BlandsLaw - Blog posts from Employment Law
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Should company policies form part of the employment contract?

We are often asked  whether or not workplace policies should be incorporated or referred to in employment contracts. Historically employment contracts have included clauses that dealt with an employer’s expectations around conduct and company procedures, however there has been a movement away from this practice as employers prefer to have more control over the content of the policies without binding themselves contractually.

The case law in this area is mixed and establishes that, while policies may be incorporated into employment contracts, or simply referenced within the contract, there is a risk that this creates binding obligations on both the employer and its employees.Employers must use precise, unambiguous and clear language to ensure their true intentions are carried across. Otherwise, employers could find themselves in legal strife if they fail to abide by their own policies. A review of the case law in this area indicates that whether or not a reference to policies within an employment contract  creates contractual obligations will be judged on the particular facts of each case.

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Disability Discrimination in the workplace

The effects of discrimination in the workplace can be damaging, not only in terms of business reputation but also staff commitment, morale and productivity. In Australia there are Anti-Discrimination laws as well as protections under the Fair Work Act 2009 (“FWA”) to provide legal redress for those who suffer as a result of discriminatory practices. The general protections under the FWA prohibit employers from taking adverse action against an employee on the basis of their race, colour, sex, sexual orientation, age, physical or mental disability, marital status and so on. For instance, a job seeker is protected from being denied employment on the basis of a physical disability.

However, there is an exception to this general rule. The protection does not extend to action that is taken because of a person’s inability to perform the inherent requirements of the particular position concerned. This exception will apply even if the discriminatory basis is the reason that the person is unable to perform the inherent requirements of the role. In a recent

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Australia & the ‘Gig Economy’

In recent years, the popularity of online service apps such as Uber, Diliveroo and Foodora has skyrocketed and Australia has embraced the ‘gig economy’ with open arms. This new movement refers to environments where businesses or individuals contract with free agent workers (usually through an app-based platform) for short-term engagements. As a result, an increased number of workers are trading off the stability which traditional employment provides for flexibility and autonomy whereas others are simply keen to earn a little extra cash on the side.

However, workers can experience inconsistent hours of work, patchy cash flow and lack of entitlements such as paid sick leave, holidays, notice of termination and so on. Additionally, workers are expected to provide their own physical assets and are required to pay any maintenance costs out of their own pockets. There is also the question of who is responsible if something goes wrong. Issues have arisen regarding the legal implications of these kinds of arrangements including whether these workers are truly independent contractors or in

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Employer Obligations when implementing redundancies

The redundancy process is complex and, if the proper process is not followed, there is a high chance that employers will fall short of meeting the requirements of a genuine redundancy. Getting the process right is important, as employees will fail in an unfair dismissal claim if their dismissal was a case of genuine redundancy.

Under the Fair Work Act 2009, the following criteria apply in cases of redundancy:

  1. The employer no longer requires the person’s job to performed by anyone because of changes in the operational requirements of the enterprise; and
  2. The employer has complied with any obligation under a modern award or enterprise agreement to consult about the redundancy; and
  3. It is not reasonable in all the circumstances to redeploy the employee in either the employer’s enterprise or an associated entity of the employer.

In a recent case heard by the FWC[1], four Staples workers were reinstated and awarded backpay after it was found their employer failed to meet its consultation and redeployment obligations, and instead

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Protecting the goodwill of your business: Restraints of Trade

When an employee leaves their job, there is the potential for the employer’s confidential information, trade secrets, client lists and business know-how to become exposed. Employers spend significant time and money developing those assets and do not want to see them fall into the hands of their competitors. However, on the other side of the spectrum, employees have the right to change jobs, develop their career and earn a living. The question is: how do we strike a balance between these competing interests?

There are various types of clauses used in employment contracts to prevent employees from carrying on certain actives, either during or after their employment, which may infringe on their employer’s legitimate business interests. Typically, these clauses include:

  • Conflict of interest
  • Confidentiality obligations
  • Intellectual property
  • Restraint on competition with the employer’s business
  • Restraint on solicitation of the employer’s customers/suppliers etc
  • Restraint on poaching/recruitment of employees/contractors etc

These last three categories are referred to as “Restraint of Trade” clauses. The general position at law is that Restraint of Trade

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Recent Privacy Act Changes

The Federal Parliament has recently passed the Privacy Amendment (Notifiable Data Breaches) Bill 2016 (Cth) which provides for mandatory notification of ‘serious data breaches’ to the Australian Information Commissioner and to those individuals whose data is suspected to be affected by a breach. Currently, the Privacy Act does not impose an obligation on entities to notify the Commissioner or any individuals whose personal information has been compromised.

Rather, the scheme is voluntary and entities are only encouraged to comply with the OIAC’s guide on how to handle data breaches.

The introduction of the changes has the support of major interest groups and is said to be largely beneficial for individuals, businesses and the Australian government. However, as the changes will not apply to those exempt from the Privacy Act, such as small businesses with an annual turnover of less than $3 million, few have questioned the limited application of the changes. Having said that, businesses with less than $3 million turnover must comply if they are:

  • Private sector health services
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Knowing when abandonment of employment is official

Abandonment of employment arises where an employee absents themselves from the workplace without reasonable excuse, and/or has failed to communicate with their employer the reason for the absence. In these situations, it is essential that the employee has demonstrated an intention to no longer be bound by the terms of the contract.

Often we are asked: at what point is it safe to assume that abandonment has occurred? Or, during a period of unexplained and continued absence, when is it reasonable to conclude that an employee is gone for good? While few modern awards specifically provide for circumstances where an employee will be deemed to have abandoned their employment, the answer is far from straightforward. As evident in the following case, employers will fall into legal trouble if they jump the gun and declare abandonment too soon.

In a recent case heard by the FWC[1], an employee was deemed to have abandoned his employment after he failed to show up to work for a fortnight. Despite previous warnings

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FWC rules to cut Sunday and Public Holiday Penalty Rates

FWC rules to cut Sunday and Public Holiday Penalty Rates

In a landmark decision handed down this week, the FWC has ruled to cut Sunday and Public Holiday penalty rates, which will impact over 1 million Australian’s. The decision comes after the Hospitality and retail sectors made applications to vary penalty rate provisions as part of the Fair Work Commission's four-yearly review of awards. However, the announcement has been greeted with mixed reviews, with some business groups arguing that businesses will benefit from the changes though:

  • Increased trading hours and services offered on Sundays and Public Holidays.
  • Potential for businesses to generate more revenue.
  • Increased shifts for workers and overall hours worked.
  • Allowing businesses to hire more staff.

Nonetheless, the decision has been widely criticised by unions and affected parties, with the president of the ACTU stating that many workers will not be able to survive on the considerable pay cut. A summary of the changes are outlined below.

The FWC rejected the argument sought by businesses that Sunday rates

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No compensation for reasonable management action

Often an aggrieved or distressed employee will claim to have suffered psychological injury as a result of an employer addressing performance issues or concerns with the employee. However, these claims will fail where it can be shown that the employer’s action was reasonable in the circumstances.

For example, under the Safety, Rehabilitation and Compensation Act (Cth), referred to in the High Court case below, reasonable management action includes:

 

  • Performance appraisal
  • Counselling
  • Suspension or standing down of duties
  • Disciplinary action
  • Anything done in connection with the employee's failure to obtain a promotion or transfer.

This definition is consistent with the courts’ interpretation of other legislation including the Fair Work Act 2009 and state-based workers compensation legislation.

But the question of what is ‘reasonable’ and what is not is often unclear. Courts accept that management actions don’t need to be ‘perfect’, and  will take into account a number of considerations including the facts and circumstances that led to the need for action, how the action was carried out and the consequences

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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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Discrimination on the basis of a criminal record

Employers are in a difficult situation when an otherwise suitable job candidate applies for a position but after pre employment screening, a criminal record surfaces and the red flag is raised. On the one hand, former offenders (just like everyone else) should be afforded equal opportunity in finding employment. Having said that, employers want to be confident that the people they hire are honest and reliable.

The number of complaints to the AHRC from people alleging employer discrimination on the basis of criminal record has skyrocketed. This indicates that further guidance is needed in this area. Importantly, employers must remember that requesting a criminal record check is only necessary if a criminal record may impact the person’s ability to perform the inherent requirements of the role.

In a recent case heard by the AHRC[1], a Data #3 employee claimed that the company discriminated against him when he was dismissed because of a ‘serious criminal record’. The employee claimed that he asked on two occasions during the interview process

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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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The importance of drafting clear Employment Contracts

A recent case heard by the FWC[1] highlights the problems that follow when employment contracts are poorly drafted. Next Residential Pty Ltd, a building company in Perth, attempted to trade off award provisions by paying a higher annualised salary but got itself into legal trouble when it failed to identify the applicable award or specific provisions it ousted.

A former employee claimed that her employer owed her $29,000 for overtime and lunch breaks worked as directed. However, her employer insisted that she had no entitlement to this as she was paid an annualised salary in accordance with her employment contract. Furthermore, her employer denied that it directed the employee to work overtime or through her lunchbreak and maintained that any additional hours worked by the employee were set off against early finishes, late starts and half days worked.

The employee’s contract stated that her salary was "inclusive of any award provisions/entitlement that may be payable under an award". The FWC found that the contract failed to identify the applicable

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Effective drug and alcohol polices cover drug testing best practice

An employee who turns up to work under the influence of drugs or alcohol creates a risk to themselves and to others that can range from minor to life-threatening.  Not only do they put themselves and their co-workers in danger, but the business itself can suffer damage to its reputation.

Employers have an obligation to maintain the health, safety and welfare of all employees. They also want to ensure their employees uphold the integrity expected of them. Implementing a drug and alcohol policy can go a long way to eliminating the hazards that drug and alcohol use have on the workplace, and best practice is that these policies should also include guidelines as to how and when drug and alcohol testing will be conducted.

In a recent case heard by the FWC[1], a Dorevitch Pathology employee was asked to undergo a drug test during a meeting, after she was accused of using heroin by an ‘anonymous source’ (later identified as her disgruntled neighbour). The employee questioned the request,

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