Resources: E-updates

Employment Law & Workplace Safety and Insurance E-update – May 2017

E-updates
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Accountancy firm found to be accessorily liable for underpayments

The Fair Work Commission introduces changes to the agreement approval process; The Fair Work Ombudsman proposes new Bill to address record keeping for vulnerable workers; Accountancy firm found to be accessorily liable for underpayments; Unions and union organisers penalised for their involvement in unlawful industrial activity; Employer ordered to pay $10,000 in damages to job candidate for discrimination based on mental illness; Injury from rugby league charity match not compensable; Cleanaway fined $650k over Adelaide chemical fire

Employment Issues

Update – “The Fair Work Commission introduces changes to the agreement approval process”

From 1 May 2017 the Fair Work Commission (FWC) changed the way enterprise agreements are approved.

By making these changes, the FWC aims to create increased transparency, efficiency and a more user focused process.

Some of the changes that have been implemented include:

An improved listing process

  • All nominated bargaining representatives will be sent confirmation emails when an application has been lodged. Parties will be advised that they have seven business days from the date of the lodgement to make any submissions or objections in relation to the application; and
  • Where no submissions or objections are received within seven business days of an application being made, the FWC may determine whether the agreement can be approved after having regard to materials lodged with the application.

A new single enterprise agreement date calculator
The FWC also launched a new single enterprise agreement date calculator.

The calculator will help employers and representatives ensure that their process for agreement making and application approval is compliant with the timeframes in the Fair Work Act 2009 (Cth).

 

Update – “The Fair Work Ombudsman proposes new Bill to address record keeping for vulnerable workers”

On 1 May 2017 Ms Natalie James, Fair Work Ombudsman (FWO), gave a speech in which she discussed the need to protect vulnerable workers and the Fair Work Amendment (Protecting Vulnerable Workers) Bill (the Bill).

Ms James acknowledged that there are a number of challenges posed by operators who are determined to avoid being caught out by any workplace regulators. The most fundamental challenge was poor or inadequate record keeping.

Ms James highlighted cases where there were either no records or where falsified records were being kept, which meant that Inspectors had to go to extraordinary lengths to access evidence from objective and neutral sources, including camping out in front of workplaces and watching when employees start and/or finish work.

Ms James emphasised that in underpayment cases, a court requires enough evidence to be able to calculate the precise quantum of underpayments and investigate compliance with minimum entitlements.

Ms James emphasised that the Bill proposes:

  • A system that would enable higher penalties to be imposed for more serious conduct – in particular, those cases where the FWO can demonstrate to a court that the contravening conduct was deliberate and part of a pattern; and
  • That the FWO will have stronger evidence gathering powers to investigate serious breaches of workplace laws.

Ms James made clear that should the Bill be enacted, the FWO would ensure that employers are aware of and understand any new obligations that apply to them.

 

“Accountancy firm found to be accessorily liable for underpayments”

Fair Work Ombudsman v Blue Impression Pty Ltd & Ors [2017] FCCA 810 (28 April 2017)

Executive summary

  • An accountancy firm knowingly failed to maintain current Modern Award rates of pay in its MYOB payroll system for one of its employer clients – a Japanese fast food chain.
  • The Federal Circuit Court found that the accountancy firm should be held liable as an accessory for the unpaid Modern Award contraventions of its employer client.

Background
In 2014 the Fair Work Ombudsman (FWO) identified contraventions of the Fair Work Act 2009 (Cth) (FW Act) by a Japanese fast food chain. This employer sought assistance from its accountant to remedy those issues.

The reason why the accounting firm was held to be accessorily liable was due to the fact that it provided “payroll services” to the employer.

The employer denied it was aware of the duties or the total number of hours its employees worked, when the employees took meal breaks, or whether any penalty rates, loadings or allowances were applicable.

Further, the employer denied that it was aware of the Modern Award that applied to its employees and that for these reasons the application should be dismissed.

Decision
The Court acknowledged that the employer had admitted that it had unlawfully paid its employees a flat hourly rate of pay of $16.50 per hour.

The Court noted that the sole director and shareholder of the accounting firm was the “controlling mind”, which had been aware of an earlier workplace audit by the FWO the previous year and was provided with applicable minimum rates of pay and these were readily available to him.

The Court found that the accountancy firm was wilfully blind (it had “deliberately shut its eyes”) to and was involved in the underpayment of its client’s employees as required by the Fast Food Industry Award 2010.

What can your business learn from this decision?
Under section 550 of the FW Act, persons involved in a contravention of a civil remedy provision (for example, underpayment of wages) can be held accessorily liable.

A person will be considered to be involved in a contravention if they have been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention.

 

Industrial Issues

"Unions and union organisers penalised for their involvement in unlawful industrial activity”

Australian, Building and Construction Commissioner v Australian Manufacturing Workers’ Union (The Australian Paper Case) [2017] FCA 167

Australian, Building and Construction Commissioner v Automotive, Food, Metals and Engineering, Printing and Kindred Industries Union (The Australian Paper Case) (No 2) [2017] FCA 367

Executive summary
Over three days in March 2014, employees in three work groups at the Maryvale Mill ceased working.

The Australian Building and Construction Commission (ABCC) argued that The Australian Manufacturing Workers’ Union (AMWU), The Construction, Forestry, Mining and Energy Union (CFMEU) and The Australian Workers’ Union (AWU) engaged in unlawful industrial activity and took adverse action with the respective union organisers ‘involved in’ the contraventions.

The Federal Court of Australia agreed and imposed penalties on each union and union organiser.

Background
On 22 March 2014, an electrician employed by BMC Welding & Construction Pty Ltd (BMC) working at the Maryvale Mill of Paper Australia Pty Ltd suffered a cut to his left hand and wrist, which required treatment.

As a result of the incident, the Health and Safety Representatives (HSRs) of three work groups were concerned that there was no first aid room on site and no full-time first aid attendant. The HSRs ordered the employees in their work groups to cease work and sit in the site sheds for the remainder of that day.

For the next three days and the morning of the fourth day following the incident, the employees returned to work but did not perform regular overtime. However, after a lunch break meeting with union organisers from the AMWU, CFMEU and AMU, the employees did not return to work for the rest of the day and did not work on Friday and Monday despite an interim order of the Fair Work Commission (the Commission).

The ABCC argued that the refusal to stop work on the afternoon and the following days was unlawful industrial action under section 417 of the Fair Work Act 2009 (Cth) (FW Act) and adverse action under section 346 of the FW Act.

Section 417 of the FW Act provides that a person must not organise or engage in industrial action before the nominal expiry date of an enterprise agreement or workplace determination. The ABCC argued that the union organisers were liable as accessories under section 350 of the FW Act as they were “involved in” the contraventions.

The unions and union organisers (the Respondents) argued that the stoppage was not industrial activity as defined by section 19 of the FW Act. Subsection 19(2)(c) of the FW Act provides that industrial action does not include action by an employee if the action is based on a reasonable concern about an imminent risk to their safety and the employee did not unreasonably fail to comply with a direction to perform other available work that was safe and appropriate.

The Respondents also argued that the stoppage was in compliance with the direction from the HSRs under section 74 of the Occupational Health and Safety 2004 (Vic) (OHS Act) and that the FW Act operated to exclusion of all State industrial laws. Section 74 of the OHS Act provided that the HSR may direct work to cease if there is an immediate threat to health and safety.

Decision
Justice Jessup was not satisfied that the employees stopped work as a result of a direction under section 74 of the OHS Act or because they held concerns about an imminent risk to their health and safety, noting that in the days immediately after the incident, the employees had returned to work.

Accordingly, Justice Jessup held that the stop work amounted to industrial action and was in contravention of section 417 of the FW Act.

In relation to the involvement of the Respondents, Justice Jessup held that while the union organisers did not encourage the stoppage of work, they were conscious and willing participants and used their status in negotiations with the employers.

Accordingly, Justice Jessup held that in accordance with section 550 of the FW Act, the union organisers were “knowingly concerned” in relation to the contravention of section 417 and the interim order of the Commission. Further, as the union organisers were working on behalf of their respective unions, each union was also “knowingly concerned” in relation to the contraventions.

Justice Jessup found that two employees had engaged in industrial activity because they were not paid during the work stoppage on 22 March 2014 and that this was adverse action. Again, Justice Jessup held that the union organisers were “knowingly concerned” in relation to the adverse action.

In a separate decision, Justice Jessup imposed penalties of $101,500 on the unions and union organisers. Justice Jessup commented that while the unions responded to the needs of their members, they should have advised against industrial action, as unions have a responsibility to assist members to comply with industrial laws.

What can your business learn from this decision?
The FW Act provides some protections for employers who are the subject of unlawful industrial action. In this decision, the Court held that the unions and union organisers used a specific incident to be involved in industrial action and was prepared to impose significant penalties for such conduct.

 

Bullying/Harassment/Discrimination

“Employer ordered to pay $10,000 in damages to job candidate for discrimination based on mental illness”

Chalker v Murrays Australia Pty Ltd [2017] NSWCATAD 112

Executive summary
A bus transport company has been ordered to pay a job candidate $10,000 for discriminating against him during the recruitment process on the basis of his mental illness.

Background
The applicant applied for a position as a coach driver with a bus company but failed to disclose in his application and interview that he had been diagnosed with borderline personality disorder.

Following the interview and a driving test, the bus company sent the applicant for a pre-employment medical. Staff at the medical practice described the applicant as difficult and argumentative. The doctor who performed the medical examination reported that the applicant appeared agitated, irritable and he queried whether the applicant was paranoid. The doctor also indicated in his report that the applicant’s attitude, behaviour, mood and affect were abnormal and the applicant refused to sign a consent form for the doctor to contact his other treating health professionals. The doctor’s recommendation to the bus company was that the applicant was temporarily unfit for the position of coach driver pending further inquiries, such as an assessment by an independent psychiatrist.

Following receipt of the doctor’s report, the manager responsible for recruitment decided, in consultation with another employee, that the applicant would not be offered the position of coach driver. The recruiting manager claimed that one of the reasons for the decision was the applicant’s dishonesty in failing to disclose his mental illness in the application or at the interview.

The applicant made an application to the Civil and Administrative Tribunal (the Tribunal) claiming that he had been discriminated against on the basis of being diagnosed with a mental illness.

Decision
The Tribunal, constituted of two members, found in favour of the applicant and agreed he had been discriminated against by the bus company.

The Tribunal found that the applicant was treated less favourably than another person would have been treated if that person did not have the applicant’s disability. In reaching this conclusion, the Tribunal noted that the recruiting manager said, in evidence, that he would not have regarded it as dishonest if an applicant diagnosed with cancer had failed to disclose their diagnosis in the application or during the interview.

The bus company attempted to argue that there should be no finding against it because the applicant could not perform the inherent requirements of the role. In this regard, the bus company relied upon the doctor’s report, which said that the applicant was not fit to perform the duties of the position.

The Tribunal rejected the bus company’s argument on the basis that the doctor’s report stated that the applicant was “temporarily unfit for the position pending further independent assessment or enquiry”, which the bus company did not act upon. Therefore, there was no evidence that the applicant was unable to perform the inherent requirements of the position.

The Tribunal awarded the applicant $10,000.

What can your business learn from this decision?
Discrimination claims against an employer can be brought, not just by existing employees, but also by prospective employees. Employers should, therefore, treat recruitment decisions just as seriously as other business decisions that carry liability. This is especially so where those decisions are made following a pre-employment medical.

 

NSW Workers' Compensation

“Injury from rugby league charity match not compensable”

Crowley v Pybar Mining Services Pty Ltd [2017] NSWWCCPD 10

Executive summary
A worker’s claim for compensation for injury arising from a charity rugby league match organised at work was rejected by the Workers Compensation Commission (the Commission).

The Deputy President of the Commission refused the application to extend time to make an appeal, finding that the appeal would not succeed as the Arbitrator did not fall into error.

Background
Mr Benjamin Crowley (the Appellant) was employed in the mining industry as a Loader Operator for Pybar Mining Services Pty Ltd (the Respondent). The Respondent provided labour services to the Newcrest Mining Ltd (Newcrest) for the Cadia Valley Operations Mine in Orange.

A fundraising event was organised by employees at the mine, which included a trivia night and a charity rugby league match to be played between the two work crews. One month before the rugby league match, a manager from Newcrest asked for people interested in playing in the game to write their names down.

On 6 March 2015, the rugby league game was played between the two work crews comprised of employees from Newcrest and the Respondent on their rostered day off. During the game, the Appellant was tackled, suffering injury to his right leg.

The Appellant made a claim for workers compensation, which was denied by the Respondent’s insurer on the basis that the injury was not suffered arising out of or in the course of employment (section 4 of the Workers Compensation Act 1987 (NSW) (WC Act)) and as his employment was not a substantial contributing factor to the injury (section 9A of the WC Act).

Decision at First Instance
At Arbitration, the Appellant argued that Newcrest’s manager had encouraged workers to participate by inviting those who wanted to be involved to write their names down at a pre-start meeting. It was also submitted that the Respondent’s project manager, who was also at the meetings, impliedly authorised, encouraged or induced the Appellant’s participation by not saying anything to oppose participation.

Applying the relevant legal tests in Hatzimanolis v ANI Corporation Ltd [1992] HCA 21, Comcare v PVYW [2013] HCA 41 and Haider v JP Morgan Holdings Aust Ltd t/as JP Morgan Operations Australia Ltd [2007] NSWCA 158, the Arbitrator determined that there was no evidence that the Respondent encouraged, authorised or induced the Appellant or expressly or impliedly induced or encouraged him to participate in the match.

The Arbitrator made an Award for the Respondent.

The Appellant lodged an appeal (which was out of time), alleging that the Arbitrator fell into error in finding that there was no evidence to support the Appellant’s claims of encouragement or inducement or that the Appellant participated in the match for bonding experience for the workers at the Newcrest mine.

Deputy President Michael Snell considered the application to extend time to appeal and the grounds of appeal.

Decision on Appeal
DP Snell dismissed each ground of appeal, finding that the Arbitrator did not err in his findings.

DP Snell held that the Arbitrator considered the evidence when he found that the Respondent had not induced or encouraged its employees to participate in the match and that it was Newcrest managers who spoke about the charity match, not any employee of the Respondent. To this end, he also held that the Arbitrator gave reasons for not accepting the inference that the Project Managers’ lack of opposition should be considered implied authorisation or encouragement to participate in the match and that the evidence supported this. DP Snell noted that the Arbitrator also considered that alternatively, silence meant that he did not authorise or encourage participation in the game.

The Appellant submitted that the Arbitrator failed to draw an inference that the Appellant participated for a bonding experience and that the Respondent derived a commercial benefit from participation. DP Snell held that the evidence showed that the Appellant’s reasons for participating were because it was fun, it was a fundraising activity and that it may help him if there were redundancies at the mine in the future. The Appellant did not provide direct evidence that the reason for participation was for team bonding.

Accordingly, DP Snell dismissed the Appellant’s application to extend time to appeal, finding that the appeal would not succeed on its merits.

What can your business learn from this decision?
Often, employers may organise workplace activities or such activities may be organised among employees as a group activity, however such activities may give rise to a risk of injury, which may be compensable.

To minimise risk, employers should make it clear that the activity is not supported or associated with the workplace and that any participation is solely at the employee’s election.

 

Work Health and Safety

“Cleanaway fined $650k over Adelaide chemical fire”

Cleanaway, a waste management company, has been convicted and fined $650,000 over a chemical fire in Adelaide that injured a worker.

The District Court of South Australia ordered the penalty following an investigation by Comcare, the Federal Work Health and Safety Regulator.

Workers were conducting Cleanaway’s first production scale trial to distil a new industrial solvent from a chemical mixture when there was a loud explosive rush of air followed by a large three metre long flame coming from the large metal still.

A worker standing approximately five meters away from the still was knocked to the ground by the force of the fire. He was treated in hospital for a wrist sprain.

The Court said the workers had very limited information about the new product and Cleanaway did not provide technical information to the workers on the ground.

Employers are reminded that when new products and/or procedures are being implemented in the workplace appropriate training and information must be provided to workers.

Once the Court has published its decision, we will provide further details.

 

Need a laugh…

Q. What happened when the dog went to the flea circus?
A. He stole the show!

Q. What do you get when you cross a dog and a calculator?
A. A friend you can count on.

 

Should you require any further information or assistance, please contact our Managing Director Athena Koelmeyer on (02) 9256 7500 or via email on sydney@workplacelaw.com.au.

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.

 

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