Equal Employment Opportunity

#metoo – why this year’s festive season should be different

It is now 12 months since the insidious discriminatory and sexually predatory behavior of powerful Hollywood moguls was exposed by a few very brave women. It is also 12 months since the phenomena of the #metoo movement. The fallout from all this publicity is certainly a heightened awareness of the unacceptable behaviours that occur at work, mostly against women. Now with the Christmas and New Year period upon us, many employers will be celebrating the end of 2018 with their employees. This is a fertile breeding ground for employees to “forget” they are required to adhere to a certain standard of behavior. However, with all employees more emboldened by the current climate, unacceptable behavior is far less likely to be tolerated and certainly much more likely to be reported. In our experience these Christmas events are notorious for being a potential breeding ground for inappropriate workplace behavior. These parties and events may put employers at risk of litigious actions such as sexual harassment, bullying, discrimination and unfair dismissal claims. Given the current spotlight cast on these matters employers need to be even more vigilant this year.

In this regard, both state and federal anti-discrimination laws provide that employers must be able to demonstrate that they have taken all “reasonable steps” to prevent unlawful discrimination and sexual harassment from occurring in the workplace. Any workplace Christmas or end of year event will be considered the “workplace” and the employer will be liable for any inappropriate or unlawful behavior that occurs, if they have not taken all reasonable steps to prevent such conduct. It is therefore imperative for employers to educate staff around what constitutes acceptable behaviour, and what kinds of conduct may give rise to disciplinary action. To this end, it is important that employers remind their staff about workplace policies in relation to acceptable codes of conduct which continue to apply and should not be ignored in the context of an event organised by the company, even if it is not on work premises. It is worthy to note that the meaning of a “workplace” has been significantly broadened by the Courts, to include social gatherings at bars, restaurants or other public venues at which interactions amongst staff occur.

In addition, under work health and safety laws, an employer owes an overarching duty to take all steps reasonably practicable to prevent the risk of injury in the workplace. The same duty of care is owed generally under the common law. In the context of work Christmas parties, subtle risks can often be overlooked by employers such as the service of alcohol, at an employer’s expense, and the possibility of participation in illegal drug taking and in some circumstances sexual misconduct amongst staff.

In this respect, and given the ability for sexual harassment and other claims to be commenced against employers as well as individual perpetrators under accessorial liability provisions provided for in various legislative instruments, it is imperative that employers take all reasonable steps available to them to provide employees with proper information, training and supervision to prevent such issues from arising.

Examples of recommended control measures include:

  1. developing and implementing policies around appropriate workplace behaviours, and refreshing these expectations with your employees regularly;
  2. consulting with staff in relation to your expectations of their behaviour at work Christmas parties;
  3. providing training to employees on their obligations under various legislation, including in respect of work health and safety;
  4. Ensuring adequate security and safety measures are in place at the venue;
  5. Auditing any foreseeable risks, particularly when deciding on venues, start and finish times, food to drink ratios, and implement measures to prevent injuries from occurring;
  6. Monitoring the amount of alcohol served generally;
  7. Ensuring that the consumption of alcohol and service of alcohol is limited and stops at a reasonable hour;
  8. Sending a reminder to all staff prior to any event, regarding their obligations to behave appropriately, the company’s policies regarding harassment and appropriate behaviours, and the consequences if they do not; and
  9. providing access to counselling and an EAP services provider.

In the event that a complaint or inappropriate workplace matter is raised about alleged misconduct at a work Christmas event, it is of vital importance that responsive action is taken quickly by employers. Such measure that ought to be considered, depending on the sensitivity of the issue, include:

  1. providing counselling and support services to the complainant;
  2. keeping the complainant informed as to the steps being taken to respond to the matter;
  3. cooperating with Police and notifying the relevant safety regulators (if warranted);
  4. investigating the matter fully either internally or via an external investigation service;
  5. notifying the employee against whom an allegation has been made and requesting their response; and
  6. suspending the accused employee until all the facts have been gathered and a course of action has been decided upon.

In approaching these matters, practical strategies employers should otherwise bear in mind when responding to workplace complaints include:

  1. avoid delaying the response time to allegations;
  2. never assume an allegation is frivolous or vexatious without making inquiries;
  3. consider all the evidence and then determine an appropriate disciplinary response;
  4. document clearly and comprehensively each step of the response process;
  5. provide employees with counselling or an EAP services provider; and
  6. communicate effectively and appropriately when dealing with sensitive workplace matters.

Relevantly, whilst inappropriate workplace conduct should be dealt with and punished accordingly, employers need to ask themselves whether the punishment fits the crime. It is therefore not only relevant to act in circumstances where a complaint of inappropriate behaviour is received, but to ensure the ensuing response is proportionate, fair and reasonable.

Whilst work functions are a great opportunity to have fun with colleagues, our recommendation to surviving the silly season is to be honest with yourself as to whether everything reasonably practicable has been done to ensure all employees are safe and without risk of being subjected to offensive behaviour.

If any further information in relation to any aspect of this alert is required, please do not hesitate to contact us. Otherwise, we are available and ready to assist should you require any advice or legal support this silly season.

This alert is not intended to constitute, and should not be treated as, legal advice.

SEXUAL HARASSMENT IN THE WORKPLACE UNDER THE MICROSCOPE

The #MeToo movement has continued to expose the frequency of sexual harassment that occurs and continues to occur against women on a global level. Sexual harassment continues to be front and centre as a growing number of victims have come forward with their own #MeToo experiences.

In this week’s article we consider the continued effect of the #MeToo movement on Australian workplaces, the legal definition of sexual harassment and an employer’s responsibilities in relation to sexual harassment in the workplace. Most importantly, we consider what steps employers should be taking within their business to reduce the risks in this area. We also examine a recent decision which demonstrate the changing attitude of the Fair Work Commission towards sexual harassment in the workplace.

Legal Definition of Sexual Harassment

By its legal definition, sexual harassment is an unwelcome sexual advance, unwelcome request for sexual favours or other unwelcome conduct of a sexual nature which makes a person feel offended, humiliated and/or intimidated, where a reasonable person would anticipate that reaction in the circumstances.

The Sexual Discrimination Act 1984 (Cth) (“SDA”) provides that unwelcome sexual harassment is unlawful. It is also unlawful for a person to be victimised for making, or proposing to make, a complaint of sexual harassment.

Examples of sexually harassing behaviour may include, but are not limited to:

  • Unwelcome touching;
  • Staring or leering;
  • Suggestive comments or jokes;
  • Sexually explicit pictures;
  • Unwanted invitations to go out on dates;
  • Intrusive questions about a person’s private life or body;
  • Sexually explicit emails or text messages; and
  • Unnecessary familiarity, such as deliberately brushing up against a person.

A working environment or workplace culture that is sexually hostile will amount to unlawful sexual harassment. Previous case law has indicated that a potentially hostile environment may include displays of obscene and pornographic material, sexual banter, crude conversation or innuendo and offensive jokes.

In many cases, employers and/or others within the business may be held liable under the SDA for acts of sexual harassment conducted by their employees or agents. However, employers are able to limit their liability if they are able to demonstrate that the business has taken “reasonable steps” to prevent sexual harassment occurring within the working environment.

Cultural Change in Attitude

Sexual harassment in Australian workplaces has been a consistent issue to which employers must pay particular attention, regardless of their size or industry in which they operate. It is clear from a number of recent decisions that the #MeToo movement has gained traction in Australian courts and tribunals, including in the Fair Work Commission.

In addition, the Australian Human Rights Commission (“AHRC”) has launched a 12-month national inquiry into sexual harassment in Australian workplaces. The inquiry will consider the economic impact of sexual harassment, the drivers of these behaviours and the adequacy of the existing legal framework. The inquiry will also make recommendations to address sexual harassment in Australian workplaces.

The AHRC also released results from a recently conducted national survey on sexual harassment in the workplace. Concerningly, the survey found that one in three workers in Australia had stated they had been sexually harassed at work in the last five years which is a significant increase from a survey conducted in 2012. The survey also highlighted the fact that almost half of those individuals who did make a formal complaint to their employer said that nothing had changed in their organisation as a result of the complaint. This statistic has been further highlighted by the Transport Workers Union who recently notified the Sex Discrimination Commissioner of the results from a cabin crew survey. This survey found that 65% of cabin crew who said they have been sexually harassed at work, were either unsatisfied with how their employer handled the matter, or were too afraid to report it to their employer.

Relevant Decision

A recent decision of the Fair Work Commission (“FWC”) demonstrates that the effect of the #MeToo movement is being considered within the Australian jurisdiction and there is now a higher standard of what is considered acceptable and appropriate behaviour in the workplace.

In the decision of Carmelo Sapienza v Cash in Transit Pty Ltd T/A Secure Cash [2018] FWC 607, Mr Sapienza’s employment was terminated after complaints were received regarding inappropriate sexual behaviour by Mr Sapienza when visiting client’s premises. In particular, the complaints related to a client’s premises (which was a women’s retail store) where Mr Sapienza made young female employees feel uncomfortable. His behaviour included, but was not limited to:

  • Hugging two female employees 30 years his junior;
  • Saying words to the effect “when will you be leaving your boyfriend so we can run away together?”
  • Telling staff, they had missed his birthday and asking, “where is my kiss?” whilst leaning over the counter and putting his cheek up to the girls’ faces; and
  • Asking an 18-year-old employee for her telephone number and stating that he had dated girls of her age.

Mr Sapienza denied some of the allegations but had accepted that he may have asked the female employees for a kiss but this was due to his “cheeky” nature and tendency to joke around. Mr Sapienza’s explanation for his conduct was that, as an Italian, he was accustom to affectionate gestures and that he also hugged staff at other client’s premises. He believed the physical encounters were consensual and friendly, and had he thought otherwise, it would have ceased immediately.

As a result of the termination of his employment, Mr Sapienza filed an unfair dismissal application with the Fair Work Commission. Deputy President Bull was of the view that the admission by Mr Sapienza that he did hug and ask for a kiss from women as young as 18 years was sufficient to substantiate that the employer had a valid reason to terminate his employment. Despite Mr Sapienza’s explanation for his conduct, DP Bull found Mr Sapienza’s actions to be “improper, unprofessional and naïve, to say the least”.

The FWC also noted that Mr Sapienza was not provided an opportunity to respond to the reasons for the termination and that he was summarily terminated without even a verbal conversation by his employer. As such, it was found that the process was seriously lacking in procedural fairness. Nevertheless, and surprisingly, DP Bull held that in view of Mr Sapienza’s admission in respect to his conduct with the young female staff, that the dismissal was not harsh, unjust or unreasonable and dismissed the application.

Whilst this decision provides encouragement for employers to act firmly when dealing with sexual harassment in the workplace, employers should not rely on this decision to cut corners when terminating employees. Procedural fairness is a factor that the FWC must consider when determining unfair dismissal applications. There has been a number of decisions where the FWC has found that there is valid reason for dismissal, however ultimately determined the termination of employment to be unfair because of the process followed by the employer was inadequate.

Employers’ Vicarious Liability

Sexual harassment may present a serious issue for employers for a number of reasons because, among other things, such conduct increases health and safety risks, damages workplace culture and productivity and can result in significant reputational harm to the business. In addition, section 106 of the SDA provides that employers will be held vicariously liable for the conduct of their employees if that conduct is connected to the employment or occurs during the course of employment. Accordingly, if employers are found to be vicariously liable for the unlawful actions of their personnel they may be subject to significant Court orders for damages, pecuniary penalties and adverse findings or declarations.

However, employers will not be held vicariously liable under subsection 106(2) of the SDA if they can demonstrate that they took “all reasonable steps” to prevent the harassment. However, the onus rests on the employer to demonstrate they did in fact take all reasonable steps in this regard.

Lessons for Employers

As demonstrated above, employers have significant responsibilities in relation to sexual harassment or misconduct of a sexual nature. To this end, there are a number of strategies employers should implement in their business to assist in addressing unacceptable behaviour and/or conduct in the workplace:

  1. Implement workplace policies in order to communicate the expected standards, behaviour and conduct of employees in your organisation and clearly state the consequences of breaching the policy. The workplace policies should include a sexual harassment policy which refers to the relevant legislation, explains what sexual harassment is and clearly states that it is unlawful. In addition, there should be a clear complaints and investigation policy that the Company applies. Importantly, the complaints policy should clearly explain appropriate reporting mechanisms and ways employees may make complaints.
  2. Implement a code of conduct – a well written code of conduct clarifies the business’ mission, values and principles and sets the benchmark against which an individual and the organisation can be measured. It serves as a valuable reference as to the ethics required by all employees in the business.
  3. Provide training for employees on sexual harassment and appropriate workplace behaviour and refer to the business’ workplace policies. In addition, train your staff not to be “bystanders” when they witness inappropriate behaviour by training them to appropriately respond and deal with inappropriate behaviour in the workplace.
  4. Ensure employee complaints relating to harassment are taken seriously and investigated properly. It is best to undertake an external and independent investigation and seek appropriate legal advice as required. Ensure the investigation process and the findings/outcome is well documented.
  5. Ensure managers lead by example in demonstrating appropriate and respectful behaviour as well as responding promptly to complaints or reports of poor behaviours. To ensure this occurs, provide appropriate management training to your managers, supervisors and leadership teams.
  6. Consider risk factors such as social functions, the interplay of alcohol, travelling remotely and social apps where people can act recklessly. Identify risk situations for your business and educate employees of the company’s expectations in such situations.

If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment law matter, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

FLEXIBILITY IN THE WORKPLACE: DOES IT ACTUALLY WORK?

Flexible working arrangements have become more and more popular over the years. Traditionally, this was something used by working mothers and carers, but as social norms have evolved, it has become very common for all types of workers to want to adopt flexible working arrangements. For example, flexible working arrangements allow employees to balance family, carer and other responsibilities and interests alongside their work commitments and career goals.

Flexible working arrangements may include flexible working hours, part-time work, home based work and job sharing. Among the more recent models, unlimited holidays, and employees determining when they perform the work (work flexibility) are some more recent innovations in this area. Many employees report being more productive and engaged in their work when they have the ability to balance the competing demands of work with other aspects of their private lives. However, on the other hand, many employers question how far their obligation extends in relation to flexible working arrangements, and in what circumstances they may refuse a request when the operational demands of the business simply do not permit the employer to agree to such a request.

In this article, we consider the obligations of employers in relation to flexible working arrangements and when an employer may have grounds to refuse such a request. We also consider the recent decision of the Fair Work Commission in relation to flexible working arrangements as part of the 4-yearly review of Modern Awards.

The Law

Section 65 of the Fair Work Act 2009 (Cth) (“FWA”) provides that an employee who has been employed with the same employer on a continuous basis for at least 12 months is eligible to make a request for flexible working arrangements in the following circumstances:

  1. The employee is the parent, or has responsibility of the care, of a child who is of school age or younger;
  2. The employee is a carer (within the meaning of the Carer Recognition Act 2010);
  3. The employee has a disability;
  4. The employee is 55 or older;
  5. The employee is experiencing family or domestic violence from a member of the employee’s family; or
  6. The employee provides care or support to a member of the employee’s immediate family, or a member of the employee’s household, who requires care or support because of family or domestic violence.

Notably, long term casual employees who have been working for the same employer and who have a reasonable expectation of continuing employment on a regular and systematic basis, may also make a request for flexible working arrangements.

If an employee is eligible to request flexible working arrangements, they are required under the FWA to make any such request in writing and to set out the details and reasons for the changes requested. An employer in receipt of a request for flexible working arrangements must provide a written response to the employee within 21 days, stating whether the request is approved or refused. In accordance with section 65(5) of the FWA, an employer may refuse a request only on “reasonable business grounds”.

Section 65(5A) of the FWA provides examples of what “reasonable business grounds” may include for the purposes of refusing a request. These include where:

  1. The new working arrangements requested by the employee would be too costly for the employer;
  2. There is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested;
  3. It would be impractical to change the working arrangements of other employees, or recruit new employees, to accommodate the new working arrangements requested by the employee;
  4. The new working arrangements requested by the employee would likely result in a significant loss in efficiency or productivity; or
  5. The new working arrangements requested by the employee would be likely to have a significant negative impact on customer service.

Importantly, there is no general internal enforcement or appeal mechanism for employees to challenge a refusal of a request for flexible working arrangements. Section 44 of the FWA specifies that no civil remedy is available where the employer’s refusal is based on reasonable business grounds. However, employees who seek to challenge the decision of their employer, can apply to the Fair Work Commission to deal with a dispute in circumstances where:

  • the employer and the employee have agreed in a contract of employment, enterprise agreement or other written agreement for the Commission to deal with a dispute in relation to their employment; or
  • the terms of an applicable enterprise agreement have the same (or substantially the same) effect as section 65(5) of the FWA in relation to the operation of flexible working arrangements.

Whilst there may be limited circumstances in which an employee can challenge their employer’s decision to refuse a request for flexible working arrangements, by seeking redress from the Fair Work Commission, the employee may be able to commence other proceedings including:

  • a discrimination claim in either the State or Federal anti-discrimination jurisdiction; or
  • a claim for breach of the General Protection provisions of the FWA.

Review of the Flexible Working Arrangements

Relevantly, as part of the Fair Work Commission’s 4 yearly review of Modern Awards the Australian Council of Trade Unions (“ACTU”) made an application to amend the Modern Awards to provide greater entitlements to employees in relation to flexible working arrangements.

The ACTU’s claim included a proposed clause to be inserted into Modern Awards which would include a right for parents and carers to access “family-friendly working hours” upon giving an employer reasonable notice. This proposal also sought the right for parents/carers to revert to their previous working hours when their child reached school age (or at a later time as agreed) or after two years on family friendly hours.

The ACTU’s proposed family-friendly working hours arrangement would enable full-time employees to work part-time hours and for part-time or casual employees to reduce their hours as needed due to carer or family reasons.

In addition, the proposal put forward by the ACTU would not allow employers to refuse flexible working arrangements on reasonable business grounds or otherwise.

In reviewing the ACTU’s proposal, the Full Bench of the Fair Work Commission stated that the proposed clause would provide a new set of employee entitlements. In particular, the clause appears to permit the unilateral variation of working hours on an unlimited number of occasions which was only subject to ‘reasonable notice’. Nevertheless, the Full Bench did accept the notion that the current provision which dealt with flexible working arrangements lacked an effective enforcement or appeal mechanism. Ultimately, the Full Bench rejected the ACTU’s claim on its merits stating, “granting the union claim would amount to replacing one flawed mechanism for facilitating workplace flexibility with another flawed mechanism”.

However, the Full Bench went on to state that the rejection of the ACTU’s claim did not conclude the matter. As the claim was made in the context of the 4-yearly review of Modern Awards, the review is conducted on the Fair Work Commission’s own motion and was not dependent on an interested party. In this regard, the Full Bench recognised the general benefit to the Australian economy and labour force to support and enable parents and carers to increase their employment participation. As such, the Full Bench expressed a “provisional view” that the Modern Award minimum safety net should be varied to incorporate a model term that has broader application for parents and carers than the current section 65 of the FWA ‘requests for flexible working arrangements’ provision, and more prescriptive requirements for employers that refuse requests.

In the decision, the Full Bench outlined how the provisional model term may supplement the National Employment Standards. These include:

  • The group of employees eligible to request a change in working arrangements relating to parental or caring responsibilities, will be expanded to include ongoing and casual employees with at least six months’ service but less than 12 months’ service.
  • Before refusing an employee’s request, the employer will be required to seek to confer with the employee and genuinely try to reach agreement on a change in working arrangements that will reasonably accommodate the employee’s circumstances.
  • If the employer refuses the request, the employer’s written response to the request will be required to include a more comprehensive explanation of the reasons for the refusal. The written response will also be required to include the details of any change in working arrangements that was agreed when the employer and employee conferred, or, if no change was agreed, the details of any changes in working arrangements that the employer can offer to the employee.

The Full Bench has opened this matter to the general public for comment and interested parties have been invited to make submissions on this subject if they wish. Should any of our readers or clients be interested in making a submission regarding this matter, please do not hesitate to contact us.

Lessons for Employers

Given the potential changes to flexible working arrangements, employers should consider how they intend to manage their workforce, in particular for working parents and casual employees. Employers wanting to differentiate themselves should consider how they may provide a better work life balance culture and how they can support flexible working arrangements.

In addition, it is important for employers to follow a fair and valid process when dealing with requests for flexible working arrangements. If the employer has chosen to refuse such a request, it is essential employers have a valid and reasonable basis on which to do so. It is also imperative that employers keep appropriate documentation of the decision-making process, particularly where a request has been declined. Employers should only consider refusing such a request where they have genuine and legitimate operational reasons for doing so.

In responding to an employee’s request, employers must also ensure they comply with the formal procedural requirements set out in section 65 of the FWA, any applicable enterprise agreement and any workplace policy which applies to the business. This is especially important otherwise employers run the risk of an employee claiming that the refusal of a request for flexible working arrangements was in some way connected to the exercise of a workplace right, that is, the right to make the request in the first place (or other exercise by the employee of a workplace right), or that the employer’s decision amounts to a breach of anti-discrimination legislation. In order to defeat such claims, an employer would be greatly assisted if it could rely on clear and carefully written records setting out the decision-making process undertaken in responding to the employee’s request for flexible working arrangements.

Although only a limited class of employee now has a limited right to request flexible working arrangements, many progressive employers are recognising the enormous motivational impact granting this right more broadly may have on their workforce. To that end, numerous employers are looking at how they can provide their employees with greater flexibility and work life balance.

We regularly advise employers on workplace flexibility matters including dealing with requests for flexible working arrangements. If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment law issue, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

Domestic Violence – Why Is It Now An Issue At Work?

The incidence of domestic violence appears to be on the increase and it is now a much discussed social issue in Australia. The statistics regarding domestic violence in Australia are horrifying – one in six women, and one in 20 men, have experienced violence from a current or former partner since the age of 15. Just in the last week there were two instances of serious injury from domestic violence reported by mainstream media.

Given the insidious and prevalent nature of this issue and the significant impact it has on sufferers working lives, the issue has been part of the 4-yearly review of modern awards. The question considered by the Fair Work Commission (“Commission”) is whether employees should be entitled to domestic violence leave in addition to the current leave requirements for annual and personal leave. The Australian Council for Trade Unions (“ACTU”) commenced proceedings in November 2016 before the Full Bench of the Commission to push for a new modern award entitlement of 10 days’ paid family and domestic violence leave and 2 days’ unpaid leave per occasion. The ACTU emphasised that providing this leave would make it easier for survivors of family and domestic violence to remain in paid employment and manage stressful and time consuming tasks like finding a new home and attending Court.

The Australian Industry Group appeared on behalf of the employers and argued that paid family violence leave should be dealt with at the enterprise level and not as part of the award safety net. The major concern for employers included the increased costs of introducing additional paid leave. It was argued that granting the ACTU claim could result in employers providing employees with 20% of the working year off with pay if all entitlements were accessed. However, in a report by Price Waterhouse Corporation in 2015 it was estimated the cost of lost production as a result of violence against women was $2.1b in 2014-2015. Furthermore, a 2015 survey by the Gendered Violence Research Network found that out of the 102 employers surveyed with a paid domestic violence clause in their enterprise agreements, an average of 43 hours was taken in the past 12 months, ranging between 8 and 202 hours.

At the moment, the Commission’s decision has been reserved. However, VP Watson prior to his retirement at the end of February 2017, took the unusual decision to publish his ruling separately before the other members of the Full Bench had done so. VP Watson found that the push to include family violence leave in modern awards should be rejected. His Honour was of the view that there was no doubt family and domestic violence is widespread in Australian society and employers should be aware of the problem and assist affected employees. He praised employers already supporting employees affected by domestic violence through the implementation of workplace policies. However, he ruled that the ACTU claim was different in nature and sought to introduce a form of leave that can be taken without prior approval, and is available in a broad and somewhat uncertain range of circumstances. He viewed this approach as having the potential of undermining the level of trust at the workplace and causing significant uncertainty and cost for employers. It was further noted that Australia had a relatively high safety net of terms and conditions and the leave being sought is not necessary to achieve a fair and relevant minimum safety net of terms and conditions of employment.

The two other members of the bench are yet to hand down a decision. However, Commission President Iain Ross has sought submissions from the parties to address whether the two remaining members could issue a decision together and whether combined with the VP Watson ruling that would constitute a Full Bench decision as per the requirements of the legislation or whether the legislation requires another member to be appointed given VP Watson’s recent retirement. If there is now a requirement to appoint a further member it raises the question: are the parties content to have the newly constituted Full Bench determine the application without a further hearing. President Ross heard the submissions from interested parties on 4 April 2017 and is expected to provide his decision regarding how the claim should proceed shortly.

Even though currently there is no legislative or other requirement for employers to provide domestic violence leave, employers in Australia are leading the way in providing employees such leave. A number of employers have elected to provide domestic violence leave to their employees such as Telstra, NAB, Virgin Australia and Price Waterhouse Coopers. There has also been a trend towards including domestic violence leave in enterprise agreements. By March 2016, it is reported that there were 1,234 current agreements with a domestic violence leave clause covering 1,004,720 employees. Furthermore, a number of male dominated workforces have also elected to introduce a variety of initiatives in relation to anti-domestic violence in their workplaces. For example, DP World Australia, who have over 2,000 employees of which 93% are male, have become a White Ribbon Accredited Workplace since November 2015.

It is interesting to note that the ACTU proposal allows both the victim and perpetrator of domestic violence to access the leave. This has caused significant controversy. A number of critics have complained that under the ACTU proposal, employers would be paying for perpetrators to take leave. However, Mr Simon Earle, CEO of METL, a large maritime training organisation which has as little as 2% to zero female employees argued that allowing perpetrators access to the leave may be part of the solution if it allows them to seek assistance and helps to stop the violence.

There are also a number of state governments considering the introduction of such leave for their public state workers. In particular, on 1 December 2016 the Industrial Relations Act 2016 was passed by the Queensland Parliament. It introduces significant changes to the industrial relations regime for Queensland state and local government employees including up to 10 days paid leave per year for victims of domestic and family violence. Additionally, the Council of Australian Governments (“COAG”) met on 9 December 2016 where a number of State leaders voiced their support for employers to provide appropriate workplace support to employees experiencing family violence. In this regard, they have agreed to review this issue at the next COAG meeting following the Commission’s final decision on the matter.

It is clear there is a marked shift in what the community may expect from their employers and many responsible employers are voluntarily incorporating domestic violence measures in their policies. It remains to be seen whether it will become a requirement rather than a voluntary choice.

We advise employers to consider what their organisation can do to assist employees affected by domestic violence. This may include the introduction of miscellaneous leave or domestic violence leave; initiatives designed to reduce the stigma associated with domestic violence; access to employer-funded employee assistance counselling programs; and the creation of a supportive and positive culture within the business. Employers should consider appropriate workplace training and the introduction of workplace policies in relation to how your organisation may support people involved with domestic violence and the process surrounding requests for flexible working arrangements.

If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to your employment relations framework, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

Turning Over a New Leaf: New Year’s Resolutions for HR Managers

Happy 2017! The start of a new year is usually a time many of us reflect on what we would like to achieve in our personal lives in the year to come. However, many of us don’t take the time to reflect on our work or professional lives in the same way. With the new year in full swing, we thought now was a perfect opportunity to consider some of the leading themes emerging in the employment law arena already this year, with a view to discussing some of the steps you can take to ensure your business stays on the right track.

Contract and Remuneration Reviews

It is important for businesses to consistently review their staff employment contracts to ensure they are still relevant to the employee’s position and are up to date with changing laws. This can be especially noteworthy if you have an employee who has been with the business for a substantial amount of time or whose employment has significantly evolved through the expansion of duties or a change in position. In this regard, employers should check that contractual terms are up to date and accurately reflect the level or seniority of the employee’s position, and consider if appropriate contractual measures are in place such as restraint of trade obligations and gardening leave provisions, to protect confidential business information and the company’s legitimate commercial interests.

Furthermore, in light of a recent decision handed down by the Western Australia Industrial Relations Commission, employers should also carefully review annualised salary arrangements for their salaried employees. This has become increasingly important following the decision of Magistrate Cicchini in Stewart v Next Residential Pty Ltd [2016] WAIRC 00756, which concerned Ms Stewart who was employed by Next Residential Pty Ltd (“Next Residential”) as an Administration Coordinator on a salary of $78,000 per annum. In the proceedings, Ms Stewart claimed Next Residential failed to pay her overtime and compensate her for working through her lunch breaks which amounted to backpay of $28,984, as required by the relevant award, being the Clerks Private Sector Award 2010. However, according to the contract the annual salary was intended to be inclusive of any award provisions and entitlements that may be payable under an award or industrial instrument. Next Residential argued that Ms Stewart was not directed to work overtime or through her lunch breaks and this was done on her own initiative. Next Residential also submitted that any additional hours worked were offset against early finishes, late starts and greater flexibility in working hours generally.

In his decision, Magistrate Cicchini found against Next Residential on the basis that Ms Stewart’s employment contract was uncertain in its terms and did not clearly indicate that the annual salary included overtime, penalty rates and the like. As such, it was held that Ms Stewart’s claim was not excluded by her employment contract and could proceed as an underpayment of wages claim. This decision highlights the importance of drafting clear employment contracts and in particular specifying the terms and provisions of any applicable modern award which are intended to be satisfied by an “all-up” annualised salary approach. To avoid any doubt, it is advisable that employment contracts identify the specific modern award provisions intended to be covered by an annualised salary clause.

Cashing Out of Annual Leave Procedures

In July 2016, the Fair Work Commission brought into effect a change that allows annual leave to be cashed out under most modern awards. The newly implemented changes mean that employees covered by a modern award that contains a cashing-out clause, can now cash out up to 2 weeks’ annual leave in any 12 month period, as long as they have not less than four weeks’ accrued annual leave remaining, and the agreement is formalised in writing between the employee and employer.

Under the new regime, employees can now also direct employees who have excessive annual leave, to take one or more weeks paid annual leave on the basis that the remaining annual leave entitlement is not less than six weeks. Before issuing the direction, an employer must first meet with the employee to try and agree on a plan to reduce the excessive leave accrual.

In addition, the change also allows an employer and employee to agree to paid leave in advance of the employee actually having accrued the entitlement to take the leave. Any such agreement must be recorded in writing.

If, however, the applicable modern award is silent on this issue, the employee will notbe entitled to cash-out their accrued leave and any agreement to do so will be a breach of the Fair Work Act 2009 (Cth) and the modern award. In addition, if the moderns award does not allow an employer to direct an employee to take leave or deal with the leave as set out above, the employer will not be entitled to do so.

For employers who have annual leave policies already in place, we recommend these policies be carefully reviewed to reflect the new reforms. Likewise, employers who do not have an annual leave policy in place should consider implementing a clear and well-worded policy that is suited to business needs and deals with the annual leave process and the ability to cash out annual leave. Employers should also review any relevant provisions in their employment contracts in order to ensure the contract reflects the changed provisions and/or any revised workplace policies.

Thinking About Redundancy for Small Business Employers

The new year is often a time of year where businesses re-evaluate their goals and budgets as they come into the second half of the financial year. Accordingly, employers should be aware of the requirements surrounding redundancy, specifically if you are a small business.

As a general rule, a small business employer is not required to pay redundancy pay, however there are some circumstances where a small business may be required to make these payments. A ‘small business employer’ is defined in section 23 of the Fair Work Act 2009 (Cth) as an employer who employs fewer than 15 employees at that time.

If your organisation falls within the definition of a ‘small business employer’ then you should be aware however, that there are a small number of modern awards that require a redundancy payment to be made to employees working within particular industries. The payment is calculated on a sliding scale typically outlined in the relevant modern award, and is less than the minimum scale under the National Employment Standards. Commonly, the scale for such payments is as follows:

o    Less than one year’s continuous service – Nil

o    At least 1 year but less than 2 years continuous service – 4 weeks pay

o    At least 2 years but less than 3 years continuous service – 6 weeks pay

o    At least 3 years but less than 4 years continuous service – 7 weeks pay

o    At least 4 years and over of continuous service – 8 weeks pay

In addition, small business employers should also note that industry-specific redundancy schemes may apply to all employers covered by certain modern awards, including small business employers. If you are a ‘small business employer’ we recommend a review of the modern awards applicable to your business to ensure that all redundancy obligations are met when carrying out change management or restructuring activities.

Paid Parental Leave and Supporting Working Parents

An astoundingly 4.1 million or nearly two in five employees are said to be either parents of a child under 15 years old or have caring responsibilities. It is for this reason that it is vital employers understand their obligations relating to pregnant employees, employees on parental leave and working parents.

We recommend businesses review their internal policies and procedures in this regard and ensure your organisation has adopted an updated pregnancy policy. As a way to assist both employers and employees, the Australian Human Rights Commission has recently released a new website to promote the mutual understanding of rights and obligations in the workplace around pregnancy, parental leave and returning to work which may assist your business establish strong foundations and compliance in this area.

Furthermore, the Federal Government has sought submissions regarding the Fairer Paid Parental Leave Bill 2016 (Cth) which will prevent new parents from “double dipping” into paid parental leave. The consequence of this Bill being passed is that parents will not be able to claim paid parental leave from both the government’s scheme and their separate employer. As a result, employers should review paid parental leave policies and the benefits offered to employees when the change takes place.

If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment law issue this year, please do not hesitate to contact us. Otherwise, we wish all our readers all the best for a successful and productive 2017!

This alert is not intended to constitute, and should not be treated as, legal advice.

Exploitation of Migrant Workers: A Systemic Issue

According to a report released by the Senate Education and Employment References Committee entitled “A National Disgrace: The Exploitation of Temporary Work Visa Holders” dated 17 March 2016 there are approximately 1.4 million temporary visa holders working in Australia who are covered by the national Fair Work system. Startlingly, many visa holders experience a significant amount of employment mistreatment. The Fair Work Ombudsman, Natalie James, recently observed that migrant worker complaints of mistreatment have soared in recent years, and sponsorship breaches were often deliberate acts of exploitation by unscrupulous employers. Similarly, Professor Allan Fels of the newly appointed Federal Government Ministerial Taskforce (“the Taskforce”) established to protect migrant workers commented that the exploitation of migrant workers in Australia was “systemic” and “deeply embedded in the practices of some businesses”.

In some of the worst cases of migrant worker exploitation, it has been reported that foreign workers have had their passports confiscated by employers, been provided accommodation sleeping up to eight people and forced to work from very early hours of the morning without any employment documentation. In addition they face exorbitant wage deductions for rent, food and other expenses. In another study completed in October 2016 entitled “The Economic Migration and Australia in the 21st Century”, the following findings were noted as reasons why migrant workers are vulnerable to mistreatment and exploitation in Australia:

  • workers on 457 and international student visas employed by members of their own immigrant country, who they may depend on for employment opportunities and information about their rights, are susceptible to underpayment of wages;
  • some visa arrangements create conditions where migrant workers can become dependent on unscrupulous employers and that discourage migrant workers from seeking redress. For example, 457 temporary skilled visa workers have limited mobility between employers in that they now face a 60-day limit to finding another sponsored job;
  • Temporary migrant workers are denied many social rights, such as public health care and student concessions which is seen to likely increase the cost of living. This in turn potentially prompts them to work lengthy hours and in some cases in contravention of visa conditions to meet the cost of living. In these situations, they are unlikely to report employment law breaches; and
  • new immigrants are not provided with information on their minimum workplace rights on arrival.

In light of these enquiries and high profile cases such as the 7-Eleven underpayment of wages scandal, where franchisees were discovered paying as little as $5 per hour to workers, new measures are being introduced with the cooperation of the Fair Work Ombudsman to rectify the increased exploitation of vulnerable foreign workers. This includes more rigorous investigations being carried out across a number of selected industries including agriculture, retail and hospitality amongst others. The exploitation of foreign workers has made the issue one of public importance and as a result there is a greater level of scrutiny more generally, which may affect all employers who either wittingly or unwittingly are failing to ensure they are paying their workers correctly.

As is already evident, the Fair Work Ombudsman has prosecuted numerous employers for modern award contraventions as well as wilful breaches of employee visa conditions. In a recent decision in Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290, the Yogurberry frozen yoghurt chain was penalised over the exploitation of four Korean workers at one of its Sydney outlets in a precedent-setting Federal Court judgment. In this decision, for the first time the Fair Work Ombudsman secured heavy penalties against the Master Franchisor for being an accessory to the exploitative practices of one of its associated companies. In summary, this case concerned four Korean workers on 417 working visa. They were all paid as little as $8 an hour while working at a Yogurberry outlet at the World Square Shopping Centre in the Sydney CBD, leading to total underpayment of $17,827. The workers also did not receive a special clothing allowance as required by the relevant Modern Award, or superannuation entitlements and three of them had unlawful deductions made from their wages.

As a result of the proactive use of the accessorial liability provision in the Fair Work legislation by the Fair Work Ombudsman, Justice Flick found that the head Australian company and Master Franchisor of the Yogurberry chain, YBF Australia Pty Ltd (“YBF”) was directly involved in the contraventions. Justice Flick also found that YBF and its associated companies had deliberately not disclosed information about the financial position of the business to the FWO. As a result of these contraventions, the Court penalised three companies within the Yogurberry Group of companies operated under the same family as follows:

  • Yogurberry World Square Pty Ltd, which directly employed the workers was penalised $75,000;
  • YBF Australia Pty ltd was penalised $25,000; and
  • the Yogurberry Group’s payroll company, CL Group Pty Ltd was penalised $35,000.

In addition, YBF’s part owner Ms Soon Ok Oh was personally penalised $11,000 for her involvement in exploiting the migrant workers. Furthermore, the Court ordered the Yogurberry Group of companies to commission a professional external audit of all Yogurberry stores in Australia. It was also ordered to rectify any underpayments discovered as well as implement workplace relations training for its managers. Yogurberry was also ordered to pay the Fair Work Ombudsman’s legal costs.

The Fair Work Ombudsman has recently flagged that it intends to pursue companies and directors under the accessorial liability provisions. This decision should send a strong message to employers and individuals in management that they can be held accountable through the accessory liability provisions of the Fair Work Act 2009 (Cth) for exploitation of workers in their organisations. It also demonstrates the ability of the Court to look behind the corporate veil to impose penalties on associated entities who have turned a blind eye to inappropriate practices.

Consistent with this approach, the Fair Work Ombudsman has proposed the introduction ten-fold increases in the penalties applicable to employers who underpay employees and who fail to keep proper employment records as well as proposing new laws to capture franchisors that fail to deal with exploitation of workers by their franchisees. Moreover, the Taskforce has indicated that several other aligned government agencies, such as the ATO, ASIC and the Department of Immigration have also affirmed their commitment to the following priority areas:

  • better communication with visa holders;
  • stronger measures to prevent workplace exploitation and ensure adequate redress when it occurs;
  • more effective enforcement, including adherence to visa restrictions, but with greater emphasis on compliance by employers; and
  • ensuring policy frameworks and regulatory setting meets necessary objectives.

The issue of migrant worker exploitation emphasises the importance for employers to comply with modern award requirements and ensure they are seeking to conduct themselves in a manner that is in keeping with the requirements of any visa restrictions applicable to foreign workers. In this regard, we recommend that all employers regularly undertake an audit of their modern award compliance and visa restrictions to ensure they do not have any actual or contingent liability.

If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment law issue, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

Age, Why Should It Matter at Work?

It is no secret that the composition of Australia’s population is much older today than it has been in the past, and both the number and proportion of older people is growing steadily. In 2014, the number of people aged 65 and over was 3.4 million, a three-folder increase on the decade prior. This trend is expected to continue, particularly as the “baby boomer generation” ages. Based on population projections by the Australian Bureau of Statistics, by 2064 there will be 9.6 million aged 65 and over, and 1.9 million aged 85 and over. Against this demographic background and the increase in sophisticated technologies, the government has made it a financial imperative to lift employment participation rates and boost productivity including by offering incentives to employers who employ older people. The only problem is that the definition of an older worker seems to be getting younger, as employers tend to implement cost cutting measures by shedding older workers through redundancy and other change management programs.

The issue of age discrimination according to the Federal Government Willing to Work Inquiry in 2015 noted that Australian companies are less likely to employ or promote older workers due to false perceptions that they are resistant to change and “won’t fit in”. This finding, as warns the then Age and Disability Discrimination Commissioner, The Honourable Susan Ryan AO, is a huge problem facing Australia. Many employers who still harbour deep prejudices that older workers are less productive and refuse to learn new systems, especially IT systems, can expect to face claims of age discrimination.

Not only does the issue of age discrimination create a very real risk for employers but it is also creates a wider social crisis. Older Australians who are unable to work are now facing real risks of poverty, lack of housing and suicide.

The Legal Landscape

From a purely legal perspective, discrimination on the basis of age in employment is prohibited under several pieces of State and Federal legislation and in particular the Age Discrimination Act 2004 (Cth) (“the ADA”). In this regard, the ADA broadly provides that an employer must not discriminate against a person on the grounds of age in the following circumstances:

(a)     in the arrangements made for the purpose of determining who should be offered employment; or

(b)     in determining who should be offered employment; or

(c)     in the terms or conditions on which employment is offered; or

(d)     in determining whether the employee can access opportunities for promotion, transfer or training, or for any other benefits associated with employment;

(e)     by dismissing the employee; or

(f)      by subjecting the employee to any other detriment.

However, there is an exemption to discrimination on the basis of age where the employee would be unable to carry out the inherent requirements of their employment because of his or her age. In determining whether it is lawful then to treat a person less favourably based on age, in circumstances where such treatment would otherwise be unlawful, the following factors apply:

(a)     the person’s past training, qualifications and experience relevant to the particular employment; and

(b)     the person’s performance as an employee;

(c)     the person’s actual ability to perform the inherent requirements of the role (rather than the perceived ability) and

(d)     all other relevant factors that may be reasonable to take into account.

In addition, the Fair Work Act 2009 (Cth) (“FW Act”) provides that an employer must not take adverse action against an employee or prospective employee because of their age (or any other protected attribute, such as race, sex, disability). Adverse action includes such things as dismissing an employee, altering an employee’s position to

their detriment or refusing to employ or promote a prospective employee.

A recent survey known as the National Prevalence Survey (2015) (“the Survey”) found that age discrimination is becoming more rampant in Australian workplaces and therefore it is more likely Courts and Industrial Tribunals will be tasked to deal with such complaints. In summary, the Survey concluded:

  • 58% of those who looked for paid work reported they were a target of discrimination because of their age compared to 28% of those who worked for a wage or salary, and 26% who were self-employed;
  • 41% of those on an income of $35,000 or less reported that they experienced some form of discrimination, compared to 20% of those earning more than $150,000;
  • 32% who had participated in the workforce in the last two years, reported that they were aware of other workers aged 50 years or older experiencing age discrimination, and of those 10% believed that it occurred all the time, and 46% said that it occurred frequently;
  • 33% of managers aged 50 years and over reported that they took an employee’s age into consideration when making decisions, while 34% of managers had experienced age discrimination themselves.

A Stern Warning to Employers

In light of these findings, there have already, unsurprisingly, been significant decisions dealing with the issue of age discrimination handed down by Australian judicial bodies. Most notably, the Federal Circuit Court in Fair Work Ombudsman v Theravanish Investments Pty Ltd & Ors [2014] FCCA 1170 involved proceedings commenced by the Fair Work Ombudsman against the employer (and company directors individually) of Mr Cheng Peng Lee, who was told his employment would be terminated on his 65th birthday. In this case, the restaurant operators wrote to Mr Lee stating that company policy was not to employ staff who attain retirement age, which in the employee’s case was 65 years. The employee responded by pointing out that the threatened termination of his employment was irrefutably an act of age discrimination and lodged a complaint with the Fair Work Ombudsman. As a result of a consequential investigation and prosecution by the Fair Work Ombudsman, the company was fined a total of $29,150 for contraventions of the ADA. In addition, the joint directors of the company were penalised a further $4,180 each and were ordered to pay the employee $10,000 in compensation. In his decision, Justice Burnett observed that:

“Discriminating against workers because of their age can have a terrible impact on their self-respect and dignity and deprive them of an equal opportunity to make a positive economic benefit to the company and the wider community.”

Benefits of Employing Mature Age Workers

Contrary to public perceptions that mature-aged workers’ are less productive and unlikely to respond positively to change, the Federal Governments Willing to Work Inquiry reported that businesses and employers benefit from promoting human rights and preventing discrimination within their organisations. Proven benefits include access to a larger talent pool, increased productivity, improved job satisfaction and customer engagement, higher rates of retention of talent, and avoiding costs (including reputational) associated with complaints of discrimination. Further, the report highlights that many businesses and employers with good practice examples and leading strategies to facilitate and promote the participation of older workers benefited from having diverse workplaces.

In addition, in recognition of the important role and experience mature age workers bring to the workplace, the Australian Federal Government has introduced the “Restart Wage Program”, a wage subsidy payment of up to $10,000 (GST inclusive) if an employer employs a mature age job-seeker for 12 months or more. To receive this financial assistance, an employer will need to employ an active mature age job-seeker who satisfies the following criteria:

  • is 50 years of age or older;
  • has been on income support for six months or more; and
  • is registered with a jobactive or Disability Employment Services or Community Development Programme provider.

Tips for Employers

Employers have a legal responsibility to take all reasonable steps to prevent age discrimination. Such steps may include implementing workplace training and putting in place policies and procedures to create a discrimination-free working environment. Employers should also consider gathering information to help better understand the composition of their workforce and should promote age diversity within teams to encourage a variety of perspectives, experiences and skills.

If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment or industrial law issue, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

Flexible Working Arrangements – How Flexible Should Employers Be?

Requests by employees for flexible working arrangements have become more and more popular since the introduction of this right as part of the National Employment Standards. Traditionally, such requests were most common amongst working mothers and employees with carer responsibilities. Nowadays it is common for all types of employees to utilise flexible working arrangements for a variety of different reasons. In our experience, many employers are more than willing to consider and, where they are able to do so, accommodate requests for flexible working arrangements. In some cases, however, the operational demands of the business simply do not permit an employer to agree to such requests. In these circumstances, an employer can refuse a request for flexible working arrangements on reasonable business grounds. In this week’s alert, we examine the formal requirements under the Fair Work Act 2009 (Cth) (“FW Act”) to deal with a request for flexible working arrangements and the potential risks of declining a proper request without proper reasons.

In order to understand the required decision-making process employers should follow when determining a request for flexible working arrangements, it is imperative to note that such requests may cover an array of employment matters, including but not limited to:

  • hours of work (e.g. changes to start and finish times);
  • move from full time to part-time work;
  • patterns of work (e.g. split shifts or job sharing); or
  • locations of work (e.g. working from home).

Employees who have been employed with the same employer on a continuous basis for at least 12 months are eligible to make a request for flexible working arrangements provided that they:

  • are the parent, or have responsibility for the care, of a child who is school aged or younger;
  • are a carer (under the Carer Recognition Act 2010);
  • have a disability (and are qualified for a disability support pension under the Social Security Act 1991);
  • are over 54 years of age;
  • are experiencing family or domestic violence; or
  • provide care or support to a member of their household or immediate family who requires care and support because of family or domestic violence.

Notably, casual employees who have been working for the same employer for at least 12 months can make a request for flexible working arrangement where they have worked “regularly and systematically” over the relevant period, and have a reasonable expectation of continuing work with the employer on a regular and systematic basis.

If an employee is eligible to request flexible working arrangements, they are required under the FW Act to make any such request in writing and to set out the details and reasons for the changes requested. An employer in receipt of a request for flexible working arrangements must provide a written response to the employee within 21 days, stating whether the request is approved or refused. Employers may refuse a request only on “reasonable business grounds”, and in accordance with section 65(5) of the FW Act, are required to provide written reasons for the refusal.

There is currently no definition of “reasonable business grounds” for the purposes of refusing a request in the FW Act. However, the explanatory memorandum to the FW Act provides the following examples of what may constitute a reasonable basis for refusal:

  • the effect on the workplace and the employer’s business of approving the request, including the financial impact of doing so and the impact on efficiency, productivity and customer service;
  • the inability to organise work among existing staff; and
  • the inability to recruit a replacement employee or the practicality or otherwise of the arrangements that may need to be put in place to accommodate the employee’s request.

Importantly, there is no general internal enforcement or appeal mechanism for employees to challenge a refusal of a request for flexible working arrangements. Section 44 of the FW Act specifies that no civil remedy is available where the employer’s refusal is based on reasonable business grounds. However, employees who seek to challenge the decision of their employer, can apply to the Fair Work Commission to deal with a dispute in circumstances where:

  • the employer and the employee have agreed in a contract of employment, enterprise agreement or other written agreement for the Commission to deal with a dispute in relation to their employment; or
  • the terms of an applicable enterprise agreement have the same (or substantially the same) effect as section 65(5) of the FW Act in relation to the operation of flexible working arrangements.

Whilst there may be limited circumstances in which an employee can challenge their employer’s decision to refuse a request for flexible working arrangements, by seeking redress from the Fair Work Commission, the employee may be able to commence other proceedings including:

  • a discrimination claim under either State or Federal jurisdiction; or
  • a claim for breach of the General Protection provisions of the FW Act.

It is therefore essential that employers have a valid and reasonable basis on which to decline such a request. It is important that employers keep appropriate documentation of the decision making process, particularly where they decline a request. Amongst other things, an employee may seek to claim that the refusal of a request for flexible working arrangements was in some way connected to the exercise of a workplace right, that is, the right to make the request in the first place (or other exercise by the employee of a workplace right), or that the employer’s decision amounts to a breach of anti-discrimination legislation on the basis that the denial of the request was not based on reasonable business grounds. The employee may seek to argue that the refusal of the request was actually based on discriminatory grounds protected at law. In order to defeat such claims, an employer would be greatly assisted if it could rely on clear and carefully written documentation setting out the decision-making process undertaken in responding to the employee’s request for flexible working arrangements.

In light of the above, employers should only consider refusing a request for flexible working arrangements where they have genuine and legitimate operational reasons for doing so. In responding to an employee’s request, employers must ensure that they comply with the formal procedural requirements contained in the FW Act, any applicable enterprise agreement, and the protocols of any policy which apply in relation to workplace flexibility.

We regularly advise employers on workplace flexibility matters including dealing with requests for flexible working arrangements. If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment law issue, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

Case Note: The Power of Redeployment in a Redundancy Context

Adcock v Blackmores Limited & Ors [2016] FCCA 265

Background

This case concerned an application by Mr Adcock, the former Commercial Manager (Asia) of Blackmores Limited (“Blackmores”) a publicly listed company which produces and sells a range of natural healthcare products, who sought compensation in excess of $140,000 on the basis that his employer dismissed him by refusing to recognise that his position was redundant and had repudiated his contract of employment by failing to pay him redundancy entitlements under an enterprise agreement. In addition, Mr Adcock claimed that Blackmores’ HR personnel knowingly or otherwise reckless misled him as to his workplace rights, namely that he was entitled to redundancy pay.

Mr Adcock submitted to the Federal Circuit Court of Australia that Blackmores, in addition to its express contractual obligations, owed implied duties to him including to exercise any decisions:

  1. in good faith;
  2. reasonably;
  3. with proper regard to his interests;
  4.  in a manner that was not capricious, arbitrary or unreasonable; and
  5.  fairly and impartially.

Mr Adcock claimed that in a meeting in July 2014, he was informed that his role would be impacted as part of Blackmores regional reorganisation to its business and his responsibilities would be allocated elsewhere. Mr Adcock was offered other alternative roles within the business. Mr Adcock subsequently informed Blackmores that he would not be accepting any of the alternative positions suggested to him for redeployment and requested calculations of his termination and severance entitlements.

Discussion

Justice Cameron observed that the evidence was uncontroversial insofar as Mr Adcock’s role being made redundant because it was abolished as part of a corporate restructure by Blackmores.

However, the evidence further demonstrated that Blackmores offered Mr Adcock numerous options for redeployment, including a Financial Controller role and Business Implementation Manager position among others, none of which he accepted, despite Mr Adcock conceding was part of the significant efforts by his employer to retain his services.

Despite the exploration of several redeployment options, Mr Adcock requested payment of his termination and severance benefits on the basis that none of the alternative roles suggested by Blackmores were acceptable to him. The Court noted that Blackmores, however, offered Mr Adcock a number of acceptable alternative positions which he declined. At trial it was conceded by Mr Adcock that these roles were genuine job offers which he could have performed.

Findings

One of the major issues in these proceedings was whether Blackmores dismissed Mr Adcock by what was alleged as repudiatory conduct by making his position redundant, amounting to a constructive dismissal. It was ultimately found by the Court that Mr Adcock failed to prove that the redundancy of his position, without more, amounted to the termination of employment. Mr Adcock did not seek to prove that the alternative positions offered to him were not suitable and as such amounted to repudiatory conduct on the part of Blackmores.

The Court rejected Mr Adcock’s claim that his employment was terminated by Blackmores’ action in making his role redundant. In essence, Justice Cameron found the Commercial Manager repudiated his own contract by telling Blackmores in September 2014 that he would no longer be attending for work thereby effectively abandoning his employment. The Court found that in circumstances where a contract of employment allowed for a change of duties, and an employer offers an employee alternative roles on the redundancy of the role they were previously performing, the redundancy of that role on its own is insufficient to amount to a termination of employment. It was open for Blackmores to make Mr Adcock’s role redundant and offer suitable alternative employment. The court found that it was Mr Adcock’s refusal to accept the alternative roles and not attend for work that brought the contract of employment to an end.

Further, the Court found that Mr Adcock was not misled as to his workplace rights and dismissed the application against Blackmores.

Learnings

Of notable relevance in this case is the fact that the process of genuine redeployment and the provision of suitable alternative roles being offered to Mr Adcock essentially prevented a finding against Blackmores that the mere redundancy of his position triggered dismissal and breach of his employment contract. This is significant as under section 120 of the Fair Work Act 2009 (Cth) an employer can apply to the Fair Work Commission for an order to reduce the amount of redundancy pay to an employee (including to nil) in circumstances where suitable alternative employment has been offered as part of a restructure.

The case also highlights the need for properly drafted employment contracts allowing an employer to alter the position and duties of its employees. In this case the existence of such a clause meant that the Court was unable to conclude that the redundancy of Mr Adcock’s role automatically meant the employment came to an end, given it was able to change his position and duties, which it sought to do.

Following last week’s client alert regarding change management and making redundancies in an unstable economy, this important decision serves as an important reminder to employers to genuinely consider and fulfil their redeployment obligations.

This alert is not intended to constitute legal advice. If you have an employment law issue, please do not hesitate to contact us for specialist advice or assistance.

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