Changes to TOIL for Award-covered employees; Annual leave changes for Award-covered employees; FWC Full Bench confirms no scope for discretion with deficient Notice of Employee Representational Rights; FWC Full Bench rules on labour hire employer obligations; Employer’s failure to follow process resulted in unfair dismissal finding; Anti-bullying guides updated by Safe Work Australia; Proposed changes to s18C of the Racial Discrimination Act 1975 (Cth).
"Changes to TOIL for Award-covered employees"
4 Yearly Review of Modern Awards – Award Flexibility  FWCFB 4579
In July 2016, the Fair Work Commission (FWC) handed down its Time Off In Lieu (TOIL) decision as part of its 4 yearly review of Modern Awards.
TOIL occurs when an employee who works overtime hours elects to take time off rather than be paid at overtime rates.
The FWC recognised that there were Modern Awards that allowed for the payment of overtime, however TOIL provisions were absent. These Modern Awards will now include a model clause for TOIL.
The TOIL provisions currently included in Modern Awards were removed by the FWC and the new TOIL model clause was inserted.
The TOIL model clause allows for a written agreement between the employer and an employee to allow the employee to take time off instead of being paid overtime.
The model term also provides:
- That TOIL must be taken within six months of the overtime being worked;
- That an employee can request for TOIL to be paid as overtime;
- That TOIL that has not been taken is paid out on the termination of employment; and
- That an employer must not exert undue influence or undue pressure on an employee in relation to a TOIL arrangement.
The new TOIL model term came into effect on the first full pay period on or after 22 August 2016 and a number of Modern Awards have been updated to reflect those changes.
- For those covered by the Airport Employees Award 2010, the Electrical Power Industry Award 2010 and the Horse and Greyhound Training Award 2010 – the FWC conferences are still in progress;
- For those covered by the Social, Community, Home Care and Disability Services Award 2010 (SCHCDSI Award) – the FWC issued a Statement on 14 September 2016 that its “provisional view” is that the SCHCDSI Award will be varied to insert a modified version of the model TOIL term, which will retain some of the features of the existing clause in the SCHCDSI Award;
- For those covered by the Medical Practitioners Award 2010 – a modified TOIL term will also be inserted into it; and
- For those covered by the Pastoral Award 2010 and the Horticulture Award 2010 – further submissions are being taken by the FWC.
We will continue to report on the progress of this matter in future E-updates.
“Annual leave changes for Award-covered employees”
4 Yearly Review of Modern Awards – Annual Leave  FWCFB 3177
In our May 2016 and July 2016 Employment E-Updates we reported on the FWC’s significant changes to annual leave arrangements under Modern Awards.
The changes, which commenced on 29 July 2016, related to taking excess annual leave, cashing out of annual leave, taking annual leave in advance, payment of annual leave and EFT.
The FWC is still in deliberation with respect to the following Modern Awards:
- The Dredging Industry Award 2010
- The Educational Services (Teachers) Award 2010
- The Higher Education Industry (Academic Staff) Award 2010
- The Higher Education Industry (General Staff) Award 2010
- The Marine Towage Award 2010
- The Maritime Offshore Oil and Gas Award 2010
- The Ports, Harbours and Enclosed Water Vessels Award 2010
- The Seagoing Industry Award 2010
Workplace Law will keep you updated as to the progress of this matter.
"FWC Full Bench confirms no scope for discretion with deficient Notice of Employee Representational Rights"
Uniline Australia Limited  FWCFB 4969
The majority of the Full Bench of the Fair Work Commission (FWC) found that the employer’s failure to give its employees the Notice of Employee Representational Rights (NERR) until two years after bargaining for a new Enterprise Agreement was initiated rendered the NERR invalid.
As a result of the NERR being invalid the Enterprise Agreement could not be genuinely agreed to and therefore, the FWC could not approve it.
Decision at first instance
At first instance, Commissioner Roe rejected the Application for the Approval of an Enterprise Agreement (the Application) because the employer gave the NERR to the employees after the 14 day time period allowed by the FW Act. Under the FW Act (s173(3)), an employer must give its employees the NERR as soon as practicable but no later than 14 days after the employer has agreed to bargain.
In this case, the employer agreed to bargain in 2014, however no action or bargaining of any kind in relation to the proposed Agreement began until February 2016, at which time the employer issued its employees with the NERR.
Commissioner Roe said that the employer had failed to give its employees the NERR within the timeframe set out in the FW Act and therefore, the employees did not genuinely agree to the proposed Agreement, as required by 186(2)(a) of the FW Act. The lateness of the giving of the NERR invalidated it and therefore the employees had not been given proper notice of their rights and could not genuinely agree to the proposed Agreement.
Accordingly, the FWC rejected the Application.
Decision on Appeal
On Appeal, the employer submitted that it had complied with the relevant sections of the FW Act by giving its employees notice of their representational rights in February 2016, when bargaining actually commenced and provided the employees with 25 days before requesting that they vote on the proposed Agreement (the minimum requirement under the FW Act is 21 days).
The employer argued that its Appeal should be heard because the rejection of the Application due to minor errors or deficiencies in the NERR has become an issue of public interest. It was submitted that a large number of applications for approval of Enterprise Agreements are being rejected for the same reason, causing frustration to employers, Unions and the FWC and that issues of proper construction of the FW Act needed to be resolved.
In a dissenting judgement, Vice President Watson expressed concern about the rejection of the employer’s Application and said that it was not the intention of the FW Act for the FWC to rigidly apply the law to the point that Enterprise Agreements were frequently being rejected because of minor deficiencies in the NERR. VP Watson preferred an approach allowing for flexibility and found that the decision at first instance should be quashed and replaced with a decision allowing the lateness of the NERR.
The remainder of the Full Bench of the FWC did not agree with VP Watson.
Deputy President Gostencnik and Commissioner Riordan allowed the Appeal because there were issues of interpretation to clarify but ultimately dismissed it, agreeing with the analysis and determination of Commissioner Roe.
It was held that there is no room in the FW Act for an employer to fail to give a NERR to employees as soon as practicable but no later than 14 days from agreeing to bargain or initiating bargaining. The FW Act effectively states that where a NERR is not appropriately given to employees, it is invalid and the effect is as though the NERR had not been given at all. If the NERR is not given, then employees cannot have genuinely agreed to any proposed agreement and so the FWC cannot approve it.
DP Gostencnik and Commissioner Riordan expressed their understanding of the frustration that parties to an Enterprise Agreement might experience upon concluding the agreement making process only to discover that the NERR was invalid. However, they noted that there is no exercise of discretion currently available to the decision makers on this point and that any change would need to be made by Parliament.
Comment – what can you learn from this decision?
When bargaining for an Enterprise Agreement, it is vital that employers follow the requirements (and timeframes) set out in the FW Act and the Fair Work Regulations precisely, especially when giving employees notice of their representational rights.
Any deficiencies in the form, content or procedure for giving the NERR can invalidate it, the consequence of which is that the FWC cannot approve the proposed Agreement, no matter what the circumstances.
Unfair Dismissal / Adverse Action
"FWC Full Bench rules on labour hire employer obligations"
DP v MODEC Management Services Pty Ltd  FWCFB 5243
- An employee had his employment terminated after a “near miss” incident in October 2015.
- The labour hire company terminated the employee’s employment because the host employer excluded him from site under the Labour Hire Agreement (the Agreement) and the employee could not be redeployed elsewhere.
- The Full Bench of the Fair Work Commission (FWC) confirmed the decision at first instance – that the employee was not unfairly dismissed.
The Agreement was made between MODEC Management Services (MODEC) (a labour hire company) and BHP Billiton Petroleum Inc (BHPB) for MODEC to provide labour to BHPB.
MODEC employed DP to work exclusively on the BHPB site.
DP had an unblemished employment record from his start date until October 2015, at which time DP was involved in a “near miss” incident. In accordance with the Agreement, BHPB directed MODEC to remove DP from its site.
MODEC did not agree that DP’s conduct justified the disciplinary action imposed by BHPB, however, removed him from the site in accordance with its obligations under the Agreement.
MODEC sought (unsuccessfully) alternative placements for DP in Australia and New Zealand. As no alternate roles could be found, on 25 November 2015 DP was advised that his employment was terminated.
At first instance, the FWC found that DP’s dismissal was not harsh, unjust or unreasonable, as the employee was dismissed due to being excluded from the BHPB site and MODEC could not redeploy him elsewhere.
The Application for Unfair Dismissal was dismissed. DP appealed the decision.
Decision on Appeal
DP submitted that there was no valid reason for the termination of his employment and relied on MODEC’s admission that he was not responsible for any wrongdoing. DP also submitted that there was no valid reason because MODEC solely relied on the provision in the Agreement.
The Full Bench of the FWC was satisfied that there was a valid reason for termination of DP’s employment as MODEC employed DP to perform the role at the BHPB site and he was no longer capable of performing the inherent requirements of his role. MODEC then sought to find alternative employment for DP, which was unsuccessful.
In relation to other criteria for assessment of whether a dismissal was harsh, unjust or unreasonable, (s 385 of the FW Act) the Full Bench concluded:
- That DP was notified of the valid reason for his dismissal;
- That DP was given the opportunity to respond to BHPB’s decision to refuse him the capacity to work on its site and to MODEC’s advice that it could not identify alternative employment for him;
- There was no unreasonable refusal by MODEC to allow DP to have a support person present at meetings;
- The dismissal was not related to performance and prior warnings were not relevant to this matter; and
- That MODEC utilised its in-house human resource management expertise, especially in its efforts to redeploy DP.
Comment – what can your business learn from this decision?
The above decision is an important one for labour hire companies as it provides clarification as to whether a dismissal is a fair one in the circumstances where a client directs that the employee not be returned to its worksite.
In this case, the labour hire company was directed to remove the employee from site – that is, the employee was barred from the role he was employed to perform and was therefore unable to perform the inherent requirements of his job.
The labour hire company was found to have a valid reason for the termination of the employee’s employment (capacity) and was genuinely unable to find suitable alternative employment for him elsewhere.
We do note, however, that in making a decision as whether a dismissal was unfair, the FWC will take into account a number of factors (as listed in s 385 of the FW Act) and so, a proper and procedurally fair process leading up to the termination of employment should always be maintained.
"Employer’s failure to follow process resulted in unfair dismissal finding"
Merrin Moore v Specialist Diagnostic Services Pty Ltd T/A Dorevitch Pathology  FWC 5910
The FWC has determined that an employee was unfairly dismissed after it was found that there was no valid reason for the dismissal and a denial of procedural fairness to the employee.
Ms Moore (the Employee) was employed as a Collections Co-ordinator for Specialist Diagnostic Services Pty Ltd T/A Dorevitch Pathology (the Employer), which provides drug testing services to employers.
In March 2016, the Employee was called to a meeting with the Human Resources Officer and her Manager, where she was requested to undergo a drug test following receipt by the Employer of a telephone complaint.
The Employee refused and after leaving the meeting, failed to return despite the Employer’s requests that she do so. The Employee subsequently provided a medical certificate for her absence.
In April 2016, the Employee was invited to a disciplinary meeting, during which she was advised that her employment was terminated for failing to follow a reasonable management direction during the March 2016 meeting.
In the unfair dismissal proceedings, an issue arose regarding the disciplinary meeting and the reason provided for the termination of the Employee’s employment.
The Employee argued:
- That the disciplinary meeting was to address her refusal to undertake the drug test; and
- That she advised the Employer at this meeting that she would now take the test and that the reason she refused to do so earlier was because she did not agree with the process for the collection of the sample. In particular, the collection of the sample by the Manager was not in accordance with the Employer’s policy and the Australian/New Zealand Standard.
The Employer submitted that the allegation put to the Employee was regarding her failure to follow the Employer’s direction to return to the meeting in March 2016.
Critically, Commissioner Bissett noted that the Employer provided conflicting reasons as to why the Employee’s employment was terminated:
- The Chief Executive Officer provided evidence that it was because the Employee refused to take the drug test; and
- The Human Resources Officer and Manager stated that it was because the Employee refused to return to the meeting.
Commissioner Bissett had regard to each reason when she considered whether the dismissal was “harsh, unjust or unreasonable”.
In relation to (a) – Commissioner Bissett was satisfied the Employer had grounds to request that the Employee undertake a drug test. However, she noted that it was not best practice for a colleague (in particular a manager or supervisor) to collect the sample and considered that the Employer was obligated to follow the Australian/New Zealand Standard with regard to the collection and chain of custody of the sample.
Commissioner Bissett did not accept that at the meeting in March 2016 the Employee clearly stated her reasons for refusing to undergo the drug test. She did accept that the Employee was later willing to undergo the test and determined that it was not a valid reason to terminate the Employee’s employment on the basis that she refused to do so at the meeting.
With respect to (b) – Commissioner Bissett noted that while the Employee was asked to return to work after leaving the meeting and did not do so, the Employer accepted the Employee’s medical certificate and approved the Employee’s absence. On this basis, Commissioner Bissett concluded that the Employee’s failure to return to work was not a valid reason for the termination of her employment.
The Employer’s conflicting reasons for the termination of employment in turn impacted on the procedural fairness provided to the Employee, in particular, whether she was clearly notified of the reason and given an opportunity to respond.
Commissioner Bissett determined that the Employee was unfairly dismissed. An Order was made for the Employee to be paid compensation in the amount of $27,900 (plus superannuation).
Comment – what can your business learn from this decision?
It is essential that employers afford employees with procedural fairness in the termination process.
This case demonstrates that an employer’s failure to clearly state (allegations and the reasons for the termination of employment) and put allegations to an employee may affect the termination process and create uncertainty as to whether procedural fairness was provided.
This case also serves as a reminder for drug testing policies and procedures to be consistent with applicable Australian/New Zealand standards.
Bullying / Harassment / Discrimination
"Anti-bullying guides updated by Safe Work Australia"
Safe Work Australia has updated two key resources for employers and employees relating to bullying in the workplace.
The “Guide for Preventing and Responding to Workplace Bullying” and “Dealing with Workplace Bullying – A Worker’s Guide” were released by Safe Work Australia earlier this month.
The “Guide for Preventing and Responding to Workplace Bullying”:
- Consolidates the link between bullying and its effect on work health safety;
- Provides further guidance to employers on what is and what is not workplace bullying, in particular, what will be taken into account in determining what is reasonable management action taken in a reasonable way and the function of the Fair Work Commission’s anti-bullying jurisdiction; and
- Includes a flowchart to assist employers on how to respond to allegations of workplace bullying.
“Proposed changes to s18C of the Racial Discrimination Act 1975 (Cth)”
Changes to the Racial Discrimination Act 1975 (Cth) (RD Act) have recently been proposed and are directed toward s 18C, which makes it unlawful for a person to “do an act, other than in private, that is likely to offend, insult, humiliate or intimidate another person (or group) where the act is done because of the race, colour, national or ethnic origin of the other person (or some or all of the group)”.
The proposed changes will amend the current version of s 18C to remove the words “offend” and “insult.” It is argued by some supporting the changes that these words amount to “hurt feelings” and it should not be unlawful for a person to cause another person “hurt feelings”.
What is the possible effect of the proposed changes?
The changes will effectively water down s 18C and make it more difficult for complainants to establish that a person has acted unlawfully towards them in a public setting on the basis of their race or ethnicity – including at work.
Comment – what can your business learn from this decision?
Under the RD Act, employers may have vicarious liability for unlawful acts committed by their employees under s 18C.
Where an employee commits an unlawful act, the RD Act will apply to the employer as if it had done the act, unless it can establish that it took all reasonable steps to prevent the employee from doing the act.
The changes may impact on the way employers train their employees and educate employees about their policies and racial discrimination laws and their impact in the workplace.
However, employers should always maintain that no form of racial discrimination is acceptable and should take a zero tolerance approach to employees who act in contravention of employer policies or any relevant legislation.
Need a Laugh
Q; Can February March?
A: No, but April May!
Q; Why is the letter A like a flower?
A: A bee (B) comes after it.
Should you require any further information or assistance, please contact our Managing Director Athena Koelmeyer on (02) 9256 7500 or via email on email@example.com.
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.