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Cases and Legislation September 2020

The Queensland Government recently passed legislation amending the Criminal Code Act 1899 (the Code) to criminalise wage theft by employers in Queensland.‍The Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (the Bill) was introduced to the Queensland Parliament in response to a Report released in 2018 by the Queensland Parliamentary Education, Employment and Small Business Committee following an inquiry into wage theft in Queensland. The Report identified critical issues in wage theft as well as deliberate action taken by employers to frustrate employees’ attempts to recover entitlements.

NEWS ALERT: Queensland passes wage theft criminalisation legislation

The Queensland Government recently passed legislation amending the Criminal Code Act 1899 (the Code) to criminalise wage theft by employers in Queensland.

The Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (the Bill) was introduced to the Queensland Parliament in response to a Report released in 2018 by the Queensland Parliamentary Education, Employment and Small Business Committee following an inquiry into wage theft in Queensland. The Report identified critical issues in wage theft as well as deliberate action taken by employers to frustrate employees’ attempts to recover entitlements.

The Bill confirms that the offence of “stealing” under the Code includes a failure to pay an employee, or another person on behalf of an employee, an amount which is payable to the employee or another person in relation to the performance of work by the employee. An amount will have been converted to a person’s own use when that amount becomes payable to the employee and it is not paid to the employee.

Under this new amendment, if an offender is or was an employer who has stolen from their employee, that offender will be liable to imprisonment for ten years.

The Bill also establishes easier pathways for employees seeking to recover wages from their employers under s548 of the Fair Work Act 2009 (Cth), by enabling the Industrial Magistrate’s Court to hear such matters where the amount sought is not more than $20,000.00.

The passing of this Bill follows similar legislation recently passed in Victoria (which is due to commence in July 2021). We will keep you updated with further developments, including when the legislation is expected to commence in Queensland.

Employers should take the opportunity now to ensure that employees are being paid their correct entitlements in accordance with applicable legislation and industrial instruments.

Accessorial Liability and Underpayments

“Juice operator penalised for underpaying employees”

Fair Work Ombudsman v Skypac Group Pty Ltd & Ors [2020] FCCA 2332

Executive Summary

The Federal Circuit Court of Australia (FCCA) has rejected an employer’s argument that any penalties to be imposed for its multiple contraventions of the Fair Work Act 2009 (Cth) (FW Act) should be reduced because of the employer’s cultural differences and ignorance of Australian laws.

Background

In 2017, the Fair Work Ombudsman (FWO) commenced proceedings in the FCCA against the operators of Hello Juice stores in Victoria, Skypac Group Pty Ltd and Skypic Group Pty Ltd, alleging multiple contraventions of the FW Act which involved underpayments in respect of 29 employees. The proceedings also alleged that the general manager of those businesses, Hua Gong, was accessorily involved in the contraventions (collectively the Respondents).

The alleged contraventions were:

  • contraventions by both Skypac and Skypic of s45 of the FW Act by failing to pay 17 and 12 employees respectively, their minimum hourly rates, casual loading, Saturday, Sunday and public holiday rates in accordance with the Fast Food Industry Award 2010 (the Award) for various periods in 2017, resulting in underpayments totalling $38,458.11;
     
  • contraventions by both Skypac and Skypic of s535(1) of the FW Act and regulation 3.32(b) of the Fair Work Regulations 2009 (FW Regulations) by failing to make and keep employee records;
     
  • contraventions by both Skypac and Skypic of s536(1) of the FW Act by failing to provide employees with payslips within one working day of payment for performance of work;
     
  • contravention by Skypac of regulation 3.44 of the FW Regulations by making and keeping false employee records and then making use of those records with the knowledge that they were false and misleading;
     
  • contravention by Skypac of s325(1) of the FW Act by requiring an employee to pay to Skypac amounts of $896.00 (in relation to her tax return) and $4,046.19 (in relation to underpayment monies which had been recovered for her);
     
  • contravention by Skypic of s712(3) of the FW Act by failing to comply with a Notice to Produce Records or Documents; and
     
  • contravention by the general manager of s550(2) of the FW Act for being involved in each of the abovementioned contraventions.

The Respondents ultimately admitted to the contraventions and the parties submitted to the FCCA an agreed range of penalties to be imposed for the conduct.


Decision

The FCCA took into consideration a number of factors in assessing whether the penalties submitted by the parties were appropriate. Specifically, it noted the seriousness of the conduct engaged in by the Respondents, the most serious of which was the production of false and misleading records which warranted a penalty at the higher end of the scale.


The FCCA also noted that the impact of the Respondents’ conduct was much greater because the affected employees were reliant on the entitlements guaranteed to them under the Award.


The FCCA rejected the Respondents’ submissions that any penalties should be reduced because it had no previous record of engaging in similar conduct or that there was no deliberate attempt to avoid their obligations as an employer.


The Respondents had also submitted to the FCCA that the general manager’s conduct was impacted by a “Chinese Culture difference” and “average English”. However, the FCCA did not consider this to be a mitigating factor but rather it underscored the need for a penalty that served as a deterrence.


The total pecuniary penalties imposed by the FCCA were as follows:

  • Skypac was ordered to pay $161,988.75 for its contraventions in relation to 17 employees;
  • Skypic was ordered to pay $80,325.00 for its contraventions in relation to 12 employees;
  • the general manager was ordered to pay $34,616.00 for his involvement in the contraventions.


What can your business learn from this decision?

The FCCA has sent a clear message to employers that ignorance of Australian workplace laws or differences in cultural practices will not be mitigating factors when it comes to underpayment of employees in Australia.


The penalties imposed in this decision reflect the seriousness with which the Courts regard proper payment of employee entitlements and record-keeping. It also reflects the increased accountability being placed on senior management who are directly involved in and responsible for the proper payment of their employees.



Social Media and General Protections

“Senior managers’ Facebook posts misrepresented workplace entitlements, including the ability to access the toilet outside of scheduled breaks”


Retail and Fast Food Workers Union Incorporated v Tantex Holdings Pty Ltd [2020] FCA 1258


Executive Summary

The Federal Court of Australia has found that a fast food employer misrepresented workplace rights to employees through Facebook, including by suggesting that if employees take their entitlement to a 10 minute drink break, that is the only time they can drink or use the toilet during their shift.


Background

The employer operated a number of McDonald’s restaurants, including three in particular in the Brisbane area. In relation to those three restaurants, the employer used Facebook Groups to communicate with employees about work related matters.


The employer, through three of its senior managers, was alleged to have made false representations to employees about their workplace rights on three separate occasions, as set out below.


Incident 1

The director of the employer posted responses in a Facebook Group to an employee who had also posted in the Group suggesting that he was unwell and might not be able to work his upcoming shift. The director wrote “You need to work this shift… You requested overnight shifts and we rostered accordingly. If you cannot find a replacement you are required to attend work.”


The director’s post was public (in that all other employees on the Facebook Group could read it) and was made in the context of rostering issues at the restaurant. Specifically, the restaurant’s employees had been failing to accurately update their availability and would subsequently be rostered for a shift they did not want to work. On realising they couldn’t work and where they couldn’t swap their shift, the employees were in the habit of calling in sick. The individual employee to whom the director’s post was directed was allegedly especially unreliable.


The Retail and Fast Food Workers Union (the Union) argued that the director’s post misrepresented workplace rights to employees because, in effect, the post said that employees could not access personal leave (sick leave) unless they found a replacement to cover their shift.


The Union claimed that this was a false representation because employees are not required to find a replacement to cover their shift if they require access to their personal leave entitlements. The Union claimed that the employer’s false representation was a contravention of the general protections provisions of the Fair Work Act 2009 (Cth) (FW Act), which prohibit a person from knowingly or recklessly making a false representation about workplace rights or the exercise of workplace rights.


In this context, the right to be absent from work on account of a personal illness or injury and/or access personal leave is a workplace right.


The employer responded to the Union's claims by submitting that the post did not have the effect as alleged and, in any event, the post was directed only to one employee who had an alleged history of unreliability which the post was attempting to correct.


Incident 2

Employees at the restaurant involved in this incident were also engaging in a practice whereby they claimed that they were unwell and did not attend their rostered shifts when they did not want to work but could not find a replacement. By December 2018, the manager of the restaurant had formed the view that many of the restaurant’s employees were engaged in this conduct and were calling in sick or posting on Facebook that they would not be attending work, despite not actually being unwell.


On 21 December 2018, the manager made two posts in the restaurant’s Facebook Group with employees:


“Christmas Day and Boxing Day shifts are final

There are no shift swaps or sick calls on public holidays

Thank you”

“*4 hours is what we ask for

2 hours is the base expectation however, according to the enterprise agreement

We are a 24 hour trading restaurant

I will not accept a sick call past 10pm for an open [sic]”


The Union alleged that, by these posts, the employer through the manager, had represented to employees that:

  • they were not entitled or permitted to be absent from work due to illness or injury on Christmas Day or Boxing Day; and/or
  • they were not entitled or permitted to be absent from work due to illness or injury on public holidays.

In response, the employer argued that the first post, at the least, was directed towards the difficulty in finding replacements for employees who cancelled their shifts and should not be interpreted as claimed by the Union.


Incident 3

In January 2019, the employer’s general manager posted the following to one restaurant’s Facebook Group:


As we all LOVE the legislation and are all clearly so hard done by …. let me clarify for you the below ENTITLEMENT!!!

We are more than happy to go with the standard 10 minute break policy as below for those crew who are all over Facebook tagging each other and commenting.

But let me clarify for you how this 10 minute break rule actually works.

If you work longer than 4 hours, you become eligible for a ‘10 minute break’.

So for majority of crew you actually probably don’t ever qualify for a ‘10 minute break’.

What this means is that if we implement this over our current situation, on your shift – this 10 minute break would be the only time you would ever be permitted to have a drink or go to the toilet. So I hope to god you don’t get thirsty on your next shift because we just wouldn’t be able to allow a drink. Fair is Fair right?

But as we go above and beyond for our people and we like to treat you guys much better than this, we allow ALL our employees irrelevant of shift length to have a drink of water as you require and have a toilet break on shift as you require.

Are we really such bad guys? Honestly!!!

It actually works better in our favour to follow this ‘legislation’ and keep you all working non stop.

Hope this clarifies anyone’s raging concerns! [sic]


The post was made in response to increased Union interest in the workplace and, in particular, to a post made by the Union (in which employees were tagging each other) about the 10 minute break. The general manager’s post was also made in the context of one particular employee being denied her 10 minute breaks when she tried to take one in late 2018.


The Union alleged that the post falsely represented to employees that:

  • they were entitled to a 10 minute break only if they worked more than 4 hours;
  • if employees were afforded a 10 minute break that would be the only time they would be permitted to have a drink or go to the toilet; and
  • the employer could lawfully prevent employees from drinking water or using the toilet outside of their scheduled breaks.

The Union argued that the representations were false because:

  • under the applicable enterprise agreement, employees were entitled to a 10 minute drink break if they worked 4 hours or more (as opposed to more than four hours);
  • the employer was not entitled at law to refuse to permit employees to have a drink or go to the toilet in general, including if they were entitled to and/or had taken their 10 minute break.

The employer argued that, if there was any false representation to employees, it was minor and should be dismissed as trifling.


Federal Court of Australia Decision

In relation to Incident 1, the Court agreed with the employer that the context in which the post was made by the director was highly relevant. The Court said “It is quite artificial to read the statement in isolation and out of context” (at [38]). The Court accepted the director’s evidence that she honestly believed the reason the employee had provided for not attending work was not legitimate, and her intention was not to make any representation about his or any other employee’s entitlement to personal leave.


The Court ultimately rejected the Union’s argument that the employer, through the director, had misrepresented workplace rights to employees.


In relation to Incident 2, the Court did not agree with the employer’s argument that the posts were directed towards the difficulty in finding replacements for shifts - the posts simply did not say that. The Court found that the representations had the meaning described by the Union, which is to say that they represented to employees that employees were not allowed to take personal leave on Christmas Day, Boxing Day or public holidays.


The Court also agreed with the Union that the representations were false representations because, under the FW Act, an employee is not prohibited from accessing their personal leave entitlements or being absent from work on account of injury or illness on Christmas Day, Boxing Day or a public holiday.


The Court commented that the manager’s statements were “glaringly inaccurate” and the manager had “closed her eyes to the obvious when she made each of the posts that day.” The Court concluded that the false representations were made recklessly by the employer.


In relation to Incident 3, the Court found that the employer, through its general manager, did make the representations as alleged by the Union and those representations were false. The Court said,


The error made by [the employer], via [its general manager], in the 5 January 2019 Post was no mere, trifling mis-statement. Rather, it was, in the prevailing circumstances, a reckless falsehood and a serious one at that.

…This was a very calculated, generic representation by a Senior Manager, which purported to specify true entitlements of employees so as to quell known workforce unrest and, not coincidentally, paint [the employer] in a favourable light (at [116 -117]).


The Court found that employees were entitled to a 10 minute break if they worked four hours or more and the employer was obliged under work health and safety laws to allow employees to access paid time to use the toilet and drinking facilities, even outside of the 10 minute drink break (or other breaks). On this point, the Court did, however, comment that it was permissible for the employer to place reasonable restriction on that access.


The Court ultimately found that the employer had, through its false representation, contravened the general protections provisions of the FW Act.


The Court also held that the employee who had been denied her 10 minute breaks should be compensated $1,000 for non-monetary losses.


The parties were directed to provide the Court with draft orders reflecting its conclusions.


What can your business learn from this decision?

While Facebook and other forms of social media might be convenient methods of communicating with employees, the informality and immediacy of the platforms can result in ill-judged use.


Where managers make statements to employees about their employment entitlements, they will usually be found to be making those statements on behalf of the employer. If those statements are reactive and not based on a comprehensive and well-founded understanding of employment entitlements, they can land the employer in hot water - as demonstrated in this case.


Employers and their managers should use formal and established methods of communication with employees or, if using social media, strict guidelines for managers should be developed to ensure communications to employees comply with the law and with the employer’s obligations.



Contractors and Superannuation

“Full Court confirms contractor dentist was an ‘employee’ for superannuation only”


Dental Corporation Pty Ltd v Moffet [2020] FCAFC 118


Executive Summary

The Full Court of the Federal Court of Australia (the Full Court) dismissed an appeal and cross appeal, confirming that a dentist was an independent contractor not an employee for the purposes of annual leave and long service leave, but was an employee for the purposes of superannuation under the expanded definition of employee found in the superannuation legislation.


Background

The dentist was the owner and principal of a dentistry practice he purchased in 1987. In 2007, the dentist sold his practice to Dental Corporation Pty Ltd (Dental Corporation) but agreed to continue on in the practice after its sale.


The sale of the practice and the subsequent arrangements were the subject of two agreements between the dentist and Dental Corporation – an acquisition agreement and a services agreement.


In short, the acquisition agreement provided for the sale of the practice and the services agreement provided for the terms and conditions upon which the dentist would continue to work in the practice.


In November 2014, the dentist resigned from the practice. At that time, he made a number of assertions about the conduct of Dental Corporation, the conduct of its employees and the impacts on his mental health.


Following his departure from the practice, the dentist made an application to the Federal Court of Australia, claiming that he was, in fact, an employee of Dental Corporation and was entitled to annual leave, long service leave and superannuation.


Dental Corporation denied that the dentist was an employee and instead argued that he was, at all times, an independent contractor who was not entitled to leave or superannuation as claimed.


In the first instance, the primary judge held that the dentist was not an employee for the purposes of any alleged entitlement to annual leave or long service leave. However, the dentist was an employee under the extended definition of employee found in the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGA Act).


You can read our summary of the primary judge’s decision here.


Full Court of the Federal Court of Australia Decision

Dental Corporation appealed the decision at first instance to the Full Court on the basis that the primary judge had erred in finding that the dentist was captured by the extended definition of employee under the SGA Act.


The dentist cross appealed on the basis that the primary judge had erred in finding that he was an independent contractor and not an employee for the purposes of annual leave and long service leave.


The Full Court first dealt with the dentist’s claim that he was an employee and not an independent contractor. The Full Court examined the reasoning of the primary judge and his application of the multifactorial (or multiple indicia) test. The Full Court dismissed all of the grounds of appeal that the dentist put forward on this point, except for one – the question of “good will”.


Whether a worker creates good will for their own or for their employer’s business is one of the factors that may be relevant to a particular set of circumstances when applying the multifactorial test.


The Full Court found that the primary judge had failed to give the question of good will its due consideration. The dentist argued that, in his work for Dental Corporation, he created good will for the business and not for himself, which should be read as an indicator that he was an employee and not operating his own business as an independent contractor.


In examining this issue, the Full Court noted that one business can be conducted within another and good will can be generated by a worker for two businesses at once – the employer/hirer’s business and the worker’s business. The example provided by the Full Court was a medical doctor and a medical practice. A doctor may provide services out of a medical practice and in doing so may create good will for both themselves as well as the medical practice. In such a scenario, two distinct sets of good will exist side by side.


However, in the present case, the Full Court found that there was not enough evidence to sustain the conclusion that the dentist had his own good will separate to that of Dental Corporation.


Despite this finding in favour of the dentist’s position, the Full Court held that it did not outweigh the other factors in the relationship between the parties, and the dentist was an independent contractor not an employee. He was therefore not entitled to annual leave and long service as claimed, and his cross-appeal was dismissed.


The Full Court then turned to examine the appeal lodged by Dental Corporation. It argued that the primary judge erred in his finding that the dentist was an employee under the extended definition of employee in the SGA Act.


The Full Court reviewed the reasoning of primary judge, and whilst they disagreed with his precise reasoning, they reached the same conclusion – the dentist was an employee under the extended definition of employee.


The extended definition of employee under the SGA Act includes a person who “works under a contract that is wholly or principally for the labour of the person.”


The Full Court found that there were two sets of benefits for Dental Corporation under the service agreement between the parties, being the relevant contract in this case. The first was the benefit of the dentist’s labour, the second was his promise that the practice would achieve a minimum cashflow (established by certain provisions in the contract related to the payment of fees against revenue and the right of Dental Corporation to recover any shortfalls in revenue from the dentist).


The Full Court commented that the benefit of the dentist’s labour under the contract would bring it within the scope of the expanded definition of employee, but the benefit related to the guarantee of revenue may not. However, the Full Court stated,


Like the dancer and the dance, these two benefits cannot be disentangled although they remain conceptually distinct…They were two sides of the same coin and must therefore be dealt with together.


For that reason, the question of whether the Services Agreement… was wholly for substantially ‘for’ [the dentist’s] labour should be answered in the affirmative. It was substantially for that purpose (at [103] – [104]).


The Full Court therefore agreed with the conclusion reached by the primary judge, that the dentist was an employee for the purposes of superannuation, and Dental Corporation’s appeal was dismissed.


What can your business learn from this decision?

The contractual arrangements that an organisation makes with its independent contractors are very important, as is the reality of the relationship.


In deciding whether a worker is an employee or a contractor, a court or tribunal will apply the multifactorial test which will take into account a range of relevant factors and apply varying weight to those factors depending on the circumstances of the case. This will include the wording of any relevant contract, but it will also include the manner in which the parties conduct themselves in the course of their relationship.


Employers should also remain alive to their responsibilities under various workplace laws in relation to contractors where the definition of employee may vary. In this case, the contractor was not an employee for the purposes of leave, but was an employee for the purposes of superannuation under the extended definition of employee under the SGA Act.



Variation to Redundancy Pay

“No variation to redundancy pay for industry specific redundancy entitlements”


Fraser, Construction, Forestry, Maritime, Mining and Energy Union v JFM Civil Contracting Pty Ltd [2020] FWCFB 4866


Executive Summary

The Full Bench of the Fair Work Commission has found that a Commissioner had no power under the Fair Work Act 2009 (Cth) (FW Act) to order the reduction in redundancy pay for an employee covered by a modern award industry specific redundancy scheme.


Background

The employee was employed by JFM Civil Contracting Pty Ltd (JFM), a small business employer with less than 15 employees. The employee was covered by the Building and Construction General On-site Award 2010 (Building Award). In November 2019, JFM provided the employee with five weeks’ notice that his employment might be redundant. After receipt of this notice, the employee resigned to take up other employment.


The employee made a claim for redundancy pay under clause 17 of the Building Award. The Building Award sets out an industry specific redundancy scheme, under which, the employee was entitled to 8 weeks’ redundancy pay.


JFM made an application to the Fair Work Commission (the FWC) under section 120 of the FW Act for an order to vary the redundancy pay as it did not have capacity to pay.


Section 120 of the FW Act provides that if an employee has an entitlement to redundancy pay under section 119, the FWC may determine to reduce the amount of redundancy pay in circumstances where the employer has obtained other acceptable employment for the employee, or if the employer cannot pay the redundancy entitlement amount.


The redundancy entitlement under section 119 of the FW Act is the minimum entitlement under the National Employment Standards (NES).


First Instance Decision

At first instance, Commissioner Spencer found that, under clause 17 of the Building Award, JFM had an obligation to pay redundancy pay under the industry specific redundancy scheme in the Building Award.


Commissioner Spencer also found that JFM’s financial circumstances indicated that it had no capacity to pay and to remain operational. Commissioner Spencer then went on to reduce the employee’s redundancy payment of 8 weeks to nil in accordance with section 120 of the FW Act.


Appeal Decision

The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) lodged an appeal against the first instance decision. The CFMMEU argued that Commissioner Spencer erred in her decision in identifying that the employee’s redundancy entitlements were found under the NES rather than the Building Award and in doing so, erred in applying section 120 of the FW Act to reduce the employee’s entitlements.


The Full Bench found that Commissioner Spencer fell into error by conflating the employee’s redundancy entitlements under the Building Award with the redundancy entitlements under the NES. The Full Bench held that the FWC only had power to reduce entitlements under section 120 of the FW Act where the source of the redundancy entitlement was under section 119 of the FW Act.


The redundancy entitlements under section 119 of the FW Act did not apply to the employee by virtue of subsection 123(4) of the FW Act as the industry specific redundancy entitlements under the Building Award applied to the employee. This subsection provides that the redundancy provisions under the NES do not apply to:

(a) an employee who is an apprentice; or


(b) an employee  to whom an industry-specific redundancy scheme in a modern award applies;


(c) an employee to whom a redundancy scheme in an enterprise agreement applies if:

  1. the scheme is an industry-specific redundancy scheme that is incorporated by reference (and as in force from time to time) into the enterprise agreement from a modern award that is in operation; and 
  2. the employee is covered by the industry-specific redundancy scheme in the modern award; or

(d) an employee prescribed by the regulations as an employee to whom that Subdivision does not apply.

Accordingly, the Full Bench concluded that there was no power to reduce the employee’s redundancy entitlement. The CFMMEU was granted permission to appeal. The appeal was upheld by the Full Bench, the first instance decision was quashed and JFM’s application was dismissed.


What can your business learn from this decision?

The FW Act provides that modern awards can include industry specific redundancy schemes and, in such circumstances, an employee would not be entitled to the NES redundancy entitlements. This decision clarifies the power of the FWC to make an order varying redundancy pay. In addition to circumstances where there is an industry specific redundancy scheme under a modern award, the FWC would also not have the power to vary redundancy pay where an industry-specific scheme is incorporated into an enterprise agreement.


Unfair Dismissal and Safety

 

“Full Bench overturns finding of unfair dismissal for safety breach”


BlueScope Steel Limited v Knowles [2020] FWCFB 3439


Executive Summary

The Full Bench of the Fair Work Commission (FWC) has upheld an employer’s appeal against the decision of a Commissioner who found that there was no valid reason for an employee’s dismissal and that the dismissal was harsh and unfair. The Full Bench ordered that the employee’s application be dismissed.


Background

In our June 2020 Review, we reported on the decision of a single member of the Commission who ordered the reinstatement of an employee who was found to be unfairly dismissed.


The employee was employed as a Despatch Operator for BlueScope Steel Limited until the termination of his employment for breaching a Critical Safety Procedure (CSP).


At first instance, the FWC held that the employee did not breach the CSP, and as a result, there was not a valid reason for dismissal. The FWC also found that, in the alternative, if there was a valid reason for dismissal, it was nevertheless harsh and unjust in the circumstances. The FWC made orders for the reinstatement of the employee, with continuity of employment and payment of compensation for loss remuneration. 


The employer lodged an appeal against the decision of the Commissioner on a number of grounds, including that the FWC erred in finding that there was not a valid reason for dismissal and its finding that in the alternative, the dismissal was harsh and unfair.


The employer submitted that the finding of the Commissioner that the employee had not breached the CSP because he did not cause a safety incident was based on a “flawed assessment” of safety risks in the workplace and did not take into account the evidence available.


In relation to the finding that the dismissal was harsh and unfair, the employer submitted that the Commissioner took into account irrelevant matters, including that the employer had discriminated against the employee because of his role as a union delegate and because he had appeared as a witness for another employee in other unfair dismissal proceedings.


Full Bench Decision

The Full Bench granted permission to the employer to appeal the first instance decision and upheld the appeal.


The Full Bench found that the Commissioner had fallen into error in finding that there was not a valid reason for dismissal. The Full Bench held that the conclusion reached that the employee’s conduct did not cause a safety incident was a significant error of fact and involved a misapplication of the CSP and a misunderstanding of the employer’s safety obligations. It was also held that the Commissioner’s conclusion was at odds with its earlier finding that the employee’s conduct was in breach and provided the employer with a valid reason to terminate.


The Full Bench also found that the Commissioner erred in its conclusion that the dismissal was harsh and unfair. The Commissioner focused on the outcome of the employee’s conduct rather than the need to avoid the risk of the coil toppling and did not take into account that the employee had breached another CSP earlier. The Full Bench was also satisfied that the Commissioner had taken into account irrelevant matters to determine that the dismissal was harsh.


Accordingly, the Full Bench quashed the Commissioner’s decision. It then went on to re-determine the matter.


The Full Bench held that there was a valid reason for the employee’s dismissal given that the employee admitted that he breached the CSP. The Full Bench also held that the other matters did not support a finding that the dismissal was otherwise harsh, unjust or unreasonable. In particular, the Full Bench held that while the employee’s conduct did not cause injury, it was a significant safety incident – there was a higher possibility that the coil could topple and the employee had a practice of not complying with the CSP.


Having found that the dismissal was not harsh, unjust or unreasonable, the Full Bench dismissed the employee’s unfair dismissal application.


What can your business learn from this decision?

This decision should be of some comfort to employers in relation to taking disciplinary action against employees who fail to comply with safety requirements, such as safe work method statements or safe operating procedures. The Full Bench in this matter noted that employers have an obligation to ensure the safety of workers and that this obligation must be considered when determining whether a dismissal was harsh, unjust or unreasonable.


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