Workplace issues and the 7-Eleven scandal

In light of the recent 7-Eleven scandal surrounding the exploitation and underpayment of its workers, the Chairman and Chief Executive Office of 7-Eleven have announced their resignations.

The lesson to be learned by all employers, regardless of the size, scope or structure of their business, is that there are significant financial and non-financial consequences for employers who breach their obligations to employees.

Regardless of their visa or residency status, employees in Australia are entitled to basic rights, such as payment of minimum wages. The minimum wage and working conditions for an employee will depend on their age, position, experience and the area of work in which they practice.

The minimum wage for employees can be found in an applicable modern award, enterprise bargaining agreement or employment contract.

An investigation into the 651 separate 7-Eleven franchises across Australia has found that franchisees were paying their workers, many of whom were on temporary working visas, half the minimum wage.

When an employer breaches their obligations under the relevant instrument, be it an award, agreement or employment contract, its past and present employees have several avenues available to them in order to recover lost wages, including;

• Lodging a dispute application to the Fair Work Commission;
• Filing a Workplace Dispute application with the Fair Work Ombudsman; and
• Taking legal action in either a State or Federal court with jurisdiction.

Such processes are often highly stressful, lengthy and expensive for employers to defend and employers risk significant penalties for breaching their obligations.

It is not only international workers that are vulnerable to exploitation, with the Fair Work Ombudsman receiving almost 600,000 enquiries per year, more than 150,000 of which are complaints regarding underpayments.

If you have received a complaint from an employee in relation to an underpayment, act quickly and repay any monies owed before the matter is escalated to the next level.

Nevett Ford lawyers are specialised in all areas of workplace relations and can advise you on your obligations in relation to payment of entitlements, as well as defending any underpayment complaints and actions.

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Even a small mistake can have big consequences for employers

 

Coffey Projects (Australia) recently learned the hard way that there are serious consequences with providing employees incorrect information in relation to their workplace rights and entitlements.

 

Despite employing a Human Resources manager, Coffey Projects relied on outdated policies that did not reflect amendments to the Fair Work Act 2009 (Cth) and provided an employee with incorrect information about his parental leave entitlements. 

 

The outdated policy incorrectly stated that parental leave was only available to “primary” caregivers. As he believed he was not entitled to parental leave, the employee took a combination of annual leave and unpaid leave in order to care for his newborn twins.

 

When he was due to return to work, he was only offered part-time hours and later made redundant. The employee successfully argued that had he been provided the correct advice, he would have applied for parental leave which guaranteed his right to return to work on a full-time basis. He then would have been entitled to be paid out his entitlements as if he were a full-time rather than a part-time employee. Coffey was order to pay the difference between these amounts being $109,000.

 

The outdated policy was in breach of the National Employment Standards and as a consequence, Coffey was ordered to pay their former employee almost $170,000 consisting of unpaid wages and redundancy pay which he would have received had he been granted parental leave. 

 

Although the Court found the employer did not act recklessly or knowingly, it was still penalised and ordered to pay an additional penalty of $8,800.

 

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The Standard Employment Contract: A Cautionary Tale

 

It really is a case of ‘buyer beware’ with many business owners downloading or buying standard employment contracts and templates online in an effort to save time and money.

 

Small businesses with limited human resources training are turning to Google and other search engines instead of an employment lawyer.

 

Unfortunately, these standard templates are often outdated and in contravention of the Fair Work Act 2009 (Cth).

 

Some documents offer less benefits than the employee is entitled to receive and do not provide an employer with adequate protection from breach of contract or unfair dismissal claims.

 

The implication for employers includes the risk of penalties of up to $50,000 by the Fair Work Commission for breaching the minimum National Employment Standards.

 

An employment contract should provide employees with the correct leave entitlements and include all important details such as location and hours of work as well as notice requirements in the event of termination.

 

A properly drafted contract will ensure both parties are fully aware of their rights and in relation to leave entitlements and their obligations at the end of the employment relationship. 

 

Do the right thing by your business and your employees and contact an employment lawyer to review your employment contracts and ensure your business is protected from penalties.

 

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Did you know that as an employer, you can be held responsible for your workers even when they are not working?

 

The Fair Work Commission recently heard a case in which three employees sought an order to stop bullying at their workplace. Their employer, DP World Maritime Limited, sought to strike out their application on the basis that the bullying behaviour took place when the employees were not ‘at work’.

Numerous employees had engaged in telephone calls and Facebook messages concerning their colleagues’ union memberships and made derogatory comments to and about them. These exchanges took place both during and outside of office hours in several locations both in and outside of the workplace.

 

The Commission had to consider the definition of the expression ‘while the worker is at work’ and what it encompassed. The Commission concluded that the concept of being ‘at work’ includes instances in which the employee is performing work and also when they are engaged in any other activity permitted by their employer, such as taking a meal break. The meaning is not confined to the workplace and includes any location or time of day when they are performing work. 

 

In this case, the Full Bench held that the behaviour took place while the employees were ‘at work’ leaving their employer at risk of liability for their actions.

 

If allegations of bullying have been made in your business, contact Nevett Ford Melbourne on (03) 9614 7111 and ask to speak to one of our workplace relations team about protecting yourself from legal action.

 

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When does a workplace entitlement becomes a contractual right?

 

An employer who failed to follow its own workplace policies has been successfully sued for breach of contract in the Full Court of the Federal Court.

 

The applicant in this case was a second officer on a supply ship and employed by the respondent, Farstadt Shipping (Indian Pacific) Pty Ltd. 

 

Like most employers, the respondent had a Workplace Harassment and Discrimination Policy in place which set out the procedure for dealing with complaints. When the applicant made a complaint of sexual discrimination, these procedures were not followed.

 

The Court had to determine whether the workplace policy formed part of the applicant’s employment contract for the purposes of establishing whether there had been a breach of contract.

 

It was found that the policy did form part of the employment contract, binding the employer to its obligations to investigate complaints in accordance with its established procedures.

 

It was successfully argued that the employer failed to follow its own policies and in failing to comply with them, breached its own employment contract.

 

The employer was found to have breached the contract and ordered to pay the applicant’s costs.

 

While it is important to ensure your business has policies in place on issues such as bullying and harassment or drugs and alcohol, employers should ensure these policies do not form part of their employment contracts, lest they become a binding upon you.

 

To have your contracts reviewed, ensure their compliance with the legislation and minimise risk to you as an employer, contact Nevett Ford on (03) 9614 7111.

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Pitfalls of lack of process

Earlier this year, two cases heard in the Fair Work Commission demonstrated what can occur when proper process is not followed relating to termination of employment

 

In Lyberopoulos v Reidwell Investments BT Pty Ltd T/A Coco Cubano Blacktown [2015] FWC 4256, the employee was employed for less than seven months before she was summarily dismissed.  

 

The employer claimed she failed to comply with their procedures and did not follow directions. The parties contested the facts of the case and Senior Deputy President Drake had to determine whom to believe. She accepted the employee’s evidence over the employer’s because the employer did not seem to be a credible or reliable witness.

 

The Commission found that the employee was not appropriately warned that her actions may lead to the termination of her employment and the reasons for her dismissal were therefore harsh, unjust and unreasonable.

 

As the employee was unable to obtain alternative employment until 24 weeks and three days following the termination of her employment, Deputy Senior President Drake ordered that the employer pay compensation to the value of 24 weeks and three days’ worth of the employee’s salary, being $36,267.

 

In Balatti v Aussie Supplements Pty Ltd [2015] FWC 4674 the employee had been working as a sales manager for three years when he received a telephone call from his employer alleging he was being investigated for the sale of illegal drugs whilst at work. The employee was advised he would be dismissed from his employment and, several days later, received a letter confirming his immediate dismissal. The employer then failed to pay the employee’s accrued statutory entitlements upon termination, such as annual leave, and failed to participate in a conciliation conference and hearing before the Fair Work Commission. Commissioner Cambridge found the dismissal harsh, unjust and unreasonable because the employer advised the employee of his termination by telephone and the letter of dismissal did not provide any reasons for the dismissal. As a consequence, the employer was ordered to pay $17,880.

 

Under section 117 of the Fair Work Act 2009 an employer is obliged to provide notice of termination in writing.  But as the decision in Clark v Framlingham Aboriginal Trust [2012] FWA 7103 shows, the failure to provide written notice does not make a termination ineffective if the employee has been notified (by whatever means) that his employment has been terminated.

 

Melita Demirova

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Workplace Bullying - Can a business be responsible for bullying outside of work hours?

The Fair Work Commission recently heard a case in which three employees sought an order to stop bullying at their workplace. Their employer, DP World Maritime Limited, sought to strike out their application on the basis that the bullying behaviour took place when the employees were not ‘at work’.

Numerous employees had engaged in telephone calls and Facebook messages concerning their colleagues’ union memberships and made derogatory comments to and about them. These exchanges took place both during and outside of office hours in several locations both in and outside of the workplace.

The Commission had to consider the definition of the expression ‘while the worker is at work’ and what it encompassed. The Commission concluded that the concept of being ‘at work’ includes instances in which the employee is performing work and also when they are engaged in any other activity permitted by their employer, such as taking a meal break. The meaning is not confined to the workplace and includes any location or time of day when they are performing work. 

In this case, the Full Bench held that the behaviour took place while the employees were ‘at work’ leaving their employer at risk of liability for their actions.

If allegations of bullying have been made in your business, contact Nevett Ford Melbourne on (03) 9614 7111 and ask to speak to one of our workplace relations team about protecting yourself from legal action.

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Workplace Policies Traps for Employers

An employer who did not follow its own workplace policies has been successfully sued for breach of contract in the Full Court of the Federal Court.

The worker was a second officer on a supply ship and employed by Farstadt Shipping (Indian Pacific) Pty Ltd. 

Like most employers, the company had a Workplace Harassment and Discrimination Policy in place which set out the procedure for dealing with complaints. When the worker made a complaint of sexual discrimination, the procedures were not followed.

The Court had to determine whether the workplace policy formed part of the employment contract for the purposes of deciding whether there had been a breach of contract.

It was found that the policy did form part of the employment contract, binding the employer to its obligations to investigate complaints in accordance with its established procedures.

It was successfully argued that the employer failed to follow its own policies and, in failing to comply with them, breached its employment contract.

The Court found the employer had breached the worker’s contract of employment and ordered the employer to pay the worker’s costs.

While it is important to ensure your business has policies in place on issues such as bullying and harassment or drugs and alcohol, employers should ensure these policies do not form part of their employment contracts, lest they become a binding upon you.

To have your contracts reviewed, ensure their compliance with the legislation and minimise risk to you as an employer, contact Nevett Ford Melbourne on (03) 9614 7111 and ask to speak to a member of our workplace relations team.

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Solidarity forever? Not quite

 

Solidarity forever? Not quite

 

An inexperienced union official employed for an important project to further the union’s aims was sacked when the union’s leadership discovered that his political opinion was different from theirs.

The official contested his dismissal as a breach of his general protections and was awarded $120,000.00 compensation.

If you want to know more about the decision in Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 27 and read my commentary on it email me at gdoran@nevettford.com.au

The decision demonstrates that employers who dismiss employees for prohibited reasons, which includes an employee’s political opinion, may face substantial claims for compensation and even the imposition of a pecuniary penalty.

Greg Doran

Questions about this article or about employment and workplace matters, our specialist employment and workplace relations team provide advice in all matters related to employment law.

 

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When is a warning not a warning? When it’s a chat

 

When is a warning not a warning? When it’s a chat

 

 

A worker was awarded nearly $29,000.00 in compensation from his employer after the Fair Work Commission found his dismissal for serious misconduct to be harsh and unreasonable: Anderson v Thiess Pty Ltd [2014] FWC 6568.

 

Ronald Anderson, 65, worked for Thiess Pty Ltd in Queensland for over a decade until he was summarily dismissed in June 2013 for forwarding a highly offensive email about Muslim radicals to a group of co-workers using his work email.

 

Thiess based the dismissal on the fact that Mr Anderson had breached the company’s code of conduct and that Mr Anderson had been previously warned about inappropriate use of company email. Thiess also argued that it had many employees of the Muslim faith and that the company did business with Indonesia, a predominantly Muslim country and Mr Anderson’s conduct would damage the reputation of the company.

 

Mr Anderson argued that he was unaware that the email he sent would be grounds for dismissal and that if he had been aware he would not have sent the email. He also argued that other employees had sent offensive or inappropriate emails but had not been dismissed. He also claimed that he was unfamiliar with proper use of email.

 

Although the Commission found that there was a valid reason for the dismissal two actions by Thiess persuaded it that Mr Anderson was still entitled to a remedy. First, an informal chat that a manager had had with Mr Anderson about emails three months before his dismissal was found not to be a warning that put Mr Anderson on notice that a repeat would mean his employment was in jeopardy. (This chat was the warning on which Thiess sought to rely). Secondly, as part of Thiess’ investigation, his immediate manager, had rated Mr Anderson’s behaviour as warranting a warning but this had been overridden by senior management and no consideration was given to suspension.

 

The Commission was also swayed by the fact that Mr Anderson was 65 years old and would have trouble finding future employment. Mr Anderson asked to be reinstated but the Commission accepted Thiess argument that it did not want someone with Mr Anderson’s values as an employee, so compensation was ordered.

 

It is an interesting case because on the face of Mr Anderson’s actions a dismissal could rightly be justified. What let Thiess down and gave Mr Anderson a toe in the door were matters to do with process.

 

Greg Doran

Questions about this article or about employment and workplace matters, our specialist employment and workplace relations team provide advice in all matters related to employment law.

 

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Ready, aim...don't fire!

A small business owner has been fined almost $30,000 for unfairly dismissing an employee.

 

Acupuncture Australia Pty Ltd summarily dismissed a sales assistant for allegedly stealing from the business. The employee had worked for the company for three years when the managing director began to suspect her of theft. The sales assistant was sacked on the spot and reported to the police, despite a lack of proof of any crime.

 

The managing director was unable to provide any evidence to the Fair Work Commission of theft or fraud against the business and the police were not proceeding with the matter further.

 

The Fair Work Commission found the dismissal was “appalling” and “inexcusable” and ordered the company pay its former employee $29,000 as compensation.

 

If you suspect an employee is committing an offence or act of misconduct, it is important to investigate the matter properly and in accordance with the Fair Work Act 2009 (Cth).  

 

Even if you are a small business employer, you must ensure all employees are treated fairly and in line with the Small Business Code.

 

An experienced workplace relations lawyer will be able to explain the step by step process needed to investigate any allegations of misconduct. Act properly and avoid being penalised for protecting your business.   

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Tweet or Twit: you be the judge

Tweet or Twit: you be the judge

 

In early 2014 I wrote about the risk to employment from the use of social media out of hours but where critical comments of an employer were made.

 

A recent decision of the United Kingdom Employment Appeal Tribunal: Game Retail Ltd v Laws [2014] UKEAT 0188_14_0311 demonstrates that use of social media, which an employer judges as inappropriate can lead to the termination of employment even if the subject of communication is not the employer.

 

In this case the offending medium was Twitter.

 

Mr Laws was the risk and loss prevention officer of Game Retail in the north of England. Game has over three hundred stores across the UK each has its own Twitter profile as a marketing and communications tool.

 

Sometime before July 2012 and independently of his employment, Mr Laws opened his own Twitter account primarily to communicate with his friends. He then began to follow the stores for which he was responsible. The Employment Tribunal found that “he did this in order to monitor inappropriate activity by other employees”.

 

The problem for Mr Laws started when Game stores started to follow him. He was not seeking followers amongst the stores for which he was responsible, but he had not enabled the privacy setting on his feed with the result that his tweets could be seen by more than just his chosen followers.

 

On 18 July 2013 a store manager was so concerned about tweets on Mr Laws’ feed that he notified his regional manager. There commenced an investigation, which led to Mr Laws’ summary dismissal on 31 July 2013.

 

The investigation identified twenty eight tweets as offensive. Amongst those criticised were police, dentists, golfers, caravaners and Newcastle United Football Club supporters (Mr Laws followed Sunderland, Newcastle’s local rival). Mr Laws used four letter words and their present participles liberally. None of the identified tweets involved his employer and none was made in his role as a risk and loss prevention officer for Game or whilst he was at work.

 

Mr Laws contested his dismissal to the Employment Tribunal, which judged it to be unfair but reduced his compensation by forty per cent for contributory conduct.

 

Game appealed to the Employment Appeal Tribunal on the grounds that the Employment Tribunal had erred in deciding how the reasonable employer should act and/or that the finding that the dismissal was unfair was “perverse”.

 

The essential issue before the Employment Tribunal was the appropriate sanction for the conduct, it being accepted that the subject tweets were offensive and the investigation process that Game undertook was procedurally fair.

 

The Employment Appeal Tribunal allowed the appeal and the application was remitted to a different Employment Tribunal for further submissions on the test of the reasonable response of the reasonable employer and how that might affect the sanction to be imposed.

 

At the time of writing Mr Laws may still be found to have been unfairly dismissed and entitled to compensation.

 

Having said that, it is my view that even though the offending tweets were not meant for other than his known followers, were not sent from a work owned or related device, did not refer to Game and were not sent in work time, Mr Laws is going to have a hard time to convince an Employment Tribunal that his dismissal was unfair.

 

The content of the tweets, the fact that they could be associated with him as a risk and loss prevention officer for Game and the loss of reputation that Game may suffer as a result of that association would be enough for dismissal to be an appropriate sanction.

 

So again the lesson is, do not say on social media anything that you are not prepared for the whole world to know.


Questions about this article or about employment and workplace matters, our specialist employment and workplace relations team provide advice in all matters related to employment law.

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Employers on notice about age discrimination

In a landmark court ruling in April 2014, relating to age discrimination in the workplace the Federal Circuit Court in Brisbane imposed penalties on a restaurant and its directors for terminating the employment of a worker on his sixty fifth birthday: Fair Work Ombudsman v Theravanish Investments Pty Ltd & Ors [2014] FCCA 1170.

The employee had worked for the restaurant since 1996 as a full time employee. Upon returning from long service leave in 2011, he was told he would be placed on part-time employment.  In the lead up to his sixty fifth birthday on 5 September 2011 the employer wrote to the worker stating that his employment would cease at that age and that it did not employ people who had reached 65 years.

The statements were clear breaches of section 351 of the Fair Work Act, which prohibits employers taking adverse action against employees because of, amongst other things, their age.

The decision acts as a warning to employers and a signal to employees that the laws to protect them at work will be enforced.

Questions about this article or about employment and workplace matters, our specialist employment and workplace relations team provide advice in all matters related to employment law.

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Conduct unbecoming means no remedy

An order for reinstatement or the payment of compensation as the remedies for unfair dismissal are discretionary and not mandatory: Jeffrey v IBM Australia [2014] FWC 8166 is a case in point.

After long periods of absence because of illness IBM dismissed Ms Jeffrey, a business analyst, for the reason that on medical grounds she would not be able to fulfil the inherent requirements of her role for the foreseeable future.

The Commission found that the medical evidence upon which IBM relied did not support that conclusion and therefore found that the dismissal was not for a valid reason.

When it came to remedy the Commission found that the conduct of Ms Jeffrey at arbitration worked against any order for reinstatement or compensation being made in her favour.

The Commission was especially critical of Ms Jeffrey using the hearing to besmirch the reputation of various IBM employees without foundation and as a forum in which to raise issues, which whilst they arose from the employment relationship, were not relevant to her dismissal.

Ms Jeffery represented herself at arbitration and her underlying illness may well have affected or impaired her judgement on matters.

Even so the fact that a remedy was not ordered is a salutary lesson to all employees contesting their dismissal: be relevant, do not make gratuitous or unfounded accusations and comply with rulings and directions of the Commission.

Questions about this article or about employment and workplace matters, please contact our specialist employment and workplace relations team.

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Choosey can be costly

The issue of redundancy looms where an employer loses work to a competitor as part of a tender process.

Often what occurs is that the employees of the employer, which has lost the work can apply and are accepted as employees of the employer, which has won the work.

Where an employer is able to redeploy an employee either within its business or obtain work for the employee with another employer, and the employee does not co-operate in that process, the employee may not be entitled to a redundancy payment if employment is ultimately terminated.

This much is demonstrated in the decision of the Fair Work Commission in Cleandomain Pty Ltd  [2014] FWC 5243.

Christine Flavell was a cleaner employed by Spotless at Fountain Gate Shopping Centre. In May 2013 Spotless lost the contract to clean there. At the time Ms Flavell was on extended sick leave, which did not finish until mid-June 2013.

Spotless representatives contacted Ms Flavell by phone and letter to advise her of the change and that she could apply for a job with the new cleaning contractor by attending an interview or be redeployed at another Spotless site.

Ms Flavell did not respond meaningfully until after the new contractor had filled positions at Fountain Gate. By that time Spotless did not have any positions that suited the hours Ms Flavell wanted to work and were in easy travel of Fountain Gate.

On 16 July 2013 Ms Flavell received a letter from Spotless stating that she had been terminated due to retrenchment and citing her lack of co-operation that “has the consequence that you declined offers of acceptable alternative employment with the incoming contractor … and the absence of a suitable alternative position being available at another Spotless site”.

The Commission found that Ms Flavell was more interested in being paid out rather than continuing in employment. Because of her period of service she was entitled to eleven weeks as a redundancy. Her lack of co-operation was her failure to attend an interview with the new contractor. All other Spotless employees at Fountain Gate who attended interviews with the new contractor were given jobs. The fact that she was on sick leave when the interviews took place did not count in her favour as she was fit enough to return to work five days after the interviews had taken place.

Cleandomain (which had been taken over by Spotless) successfully argued that section 120(1)(b) of the Fair Work Act applied and because it had done all it could to obtain other acceptable employment for Ms Flavell its obligation to pay her redundancy on termination of employment could be reduced to nil.

The lessons are:

1.         Employers should attempt to redeploy employees to minimise their obligation to pay redundancy; and

2.         Employees should not assume that a redundancy will be paid to them if there is other work to be had.

Contact our specialist employment and workplace relations team with any questions about this article

or employment and workplace relations matters.

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