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Managing performance issues through informal methods

In certain situations, letting go of underperforming employees can be difficult, particularly when you have bent over backwards trying to help them correct poor conduct or performance. However, there comes a time when it is obvious the employment relationship is no longer viable, especially when the employee’s attitude indicates they have no desire to improve.

In a recent case before the FWC, it was found that there can be exceptions to the usual requirement to follow a formal performance management process when dealing with underperforming staff. Ongoing informal approaches may be utilised, but it must be shown that the employer made continued efforts to communicate the worker’s performance shortfalls and provided assistance in achieving expectations. In this case, the employee was dismissed after his employer dedicated 10 months to daily coaching, training and support as part of an informal performance management process.  According to his supervisor, the employee received far more one-on-one time than any other employee. During these discussions the employee nodded his head to signal he understood what

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Accountancy firm held liable for client’s breaches of the Fair Work Act

Recently, the issue of accessorial liability has been at the forefront of the Fair Work Ombudsman’s (FWO) agenda and it’s not a subject being taken lightly.

The Federal Circuit Court recently handed down a decision in a case that dealt with third party advisers who were knowingly aware of their client’s breaches of the Fair Work Act.

Accountancy Firm, Ezy Accounting, was found liable as an accessory for its involvement in a Japanese restaurant operator’s underpayments to its staff. The contraventions included failure to pay the minimum hourly rate of pay, the evening loading, the Saturday and Sunday loading, the public holiday penalty rate, the special clothing allowance, and failure to provide rest breaks and meal breaks.

Ezy Accounting was alert to the fact that the restaurant was failing to meet award obligations and paying their staff incorrect rates, however the company chose to “deliberately shut its eyes” to the contraventions occurring. Whilst the Court is yet to make a determination on the penalties against the accountancy firm, it could

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Recent FWC Decision: Casual conversion to permanent employment

As part of their 4 yearly review of modern awards, the Fair Work Commission (FWC) has handed down a decision which allows for casual employees to request to convert to full-time or part-time employment, subject to certain criteria and restrictions. The Australian Council of Trade Unions (ACTU) sought the changes in an effort to ensure that the safety net system remains fair and relevant. Importantly, it was argued that long-term casual employment permanently denies casual employees to NES benefits such as sick leave, annual leave as well as stability of employment.

In their decision, the FWC have developed a draft model clause which is to be executed in into 85 of the 88 modern awards which do not already contain a casual conversion clause. This clause will allow casual workers to request to convert to permanent employment when:

  • They have remained engaged with their employer for 12 months and
  • They have worked a pattern of hours on an ongoing basis over the 12 month period which could continue to be
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Employers can face hefty costs when involved in confidentiality breaches

The loss of sensitive confidential information can severely harm a business. For this reason, there are legal mechanisms in place designed to prevent former or current employees from divulging confidential information to new employers or by creating their own competing business. Depending on the nature of the employment relationship, confidential information may be protected though:

    • Confidentiality provisions and restraints in employment contracts.
    • The equitable obligation of confidence.
    • Fiduciary duties to act in employers best interest.
    • Obligations owed under the Corporations Act.

Importantly, the Corporations Act includes a provision that triggers liability when a person is knowingly concerned in or party to a contravention under the Act. Therefore, company directors should think twice before ignoring their duties by participating in confidentiality breaches.

In a recent case heard by the Federal Court, funeral fund management company ‘Forresters’ was ordered to pay $6.2 million in profits earned to competitor company ‘Lifeplan’ for its knowing involvement in the contractual and fiduciary breaches of two Lifeplan employees. In an effort to prepare a business

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The FWC has announced increases in national minimum wage effective from 1 July 2017

The Fair Work Commission has released its 2017Annual Minimum Wage Decision, awarding a 3.3% increase to award-reliant employees.

The FWC decision increases the national minimum wage to $694.90 – or $18.29 an hour. This constitutes an increase of $22.20 a week or 59 cents an hour being the equivalent to 3.3% minimum wage increase. . All award rates of pay will increase by 3.3% with effect from the first pay period commencing on or after 1 July 2017.

The FWC panel stated that company profit growth was strong among all industries and that labour productivity in the market sector grew more strongly across 2016 than it had in the previous 2 years.

It was acknowledged that the level of increase decided upon will not lead to inflationary pressure and is highly unlikely to have any measurable negative impact on employment.

Who is affected?

The 2017 Minimum Wage Decision applies to all employees covered by the national workplace relations system.

The Minimum Wage decision will notapply to:

  • employers who are sole
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Raising Occupational Health and Safety concerns in the workplace

Employees are well within their rights to raise occupational health and safety concerns without fear that their employment will suffer as a consequence. Under OHS laws, employers cannot dismiss, injure or alter (or threaten to) an employee in their employment to their detriment for a prohibited reason.




Typically, examples of injuring or altering the conditions of employment have included:

  • Demotion/ refusing promotion
  • Lower salary, increments or less rewarding bonuses
  • Allocation of work below skill/classification level
  • Fewer training opportunities
  • Job transfer

Employers who engage in these practices can face legal proceedings or even criminal prosecution and penalties if the dominant reason for their action was because of the employee’s involvement in raising health and safety concerns.

In a recent case[1], the Victorian Supreme Court has provided guidance on how OHS laws are applied when employees are discriminated against for a prohibited reason.  A group of Acme Storage employees voiced fears to their operations manager that workplace goods, which required lifting, exceeded the safe work limit of

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Managing internet and email use in the workplace

The benefits of internet and email use in the workplace are undeniable; not does communication happen at the click of a button, but information can be sourced instantaneously meaning tasks can be completed quickly and efficiently. Having said that, employees do not have free reign to surf the web as they please, and restrictions should be in place to prevent employees overusing these services for non-work related activities.

In a recent case before the NSW Industrial Relations Commission[1], an employee was dismissed for breaching her employer’s code of conduct and communications policy when she stored 1200 inappropriate and pornographic emails in a "funny emails" folder. The investigation found that the folder contained emails which were “considered pornographic, graphic (violence), and generally inappropriate in nature”. A non-work-related, 23-page personal journal was also found, which breached the policy's personal use clause and ‘encroached on work time’.  

The employee adopted a ‘cavalier attitude’ towards the situation and attempted to contend that the employer’s IT system should have prevented unwelcome and

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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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