FWA has this morning immediately terminated industrial action at Qantas for 21 day – extendable by a further three weeks – following hearings that went on until 2am this morning. The Full Bench decision followed on from the action of Qantas on Saturday to lockout its workforce and ground all its aircraft.

 The dramatic action by Qantas was their response to ongoing protected industrial activity in support of pay increases and demands for job security – with Qantas being insistent that it giving into the demands for job security would adversely impact on its future ability to meet growing competition from carriers based offshore.

Workplace Relations Minister Senator Chris Evans asked FWA to terminate the industrial action under s.424 of the Fair Work Act and it was this application that was decided on this morning.

 While the decision give the parties 21 days to reach an agreement, extendable by another 21 days if necessary, it is considered unlikely that the key demands for job security from the unions will be agreed to and the matter will then proceed to a binding arbitration by FWA – a move supported by Qantas.

 Minister For Tertiary Education, Skills, Jobs And Workplace Relations (31 October, 2011 – B2011/3816)

QantasDecisionFWA311011

The decision by Fair Work Australia Commissioner Raffaelli on15 September, 2011 upholding the termination by an employer of an employee via a texted message has renewed interest in the way managers and staff should communicate matters between themselves.

 While the decision centred around the issue of whether a painter failing to add an essential additive to a paint mixture (causing $74,000 damages) was guilty of misconduct, the bulk of interest in the case concerned the way the decision was communicated to the employee, who had proceeded onto annual leave and was about to fly overseas.

 The employer argued he had already discussed the matter with the employee by phone and as the employee was on annual leave, it was not inappropriate to communicate his decision to terminate the employee by way of a text message. The employee argued he had not been given adequate opportunity to defend himself and it was inappropriate to terminate him by text message while he was on annual leave.

 Commissioner Raffaelli found in favour of the employer, holding that while in most situations termination by text message is not appropriate, in this case the outcome for the employee would have probably been the same even if he was able to attend a face to face meeting with his manager. Accordingly, the employee’s dismissal was not harsh, unjust or unreasonable.

 The latest decision of Fair Work Australia compares with an earlier case this year where Commissioner Cambridge found the dismissal of a salesperson by text message deprived her of any opportunity to respond to the allegations – this constituted a fundamental breach of the notions of procedural fairness, even for a small business.

 Martin v DecoGlaze Pty Ltd (15 September, 2011 – U2011/8460)

The Australian Competition & Consumer Commission (ACCC) has recently released updated guidelines for employers on how to ensure advertisements for jobs in their businesses do not lead them to breach Australian Consumer Law (ACL).

For those more used to the provisions of the Trade Practices Act in regulating this area, the ACL are part of the legislation that replaced it in 2010, the Competition and Consumer Act. While the Act may have changed names, the obligations remain for employers to ensure they do not mislead job applicants with advertisements that do not accurately set out the terms and opportunities pertaining to positions they are recruiting for. 

 Employers need to be sure their job advertisements correctly set out the remunerations, the type of employment ie permanent, casual, contractor, etc, the work conditions, future prospects – all without exaggeration, or face penalties of over $1.0 million.

 For a copy of the new guidelines go to: http://www.accc.gov.au/content/index.phtml/itemId/715525

The recent series of claims and counter claims on Australia’s productivity, ignited by the address by Reserve Bank Governor Glenn Stevens to the House of Representatives Standing Committee on Economics on 26 August, 2011 appear to be raising the temperature on Fair Work Australia to examine workplace flexibility measures during its 2012 review of the Fair Work Act 2009.

 Such an examination would, if employers got their way, include assessing the ability of Individual Flexibility Arrangements IFAs) permissible under the Fair Work Act to provide similar levels of flexibility to employers as the much criticised Australian Workplace Agreements (AWAs) under the former WorkChoices legislation of the Howard era. Employer associations such as AMMA and ACCI see a return to AWAs as a possible panacea for their member’s ability to reverse falling productivity levels, even with the proviso of having them subjected to a no disadvantage type test.

 However, the experience of TELS with IFAs would tend to show that without very radical surgery to the Fair Work Act, IFAs will never be able to match the scope and ability of AWAs to provide high levels of workplace flexibility.

 It also needs to be kept in mind that labour productivity has been steadily falling since the 1990s, lending weight to the claims of the ACTU that a return to AWAs is no guarantee of a quick remedy to improve productivity.

A key decision for any employer remains deciding on the best way to employ new staff. With latest ABS statistics showing that full-time permanent workers now consist of less than 50% of the Australian workforce, here are some of the options available to employers in 2011:

Part-time staff

Benefits – offer flexibility in hours and are often able to do more hours to cover peak periods of work, without payment of loadings in most cases. Many employers report higher levels of productivity from their part-time staff and find they have less turnover than casuals.

Disadvantages – while most part-timers do not need to be paid a loading but be aware that in some sectors, this is not the case ie cleaning. Also beware of Modern Award provisions restricting flexibility of hours and days of work.

Casuals

Benefits – also offer flexibility in hours and are often keen to work more hours to cover peak periods of work. Casual loading covers sick and annual leave so casuals are more available than full time and part-time staff.

Disadvantages – Almost always paid a loading of 20-30% although this does cover sick and annual leave obligations. Beware of Modern Award provisions restricting flexibility in using casuals. More likely to leave without much notice.

Fixed term contract staff

Benefits – ability to employ knowing that there will be no unfair dismissal fight when they are terminated. Often highly motivated to get project or fixed term completed to satisfaction of employer to justify new term of employment.

Disadvantages – can be harder to find and recruit good staff willing to work fixed term.

Employers trying to prepare for the introduction of nation-wide OHS laws on 1 January, 2012 should take note of the new National Compliance and Enforcement Policy that was endorsed last month.

This policy will have a key impact on the way you implement and monitor OHS systems in your workplaces – while workplaces across Australia will be subject to similar harmonised OHS laws, the way regulators in each State and Territory monitor compliance and deal with accidents and breaches will differ.

This means that for employers in NSW, the way WorkCover will monitor your workplace and prosecute for breaches will vary from the approach taken by WorkSafe in Victoria.

Make sure you keep up to date on this ever evolving area of your workplace – with the first endorsed Codes of Practice due to be released later this month.

The case of PSA v Director-General of Department of Human Services (Juvenile Justice) [2010] NSWIRComm 32, provides a timely warning to managers responsible for making decisions on relevent disciplinary action following findings of misconduct, particularly for those working within the NSW Public Sector Employment and Management Act.

In this case, Marks J declared invalid a decision to take disciplinary action against a Juvenile Justice Officer for a long string of offences. His Honour found that the Department had breached two fundamental provisions that meant the Officer had been unable to make an adequate response to the Department’s intention to take action against him.

The key problem appeared to be that the Officer was not provided with sufficient particularity of the various matters being taken into account by the Director-General when determining the appropriate penalty for his misconduct. The employee had been employed since the early 1990’s but had committed a number of serious driving offences around 2008, including:

• Having his driver’s licence suspended for a mid range PCA offence
• Being caught speeding while suspended

Additionally, after the last offence, the Officer, Mr Philip Sullivan continued to drive a departmental vehicle on at least ten occasions before informing his manager of his 18 month disqualification from driving. Upon advice of this, the Department instituted a misconduct investigation in the three above issues which resulted in advice to the Director-General that Mr Sullivan had engaged in misconduct.

Consistent with Departmental processes, a letter was sent to Mr Sullivan advising him of the investigation findings and informed him that before making a final decision on disciplinary action, the Director-General would consider the investigation report, his “previous employment matters (such as past remedial actions, warnings/disciplinary matters or previous satisfactory work history)” and any submission he wished to make. The next day, the Department sent another letter to Mr Sullivan asserting that as he had been convicted of a serious offence ie one punishable with 18 months imprisonment for driving whilst disqualified, he should also make a submission on this issue before the Director-General made a decision using the same criteria as above.

Eventually, the Director-General made a decision which took into account Mr Sullivan’s prior performance and disciplinary action, including discipline in 2006 for failing to report the receipt of emails at work containing sexually explicit material from other employees. The Director-General also took account of other issues that Mr Sullivan was not specifically referred to, including:

• His untruthfulness in failing to notify his manager of his licence suspension
• His recording false information in vehicle log books during his suspension
• His dishonest representations to the police officer booking him for speeding

The Director-General then directed Mr Sullivan to resign.

The PSA claimed that the specificity of “previous employment matters” as set out in the Director-General’s letter did not sufficiently alert Mr Sullivan of the significance they had assumed in the mind of the Director-General in determining what disciplinary action would be taken against him and on this point Marks J agreed, declaring the decision on disciplinary action to be invalis. Additionally, His Honour noted that the Department had a general right to be afforded the common law notions of natural justice and procedural fairness and that these principles were not displaced by Part 2.7 of the Act – finding instead that Part 2.7 embraced these principles.

Enquiries –   - inquiry@tels.com.au 1300 85 17 20

The new Federal independent contractor’s legislation commenced operation from 1 March 2007.

Definition

The Common Law test of an independent contractor remains applicable. The new Act is intended ‘to recognise independent contracting as a legitimate form of work arrangements that is primarily commercial; and to prevent interference with the terms of genuine independent contracting arrangements.’

The new Act will override provisions of State laws that deem certain classes of independent contractors to be employees and provisions that deal with unfair services contracts.

Court review

Under the new Act, the Federal Court or the Federal Magistrates Court will have the power to review a contract that relates to the performance of work by an independent contractor where at least one of the parties to the contract is a constitutional corporation or the Commonwealth or a Commonwealth Authority or a Body Corporate incorporated in a Territory in Australia.

The court may determine that the services contract is either unfair or harsh or both. In reviewing the contract the court is to have regard to the relative strength of the bargaining positions of the parties to the contract, whether any undue influence or pressure was exerted on either party or whether the contract provides total remuneration that is or is likely to be less than that of an employee performing similar work. The court may have regard to any other matter that the court thinks is relevant.

The court may make an order setting aside all or part of the contract or an order varying the contract. Under transitional provisions to the Act contracts made before the new laws take effect or contracts that continue the terms of the previous contracts may continue to be dealt with under State and Territory contractor laws until such a contract is replaced by a contract made under the new Act or for three years from the date that the new Act takes effect, whichever comes first.

In the recent case of Buttigieg v Shoalhaven City Council [2010] NSWIRCComm 43, the Full Bench of the NSW IRC refused an appeal against a decision of Connor C which had determined that while in certain circumstances a demotion for disciplinary reasons could constitute a dismissal, in the case of Mr Buttigieg in his role as a Supply Team Leader, his demotion to a lesser role for authorising a fraudulent invoice was not inconsistent with an award clause allowing demotion for disciplinary purposes.

The facts were that Mr Norman Buttigieg was employed by Shoalhaven City Council in July 2007 as a Supply Team Leader in the Finance and Corporate Services Group. He apparently worked without blemish until he was involved at some time in 2009 when he was subject to disciplinary action following allegations he had negligently authorized fraudulent invoices, and as such, had been negligent in the performance of his work.

It appears that Mr Buttigieg was not involved in the fraudulent invoices presented for payment to Council but it is understood that Council did suffer financial loss due in part to the alleged failure of Mr Buttigieg to adequately and correctly conduct work in the authorization of invoices for payment.

Pursuant to Clause 31, Disciplinary Procedures of the Local Government (State) Award, Council demoted Mr Buttigieg to the position of storekeeper at its Ulladulla store and preserved his higher rate of pay for three weeks after the effective date of his demotion, this being one week more than required by Clause 31.

Although the action in disciplining Mr Buttigieg was taken consistent with the Award, Mr Buttigieg argued before Connor C that the demotion was such as to constitute an unfair dismissal. Council challenged the application of Mr Buttigieg on two grounds – the first that his application was out of date and the second that he had not been dismissed in the first place.

Connor C referred to a number of cases including his own unreported decision in Mann v Side Cafes Pty Ltd [Matter IRC 413 of 1996] as authority for the view that in certain circumstances, a demotion may constitute a dismissal. However, Connor concluded that Mr Buttigieg’s contract with Council needed to be read in conjunction with the provisions of the Award, including Clause 31 which allowed his demotion. If Mr Buttigieg had been a member of the Union, his case could have been progressed under S.130 but as this was not a remedy available to Mr Buttigieg in this case and Connor dismissed the Part 6 application for reinstatement to his former position as falling beyond his jurisdiction.

On appeal, the Full Bench was asked to decide if Connor C had failed to consider, on a proper construction of the Award, whether or not there was an implied limitation on the discretion to demote beyond which the reduction in grading ceased to be a demotion and became more characterized as a termination of employment.

However, the Full Bench decided that because proceedings before Connor C were conducted without the benefit of evidence being put forward by the parties on the facts of the matter or the history of the Award, they had no other option but to refuse leave to appeal.  They concluded by leaving the question of whether a demotion could constitute a dismissal for a more detailed consideration if a suitable case was argued before them.

Enquiries  – inquiry@tels.com.au 1300 85 17 20

Modern awards are one the biggest issues that many employers are grappling with at the moment.

Almost all modern awards include provisions to ’transition’ employers and employees from their pre-modern award entitlements to the modern award system. This transition period begins on 1 July, 2010 so it is important for employers to check their modern award to determine what, if any, transitional arrangements apply to relevant employee(s).

However, employers need to approach this transition period with great care as even lawyers and employer associations are finding the exercise to be confusing.

For example, for most employers, the model transitional provisions set out in their modern award provide for the ‘phasing in’ of increases or decreases in certain monetary entitlements. This process is referred to by Fair Work Australia as ‘phasing’ and the entitlements that are affected are referred by them as ‘transitional’ (e.g. ‘transitional wage rate’) and is as follows:

Modern Award phasing process

The phasing process is to be accomplished in five set instalments over four years (20% per year) beginning from the first full pay period on or after 1 July 2010 and ending at the first full pay period on or after 1 July 2014, when modern award rates apply in full.

This means that until 2014, wage, loading and penalty entitlements under modern awards will change on the first pay period on or after 1 July each year, and need to be recalculated accordingly.

However, for those who moved into the national system because of a referral from a State government (e.g. non-trading corporations, sole traders and partnerships in New South Wales, different rules apply and these rules depending on whether the employer’s business and / or the type of work that its employees perform was covered by a State award immediately before 1 January 2010. For example, for those with employees covered by State award, these Award terms and conditions will continue to apply in full until 31 December 2010 (as a “Division 2B State award”). The modern award will start to apply to these employees from 1 January 2011.

For more information about arrangements for employers and employees moving into the national system from a State system, the Fair Work Infoline can be contacted on 13 13 94.

The AiG case will seek to clarify two of the FWO’s interpretations of the transitional provisions – that overtime isn’t subject to phasing arrangements and that employers have to seek employees’ agreement to absorb over-award payments.

We will let our readers know of the outcome of this case when it comes to hand.

Contact TELS if you need any further assistance or information on this topic – inquiry@tels.com.au.