (FWC) has dismissed an employee’s unfair dismissal application on the grounds that the employee was genuinely redundant, even though it engaged a contractor shortly after the employee's dismissal.

Background

The employee was employed as an Assistant Coach by the Brisbane Broncos Rugby League Club Limited (the Club). The employee was engaged on a maximum term contract which was to operate from December 2018 to October 2020.

In or about March 2020, the employee was made redundant as a result of the financial impacts brought about by the COVID-19 pandemic.

In or about June 2020, the employee became aware through a media release from the Club that it had engaged a new skills coach.

The employee subsequently submitted an application to the FWC alleging that his dismissal from the Club was harsh, unjust and unreasonable.

The Club denied the dismissal was unfair and raised two jurisdictional objections on the basis that:

  1. the application was submitted 95 days after the employee’s termination and therefore outside the 21-day statutory time limit pursuant to s 394(2)(a) of the Fair Work Act 2009 (Cth) (FW Act); and
  2. the employee’s dismissal was a case of genuine redundancy pursuant to s 389 of the FW Act.   

The employee submitted that the redundancy could not have been genuine because the Club filled his position within months of his dismissal. The employee also claimed that the Club had promised to re-deploy him should a coaching position become available, but this was not done and instead, it hired someone else.

In relation to the delayed application, the employee submitted that he only believed his redundancy was not genuine after finding out his position had been filled and it was at this stage that he decided to take legal action. 

The Club maintained that the decision to make the position redundant was taken in response to the COVID-19 pandemic and that the employee’s dismissal was not targeted as 23 other employees were also made redundant.  

The Club also rejected the claim that the redundancy was not genuine on the grounds that the new role differed to the employee’s previous role. The new skills coach was engaged as a contractor on a short-term basis and only worked twice a week.

The Club also submitted that while the prospect of the employee's redeployment was considered, it decided that the employee did not possess the skills required for the positions available at the time of redundancy.

Decision

The FWC accepted that the Club’s decision to make the position redundant was made at a time of great uncertainty due to the impacts of the COVID-19 pandemic.

The FWC stated:

"Whether a redundancy is genuine, first involves determining whether the person’s employer no longer required the person’s job to be performed by anyone due to changes in the operational requirements of the employer’s enterprise" (at [15]).

Accordingly, the FWC was satisfied that the operational requirements meant that the Club could not afford the employee and had no choice but to make his role redundant and terminate his employment.

The FWC agreed with the Club in that the skills coach was engaged on a short-term basis as a contractor and this was different to the position in which the employee had previously worked.

In having regard to the above, the FWC was satisfied that the redundancy was genuine and therefore, the employee’s unfair dismissal application was without merit. 

Given that the application was without merit, the FWC did not have to consider an extension of time for the application. The FWC did note however, that action taken to contest a dismissal, other than lodging an unfair dismissal application, may favour granting an extension of time.

The FWC concluded by stating:

"Whilst the [employee] is entitled to feel particularly aggrieved at the circumstances of his selection for redundancy, the [Club] was entitled, in the circumstances, to make the decision" (at [176]).

The FWC upheld the jurisdictional objection and dismissed the employee’s application on the grounds that the redundancy was genuine.

What can your business learn from this decision?

The FW Act provides that an employee will not be unfairly dismissed in the case of a genuine redundancy. When considering whether a redundancy is genuine and that the role is no longer required, the FWC will look at the circumstances of the employer at the time of the dismissal.


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