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Look to the EBA rather than the NES when determining what reasonable overtime is

January 2020

The National Employment Standards (NES) in the Fair Work Act 2009 (Cth) entitles employees to refuse to work hours of work in addition to their ordinary hours (i.e. overtime) that are unreasonable. The NES sets out a range of factors that are relevant to the question of whether a requirement to work overtime is reasonable. These include: any risk to employee health and safety from working the overtime; the employee’s personal circumstances, including family responsibilities; the needs of the employer’s business; whether the employee is compensated for the overtime; notice given by the employer of the requirement to work the overtime (or in the employee’s case his or her intention to refuse to work it); the usual patterns of work in the industry, or the part of an industry, in which the employee works; and the nature of the employee’s role and level of responsibility. However, in Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services (2019) the Court ruled that where an enterprise agreement specifies what is reasonable overtime in terms more generous than the NES, the NES factors are not to be considered when assessing whether a requirement to work overtime is reasonable. In that case, employees working 35 ordinary hours a week at a coal terminal were being required to work an additional 8.75 hours of rostered overtime per week, or 455 hours of overtime per year (although the employer argued that when the employees’ entitlement to 6 weeks’ annual leave was taken into account, the annual overtime hours would be 402.5 hours). The enterprise agreement provided that the employer ‘may’ require an employee to work reasonable overtime and the employee will work such overtime as required. The Court ultimately ruled that, in addition to giving the employer the right to require employees to work reasonable overtime, this provision was also protective of the interests of employees. In other words, the employer would breach the clause if it required employees to work unreasonable overtime. If the employer wanted overtime work it had to assess whether it would be reasonable to impose that requirement. The Court decided that the employer couldn’t assume that if it rostered the overtime it was reasonable so long as the employee did not refuse to work the hours. Refusal may be perceived by the employee as jeopardising or likely to prejudicially affect the employee’s employment. What is ‘reasonable overtime’ depends on the employee’s circumstances and the employer’s business. The Court noted that the Australian Industrial Relations Commission accepted in a 2006 test case that the borderline between reasonableness and unreasonableness existed somewhere between an overall working week of 44 and 48 hours. The agreement provided that 104 hours overtime in a year is generally considered reasonable (although it made it clear that every employee should not expect to be offered or to be required work this level of overtime). The Court ruled that, because the parties to the enterprise agreement had specifically agreed that 104 was the benchmark of overtime hours generally considered reasonable in a year, a requirement to work more than 4 times that benchmark - on average an extra 8.75 hours per week overtime, on top of their ordinary 35 hours per week was unreasonable.  


Good intentions do not provide a reasonable excuse for not paying workers

January 2020

If a Fair Work Ombudsman (FWO) inspector reasonably believes a person has not complied with applicable industrial laws, the inspector can issue a compliance notice requiring compliance. Failure to comply with the notice is itself a breach of the Fair Work Act, unless the person has a ‘reasonable excuse’ for not complying. A reasonable excuse is an excuse that would be accepted by a reasonable person. It can include physical or practical difficulties in complying with the notice. The expense and inconvenience in complying will not usually provide a ‘reasonable excuse’ for non-compliance with the notice. It is to be expected that compliance will usually cause some inconvenience and expense. Unless the circumstances are out of the ordinary, this is just part of compliance. In Fair Work Ombudsman v Joys Child Care Limited & Anor (2019) an FWO inspector investigated a not-for-profit, community-based childcare service for engaging childcare workers under so-called volunteer agreements to perform unpaid work. After the investigation, the FWO inspector issued the employer with compliance notices requiring payment of wages to two employees. The employer did not comply with these notices and was subsequently prosecuted for breaching the notices. The employer sought to argue that it had a reasonable excuse for non-compliance being that the employees concerned were volunteers working for a community-based, not-for-profit company with registered charity status that paid no wages. The Court ruled the ‘volunteer’ agreements entered into between the employer and the childcare workers bore no resemblance to the one year traineeship that was advertised by the employer. It required the workers to give ‘everything’ and receive ‘nothing in return’. The employer did everything they possibly could to disguise the arrangement that it had with the workers in ways that sought to avoid the impression of employment. In substance, the Court ruled, the agreement was neither a voluntary arrangement, nor was it an unpaid traineeship. The Court saw the reality of the situation being that the workers were taken advantage of by the employer. The fact the employer conducted a community based facility, was a not-for-profit company limited by guarantee, and was a registered charity, did not make the slightest difference to the reality of the situation. Neither their intentions, nor any altruistic motives, gave the employer a reasonable excuse for non-compliance. The Court considered that, on the facts of this case, “it would give offence to the notion of reasonable excuse to hold that noble intentions and altruistic motives justifies what happened”.  


Stand down rights and fire-damaged workplaces

January 2020

Amidst this terrible bushfire season, it is inevitable that some workplaces will be disrupted because of damage to premises or machinery. This brings into play the employer’s rights to stand down their employees. Stand down means placing an employee in a position in which for the time being his rights and duties as an employee and the rights and duties of the employer in relation to him or her are suspended. However, this can only apply when work cannot usefully be performed by the employee for reasons beyond the control of the employer. Without a right to stand down an employee being available under legislation, the employment contract, an award or enterprise agreement, the employer has no right to suspend the employee without pay in circumstances where the employee cannot usefully be employed. In CFMMEU v Ta Ann Tasmania (2019) the Fair Work Commission (FWC) considered the operation of an award clause permitting stand down when an employee cannot usefully be employed because of any breakdown of machinery or any other stoppage of work for any reasonable cause. A reasonable cause is one for which the employer cannot reasonably be held responsible, i.e. the stoppage of work was not a natural and probable consequence of the employer’s actions. In this case, the employees could not usefully be employed for 10 weeks because machinery was damaged and rendered inoperable by fire. However, the clause contained an exception that prevented it from allowing the deduction of pay “on account of” bushfire. The FWC ruled the expression “on account of” was concerned with a situation where bushfire was the proximate and direct cause of the relevant employees being prevented from working.  Given the proximate or direct cause of employees being prevented from working at the mill was the fact that the machinery at the mill had been rendered inoperative. The bushfire, which had ceased well before this time, was not the direct cause, but rather only the cause of the cause or the indirect cause. Therefore, the employees could be lawfully stood down under the award clause.  


How to keep your confidential workplace investigation reports out of court

December 2019

In some cases you might seek to have a lawyer investigate the facts or circumstances of an incident in the workplace, so they can give you professional legal advice about the implications of that incident for you and your business. For instance, you might ask a lawyer to advise you about your vicarious liability as an employer for an alleged instance of sexual harassment engaged in by one employee in respect of another employee at an end-of-year party. You might ask your in-house or external lawyer to conduct an investigation, make findings as to what actually happened and give you advice about your liability as an employer. The documents that record communications relating to this investigation may attract legal professional privilege. This means that if there is some legal compulsion to produce these documents (for example, a Fair Work inspector issues a notice to produce or there is a Court order to give these documents to an applicant claiming sex-based discrimination) you can resist this by a claim of privilege. However, certain rules apply to claim this privilege. The documents created as part of the investigation must be for the dominant purpose of the lawyer giving legal advice. The documents and the communications they record must also be confidential. If the documents are forwarded on to a third party for a purpose unrelated to the giving of legal advice, the privilege will be lost. For example, suppose the lawyer issues an investigation report to you which finds the sexual harassment allegations to be unsubstantiated. You then forward the report to your WorkCover insurers for the purpose of assisting them to determine whether a workers’ compensation claim by the employee should be accepted. The report was privileged when it arrived to you but was lost as soon as you forwarded it to the insurer.  


Employer checklist: How to stay off the naughty list this Christmas

December 2019

The festive season is now upon us, and for many workplaces that means people are able to let loose, have a few drinks and attend Christmas party after Christmas party. While these events are great for team building and morale, they are also a potential source of liability for employers if things don’t go to plan. Where an injury arises ‘out of or in the course of employment’, a worker will be entitled to compensation for that injury. What is considered to fall within the scope of ‘out of or in the course of employment’ depends on the sufficiency of connection between the employment and the relevant conduct at the time of the injury. We have prepared a checklist to help employers keep their Christmas parties safe and risk free this festive season. Sexual harassment and out of hours conduct Can sexual harassment at an after-party constitute workplace sexual harassment? You might be surprised by the answer. Sexual harassment that occurs outside of the workplace or out of hours may still be considered to be workplace sexual harassment if there is a sufficient connection between the employee’s out of hours conduct and their employment. This includes conduct that occurs at social events such as after work drinks, Christmas parties and work functions. It may even extend to hotel after-parties, taxi rides, as well as texts, photos and videos sent via social media. Employers must ensure they not only have sexual harassment policies in place, but that these policies are circulated, enforced and that employees are given regular training. Employers who do not take appropriate precautions risk exposure to sexual harassment claims and hefty awards of damages being made against them. This can range from anywhere between thousands to millions of dollars. Occupational health and safety and workers’ compensation Occupational health and safety claims are a major concern at Christmas parties, which usually come hand in hand with hard-earned celebratory drinks. Under OHS laws, employers have a duty of care to protect the health and safety of not only their employees at work-related functions, but also that of third parties. Employers’ are usually liable for injuries that occur at work-related functions. This may extend to injuries that occur on the way to the Christmas party and on the way home from the Christmas party. However, liability does not extend to accidents that happen once the Christmas party is deemed to have officially ended. If an employee becomes intoxicated at a work event and injures themselves as a direct result of their intoxication, this may impact their entitlement to workers’ compensation. However, if an employer is supplying the alcohol and does not properly monitor consumption and service, the employer may be liable for negligence if an accident occurs. Do: If alcohol is being served, ensure food is also supplied (substantial food, not just snacks) Ensure alcohol is only supplied by venues/persons who are RSA certified If full-strength alcohol is supplied, also offer non-alcoholic and low-alcoholic drinks Conduct a risk assessment to reduce the risk of slips and trips from spilt drinks, loose cords and decorations   Don’t: Encourage staff to drink (this means no drinking games!) Allow staff to pour their own drinks, particularly if spirits are being served Bullying At Christmas parties, particularly at off-site venues, it may slip employees’ minds that they are still ‘at work’ and that the same standard of behaviour applies as it would during normal working hours at the office. Sometimes this may lead to gossip, banter and ‘jokes’ which could be offensive to others, and may constitute bullying. Employers have a duty of care to ensure the safety of their workers, which includes protection from bullying, victimisation and harassment. Employers should put safety measures in place both before and after their Christmas parties to reduce liability and ensure employees are aware of what is expected of them. What else can employers do to minimise their risk of vicarious liability? Before the festive season begins and Christmas parties get into full swing, employers should remind employees of their obligations by providing them with existing behaviour policies and by circulating a ‘Festive Season letter’ outlining expectations of them, including a reminder that a breach may result in disciplinary action being taken against them. Employers should ensure their businesses have the following policies in place, and that they explicitly extend to out of hours conduct: Drug and alcohol Anti-discrimination and sexual harassment Social media Workplace health and safety Workplace bullying  


An EBA ballot doesn’t need to include employees who join during the voting period

December 2019

If you ask employees to vote on a proposed enterprise agreement you need to give them access to the proposed agreement for at least 7 clear days before the voting period. In the notice to employees about the voting period and method, the question arises as to whether you need to give a vote to employees who aren’t working for you at the time notice is given or during the access period, but are working for you during the voting period. This issue arose when a major retail chain submitted its proposed enterprise agreement to the Fair Work Commission (FWC) for approval (Kmart Australia (2019)). The employer notified employees of the time, place and method of the voting process for the agreement on 12 November 2018. The electronic voting process commenced 21 November 2018 and ran until 30 November 2018. The employer gave any casual employee who had worked in the 3 months prior to the access period a vote. The employer added to the voting cohort employees employed on or after 21 November 2018, but could not reach a practical solution as to how employees employed on or after 28 November 2018 could be added to the electronic voting system. This resulted in the exclusion of casuals employed in the last 2 days of the voting period. At first instance the FWC considered this was a fatal flaw in the voting process and dismissed the application for approval of the agreement. On appeal, the FWC overturned this ruling. The FWC determined that it was ‘logically nonsensical’ that a request for employees to vote to approve a proposed agreement remains operative on an ongoing basis even after voting has already commenced. This would allow newly engaged employees to vote who had not been given access to the agreement or have it explained to them. It would also give rise to the practical difficulty, where there is an extended voting period. An employer would have to continually add to the ‘roll’ of voters and provide with a means of voting any new employees who are engaged up until the very end of the voting process.  


Qantas sign-on bonus alleged to be adverse action

November 2019

In 2018 Qantas offered a bonus ($2,500 for full-time employees and $2,000 for part time employees). One of the conditions for receiving the cash component of bonus was that new enterprise agreement was voted up and approved. This has had the effect of delaying the cash bonus payment for employees who are not employed under an enterprise agreement (the non-EBA employees received their payment in September 2018). Qantas also reserved the right ‘not to award the bonus to an employee group that engages in any action that harms the Qantas Group or any Qantas Group Company, or on other reasonable grounds’. In June 2019, unions commenced a general protections claim against Qantas (naming its executive manager in employee relations as an accessory). They argued the conditions for the bonus amounted to a threat to withhold the bonus if employees exercised workplace rights to bargain and/or take protected industrial action in support of claims for the new enterprise agreements. The unions argued this was an unlawful threat to take adverse action if employees exercised their workplace rights. The claim raises a legal issue that frequently arises in adverse action cases. If Qantas was to withhold a bonus to a group of employees engaging in lawful protected action because of the harm caused by the action, it would no doubt argue that the fact the lawful protected action was taken had nothing to do with the decision to withhold the bonus. Instead they would argue it was the impact of the action that motivated the exercise of the discretion not to pay the bonus. It would then be up to the Court to discern whether the effect of industrial action could be sensibly disentangled from the action itself in determining what was in the mind of the decision-maker. A secondary issue is whether the threat to withhold payment of a bonus, to which a discretion to pay is expressly predicated on satisfaction of certain conditions, can amount to adverse action.  An employer takes adverse action against an employee if it discriminates between the employee and other employees. Is this discrimination or less favourable treatment of Qantas taking lawful industrial action because they are taking the action or because of the effect of it?  It might be indirect discrimination in that striking Qantas employees are less likely to meet the condition – however it is not yet settled that the general protections provisions contemplate indirect discrimination. A separate feature of the bonus is that it is expressed to be inclusive of any required superannuation contribution. Superannuation Guarantee contributions are deducted from the $2,000 or $1,500 bonus amount e.g. a full-time employee with a 10% superannuation contribution rate will receive a superannuation contribution of $181.82 and a gross cash payment of $1,818.18 less tax. Qantas asserts it can do this, despite the fact that a bonus cash payment is ordinary time earnings for the purposes of the Superannuation Guarantee (Administration) Act. Arguably, if an employer states an employee will be eligible for a cash bonus of a certain amount and a decision is made to award that bonus, then Superannuation Guarantee contributions are payable on top of that amount, unless it is made expressly clear to the employee that the actual cash amount of the bonus will be grossed down to offset the SG liability. Even inadvertent adverse action can result in a costly claim Regardless of the size of your company. Do you know exactly what constitutes adverse action and when it is unlawful? Find out by reading the Employment Law Practical Handbook on Portner Digital. You can get access to it for free if you aren’t a subscriber.  


S-xual harassment policy didn’t protect employer from $30K claim

November 2019

As an employer, you will be liable for any acts of sexual harassment committed by your employees in the course of their employment, unless you can show you took reasonable steps to prevent the conduct. However, these steps are not confined to steps taken prior to the incident and you must investigate any sexual harassment allegation properly if you want to avoid vicarious liability as an employer. In a recent decision in the South Australian Employment Tribunal (SAET), Evans v Pasadena Foodland and Crugnale (2019), a supermarket and its head chef were ordered to jointly pay an employee $30,000 in compensation because the employer did not properly investigate a sexual harassment complaint. Employer sees ‘nothing of concern’ The employee claimed the chef had deliberately brushed past behind her on three occasions in one day. She said the chef pushed his body up against hers and glided the palm of his hand between her buttocks as he walked past. The third time he did this, she said she could feel something hard press up against her, which she thought could have been a belt buckle, or his erection. After she reported the incidents, the management reviewed the CCTV footage and decided they saw “nothing of concern”. The security footage was destroyed two weeks later. Liability denied for ‘accidental’ touching In the SAET hearing, both the employer and the chef denied that any sexual harassment had occurred and that the touching was nothing more than “accidental”. The chef submitted that because of his larger build and the narrow workspaces, it was more likely for him to bump into the employee. He contended that the employee could not have felt his erect penis, as it was not capable of extending past the girth of his stomach, nor was he wearing a belt, but rather pants fastened with a knotted cord. The employer argued it had taken reasonable steps to prevent sexual harassment from occurring by: maintaining a workplace policy for the prevention and reporting of sexual harassment; ensuring the employee who had allegedly engaged in sexual harassment was aware of and understood that policy prior to employment; and investigating the complaint. Insufficient training and late, inadequate investigation SAET Deputy President Judge Leonie Farrell found that the employer had failed to properly train staff in relation to sexual harassment and the procedure by which complaints would be handled (which resulted in the employee in this case raising her complaint with multiple people). Judge Farrell also found that the employer’s investigations were inadequate. The employer only investigated the matter about one month after the incident, following an altercation between the chef and the employee. The employer should have conducted a better, formal investigation more promptly and the matter should have been escalated to senior management, given the seriousness of the allegations. The defects that were found with the investigations included: a proper statement was not taken from the complainant in a timely manner and in a private place (it was taken on the shop floor); the precise allegations were not put to the perpetrator and a statement was not obtained from him in a timely manner; other potential witnesses were not interviewed in a timely manner; the CCTV footage was not reviewed and shown to the parties – as a result it was deleted; and the outcome of the investigation was not reported to the parties in a clear and timely manner. Judge Farrell also rejected the employer’s contention that the employee’s history of being late for work or warned about her performance negated or diminished the likelihood of her complaints being true. The employee sought $150,000 in general damages, but Judge Farrell said this amount was excessive and “must be confined to the conduct on that day” as the sexual harassment was “not of the most serious kind nor did it continue over a period of time”. The employer and chef were found jointly and severally liable for general damages including “psychological harm, suffering and hurt feelings” they had caused to the employee. Judge Farrell ordered both parties to jointly pay the employee $30,000 in compensation. A mismanaged sexual harassment claim can destroy more than just your reputation Don’t put your business at stake. Take action to protect yourself before an allegation is made. Learn more.  


Overworked professional employees – How do you comply with the Fair Work Act?

November 2019

Each week we read about another employer who has been allegedly not paying their employees for the hours they have worked. These cases are often not concerned with employers applying a pay rate that is less than the applicable award rate. Rather, they relate to the use of weekly or annual salaries that build in an over-award margin, which is alleged to be insufficient for the hours actually worked by the employee. The focus of the attention of the Fair Work Ombudsman and other agencies is primarily concerned with situations where young or otherwise vulnerable employees are exploited through these arrangements. This is fortunate for those employers of professionals who require these employees to work 50 or 60 hours a week. Often these organisations do not have any records of the hours worked by their professional employees. In most cases there is no award applicable to the employment of these workers. However the Banking, Finance and Insurance Industry Award covers senior specialists and professionals in the financial services sector. The Professional Employees Award (PEA) covers professional scientists, engineers and IT employees. The PEA does not designate a penalty rate for working overtime. However, it requires that full-time employees are compensated for time worked regularly in excess of ordinary hours of duty (being 38 hours per week or an average of 38 over a regularly worked cycle), time worked on call-backs (or in readiness for a call-back), time worked on afternoon, night or weekend shifts and any time spent carrying out duties over the telephone or via remote access outside of ordinary hours of duty. This compensation can include granting special additional leave, granting special additional remuneration, taking the above factors into account in fixing annual remuneration, or granting a special allowance or loading. The PEA requires this compensation and/or remuneration to be reviewed annually to ensure it is set at an appropriate level. Even if the professional employee is award-free, requiring employees to work significant hours each week in excess of 38 may lead to claims that you have required employees to work unreasonable additional hours in contravention of the reasonable hours National Employment Standard in the Fair Work Act. You will have good grounds to defend claims on unreasonable additional hours if your employees are paid salaries above minimum entitlements, such that they are adequately remunerated to reflect the expectation of additional hours. What are some other options to mitigate your legal risk in this area? Undertake an audit of currently worked hours: select a number of employees to log their pattern of hours for two to three months. Once the audit has been completed, review the salaries and increase salaries in line with the excess hours required or limit the excess hours required of employees. Implement a time in lieu policy: a time in lieu policy would specify the circumstances in which an employee is entitled to time in lieu, e.g. employees receive an entitlement to one hour of time off for each hour worked in excess of ordinary hours, on the condition that overtime is logged and submitted to their manager. Management oversight: instruct managers to have broad oversight of the hours being worked by their subordinates, and frequently emphasise that their subordinates have an obligation to not work unhealthy or unsafe hours of work.  Implement a claims-based system for excessive overtime: develop a mechanism to deal with employees who are, for whatever reason, requested or required by their manager to work hours beyond the specified cap. Ensure adequate set off clauses in employment agreements: a set off clause should indicate the salary paid is in satisfaction of all entitlements under any relevant industrial law or instrument. The workplace lawyers at Portner Digital know employment law And for a small subscription free, you can get access to a compendium of their professional knowledge – as well as free, unlimited one-on-one email support. Take a free, no-obligation trial of the Employment Law Practical Handbook on Portner Digital today and discover a smart, affordable way to protect your business.  


Workplace manslaughter bill introduced in Victoria

November 2019

The Victorian government has released its proposed legislation to insert criminal manslaughter offences in to the Victorian Occupational Health & Safety Act (OHS Act). This would create a new criminal offence of workplace manslaughter, being conduct of an employer or officer of the employer that is negligent and causes the death of an employee or member of the public. Compliance with OHS Act duties is a complete defence In the case of the employer, the offence will only be committed if the employer breaches a duty owed under the OHS Act. An example, is the employer’s duty to, so far as is reasonably practicable, provide and maintain for its employees a working environment that is safe and without risks to health. OHS Act duties are owed by employers to employees, contractor’s employees, sole traders, and any members of the public that may be in or near the workplace. If the employer complies with its duties under the OHS Act it will not commit this new offence. What is negligent conduct? An employer’s conduct will be negligent if it greatly falls short of the required standard of care, and, as a result of the conduct, there is a high risk of death, serious injury or serious illness. The offence can be committed by an employer that is not an individual person; i.e. bodies corporate, partnerships, unincorporated bodies and unincorporated associations. In determining whether such an organisation is negligent, the focus will be on what the employer did or did not do compared with what a reasonable employer would have done or not done in the same circumstances. Some of the ways an organisation might engage in negligent conduct causing death include: its unwritten rules, policies, work practices or conduct implicitly authorised non-compliance, or failed to create a culture of compliance, with its OHS Act duties, and death resulted from the negligent conduct; a number of individuals within the organisation, acting with the actual or apparent scope of their employment or authority of the organisation, did or did not do things that, when aggregated, amounted to negligent conduct of the organisation; and the organisation failed to take steps to prevent or minimise the risk of death, serious injury or serious illness. The liability of an organisation will be reduced if a ‘rogue’ employee acts contrary to the policies and procedures of the body corporate. Who is exempt? Volunteers and employees who are not ‘officers’ will not be liable to commit the new offence of workplace manslaughter. When is an officer negligent? An officer is a director or an employee who participates in making decisions that affect the whole, or a substantial part, of the business of an organisation. Relevant matters to determining whether an officer is negligent include: what the officer knew about the matter concerned; the extent of the officer’s ability to make, or participate in the making of decisions that affect the body corporate in relation to the matter concerned; and whether the contravention by the body corporate is also attributable to an act or omission of any other person. Operation outside Victoria Employers and officers situated outside Victoria may commit the offence of workplace manslaughter where the relevant conduct results in a workplace fatality in Victoria. Similarly, the fact the negligent conduct causes a workplace fatality outside Victoria will be no defence. Do you know the workplace laws that apply to your organisation? Find out by reading the Employment Law Practical Handbook on Portner Digital. It’s available on a free, no-obligation trial.  


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