Unfair Dismissal – Your worker has been with you for HOW long?

How long does an employee have to be employed before they’re eligible to make an unfair dismissal claim?  The short answer is “that depends on the size of your business.”  If you’re a small business, the employee will have 12 months before they can claim eligibility. If you employ more than twelve employees, they will only have six months. But how is that six months calculated?

 

In Emma Wells v ABC Blinds & Awnings [2016] FWC 8260 the worker was employed between 4 February 2016 and 4 August 2016. She was originally engaged as a casual employee for the first three months and was later offered a permanent position, which she retained for another three months.

 

It’s important to note that during her casual employment, the worker worked regularly on a roster based system and took two days of unpaid leave within this period. 

 

The worker was sacked shortly after arriving at work on 4 August 2016 – exactly six months after her first day of work with the Employer.

 

The Employer argued that 1) the Applicant’s service as casual employee should not be included when calculating continuous service and 2) if the casual employment were deemed to be included, her continuous service would not add up to six months as she had taken two days off during that time. 

 

The Fair Work Commission found that the Applicant’s employment was regular and systematic and therefore it could be included as part of her continuous service.

 

However, in light of the unpaid leave taken during her casual employment, the Applicant was found not to have served the minimum employment period, meaning she was not a person protected from unfair dismissal and her application was dismissed.  

 

So what are the lessons here?

1. A worker’s casual employment may be classified as continuous service for the purposes of the unfair dismissal laws depending on the regularity of their work schedule and also their expectations of future employment.
2. Any unpaid leave taken during casual employment will not break an employee’s continuous service, but it will also not contribute their continuous service with an employer.
    

If this all sounds too confusing and overwhelming, never fear! Call one of the workplace relations lawyers at Nevett Ford on (03) 9614 7111 for advice and assistance on all of your employment law matters. 

 

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Gun mistake not grounds for summary dismissal

An Australian champion clay shooter, who had Senator David Leyonhjelm as his support person at the meeting to discuss his future employment was found to have been fairly dismissed but entitled to notice: Waters v Goodyear Australia Pty Limited [2016] FWC 1991.

Mr Waters breached a number of his employers’ policies when he acquiesced in a person whom he was mentoring in clay shooting bringing a gun into the vicinity of his workplace.

After a comprehensive investigation, the employer found that Mr Waters’ actions constituted serious misconduct.

Whilst Commissioner Cambridge agreed that Mr Waters had breached the trust and confidence inherent in the employment relationship to a degree to warrant dismissal he was not satisfied that Mr Waters had set out deliberately to do so in the incident giving rise to his dismissal.

As his employment contract provided for four weeks notice, Mr Waters was awarded compensation for that period.

The case also suggests that the way in which a support person acts at a meeting can affect a finding on the degree to which the employment relationship has broken down and cannot be retrieved.

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Redundant one day and offered alternate employment the next equals no redundancy pay

DRW Investments Pty Ltd v Richards [2016] FWC 461 is a decision in which a large transport company having lost a major hauling contract found work for affected drivers with the new contractor.


The affected drivers argued that they had been made redundant by their old employer entitling them to redundancy payments but the old employer disagreed.


Commissioner Sams found that the drivers had resigned from their old employer to take up work with the new employer. As a result their employment had not been terminated at the initiative of the old employer so as to bring into operation section 119 of the Fair Work Act.


Commissioner Sams also commented that redundancy pay was for a specific beneficial purpose and not meant as a windfall where employees, whilst being made redundant one day are offered and accept suitable alternative employment the next day.

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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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Employers: don’t have a restraint clause in your contracts of employment? All may not be lost.

A recent decision of the Federal Court in APT Technology Pty Ltd v  Aladesaye [2014] FCA 966 demonstrates that employees who attempt to use the confidential information of their former employers in their new business ventures can be restrained from doing so even if there was no formal restraint clause in the their contracts of employment with their former employers.

When APT discovered that Mr Aladesaye had established a business in competition with its own (whilst still its employee) and was taking or using client lists and know how he was summarily dismissed.

APT then asked Mr Aladesaye to provide undertakings not to use confidential information he had obtained in his employment with APT but the parties could not agree on the terms of the undertakings.

The result was that APT applied to the Federal Court to restrain Mr Aladesaye from continuing to use its confidential information.

As there was no formal restraint clause in Mr Aladesaye’s contract of employment, APT relied upon the “springboard principle” developed from a line of English cases and applied in Australia.

The springboard principle is that information a person has obtained in confidence is not to be used as a springboard for activities detrimental to the person who made the confidential information. The possessor of the confidential information must be placed under a special disability in the field of competition to ensure that he does not get an unfair start.

In the circumstances of the APT case Justice Foster made orders restraining Mr Aladesaye from approaching APT’s clients or using or disclosing APT’s confidential information or intellectual property to any other person for specified periods.

So if a former employee is using confidential information to a former employer’s disadvantage, the fact that the former employee had no restraint clause in his contract of employment may not be the end of the matter.

Obviously, employers best safeguard their positions if express and well worded restraint clauses are part of their contracts of employment.

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Are your job ads breaching the Human Rights Act?

Phil Brewin (Accredited Specialist - Employment Law) provided insight for HC Online regarding job ads and whether the use of specific language breaches the Human Rights Act?

For further queries about the Human Rights Act or workplace relations, please contact our employment and workplace relations specialists.

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Employees: be clear on what you’re applying for

When employees are dismissed they are sometimes faced with a choice of which type of claim applies to their circumstances for seeking a remedy under the Fair Work Act.

Have they been dismissed unfairly so as to be able to apply under Part 3-2 of the Act?

Have they been dismissed in contravention of their general protections so as to be able to apply under Part 3-1?

The choice is important. While section 586 of the Act allows corrections or amendments to be made to applications, the Full Bench of the Fair Work Commission has decided that the power to amend does not extend to converting a general protections application  into an unfair dismissal application: Ioannou v Northern Belting Services Pty Ltd [2014] FWCFB 6660.

An unfair dismissal application and a general protections application are meant for different circumstances even though they each may address that an employee has been dismissed. They are not interchangeable.

Once employees commence one type of application they cannot change midstream. They have to discontinue one application and then start the other if, after reflection or advice, they realise they have used the wrong application in the first place.

As 21 day time limits apply to both unfair dismissal applications and general protection applications (where a dismissal has occurred) the consequences for employees not getting it right at the start can be far reaching.

The lesson for employees is to be clear on what they are applying for.  If they are not clear they should seek advice so that they choose the application that suits the circumstances of their dismissal.

For further questions about employment or workplace relations, please contact our specialist employment and workplace relations law team.

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Federal Court Case: Chef comes to grief over schnitzels

In a recent decision of the Federal Circuit Court a chef has been ordered to pay his former employer, a Hotel in North Wollongong, $72,838 for breach of his contractual duty to act with fidelity and good faith.

The Chef purchased schnitzels from his wife’s business and charged his employer one dollar more than the he paid for them.

The Chef originally sued his employer for an unpaid bonus and leave. The Hotel counter claimed for its losses due to the conduct of the Chef in acting in conflict with his obligations to his employer.

Wisely the employer had a term in its written employment agreement that required its employees to act “faithfully and diligently serve the company”

Nevett Ford acts for employers and can provide expert advice on all aspects of employment law and workplace contracts.

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Employment Contracts: If it's not written it may not be in

MAJOR HIGH COURT DECISION ON EMPLOYMENT CONTRACTS

IF IT’S NOT WRITTEN IT MAY NOT BE IN.

Contracts of employment can be oral, written, implied by law or be a combination of all three.

A written employment contract does not necessarily contain all the terms that govern the employment relationship as some terms may be implied by law. 

The law that implies them can be either legislation or law that has developed through court decisions, which is known as common law.

An example of a term that could be implied by legislation is one against theft.  As it is illegal to steal, it is implied into employments contracts (unless they state so explicitly) that employees not steal from their employers.

Breach of such an implied term routinely leads to an employer terminating the contract and summarily dismissing the employee.

The difficulty with implied terms is where the common law is relied upon.

Some terms can be “in” whilst others are “not in”.

One implied term recently ruled “not in” was an implied term of mutual trust and confidence.

Such a term means that neither employers nor employees will do anything, without reasonable cause, to destroy or seriously damage the relationship of trust and confidence that exists between them.

Mr Barker was a long time employee of the Commonwealth Bank of Australia, who when he was not redeployed within the bank was made redundant. He contested whether the bank had implemented its redeployment policy correctly and said the that bank’s failure to do so breached, amongst other things, an implied term in his employment contract of mutual trust and confidence.

The trial judge agreed adopting legal reasoning developed from  cases in the United Kingdom  and awarded Mr Barker $300,000.00 as damages: Barker v CBA [2012] FCA 942.

On the bank’s appeal to the Full Court of the Federal Court, Mr Barker held on to his money by a two – one majority: CBA v Barker [2013] FCAFC 83.

On the bank’s further appeal to the High Court, Mr Barker was not so lucky: CBA v Barker [2014] HCA 32. There the five judges relying on slightly different lines of reasoning decided that there was no implied term of mutual trust and confidence in Australian common law so that it could form part of an employment contract.

The result was that Mr Barker was left with an amount for four weeks’ pay in lieu of notice: a substantial reduction on the damages first awarded to him.

The general legal principle around implying terms into contracts is that they must be necessary so as to give business efficacy to the contract.

The lesson to take from the Barker cases is that implying terms from common law into an employment contract, regardless of the parties’ intentions as expressed by the written agreement between them, will be increasingly more difficult.  

Nevett Ford’s workplace relationsteam can advise on all aspects of employment law.

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FAIR WORK COMMISSION’S EOFY CHANGES

Employers and employees – take note of the changes to the Fair Work Commission’s application fees, high income threshold and compensation awards that came into effect on 1 July 2014:

Fair Work Commission application fee

The Commission’s application fee to file an unfair dismissal application, general protections application and anti-bullying application has increased to $67.20 (see regulation 3.02 of the Fair Work Regulations 2009).

There has been no change to the time limit on making applications involving a dismissal, which is 21 days from the dismissal taking effect. 

High income threshold

To bring an unfair dismissal claim, employees must have been employed for over 6 months (or 12 for those employed by Small Business Employers) and either earn under the high income threshold, or have their employment covered by a Modern Award or an Enterprise Agreement (see section 382 of the Fair Work Act 2009). 

The high income threshold is now $133,000 (see regulation 2.13 of the Fair Work Regulations 2009).

The high income threshold includes wages, salary sacrifice amounts and non-monetary benefits.  

It does not include reimbursements, employer superannuation contributions, or payments that cannot be calculated in advance, for example bonuses that are reliant on an employee’s performance.

Compensation limits

For unfair dismissal applications relating to dismissals occurring on or after 1 July 2014, the Commission can award an employee a maximum of 26 weeks pay for compensation for their lost earnings.  This amount cannot exceed $66,500, which is half of the high income threshold (see section 392 of the Fair Work Act).

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Social media: use at your own risk

 Following from my previous article on social media and how their use can affect ongoing employment I want to bring to your attention the recent case of Wilkinson-Reed v Launtoy Pty Ltd [2014] FWC 644. 

Ms Wilkinson-Reed was the HR manager at the Launceston Toyota, a position she had held for 18 years at the time of her dismissal. 

She was friends with the wife of the current dealer principal. 

The dealer principal and his wife had separated.

The dealer principal issued a directive to Ms Wilkinson-Reed and other employees not to discuss various matters concerning the business with his wife as she (the wife) was not a company director.

Ms Wilkinson-Reed was dismissed for serious misconduct, part of which was said to arise from a Facebook conversation between her and the dealer principal's estranged wife in which Ms Wilkinson-Reed said:

1.         The dealer principal had taken a dislike to another employee;

2.         Staff could not wait to be able to say exactly what they thought about the dealer principal in a Toyota sponsored anonymous survey;

3.         Another person had told her that the dealer principal was 'called tosser' in the motor vehicle world in Launceston.

The dealer principal accessed his wife's Facebook page through the use of her password without her knowledge or consent and saw the exchange between Ms Wilkinson-Reed and his wife.

Commissioner Deegan found that Ms Wilkinson-Reed had breached her duty of confidentiality by stating that the dealer principal had taken a dislike to an employee but it was not so serious as to justify dismissal.

Commissioner Deegan accepted that the comments about the dealer principal were in a private conversation.

The issue in this case was not so much about the medium by which Ms Wilkinson-Reed expressed her low opinion of the dealer principal but whether the expression of such an opinion by a long standing employee with an otherwise impeccable record was 'having a deleterious effect on the workplace, its employees or the business of the employer'.

Commissioner Deegan decided that it did not so as to warrant dismissal.

Taking into account that Ms Wilkinson-Reed had held only 2 employment positions in 36 years and was 3 years from retirement, he awarded her the maximum 26 weeks compensation available under the Fair Work Act.

In my view this case demonstrates yet again how the use of social media can affect ongoing employment.  Users cannot guarantee privacy of communication even if they intend them to be private.

Although the dealer principal breached his wife's privacy by reading the Facebook conversation with Ms Wilkinson-Reed this fact was little consolation to Ms Wilkinson-Reed who found herself without a job towards the end of her working life.

The lesson is clear: only say things on social media that you are happy for anybody to read.

Greg Doran
Director

Anyone seeking advice about workplace laws should contact Nevett Ford Melbourne Lawyers on 03 9614 7111.

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