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Employment Law – Ex-Employee Restraint Clause Unenforceable    

Employment Law – Background

The Victorian Court of Appeal reaffirmed a decision that an employer was unable to enforce a restraint clause against an employee. The accounting firm’s breach of an employment contract consequently ended its right to enforce a restraint clause against the accountant. The case highlights the importance of carefully assessing any differing views between the employee and employer in employment law.

Employment Law – Facts

In essence:

  • the employee-accountant signed an employment contract in 2012
  • the contract contained a restraint clause that operated for 12 months. Notably, the terms were found to be reasonable by judges in earlier cases
  • the accounting firm expanded its business over 2015-16
  • the accounting firm denied the accountant certain bonuses he believed he was entitled to
  • as a result, the accountant requested payment to which the employer refused
  • the accountant took a week’s leave. A few days after he returned, he informed the employer he considered the refusal to pay the bonuses as a repudiation of the employment contract
  • especially relevant, the account set up his own business. Consequently, the employer sought to enforce the restraint clause

Employment Law – Decision

The Victorian Court of Appeal:

  • concluded that the accountant-employee’s interpretation of the bonus clauses was correct
  • held that the organisational changes could not justify the refusal to pay hence he should have been paid the bonuses
  • found that in conclusion, the refusal to pay was a breach of the employment contract. Consequently, the right to enforce the restraint clause ended

Employment Law – Tips for Employers

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

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Employment Law – Modern Awards Reductions

Employment Law – Background

In June this year, the Fair Work Commission (FWC) announced the reductions of public holiday penalty rates for the hospitality, retail, fast food and pharmacy sectors. The reductions were decided as part of the FWC’s four-yearly review of modern awards.

As of 1 July 2017, public holiday penalty rates were reduced while Sunday rates will reduce over three to four years. Although the unions argued for the delay in reductions, the FWC agreed with employer organisations. As a result, the first transition step is smaller than later transitions. Furthermore, the retail and pharmacy sectors will have longer transition periods due to their reductions being more significant. [...]  READ MORE →

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Employment Law – The Need for Proper Workplace Investigations

Employment Law – Background

Employment claims like bullying and unfair dismissal continually on the rise in employment law. Consequently, employers are increasingly required to take pro-active steps to investigate suspected workplace incidents and disputes before they lead to such claims.

A workplace investigation is a formal investigative process into an alleged workplace incident or dispute and it may be necessary to undertake same even if the complainant objects to it (ie, because they only wish to make an informal complaint). [...]  READ MORE →

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Employment Law – Redundancy Consultation

Employment Law – Background

Currently, there are no specific guidelines on how long employers should or must conduct redundancy consultations under a Modern Award.

Different rules of course may apply to enterprise agreements, under company policies or in some cases under the terms of an employee’s employment agreement.

We understand that employers may want to rush a business restructure in order to continue running the business, however, there are a few tips employers should consider to minimise any possible adverse effects. [...]  READ MORE →

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Employment Law – s 457 Visa Entitlements

Employment Law – Background

The Australian Government announced the abolition of the Temporary Work (Skilled) visa (subclass 457 visa) in April 2017. They will be replaced with the Temporary Skill Shortage (TSS) visa in March 2018. Consequently, employment law questions have arisen regarding the entitlements afforded to such workers in this transition period.

Common questions include:

  • Could the employee successfully claim unfair dismissal?
  • Is an employee on a 457 visa entitled to redundancy pay if there is no further work when the visa expires?

Employment Law – The Fair Work Act 2009 (Cth)

s386(2) provides that an employee is excluded from claiming unfair dismissal if:

  • the employee is employed on a contract;
  • for an unambiguous specified period of time; and
  • whose employment is terminated at the end of that specified period

Employment Law – Case Decision

A decision of the Full Bench of the (then) Australian Industrial Relations Commission held that a s457 visa can be used to specify the fixed time period of an employment contract. This is provided that the parties have a sufficiently proven understanding of the terms of the visa and the contract of employment. This understanding must therefore include the period of employment and most notably, the end date. [...]  READ MORE →

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Employment Law – Incapacity Not a Refusal to Work

Employment Law – Background

The Fair Work Commission has criticised a company for misconstruing an employee’s extended absence on certified sick leave as a refusal to work.

Most noteworthy, the HR team dismissed the mentally unwell supervisor via email.

The decision highlights the importance of due process in the dismissal of employees while having regard to human dignity.

Employment Law – Facts

In essence:

  • the customer service supervisor was employed at Komatsu
  • the supervisor said he was “directed” to take sick leave in March 2015 due to “health and well-being”
  • he failed to meet his sales budget KPI’s. As a result, he was placed on a performance improvement plan in August 2015
  • the supervisor began experiencing mental health issues in March 2016. Consequently, he was taken off the performance improvement plan
  • furthermore, he experienced difficulties with his new manager which also contributed to his mental health problems
  • Komatsu encouraged the supervisor to participate in a return to work plan
  • additionally, Komatsu reconfigured its management structures to prevent the supervisor interacting with his previous manager
  • the supervisor was dismissed via email in November 2016

Employment Law – Decision

The Fair Work Commission:

  • held that the medical evidence confirmed the employee’s incapacity to work rather than his refusal to perform work
  • held there was no valid reason for the dismissal
  • underlined the need to establish the illness was not genuine in order to treat absence as a refusal to work
  • noted the mandatory opportunity for an employee to be provided with a ‘show cause’ meeting before any dismissal is made
  • stressed that dismissal via electronic means should be “strenuously avoided”
  • suggested Komatsu review its employee management practices
  • therefore ordered Komatsu to pay the supervisor $1,250 in compensation

The decision is available for you to read through the hyperlink:

John Finnegan v Komatsu Forklift Australia Pty Ltd [2017] FWC 2433 (10 May 2017) [...]  READ MORE →

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Employment Law – FWC Slams Poor Agreement Drafting

Employment Law – Background

A poorly drafted enterprise agreement has been criticised by the Fair Work Commission (FWC). The case was brought by the Electrical Trades Union (ETU) and the Communications Union (CEPU) against electrical contractor Kentz Pty Ltd (Kentz) in dispute of a clause requiring the purchase of particular income protection products.

The case was initially heard in February this year when Commissioner Michelle Bissett found “no ambiguity” in the wording of the contractual requirement to purchase income protection insurance. However, an appeal was permitted by the Commission because the decision was “attended with sufficient doubt” to permit a rehearing. The full bench of the FWC reaffirmed the earlier decision. Furthermore, it highlights the importance of clear drafting of enterprise agreements in employment law. [...]  READ MORE →

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Employment Law – Landmark Sham Contracting Case

Employment Law – Background

In March 2015, the Fair Work Ombudsman (FWO) brought a case against Quest South Perth Holdings Pty Ltd (Quest) for breaches of the Fair Work Act 2009 (Cth) (the Act). In a long-running legal saga, the Federal Court found that Quest and Contracting Solutions Pty Ltd had not contravened the Act by moving employees onto independent contractor arrangements. By the end of 2015, the High Court of Australia overturned the Federal Court ruling and therefore found Quest had engaged employees in a ‘triangular’ sham contracting arrangement. [...]  READ MORE →

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Fair Work Commission: On-Hire Worker Unfairly Dismissed

Employment Law – Background

In Tasmanian Ports Corporation Pty Ltd t/a Tasports v Mr Warwick Gee, the Fair Work Commission confirmed that labour hire companies cannot dismiss workers on the grounds that they have run afoul of a host employer.

Employment Law – Facts

In essence:

  • A shiploader was dismissed by TasPorts in 2015 after his access to a site in Tasmania was revoked by his host employer, iron ore miner Grange Resources Limited
  • Grange Resources accused the shiploader of misconduct and blocked his access to the port after he allegedly failed to follow reasonable work directions, breached reporting protocols and posted unauthorised photos of their assets on social media
  • Tasports argued that there was a valid reason to dismiss the shiploader under s387(a) of the Fair Work Act as he no longer had the capacity to do the job and access the site

Employment Law – Fair Work Commission Decision

The full bench of the Fair Work Commission:

  • Concluded that the Grange Resources removing the shiploader from a site was not a valid reason for their dismissal, utilising the principles set out in Kool v Addeco which established that the individual circumstances of the case determine whether there was a valid reason.
  • They confirmed the approach taken in the Adecco and Pettifer cases, whereby “the contractual relationship between a labour hire company and a host employer cannot be used to defeat the rights of a dismissed employee” and that “labour hire companies cannot use such relationships to abrogate their responsibilities to treat employees fairly”
  • Found that Tasports had failed to establish that the host employer had a legal right to remove the ship loader, or that it was unable to maintain his employment
  • Criticised the fact that Tasports had failed to independently investigate whether the shiploader committed the alleged misconduct. They also failed to adequately consider alternatives for the shiploader’s redeployment
  • Referred the matter back to the deputy president to consider the appropriate remedy

Employment Law – Tips for Employers

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

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Employment Law: Compensation for Unfairly Sacked Truckie

Employment Law – Background

In SR v Geelong & Surfcoast Laundry T/A Swim Alumni Pty Ltd, the Fair Work Commission ruled that a truckie involved in three accidents and an alleged road rage incident was unfairly dismissed.

Employment Law – Facts

In essence:

  • the employee was employed by Surfcoast Laundry as a casual truck driver from March 2015 until November 2016
  • the employee was dismissed for having three accidents in a year and for allegedly being involved in a road rage incident
  • however, the employee received no written warnings, was not told the reason for his dismissal at the time it occurred and was not given an opportunity to respond
  • Surfcoast Laundry claimed the dismissal was in accordance with the summary dismissal section of the Small Business Fair Dismissal Code which indicated that it was fair to dismiss an employee without notice or warning if an employer believes on reasonable grounds that an employee’s conduct was sufficiently serious to justify immediate dismissal.

Employment Law – Fair Work Commission Decision

The Fair Work Commission:

  • found that whilst intervention may have been warranted, the dismissal was disproportionate to the severity of the conduct
  • whilst the employer’s evidence that the accidents and alleged road rage incident contributed to the decision to dismiss, it was held that the operative reason for dismissal was the employer’s annoyance at the employee complaining about underpayments
  • held that the termination was harsh, unjust and unreasonable due to the lack of procedural fairness and the lack of a valid reason for dismissal
  • the employee was awarded $14,995 in compensation

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • review this Fair Work Commission decision
  • seek the assistance of an employment lawyer to understand the impacts of this Fair Work Commission decision
  • ensure compliance with all employment laws including Fair Work Commission decisions, Awards and enterprise agreements
  • fairly, consistently and lawfully respond to breaches of employment laws including Awards and enterprise agreements
  • follow good HR practice when it comes to performance management
  • not unreasonably apply the Small Business Fair Dismissal Code
  • raise any employment law questions with an employment lawyer

The decision is available for you to read through the following hyperlink: [...]  READ MORE →

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Fair Work Commission: High Earner Can Pursue an Unfair Dismissal Claim

Employment Law – Background

In Mr James Kaufman v Jones Lang LaSalle (Vic) Pty Ltd, the Fair Work Commission ruled that a regional director of a multibillion dollar real estate business could purse his unfair dismissal claim despite earning over the high income threshold as his duties indicated he was actually a sales representative under an Award.

Employment Law – Facts

In essence:

  • the former capital markets regional director claimed that he was unfairly dismissed when he was made redundant by Jones Lang LaSalle (Vic) Pty Ltd (JLL)
  • JLL made a jurisdictional objection to the application claiming that the employee was not a person protected from unfair dismissal within the meaning of s382 of the Fair Work Act
  • JLL argued the employee was a senior manager with significant leadership, mentoring and business generation responsibilities which went beyond the classifications in the Real Estate Industry Award 2010 (Award)
  • JLL also claimed the employee wasn’t protected from unfair dismissal due to his earnings surpassing the high income threshold

Employment Law – Fair Work Commission Decision

The Fair Work Commission:

  • held that the employee could pursue his unfair dismissal claim despite earning well-over the high income cap as the duties he undertook fell “squarely within the role definition of a property sales representative’ set out in the Award
  • formed this view because the question of Award coverage is determined not by a person’s title, rather “it is the duties performed that will be of significance”
  • noted the employee’s title of “regional director” was merely a “rank or accolade”
  • held the employee’s position in the hierarchy said little about his role “other than that he was a high performing successful employee”
  • disagreed that the employee was a senior manager as there was nothing in his regular duties which could be described as a managerial function and he had no direct reports – whilst he had general leadership expectations, it was found that these would be common amongst “most employers in the real estate industry
  • ultimately, it was held that the “fundamental or principal purpose” for which the employee’s position existed was to sell real estate, which fell under the Award
  • the employee was therefore protected from unfair dismissal

Employment Law – Tips for Employers  [...]  READ MORE →

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Employment Law – Ambiguous Enterprise Agreement Win

Employment Law – Background

The Fair Work Commission held that a South Australian car manufacturing company must pay out 117 redundant employees in lieu of notice as part of a redundancy package agreed to in their enterprise agreement. The case concerned the alleged ambiguity of certain terms in the enterprise agreement. Furthermore, it stresses the importance of clear drafting of enterprise agreements in employment law.

Employment Law – Facts

In essence:

  • the South Australian operations of Futuris Automotive Interiors Pty Ltd (Futuris) announced it was closing down because Holden were ceasing manufacturing operations in Australia in October 2017
  • in February 2017, Futuris told 117 employees that all roles would be made redundant around October 2017
  • Futuris also said all employees would be required to work out their employment notice period
  • an employee asserted to HR that given clauses 3.5.5 and 3.5.6 of the Futuris Automotive Interiors (South Australia) Work Place Agreement (Enterprise Agreement), employees were not required to work out their employment notice period
  • HR stated that the Enterprise Agreement and the National Employment Standards under the Fair Work Act provided that employees could be paid in lieu of notice only when it did not require employees to work during the notice period
  • clause 3.5.5 of the Enterprise Agreement contained an entitlement to be paid when an employee received a separation package even where notice was provided
  • the relevant union argued that Futuris had been applying the Enterprise Agreement inconsistently. In addition, this was causing employees to feel ‘betrayed’ when past employees who accepted voluntary redundancies were not required to work out their employment notice periods

Employment Law – Fair Work Commission Decision

The Fair Work Commission:

  • considered whether the Enterprise Agreement had intended for the notice entitlement in clause 3.5 to be a part of the redundancy package or to be paid out through the employment notice period
  • stated that the terms in the Enterprise Agreement were ‘ambiguous’ and ‘susceptible to more than one meaning’
  • concluded that ‘the concept of the package of entitlements is more consistent with the notion that payment is to be made upon the redundancy, rather than having the notice provided and paid in the lead up to that redundancy’
  • held that in consideration of the whole of the Enterprise Agreement, the intention of clause 3.5 was for a package to be paid to each employee upon the redundancy
  • restricted its decision to the particular words used in the Enterprise Agreement

The decision is available for you to read through the following hyperlink: [...]  READ MORE →