OK to bring a termination letter to a show cause meeting for ‘convenience

March 2020

If an employer arranges a meeting with an employee to give the employee a chance to respond to allegations of misconduct, it is important the employer not prejudge the outcome of that meeting. If there is evidence that the employer was not genuinely prepared to listen to the employee’s responses and to take these into account before making a decision as to whether dismissal was appropriate, the resulting dismissal is open to challenge as an unfair dismissal.

In Boulton v Telstra Corporation Limited (2019) FWC 370 a sales person with 14 years’ service who worked remotely in Cairns challenged the fairness of his dismissal on this, amongst other grounds.

The manager flew to the show cause meeting with a prepared letter of termination. However, the Fair Work Commission (FWC) accepted manager’s evidence, this was ‘a matter of convenience rather than to pre-determine the outcome of the discussions that had been organised’.

The employee was dismissed for running a personal side business in breach of the employer’s conflict of interest policy and lying during the investigation.

The FWC ruled the out-of-work private sales of mobile phone sets had sufficient connection with his employment duties, being retailing mobile phones. These out-of-hours activities amounted to competition and a conflict of interest.

The employee’s conduct and further dishonesty in the disciplinary interviews supported the employer’s claim that it had lost trust and confidence in him, given his work in Cairns required him to work remotely from his manager.

The FWC acknowledged there was some tension in the asserted loss of confidence and the fact the employer waited three months to dismiss the employee. However, this was because of the employee’s evasiveness and refusal to acknowledge his wrongdoing.

The FWC ruled the employee’s breach of policy and dishonesty during the investigation was inconsistent with continuing employment, and provided a valid reason for dismissal. If the employee had been open and transparent during the investigation, the dismissal may have been unfair.

Does job insecurity make people work harder?

March 2020

While some may believe job insecurity increases productivity by motivating employees to work harder, recent research has revealed the opposite. Employees exposed to job insecurity for more than four years can become less emotionally stable, less agreeable, and less conscientious, a study has found. And it’s not just employees who actually experience job insecurity firsthand. A perceived sense of instability in the job market can also lead to these shifts. Dr Lena Wang from RMIT, who co-authored the Effects of chronic job insecurity on Big Five personality change report,  said this study adds to growing research that demonstrates the negative consequences of job insecurity. “Traditionally, we've thought about the short-term consequences of job insecurity - that it hurts your well-being, physical health, sense of self-esteem,” Dr Wang said. “But now we are looking at how that actually changes who you are as a person over time, a long-term consequence that you may not even be aware of.” The study used data from the Household, Income and Labour Dynamics in Australia Survey, analysing 1,046 employees’ answers about job security and personality over a nine-year period. Applying a personality model called the ‘Big Five’, the personalities of the respondents were categorised into five traits: emotional stability; agreeableness; conscientiousness; extraversion; and openness. Researchers found long-term job insecurity had a negative impact on conscientiousness, emotional stability and agreeableness. These findings go against commonly held assumptions about job insecurity, Dr Wang said. “Some might believe that insecure work increases productivity because workers will work harder to keep their jobs, but our research suggests this may not be the case if job insecurity persists,” she said. “We found that those chronically exposed to job insecurity are in fact more likely to withdraw their effort and shy away from building strong, positive working relationships, which can undermine their productivity in the long run.” The report’s lead author Professor Chia-Huei Wu from the University of Leeds said insecure employment can include short-term contracts or casual work, jobs threatened by automation, and positions that could be in line for a redundancy. However, Professor Wu said many worries about job insecurity are down to perception, and there are steps employers can take to reduce that.  “This is as much about perceived job insecurity as actual insecure contracts,” he said. “Some people simply feel daunted by the changing nature of their roles or fear they'll be replaced by automation. “But while some existing jobs can be replaced by automation, new jobs will be created. “So employers have the ability to reduce that perception, for example by investing in professional development, skills and training, or by giving career guidance.”

Your questions answered: Does carer’s leave have to be taken in Australia?

March 2020

Q   An employee has put in a request to take carer's leave to look after his sick mother. However, his mother lives in India and he will be travelling there to care for her. Does the carer's leave entitlement still apply, if his mother is not a resident in Australia?   A   Section 97 of the Fair Work Act provides that an employee may take personal/carer’s leave to provide care or support to a member of the employee’s immediate family/household due to personal illness or injury, or an unexpected emergency. There is no requirement that the immediate family member must reside in Australia in order for the employee to be entitled to carer’s leave.

Your questions answered: Can we reduce working hours when renewing an employment contract?

March 2020

Q   I have a full-time employee whose contract is due to end early next year. We are able to renew the employee's contract for another year on the basis that the employee reduces their hours from full-time to 0.8FTE. Are there any legal risks that we need to be aware of?   A   You can offer a new contract at 0.8FTE provided the cessation of the current contract term and non-renewal would result in employment coming to an end. In some circumstances the employment relationship would continue after expiration of the contract term and an attempt to unilaterally change the employment from full-time to part-time without employee agreement could result in constructive dismissal.

Your questions answered: Can annual leave loading be set-off in an annualised salary?

March 2020

Q   If we pay above the award rate, can we absorb annual leave loading into the annualised salary? If yes, does this need to be documented in the employee’s letter of offer? Is there specific wording that needs to be used in their letter of offer to accommodate this change.   A   As a general proposition, yes annual leave loading can be set-off in an annualised salary. This should be carefully documented in the employment agreement under a set-off/compensated entitlements clause. A set-off clause should generally cover all entitlements - e.g. overtime, allowances, loadings and penalties. If you include a set-off clause, you should also ensure your employees are being paid for at least the amount they would have been paid if they were being paid award rates.

Annualised wage clauses in modern awards

March 2020

Andrew Stirling, head of Tanda PaySure, has written to the President of the Fair Work Commission (FWC) about the ambiguities in the new modern award annualised wage clauses. The clauses commenced in 18 awards on 1 March 2020.  Mr Stirling’s correspondence to Justice Iain Ross drew on Tanda’s experiences talking to customers and potential customers about compliance with the new clauses.  Tanda has been demonstrating to its clients how Tanda’s platform can be used, off the shelf, for complying with the new annualised wage clauses.  Mr Stirling asked the FWC to consider amending the annualised wage clauses to: confirm, one way or the other, the clauses’ relationship with contractual set-off clauses; either: make it clear that any and all payments due under the award could be satisfied by the annualised wage; or specify which award payments cannot be included in the annualised wage; clarify how employers should calculate the “outer limit” penalty rate and overtime hours; confirm that payments for work outside the “outer limit” hours can be included in the 12-monthly annualised wage reconciliation; and clarify whether employees can “acknowledge as correct in writing” their timesheets by silence (e.g. if they do not reply to an email that asks them to notify the employer if they worked outside a set of standard hours). In his correspondence, Mr Stirling noted that Tanda would also imminently release a wage check report that will allow customers to check annual salaries against modern award obligations. We will keep subscribers updated with any response from the FWC. Subscribers looking for more information regarding Tanda’s solution to comply with the new annualised salary clause can go here.

Your questions answered: Are casual employees entitled to overtime rates?

March 2020

Q   We have several casual employees who have been employed on a set hourly rate (no mention of overtime in their letters of offer) to work approximately 38 hours per week. Over the last couple of weeks this has blown out to be around 55 hours per week. Are we required to pay overtime rates after a certain number of hours, or is it ok to pay all hours at the original agreed rate?   A   You should refer to the terms of the applicable modern award/enterprise agreement. Overtime rates will generally apply under award for any work performed in addition to ordinary hours as defined in the award. More information can be found here:

Your questions answered: Do we have to pay superannuation on ‘cashed out’ personal leave?

March 2020

Q   Under the Timber Industry Award 2010, employees can request payment of personal leave in excess of 15 days. Does this payment attract the super guarantee?   A   When ‘cashing out’ personal leave, you are required to pay super contributions as normal.

S-xual harassment was ‘comradery’, employee claims

March 2020

In Emmanuel Montes v The Star Casino (2020), the Fair Work Commission (FWC) found that a waiter dismissed for sexual harassment had a “complete lack of understanding and/or disregard for appropriate standards of conduct in the workplace”. A “lack of understanding” apparently so deeply ingrained he never once believed he’d done anything wrong. When the employee finally realised he could face dismissal for his actions, he called a colleague he harassed an “imaginary whinger” and threatened to “raise HELL” for the employer. The FWC dismissed his unfair dismissal claim. ‘Only joking’ About nine months prior to his dismissal, the waiter received a written warning for “creepy, unwanted, disgusting and inappropriate” text messages he sent to a female colleague. She resigned from the company later that month. Eight months after, another employee made a complaint when the waiter unwelcomely commented about how attractive she was. She said she tried to end the discussion by walking away “but he continued to say how attractive I was and that he wouldn't want to be anywhere but underneath me nor get on the wrong side of me”. A few weeks later, a third employee made a complaint about the waiter after he had smacked her on the backside with a serving tray. She told him she found this “extremely rude and disrespectful”. He replied “Come on, I'm only joking”. When he was confronted by management about this, he said he only “hit her on the bum” as an afterthought when exchanging banter. “She should have understood this in the spirit of comradery. It is inexplicable to me that it was inappropriate,” he said. ‘Take it easy with me, or I will raise HELL … and it’s my birthday’ The final nail in the coffin for the employee was his reply to an email from a female manager summoning him to a meeting. Part of the employee’s email read: “Thank you Dear Sir for your several attempts to contact me regarding this unfortunate episode (‘inappropriate and unprofessional behaviour’) As you know I will be defending this claim, and am eager and keen to put this defamation to rest. What you may not know (the reason why you were unable to contact me on several attempts) is that I have been extremely busy with the legal-medical situation regarding my spouse, who suffered a heart attack in December of 2016, and that I am liaising and commuting on an almost daily basis with groups such as NDIS (the National Disability Insurance Scheme), advocacy groups, and the aged care residency at which she has been forced to stay (NH Aged Care Residency: ‘New Horizons’) Please take it easy with Me at tomorrow's hearing, I have been carrying a superhuman effort for two and a half years. Otherwise I will raise HELL for THE STAR. Please keep in mind that I'm not just fighting for my reputation, I am fighting for my wife's life. My word reveals a tendency to become law over the years. And I'm certainly not going to let the claim of some imaginary whinger stand in the way of that fight! The complainant's claim is frivolous and has no merit. Sarah either set me up or she set herself up, but she set somebody up. Why she did that is inexplicable to myself, but I can explain it to you, and anyone who cares to hear it. Oh, and another reason why you should take it easy on Me tomorrow is because tomorrow is my birthday (the 22nd of August), and I have been working with You and for You, for Three Years. What the Fuck! What a way to say Thank You!” The employee was subsequently dismissed. Employee had ‘absolutely no understanding’ “In relation to each of the complaints, [the employee’s] conduct was unacceptable,” FWC Deputy President Lyndall Dean said. “The conduct standards in the workplace were known to him. He had received a warning about his conduct only a few weeks after he commenced employment. “At the time of his dismissal, and during the hearing, he demonstrated absolutely no understanding that his conduct was not appropriate in a workplace. “I am satisfied that the dismissal of [the employee] was not unfair. “Accordingly, the application is dismissed.”

Can you sack employees who claim workers’ comp?

February 2020

In Paula Jane Allen v Kandeena Pty Ltd (2020), the Fair Work Commission (FWC) found that a dismissal for “a multitude of deliberate policy breaches” was unfair because the employer’s policies were inconsistently enforced. It was also revealed the company director probably had an ulterior motive to dismiss the service station employee, as he told another employee he was “taking his chances” sacking her because she had made a workers’ compensation claim. Defamation, sexual misconduct and pink hair The employer submitted the employee defamed the employer by telling a colleague the company had “f---ed her shoulders” and that she was seeing a lawyer. When the employer raised this with the employee, she denied saying it. The employer also alleged the employee had breached the Sex Discrimination Act 1984 when she replied “Oh yeah” or “Hell yeah” in response to sexual comments a senior employee made about a customer. In addition, the employee had a pink strip in her hair which the employer said was a “blatant breach in uniform policy”. She was also observed reading a magazine and using her mobile phone while at work. Only two valid reasons for dismissal FWC Commissioner Jennifer Hunt found that reading a magazine and using a mobile phone were not valid reasons for dismissal as “other appropriate disciplinary action” could have been taken. She also found that having pink hair was not a “significant breach” of the employer’s recent policy, as the employee had pink-dyed hair for many years before and agreed to change it. Regarding the claim of sexual misconduct, Commissioner Hunt noted that the director “was too afraid” to approach the senior employee over her “more vulgar” comments. “The unfairness in dismissing [the employee] over her statement while leaving [the senior employee] as an untouchable employee assists in the consideration as to whether the dismissal was harsh, unjust and unreasonable,” Commissioner Hunt said. The allegedly defamatory comments made about the company also didn’t constitute a valid reason for dismissal, Commissioner Hunt found. However, the employee denying that she made them did. “An employer should be able to expect that its employees do not tell untruths when difficult conversations are held with them,” Commissioner Hunt said. Commissioner Hunt also found that the employee colluding with a manager to get preferential treatment for extra shifts was too a valid reason for dismissal. Irrespective of this, Commissioner Hunt still found the dismissal unfair. “[D]espite there being two valid reasons for the dismissal, one known prior to the dismissal, and one following the dismissal, I find that the dismissal was harsh, unjust and unreasonable,” Commissioner Hunt said. “Accordingly, I determine that [the employee’s] dismissal was unfair.” Commissioner Hunt ordered the employer to repay the employee 15.5 weeks’ wages in compensation, less 30 per cent for misconduct.

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