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Recognising a ‘sham’ contract

A sham contract refers to an agreement in which an employer attempts to disguise an employment relationship as an independent contractor arrangement. This is done with the intention ofavoiding paying employee entitlements such as superannuation, workers compensation, leave, and certain taxes. Doing this not only significantly reduces costs, but also eliminates an employer’s vicarious liability for the wrongdoing of itsemployees.

However, employers should think twice before presuming they have found a loophole in the system;these arrangements are punishable under the sham contracting provisions of the Fair Work Act 2009, and companies can face a hefty fine of up to $54,000 in the event of a breach. In addition, employers may also be liable for underpayment claims, payroll tax, superannuation payments and be exposed to unfair dismissal claims.

In a recent case heard by FWC[1], it was determined that a worker had access to unfair dismissal after it was found he wasmisrepresented as an independent contractor when in reality he was an employee.The FWC stated that the employer

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When does banter between co-workers cross the line?

Workplace culture can heavily influence the way co-workers interact with one another. The trouble is, when the culture is laid back, it becomes all too easy for the lines of acceptable and inappropriate conduct to become blurred. Ultimately, this can lead to a fall out between colleagues and can contribute to an undesirable (and potentially unhealthy or unsafe) working environment. In these situations, employers must uphold their obligations and take reasonable disciplinary action where necessary.

In a recent case before the FWC[1], a mineworker was dismissed for making a number of derogatory Islamophobic and sexist comments over a two way radio which were heard by over 100 employees. The employee argued that the use of the radio was an attempt to avoid fatigue and the channel he used was commonly referred to as the ‘chat channel’. He also maintained that he had not been trained in the company policies regarding unacceptable conduct, and his behavior was not inappropriate as he had heard similar comments over the radio from

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The ‘silly season’

With a busy month ahead for many businesses holding work social functions and Christmas parties it is a good time to consider your workplace policies and practices and how they apply to social functions and behaviour that is outside the usual office or work space.

Social Functions

Employee behaviour at work social functions or Christmas parties is subject to workplace policies and must also meet certain standards. A social functions policy may, for example, cover alcohol consumption, appropriate conduct and gift-giving guidelines. It may be useful at this time of year to remind employees what policies are in place, when these apply and that in some instances they cover behaviour outside of the office.

On a practical or common-sense note, planning ahead will give you an edge. Prior to any work function consider possible risks or issues and manage them ahead of time. For example, do you need to arrange transport or taxi vouchers for employees to get home after a work function.

Good workplace policies offer many benefits to

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Can you be sacked for your Facebook comments?

In today’s society, employees are connected in many ways. Not only do they work together but if they are friends on Facebook or connected via LinkedIn, then activities outside of business hours are also visible and can be shared. Therefore, the boundaries between work and private life have become increasingly blurred. Employees should keep in mind how their posts, comments, likes or tweets could affect the relationship they share with their co-workers and potentially negatively impact their employer’s reputation.

Just because an employee is at home when the conduct occurs doesn’t mean action cannot be taken. Claims of bullying and harassment via social media are on the rise and it’s not an issue the FWC takes lightly. In some situations, a person’s employment may be in jeopardy where there is a sufficient connection between alleged misconduct over social media and their employment.

In a recent case heard by the FWC[1], it was found that the decision to sack a worker for making disparaging comments about his supervisor on

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Restraint of Trade: How far is too far?

Employers commonly use restraint of trade clauses in employment contracts to prevent their employees from jumping ship and working for a competitor when their employment ends. In doing so, employers are seeking to protect their business as well as their confidential information, trade secrets and customer, staff and supplier connections. Seems reasonable doesn’t it?

While confidentiality and non-solicitation clauses are generally found to be reasonable and enforceable,the challenge for employers is to ensure their restraint of trade clauses are not struck out for going beyond what is necessary to protect their legitimate business interests.

In a recent case before the Victorian Supreme Court[1], Just Group Ltd (JGL), a retailer company which includes Just Jeans, Peter Alexander and Portman’s, alleged their CFO, who was employed with them for just 6 months, breached her restraint of trade and confidentiality clauses when she accepted a job offer from rival Cotton On. Justice McDonald concluded that the restraints were too broad and went beyond what was reasonable to protect the company’s legitimate

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When swearing amounts to verbal abuse

Employees should choose their words carefully; whilst ‘colourful’ language may be tolerated at times, profane and insulting language towards another employee usually isn’t.

In two recent cases, the FWC has shed light on when an employer may be justified in sacking an employee for verbally abusing co-workers. However, employers are cautioned to consider all the factors surrounding the employee’s conduct when deciding whether instant dismissal is warranted.

In the first case[1], the dismissal of a sales consultant at a car dealership was upheld after he verbally abused the dealership’s stock controller over the phone. The employee and his wife (also an employee) were on a rostered day off when his wife received a call from the stock controller informing her about an inquiry from a contractor.

Despite the fact that the inquiry was quickly resolved, the employee called back shortly afterwards and began to abuse the stock controller using words such as “don’t f***ing call us ever” and “we are busy”. She tried to explain to the employee

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A tougher FWO to protect Australia’s vulnerable workers

The Turnbull Government is following through with its election promise to deliver greater protection to Australia’s vulnerable workers by strengthening the powers of the Fair Work Ombudsman.

In early 2017, new laws will be introduced that will enhance the FWO’s examination powers and expressly prohibit employers from providing false and misleading information to Fair Work Inspectors. The Government also plans to increase the penalties (up to ten times the current maximum) that apply to employers who underpay workers or who fail to keep sufficient employment records.  The intention is to deter businesses from engaging in practises that exploit vulnerable workers and to equal the playing field for compliant businesses doing the right thing.

In addition, a migrant workers taskforce has been established to improve employee protections for overseas workers. One of the key functions of the taskforce is to monitor 7-Eleven’s progress in rectifying their breaches which included the significant underpayment of wages, the manipulation of the payroll system and the doctoring of false employment records. The taskforce, chaired by

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A very flawed approach to the Dismissal Process

It’s a recurring issue that many employers seem to struggle with: getting the dismissal process right. It appears simple enough- if an employer has a valid reason for a dismissal and the process is handled with procedural fairness, then there should be no reason for an unfair dismissal claim. But why do so many employers get it wrong?

In a recent FWC[1] case it was held that an employee was unfairly dismissed despite his behavioural, performance and conduct issues which included the downloading and storing of pornographic material on his company phone and laptop. Unfortunately, the disciplinary process and the employee’s dismissal were riddled with errors which resulted in a termination that was found to be harsh, unjust and unreasonable.

Smarter Insurance Brokers, a small business, had mistakenly relied upon a clause in the employee’s contract that it believed meant payment in lieu of notice would relieve it of the obligation to provide a substantive reason for dismissal. Consequently the employer dismissed the employee and paid out the notice period

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Calculating Redundancy Pay: Do previous casual hours count?

A full bench of the FWC has handed down a landmark decision which has changed the previously accepted interpretation of ‘service’ under the FWA and, in effect, turned upside-down the way in which redundancy payments are usually calculated.

Following the decision in AMWU v Donau[1], a permanent employee’s initial period of regular and systematic casual employment with the same employer will now count towards their period of continuous service used to calculate redundancy pay. Whilst many employees will be rejoicing with this news, the decision holds considerable and far-reaching ramifications for employers who will have to pay the price.

The case involved Donau, a Newcastle engineering and ship-building company, who commenced a large scale redundancy process. Initially, the company did not include prior continuous service by casuals in their redundancy pay calculations. The AMWU argued that this was in breach of their enterprise agreement, which specified that redundancy pay is to be calculated according to periods of continuous employment. The dispute then turned its discussion towards the definition of

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Workplace investigations can be an important and useful tool. When used in the right situations and conducted appropriately a workplace investigation can resolve a range of issues including bullying and harassment complaints. A recent case, however, has highlighted the ramifications that may occur when an investigation is not conducted properly.

In Romero v Farstad Shipping (Indian Pacific) Pty Ltd[1] a shipping officer sent an email to her superiors alleging bullying by her ship’s captain during a 12 day sea voyage. In addition to Romero’s bullying allegations, the captain separately raised issues of competency in relation to Romero.

The employer, Farstad, proceeded to investigate the issues although failed to follow their own internal policy and the processes outlined within in. Specifically, Romero’s bullying complaint was investigated as a formal complaint although it had not been formally lodged as a complaint and this had not been the intention of Romero’s email. Added to this, the captain was interviewed before Romero (the complainant) about the alleged bullying and the issues of competency

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Circumstances may arise in which the employment of your employees need to be terminated. Termination attracts various legal obligations of which employers ought to be mindful in order to avoid or minimise litigious repercussions.

From 1 July next year, the Federal Government's changes to the Work Choices unfair dismissal laws will take effect, which will in turn alter the current legislative termination landscape.

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Directors and managers have onerous obligations and personal liability under occupational health and safety laws. Different provisions apply across the country however, regardless of where the workplace activities are being undertaken, the obligations and duties on directors and managers are particularly onerous.

In all jurisdictions except for New South Wales and Queensland, the primary obligation requires an employer to take all reasonable and/or practicable steps to ensure or provide a safe working environment or to protect the health and safety at work of employees.

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In addition to the well-publicised anti-bullying measures introduced on 1 January 2014, there are several other changes to the Fair Work Act 2009 that also came into effect on 1 January and have implications for employers.

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With a few busy months ahead for many businesses holding work social functions and Christmas parties, it is a good time to consider the issues around drugs and alcohol in the workplace. From a legal risk management perspective, best business practice around these issues involves the implementation of workplace policies that cover not only drugs and alcohol, but also performance management, occupational health and safety, discrimination and termination. It may be useful at this time of year to remind employees what policies are in place and when these apply.

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A Queensland tribunal recently found an employer was liable after it failed to properly investigate a sexual harassment claim brought by one of its employees. (McCauley v Club Resort Holdings Pty Ltd (No 2) [2013] QCAT 243 (13 May 2013))

The case involved a sexual harassment claim made by a food and beverage attendant against a chef with whom she worked. The attendant claimed the chef had made derogatory comments to her over a number of days and made growling noises in her ear and around her neck. 
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While there is no general entitlement to unpaid leave under the Fair Work Act 2009, there are some provisions that deal with the question of when unpaid leave can be taken. In other cases it is a matter for agreement between the employer and employee.

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Social media in the workplace: practical tips for best practice policies

Internet Law Bulletin (Lexis Nexis) – June 2013

Andrew Bland and Sarah Waterhouse look at the rise in employment law decisions involving social media, particularly in unfair dismissal cases, and examples of emerging case law including the recent appeal in Linfox Australia Pty Ltd v Glen Stutsel. This paper – aimed at legal advisors in the areas of workplace and internet law – proposes that a comprehensive and effectively-implemented policy for employee use of social media is an essential legal risk management tool. It also provides practical hints on what to include in a social media policy for employees.

Click to download article > Internet_Law_Bulletin_June_2013 SM articles