Aussie Rules

Retired Judge Paul Stein’s report on the NSW OH&S laws has finally been released by the NSW Labour government, more than a year after it was finalised.

The report was handed to then IR Minister John Della Bosca in April 2007, but it was not publically released due to continuing talks within the government; its examination of the legislation and because consensus between employers, the government and the unions had proven difficult, according to the government.

Many businesses in NSW perceived that the report was not released due to fears of union reaction. The report was eventually released the day after submissions closed for the National Review into Model Occupational Health and Safety Laws — timing which has also been greeted with some cynicism by the opposition party and employer groups.

The report notably recommends the absolute duty to provide a safe workplace be modified to require employers to do what is “reasonable and practicable” bringing the legislation into line with the Victorian, South Australian, Tasmanian and Western Australian OH&S laws. However, whilst the Government has included the report in its submissions to the National Review Panel, it has not made any commitment in relation to implementing any of the recommendations.

Labor’s Workplace Relations legislation, to be released later this year, is underpinned by a focus on collective enterprise bargaining — with the requirement that employers bargain with employees in “good faith”. But what exactly will this elusive good faith bargaining (GFB) requirement entail, and will employers, unions and workers embrace the concept?

Labor’s Forward with Fairness Policy indicates that employers will be obliged to:

• attend and participate in meetings;
• disclose relevant information;
• provide timely responses to each other’s proposals;
• give genuine consideration to proposals and the needs of the other parties and provide reasons for responses; and
• refrain from engaging in unfair conduct that undermines freedom of association or collective bargaining.

In determining whether the GFB obligation has been breached, employers’ conduct may be scrutinised by the courts. Employers that attempt to undermine the collective bargaining process by intentionally misleading employees or the union, making unreasonable demands, engaging in evasive behaviour or attempting to bypass the union or bargaining agent will likely be found to have breached the GFB duty.

The GFB obligation does not mean that parties will have a duty to reach agreement, as this would essentially invalidate the freedom of the parties to engage in the process of collective bargaining. However, there will be the minimum requirement that employers give genuine consideration to the proposals and the needs of the other party. Where parties require assistance, are not complying with their obligation or are at an impasse, Fair Work Australia could become involved in the process.

To minimise potential risks of industrial action or a damaging bargaining process, employers need to develop and maintain appropriate and cooperative rapport with their employees. The most effective way to end up with a positive outcome is to promote a high level of trust and consultation between the employer and employees. Effective workplace communication will likely determine the success or failure of the bargaining process. It is imperative that employers understand their obligations as part of this process, which is set to commence in 2010.

The Federal Government recently released its 10 National Employment Standards (”NES”) — a new “simpler” statutory safety net aimed at “protecting fair minimum wages and conditions for all working Australians”. Although the standards will apply from 1 January, 2010, it is important for employers to just how they might affect their obligations to employees.

The new safety net is made up of 10 standards covering:

1. Maximum weekly hours of work
2. Requests for flexible working arrangements
3. Parental leave and related entitlements
4. Annual leave
5. Personal/carer’s leave and compassionate leave
6. Community service leave
7. Long service leave
8. Public holidays
9. Notice of termination and redundancy pay
10. Fair Work Information Statement

The 10 NES will enshrine a number of additional entitlements for employees that did not previously form part of the industrial safety net under WorkChoices.

FOr example, employees (with a qualifying period of at least 12 months) will have the right to request a change in their working arrangements to assist them in caring for a child under their responsibility. Although employers will have the opportunity to refuse the request on “reasonable business grounds”, in most cases employers will need to accommodate their employees’ family responsibilities when requested to do so. This could potentially affect the current 9-to-5 full-time working arrangements that most businesses operate under.

Employees will also have the right to be absent from work for jury service, voluntary emergency management services or other prescribed activities. Employers will be required to pay full-time employees up to 10 days’ pay for attending jury service. Employees will also have the right to be absent from work on public holidays, unless the employer’s request for them to work is reasonable.

Employers will be required to honour long service leave provisions reflected in awards and other industrial instruments. There will also be a legislated minimum scale of redundancy payments which an employer must pay in the event that the employee’s employment is terminated because the employer no longer requires the job to be done or because the employer is insolvent.

While the penalties for failing to abide by these standards are still unclear, it is clear that businesses will need to start factoring the NES into future planning.

The explosion of the Internet, and the ease of information access it provides, has become both a blessing and a curse for many employers. While it gives workers and their employers the ability to “google” helpful business resources, it can also threaten the security of a workplace computer system, result in extensive time-wasting and productivity loss and contain offensive or harassing material. In an attempt to prevent these negative consequences how far can employers go when it comes to blocking emails, tracking computer usage or blocking access to various Web sites?

Workplace surveillance regulates and affects an employer’s ability to lawfully undertake computer surveillance in the workplace. It is an offence for an employer to carry out any kind of covert surveillance of an employee in the workplace, unless:

• the employer has reasonable suspicion the employee(s) has acted unlawfully;
• the employer has been issued with an authority from a magistrate that allows such surveillance; or
• the employer notifies its employees in writing of the intended surveillance.

Employers are allowed to block emails sent to or by an employee and to block Internet access by an employee provided the employer is acting in accordance with its email and Internet access policy and provided that the employees are aware of and understand the policy. The regulations however do not give employers unfettered rights to access the private emails of its employees.

Employers should regularly review and update their computer usage policies as technology progresses and employees must ensure they are aware of and comply with the computer usage policy that applies in their workplace.

A Coles store manager, who was employed by the company for 24 years, was recently dismissed following allegations that she pulled the hair of a subordinate, swore at a sales representative in an abusive manner and conducted herself inappropriately when she engaged in physical contact with a male colleague in her office. An internal investigation proved the complaints and her employment was terminated. A subsequent unfair dismissal claim was unsuccessful. After accepting that the allegations against the employee were well-founded, the Australian Industrial Relations Commission (AIRC) held that she was not unfairly dismissed.

The Commissioner said the hair pulling incident, where the manager grabbed a worker by her ponytail and pulled her to a display bin was “clearly an incident of bullying, if not physical assault.” With regards to swearing at a sales rep, the Commissioner said that this treatment “demonstrated a lack of respect, breached any normal standards of professional courtesy and etiquette, had the potential to damage [Coles’] reputation both in the market place and the community … and was affronting and offensive.”

This case highlights that employers should not tolerate this kind of behaviour from their employees. Regardless of an employee’s length of service, dismissal may be warranted.

Sinapi v Coles Supermarkets Australia Pty Ltd [2008] AIRC 405

When returning from parental leave an employee is legally entitled to return to the same or a comparable position. There have been many instances where employers have not complied with this obligation resulting in the courts awarding damages to affected employees.

In 2007, Nike was ordered to pay one of its employees almost $20,000 in damages for discriminatory conduct towards the employee on her return to work following maternity leave. When she returned, the employee found herself demoted to a role junior to the one she had held previously. The employee’s manager told her that her priority should be the care and attention of her baby. He further sent an email following the employee’s return to work saying “Please welcome Sally back to the office and if she s p e l l s e v e r y t h i n g o u t when talking to you please be patient!” This email was found to be patronising and inappropriately made a connection between the employee’s role as a carer of her child and her performance in the workplace. It was found that the employee was not appointed to the senior role because of her child care responsibilities and her manager’s beliefs about the effect these might have on her performance.

In another 2007 case, an employer was ordered to pay $55,000 to an employee by failing to allow the employee to return to work after taking maternity leave. The company employed a contractor to fill her position while she was on leave. The contractor was perceived to be a superior worker with greater experience to the employee on leave. When the employee attempted to return to work she was told her position had been made redundant. The court found that the real reason why the employee was not permitted to return to work was because the Company wanted the contractor to do the work instead. The company was found to be “insensitive” to the employee’s circumstances and was “dismissive of her as a valued employee”.

These cases demonstrate that employers must avoid relegating former employees who return from maternity/paternity leave to inferior positions without sufficient justification. A person’s status as a carer or parent should not be a substantial consideration when determining what position a potential or former employee should undertake.

1. King v Nike Australia P/L (Anti-discrimination) [2007] VCAT 70 (24 January 2007)
2. Iliff v Sterling Commerce (Australia) Pty Ltd [2007] FMCA 1960 (3 December 2007)

Many organisations have work experience placements that allow students to get a feel for different workplaces — enabling them to better make educated decisions on future occupations. What you may not be aware of, is that those host employers are required to provide the same occupational health and safety (OH&S) conditions to these students as they do to other employees.

A recent decision in South Australia found a fishing company guilty for failing to provide the information, instruction, training and supervision reasonably required to ensure a work experience student was safe from injury or risks to his health. The fishing company engaged a 16-year-old student for a period of one week as required by his school’s work experience curriculum. On his second day on the job the student injured his fingers when removing a rope from the stern of the boat. Although his injuries were fairly minor, there was a real risk of more serious injuries such as amputation of fingers or permanent nerve damage.

The company failed to provide the student with a full induction process prior to and upon boarding the boat (as they would do for new employees). No training was given to the student in relation to untying the boat and no demonstration was given of the safety features of the boat. Even though the company had an excellent safety record, with OH&S policies and procedures in place, it failed to implement these policies with respect to the student. The company’s line was that the student was merely directed to “stand back and observe”; the Court, however, recognised that the purpose of work experience is “to involve the student in participating in the daily routines of the industry” and therefore it was required to provide adequate instruction, information, training and supervision.

This case demonstrates that an employer’s OH&S obligations extend not only to employees but also to others in the workforce, including “non-traditional” working relationships such as work experience students. As these workers are generally young and, by definition, inexperienced, an employer must ensure its OH&S obligations are properly implemented and students in the workplace are monitored and supervised at all times.

Markos v Australian Fishing Enterprises Pty Ltd [2008] SAIRC 9

The legal risks associated with using social networking sites, like Facebook, at work are becoming a growing concern for many employers. With Australia having the fifth-largest number of Facebook users worldwide, the Web site is opening up a plethora of potential legal risks for companies who allow their employees to access the site at work. Benefits there may be, but these are a few of the possible risks employers are exposed to.

Productivity Loss
One major concern for most employers is the substantial productivity loss Facebook is causing when used during working hours. A report conducted last year by Internet filtering company SurfControl estimated that the site may be costing Australian businesses $5 billion a year.

Security and Privacy Concerns
Another growing concern is the potential for confidential company information to be disclosed or leaked online by employees. Although most employees primarily use the site to “keep in touch” with friends, there is the risk of employees discussing company business and corporate affairs online and leaking company trade secrets. There is also the fear that employees using the site at work may make company systems vulnerable to hackers to infiltrate company networks since many Facebook profile pages contain users’ current employment details.

Risks searching Facebook to make recruitment decisions
There have been reports that some companies use these sites to “validate” recruitment decisions when recruiting new employees. This can lead to discrimination claims being brought against them.

Inappropriate content and behaviour online
Another serious legal concern is that vicarious liability may be attributed to employers for the bullying, harassing, discriminating or defamatory conduct engaged in by employees online, since this type of behaviour is essentially occurring at work, during working hours and using company property. Employees who upload inappropriate content at work could also be breaching email and Internet usage policies already in operation at the workplace.

IT issues
Employees downloading/uploading video or photo content online while at work can also affect the overall performance of the computer network system at the office.

Some suggest it is only a matter of time before these types of cases are brought before the courts. If employers are concerned about being exposed to these risks, they should either block Facebook access altogether, monitor usage and moderate its content or at the very least implement policies regarding the usage of Facebook and other social networking sites at work to ensure employees are not putting their businesses at risk.

Recent penalties handed down by the courts as a result of underpayment investigations by the Workplace Ombudsman should serve as serious warnings to employers to comply with employee Awards. A Sydney meat market was recently fined $93,600 by the Federal Magistrates Court for underpaying one of its employees approximately $9,400 and breaching multiple terms of the Award that governed the employee’s contract.

The employee, a 21-year-old apprentice butcher, was not paid the correct wages, overtime, weekend and public holiday allowances, pay in lieu of notice, annual leave, sick leave, meal allowances and superannuation.

The severity of the penalty handed down was exacerbated by the failure of the employer to act promptly to remedy the breaches of the award. The initial investigation began in March 2006 following a complaint made by the employee, but the underpayments were not rectified until January 2008. The substantial penalty therefore pointed to the “significant and ongoing failure” by the responsible managers “to be properly informed as to the effect of the Award”. The breaches were considered “serious and inexcusable” by the Court because of the large size of the company (it employs approximately 9,000 employees across various retail butcher stores, abattoirs and smallgoods outlets) and its associated business structure in the industry.

In other recent cases, a Hobart hair and beauty business was fined $28,000 for underpaying one of its employees approximately $9,000. Another company was fined $66,000 for underpaying its employees’ approximately $14,000. Company directors have also been found liable and ordered to pay $40,000 relating to breaches of the Workplace Relations Act. It is imperative therefore, that employers are aware of their obligations at law and abide by the terms and conditions set out in applicable awards or instruments that apply to their employees.

When employees leave your business, there is a potential risk that they may take your key clients, confidential information and intellectual property with them. To prevent this occurring, restraints are used to prohibit or discourage employees from removing, copying, using or disclosing confidential information and from soliciting customers, suppliers and other employees. However, in order to be effective the restraint must be reasonable. When and under what circumstances will a restraint be found to be unreasonable? The following case provides guidance on this issue.

AMP Services Ltd (”AMP”) operated a financial planning business as a subsidiary known as AWM. The defendant, a senior adviser, was one of several employees who left AWM to work for a competitor. AWM sought to recover a substantial amount of alleged lost revenue from the former employee, claiming that she had breached the post-employment restraint in her employment contract. The contract restricted the employee for a period of 12 months following termination or resignation, from approaching, enticing away or soliciting any of AMP’s clients or employees. AWM claimed the former employee improperly encouraged a group of employees to leave the company by putting them in contact with people at the competitor company.

The Federal Court found that although the former employee did not induce other employees to move companies, she did facilitate the move to some degree. Prior to leaving, the employee contacted most of her clients informing them of her departure, and most of those clients followed her to the competitor company. AWM alleged that by engaging in this conduct, she acted in breach of the restraint. The Court however, found the restraint to be unreasonable and void due to the fact that it was wider than necessary, covering all AMP clients, many of whom did not have any connection with the employee. AWM could not rely on the restraint in the employee’s employment contract because she had gone to work for a competitor of AWM and the restraint only referred to competitors of AMP.

This case highlights the importance of drafting accurate restraint clauses, by ensuring they reflect the relevant company the employee works for and the particular clients they are in contact with in order to guarantee these restraints will be enforceable and provide sufficient protection.

AMP Services Ltd v Manning [2006] FCA 256 (March 24, 2006)