The recent decisions of the Full Federal Court in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016) and of the NSW Court of Appeal in McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC(RBS) v James [2016] NSWCA 36 (9 March 2016) are a timely reminder for employers about the risk of employment policies and other representations giving rise to breach of employment contract claims and damages awards for such breaches. In the latter case, two former bank executives successfully sued RBS for redundancy pay arising under a policy, that applied when it took over ABN Amro, on the basis that the policy had become contractually binding as a result of assurances made by RBS during the takeover process that the policy would continue to apply.

To avoid similar successful claims, employers should ensure that:

  • employment contracts do not refer to the requirement to comply with policies, or if they do then include an express statement stating that they do not form terms of the contract;
  • the introduction to the policy manual states that employees are directed to comply with the policies although the policies do not form terms of the employment contract; and
  • other verbal and written representations made about the application of the policies, whether in or outside of the policies, make clear that they are not promissory in nature or intended to have contractual effect.

We also remind you that employers need to be careful when adopting global corporate policies which are not specifically adapted to Australian law. In Richardson v Oracle Corporation Australia Pty Limited [2013] FCA 102, the court found Oracle liable for sexual harassment because the Australian subsidiary of the multinational company had simply adopted a global policy and so had not discharged its obligations under Australian law (as its policies and training programs about such policies were not appropriately tailored to Australian legal requirements). 

JWS can provide best practice employment policies required for employers to discharge their obligations under Australian employment laws such as discrimination, sexual harassment, bullying and health and safety laws to avoid liability or we can review and adapt global policies for this purpose.

We also prepare comprehensive toolkits and training packages for employers on these matters to help guide managers and HR professional on how to deal with grievance resolution, redundancies, investigations into complaints and performance management. Our toolkits include flowcharts, template letters, template scripts and guidelines and/or checklists for implementing every step in the process and these are adapted to the specific needs of each organisation.