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Employment Law – New Employer Liable in Confidential Information Case

Employment Law – Background

The following is a recent example of where a new employer was stung for the wrongs a new employee committed against their former employer …

Employment Law – The Case

In essence:

  • Lifeplan and Foresters were competitors in the business of funds management and the provision of investment products, principally for the purpose of funeral plans
  • whilst employed by Lifeplan, a manager emailed confidential Lifeplan documents to his personal email address and used these documents to prepare a business plan which he then presented to Foresters with the assistance of another manager
  • at the same time, both managers solicited the business of several funeral companies and service providers in order to secure business for Foresters and themselves
  • the managers used Lifeplan contracts, brochures and other marketing materials to prepare similar documents for themselves, and utilised Lifeplan’s printing company to generate this material
  • Lifeplan commenced proceedings against the managers and Foresters (who by this time employed the managers)

Employment Law – The Decision

The court on appeal held:

  • there could be “no doubt that the board of Foresters was actually aware, had actual knowledge, of the taking and using in breach of duty of confidential information”
  • the managers, “with the full knowledge of Foresters, dishonestly breached their duty by, amongst other things utilising confidential information to prepare a business plan for the consideration of the board of Foresters”
  • the Board of Foresters actively used the business plan in its decision-making process and, subsequently, to monitor the performance of the joint venture
  • the business plan disclosed “detailed information, some of which expressly and plainly came from Lifeplan’s records… No honest and reasonable person, not shutting his or her eyes to the obvious, could conclude other than that the document was based on Lifeplan’s confidential information brought by current employees of Lifeplan”

Employment Law – The Sting

Foresters’ knowledge and even participation in the manager’s breaches (contrary to the manager’s statutory and fiduciary duties under the Corporations Act), rendered it accessorily liable for the breaches pursuant to section 79 of that legislation. [...]  READ MORE →

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Employment Law – Recommendations for Employment Entitlements

Employment Law – Background

This article provides a consideration of the pros and cons of including employment entitlements in the following forms:

  • HR policy
  • Enterprise agreement
  • terms in a separate employment contract

Employment Law – Enterprise Agreements

Employers should actively encourage diversity and inclusion by using ‘inclusive’ language in the Enterprise Agreement. It should include:

  • Paid parental leave for both primary and secondary carers (this language includes same-sex couples)
  • A flexibility term
  • A consulation term
  • A disputes, grievance handling provision
  • Rates of pay
  • Provisions that enhance productivity improvement and flexibility.

Employment Law – HR policy versus Enterprise Agreement

Pros of using a HR policy include:

  • the benefit of non-binding application compared to a binding provision for the life of the Enterprise Agreement
  • less legal exposure in policy statements as breaches of enterprise agreements can incur fines or legal action
  • HR policies can be amended from time to time
  • a policy statement adds details and implementation procedures to the core entitlements contained in the Enterprise Agreement

Employment Law – Contract Provisions

Pros of putting provisions in individual contracts include:

  • flexibility to accommodate personal circumstances compared to a collective enterprise agreement
  • opportunity to trial new arrangements such as flexible working arrangements

Cons include:

  • provisions are difficult to remove later on
  • offering different conditions to different employees may increase the likelihood of discrimination complaints

Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • engage an employment lawyer to ensure consistency with all employment documents containing employment entitlements
  • aim to include every employee demographic group to avoid criticism
  • use specific advertisements for employment to target specific demographic groups
  • ensure management are aware of the implications of a policy
  • educate staff particularly managers who are responsible for eligibility and implementation
  • train managers on handling ‘sensitive’ conversations with ‘minority’ employees
  • provide supporting resources such as toolkits and access to external experts
  • consult an employment lawyer about whether to adopt a policy, enterprise agreement or the insertion of provisions in a separate contract
  • speak to an employment lawyers about the cost-benefit analysis of each approach
  • prepare new employment law policies as required
  • draft new/changes to employment contracts with the assistance of an employment lawyer
  • draft new/changes to employment law policies with the assistance of an employment lawyer

Employment Law – More Information

Please call the leading employment lawyers in Parramatta, the Matthews Folbigg Workplace Solutions employment law team on 9635-7966 to speak with one of our employment lawyers. [...]  READ MORE →

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Fair Work Commission – Re-Determination of Safety Dismissal

Fair Work Commission – Background

A Fair Work Commission decision has been ordered a re-examination by a Full Bench of the FWC for the dismissal of an employee for his ‘nonchalance’ towards Work, Health & Safety obligations, lack of remorse after a workplace incident and failure to wear safety glasses.

As Commissioner Tanya Cirkovic did not make a finding in regard to the workplace incident, there was no valid reason to conclude the employee had been negligent in complying with safety requirements or failing to report the incident. [...]  READ MORE →

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Employment Law – Workplace Investigation Documents

Employment Law – Background

In ‘LC’ and Australia Post the Information Commissioner has upheld an employer’s right to deny a former employee access to workplace investigation witness statements in order to protect the integrity of its complaints process.

Employment Law – Facts

In essence:

  • the former Australia Post employee requested access to documents after a HR practitioner informed him that two managers were facing discipline in their employment as a result of being heard making “derogatory” comments about him
  • although Australia Post initially denied the request, after reviewing its decision they granted him access to four workplace documents in full and two in part
  • however, they refused to provide him access to witness statements, “warning counselling documents” and an email chain
  • in refusing access to these workplace documents, they relied on the exemption under s47E(c) of the Freedom of Information Act (Act), which allows access to documents to be denied if such access would have a “substantial adverse effect on the management or assessment of personnel”
  • the employee applied to the Information Commissioner to gain access to the remaining workplace documents

Employment Law – Decision

The Information Commissioner found:

  • the documents qualified for the exemption under the Act
  • this was because the witness statements and “warning counselling documents” would “directly address the substance of the workplace complaint”
  • thus, releasing them would make witnesses reluctant to come forward in the future for fear of facing “backlash” from others involved
  • consequently, this would have a “substantial adverse effect” on the conduct of HR’s enquiries and the employer’s management function as a whole
  • the email chain was also exempt as it related to witness statements
  • there was a public interest in “protecting the integrity and robustness of Australia Post’s code of conduct complaints processes” and similar processes in other government agencies

 

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers: [...]  READ MORE →

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Employment Law – Dismissal of employee for pornographic emails

Employment Law – Background

In B v Mid North Coast Local Health District, the NSW Industrial Commission found that despite a woman’s sacking for amassing thousands of sexually explicit emails on her work computer being valid, the dismissal was still harsh.

Employment Law – Facts

In essence:

  • the woman was working with Mid North Coast Local Health District as an assistant to the district manager of Mental Health Services
  • she was found to have received, stored and sent a large amount of emails which were “pornographic, graphic (violence) and generally inappropriate in nature”
  • she was sacked for inappropriately using the workplace email system, breach of the code of conduct and the employer’s employment law communications policy and serious misconduct
  • she argued that her employer’s email system should have had a filtering system in place to prevent inappropriate emails
  • it was also argued that she was unaware of the employer’s employment law communications policy

 

Employment Law – Decision

The NSW Industrial Commission found:

  • the employer had a valid reason to dismiss the woman
  • the workplace law policies made it clear that sending and receiving inappropriate emails was strictly prohibited. This was clear by requiring users to accept the employer’s employment law policy through ticking a pop-up box when they logged in
  • despite its validity, the employee’s dismissal was harsh under workplace laws
  • consideration was given to mitigating factors such as her difficulty “in obtaining alternative employment … her personal, family and dire financial circumstances”
  • the fact that she had not been previously warned for misconduct was also taken into account
  • reinstatement was impracticable considering “the gravity of the misconduct” and the fact that the employment relationship had irretrievably broken down
  • the woman was to be compensated eight weeks pay

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers: [...]  READ MORE →

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Employment Law – Out-of-Hours Misconduct Dismissal Too Harsh

Employment Law – Background

In the Fair Work Commission decision of JC v Bechtel Construction (Australia), an employee won reinstatement and back-pay after he was dismissed for out-of-work misconduct when his partner, who was employed by the same company, was only given a workplace warning.

Employment Law – Facts

In essence:

  • Mr C was employed as a rigger by Bechtel Construction Australia on the Wheatstone Liquefied Natural Gas Project in Western Australia
  • in the incident in question, Mr C checked into a hotel in Onslow on a weekend with his partner Mrs H who was also a Bechtel employee
  • they were wearing their Bechtel uniforms when they checked in, however, Mr C had paid for and organised the trip separately of Bechtel
  • Mr C had a 15-30 minute argument with Mrs H in his own hotel room which was loud enough to disturb and alarm other guests
  • the hotel manager was unhappy and contacted Bechtel
  • Bechtel conducted a workplace investigation and dismissed Mr C who then sought a finding of unfair dismissal
  • however, Mrs H was merely given a final written warning because the investigators believed she was the “victim” not the instigator of the incident

 

Employment Law – Decision

The Fair Work Commission found:

  • Mr C’s dismissal was for a valid reason, but was found to be both harsh and unjust
  • Mr C’s failure to comply with workplace codes and directions can form a valid reason for dismissal
  • Mr C signed an employment contract which expressly required him to comply with, and accept, the company’s workplace policies
  • clauses in the relevant workplace policy stated that particular acts could constitute misconduct or serious misconduct which could jeopardise his employment
  • Mr C should not have been dismissed for a single act of misconduct because his shouting and arguing was merely considered misconduct, not serious misconduct, sighting the company workplace policy that specifically stated that “drunken behaviour in public that causes a disturbance or a nuisance to others” as an example of misconduct
  • Bechtel’s differential treatment of Mr C and Mrs H was harsh because Bechtel’s own workplace policy required them to hold both participants of the offensive behaviour equally accountable
  • both parties were equally responsible for the disturbance as their conduct was properly comparable, consequently equal disciplinary action would have been expected
  • Mr C’s reinstatement was appropriate as the misconduct occurred outside of the workplace and the character of the misconduct didn’t prevent Mr C from carrying out his workplace duties
  • an order for reinstatement to his employment and back pay was made

 

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers: [...]  READ MORE →

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Employment Law – Payroll Company Liable for Client’s Award Breach

Employment Law – Background

The decision in Fair Work Ombudsman v Blue Impression Pty Ltd & Ors serves as a warning to payroll and accounting companies, as the court held an accounting company liable for its client’s breaches of the Fair Work Act.

Employment Law – Facts

In essence:

  • Blue Impressions, a Japanese restaurant chain, engaged EZY Accounting to do its data entry, bookkeeping and payroll processing for its employees
  • Blue Impressions sent data to EZY Accounting who uploaded it to MYOB for calculating and processing the payroll for employees
  • the relevant employees were covered by the Fast Food Industry Award 2010
  • the employees were being paid approximately $16.50 an hour, when they should have been receiving at least $19.44 an hour
  • the restaurant was audited by a Fair Work inspector
  • it was determined that the Fast Food Industry Award 2010 applied to the business and the Ombudsman sent a letter to Blue Impressions to that effect
  • the restaurant then engaged a workplace relations specialist to provide employment related advice
  • due to the audit and the specialist’s advice, EZY Accounting became aware of the details of the Fast Food Industry Award 2010 and the correct rates to be paid to employees, however, it failed to change the pay rates because they claimed they had no authority to do so
  • EZY Accounting argued that it was the responsibility of its client, Blue Impressions, to ensure its employees were paid correctly
  • further underpayments occurred

 

Employment Law – Decision

The Federal Circuit Court of Australia found:

  • EZY Accounting was an accessory to its client breaching the Fair Work Act
  • EZY Accounting had the requisite knowledge of the employment underpayments because of the audit and because it produced workers’ payslips through its payroll system, yet “deliberately shut its eyes” to what was going on
  • this employment related conduct “amounted to connivance in the contraventions” by the restaurant of the Fair Work Act as EZY Accounting had “had at [its] fingertips all the necessary information that confirmed the failure to meet the Award obligations by [the restaurant] and nonetheless persisted with the maintenance of its (payroll) system with the inevitable result that the Award breaches occurred”
  • paying less than the employment law rates in the Fast Food Industry Award 2010 is a breach of the Fair Work Act
  • under the Fair Work Act a person who is involved in a breach of the Fair Work Act is deemed to be in the same position as the person who actually breached the Fair Work Act
  • a person is considered to be “involved” if they aided, abetted or procured the breach, or if they were in any way, by act or omission, directly or indirectly, knowingly concerned in, a party to, or a conspirator with others to, the breach
  • EZY Accounting breached the Fair Work Act under these ‘accessorial liability’ provisions
  • that is, EZY Accounting was ‘involved’ in the contraventions of the Fair Work Act by the fast food restaurant chain
  • the penalty to be imposed on EZY Accounting will be determined later

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers: [...]  READ MORE →

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Employment Law – Redundancy and Job Swaps

Employment Law – Background

The Fair Work Commission decision in Skinner v Asciano Services Pty Ltd serves as a warning for employers to consider all redeployment possibilities, including voluntary job swaps, before making an employee redundant.

Employment Law – Facts

In essence:

  • Pacific National was experiencing a reduction in workload due to reduced export grain demand, client loss and the closure of a key site
  • consequently, its national operational requirements changed in its bulk haulage division
  • Pacific National Bulk (PNB) made multiple positions redundant, both voluntarily and forced
  • PNB followed a redeployment process for affected employees, specifically those whose employment was involuntarily terminated, whereby they held consultation meetings and advised of available internal transfer opportunities
  • despite the redeployment process, in the original decision, nine employees who were train drivers before being made redundant filed unfair dismissal applications, arguing that their redundancies were not genuine under the Fair Work Act
  • the Fair Work Commission was initially satisfied that there was a genuine redundancy in each case, and it was not reasonable for PNB to deploy the employees
  • seven employees appealed the original decision of the Fair Work Commission by primarily arguing that the PNB had failed to comply with its redeployment obligations under the Fair Work Act

 

Employment Law – Decision

The Fair Work Commission on appeal:

  • overturned the initial decision of the Fair Work Commission
  • found that PNB had breached its statutory obligation under the Fair Work Act to explore redeployment options by failing to consider the possibility of job swaps for the affected employees
  • stated that whilst there is not an obligation on an employer to implement job swaps, they should still consider whether it is reasonable in the circumstances of the workplace
  • considered the following five factors in coming to decision that PNB should have offered job swaps
  • one – PNB was a large company with a large amount of employees who undertook the same role to those who were made redundant
  • two – numerous employees performed the same role of train driving which meant that in allowing swaps PNB would not face onerous training requirements
  • three – there were potentially job swaps available in depots that were reasonably close to depots where some of the affected employees worked. This meant PNB would not have costs associated with transferring the employees
  • four – PNB had already canvassed job swaps as a possibility to mitigate the effects in the round of redundancies which resulted in the employees dismissal
  • five – PNB had previously allowed job swaps in similar circumstances

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • carefully consider the impact of this Fair Work Commission decision when considering redundancies
  • consult with employees as to all possible options for redeployment before terminating their employment for redundancy reasons
  • this includes exploring whether the employee can swap their employment position with another employee who wishes to accept a voluntary redundancy of their employment position
  • update employment law policies, especially those relating to termination of employment and redundancy, in response to this Fair Work Commission decision
  • seek the assistance of an employment lawyer to understand the impacts of this Fair Work Commission decision
  • ensure employment contracts and employment law policies comply with relevant employment laws, Fair Work Commission decisions, common law employment law principles and contractual obligations
  • raise any employment law questions with an employment lawyer

Employment Law – More Information [...]  READ MORE →

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Employment – Personal Liability for Directors and Managers

Cause for Vigilance!

A string of recent employment cases involving the Fair Work Ombudsman have clearly illustrated the risk posed by the ‘accessorial liability’ provisions within the Fair Work Act.

In essence:

  • accessorial liability is a legal doctrine used to extend legal responsibility for an unlawful act to those involved in or associated with the act
  • in employment claims, accessorial liability can also render a director and/or manager liable for an employer’s contravention of the Fair Work Act

Accessorial Liability under the Fair Work Act

Under the Fair Work Act a person who is ‘involved’ in a contravention of the Fair Work Act is taken to have contravened that provision, where the person:

  • has aided, abetted, counselled or procured the contravention; or
  • has induced the contravention, whether by threats or promises or otherwise; or
  • has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
  • has conspired with others to effect the contravention.

Founding Employment Decision

The foundation for such claims brought under the Fair Work Act was the decision of Guirguis v Ten Twelve Pty Ltd & Anor where the court held that in order for a person to be liable under the accessorial liability provisions of the Fair Work Act the person must: [...]  READ MORE →

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Employment Law – Loss of Mutual Trust Causes Resignation

Employment Law – Background

Workplace relations between a surgeon and his practice manager had eroded to the extent that her subsequent resignation was held to be a constructive dismissal (meaning it was, in effect, a dismissal by the employer).

Employment Law – Facts

In essence:

• the practice manager was employed by an orthopaedic surgeon and developed a close friendship with the surgeon’s wife over several years
• the surgeon’s marriage ended in 2012 and the practice manager found out in 2013 from other employees about his new relationship with a nurse and she became upset because she was not informed about the marriage breakdown
• the surgeon employed the nurse to assist with patient care in 2014 and the practice manager’s workplace conduct changed including taking a Friday afternoon off without informing the surgeon, causing difficulties with the surgical list for the following week, writing terse emails, and refusing to teach the nurse office practices
• the surgeon requested her to remain professional and courteous in all her dealings
• in August 2016, the practice manager emailed the surgeon alleging verbal harassment and bullying from the surgeon and the nurse over the last three years was causing her stress
• after several attempted consultations the practice manager volunteered to resign, citing lack of loyalty and said to the surgeon “our relationship has ended”
• she sought an unfair dismissal remedy under the Fair Work Act 2009 because her termination was a constructive dismissal and had been harsh, unjust and/or unreasonable
Employment Law – Fair Work Commission Decision [...]  READ MORE →

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Employment Law – Unfair Dismissal – ‘Crude’ Facebook Post

Employment Law – Background

The Fair Work Commission’s decision in Colby Somogyi v LED Technologies Pty Ltd, where the FWC awarded an employee compensation after his dismissal for crude Facebook posts, provides a warning to employers of the care that needs to be taken in addressing issues arising from employee use of social media.

Facts
• A company dismissed a sales representative after posting crude comments on Facebook suggesting that a woman gave sexual favours to her boss for a promotion
• The company argued that as the employee posted the comments during work hours and directed the comments at the business, one of its employees or customers, it was “clearly inappropriate”
• The company believed that the employee’s opinions did not align with its objectives of promoting a safe workplace free of harassment, victimisation or sexual abuse
• They claimed that the employee had breached its social media policy, which prohibits inappropriate social media use at work
• However, the employee argued that the dismissal was unfair because he was not given an adequate chance to respond. He was not informed that the Facebook post was the catalyst for his dismissal, as the company did not respond to his queries as to why he was dismissed
• The employee claimed that his posts were not directed at the company, and were actually in reference to his mother being bullied at her workplace
• The employee claimed he posted the comments during his break and that he was unaware of the company’s social media policy [...]  READ MORE →

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Employment Law – Former Manager Ordered to Hand Over Electronic Files

Employment Law Background
The Supreme Court of NSW in Georges Apparel Pty Ltd v Giardina [2017] ordered that the former business development manager of a school uniform importer and manufacturer hand over her electronic files and devices for inspection, on the basis that she was suspected of taking confidential information and utilising it for her own business.

Facts
In essence:
• A school uniform importer and manufacturer has alleged that its former business development manager stole confidential information through taking confidential files, including computer programs designed to assist a computerised embroidery machine to embroid school logos onto uniforms
• The employment contract required her to perform her duties, including protecting and promoting the interests of the employer. It also required her not to misuse or disclose confidential information during or after her employment
• Her contract also contained a restraint of trade clause. This prohibited her from competing with the business in any way, including soliciting customers in NSW for up to 6 months after leaving the company
• The employee allegedly set up her own sales agency business whilst she was still an employee. It was alleged she sold school uniforms imported and manufactured by other wholesalers to the company’s customers
• The company also sought access to the manager’s computers, tablets, mobile phones, electronic storage devices and digital files to determine whether she had breached her employment obligations in accessing the embroidery files
• However, the manager argued that her post-employment obligations were misrepresented to her, made in “bad faith” and that the employer engaged in deceptive conduct during the negotiation of her contract.
• She claimed she discussed with the company about re-negotiation of the non-compete clauses as she was going to set up a similar business. However, the company stated these provisions were necessary to prevent “abuse of its confidential information” [...]  READ MORE →