What a big quarter it has been in the world of employment, industrial relations, and safety!
Fortunately, if keeping abreast of all the latest developments has proven to be all a bit much, we’ve distilled all the key information and updates for you in the one place in this jam-packed edition of “Hot Issues”.
Do you smell what the ROC is cooking?
The Registered Organisations Commission (ROC) has finalised its investigation into the Australian Workers’ Union (AWU) and its former secretary, Cesar Melhem.
Mr Melhem was the secretary of the AWU from 2006 until his resignation in 2013, when he was appointed to a vacancy in the Victorian Legislative Council.
The investigation, which first commenced in November 2016, was concerned with allegedly corrupt deals that were struck by the AWU at the time Mr Melhem was secretary.
At a high level, the investigation involved allegations that Cleanevent Pty Ltd, a cleaning company, agreed to pay the AWU $25,000 per year in a “side deal” to its enterprise bargaining agreement. This was alleged to be essentially a kick-back from the employer to the AWU in exchange for the AWU’s support of an enterprise agreement that contained unfavourable terms and conditions for Cleanevent employees, saving the employer over $1 million and giving the organisation a competitive advantage over other cleaning companies.
It was alleged that Mr Melhem, in his dealings with Cleanevent, may have breached his duties as an officer of the union under sections 285 and 286 of the Fair Work (Registered Organisations) Act (Fair Work (RO) Act). Those provisions impose obligations of care and diligence and good faith on union officers.
The ROC was also asked to review whether the AWU failed to maintain proper financial records of its membership arrangement with Cleanevent and other companies, which would potentially put the AWU in breach of section 253(3) of the Fair Work (RO) Act.
Before making a final decision, the ROC has provided both Mr Melhem and the AWU with letters outlining the proposed findings and inviting both to provide a response.
No leave for rolling up your sleeve
A Full Bench of the Fair Work Commission (FWC) has dismissed an application from the Shop, Distributive and Allied Employees’ Association (SDA), which sought to include a provision for paid blood donor leave in the pharmacy, hair and beauty, fast food, general retail and mannequins and models awards. The clause, if approved, would have enabled an employee to take up to two hours, leave four times per year for the purpose of donating blood.
The Full Bench accepted that the donation of blood is a “socially beneficial activity” and agreed that the provision of blood donor leave facilitates blood donations. However, the Full Bench gave extensive consideration to section 138 of the FW Act, which provides that a “modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.”
Section 134 of the FW Act relevantly sets out a range of considerations as to the “modern awards objective” which may be summarised as setting out a fair and relevant safety net of terms and conditions. However, the Full Bench concluded that it was not satisfied that the inclusion of the blood donor leave clause was necessary for the five awards to meet the modern awards objective.
Committee condemns burdensome bargaining tactic
The Senate Education and Employment References Committee (SERC) has delivered a report into corporate avoidance of the FW Act which, amongst its key recommendations, proposes an amendment to section 226 of the FW Act. This amendment would prevent the FWC from terminating an enterprise agreement which leaves workers worse off as a result of the termination. Where an expired enterprise agreement is terminated, employees fall back onto the terms and conditions set out by the applicable modern award.
SERC acknowledged that, in relation to enterprise agreements that have passed their nominal expiry date, a “spate of cases was brought to [SERC’s] attention over the course of [the] inquiry where employers have seemingly sought to unilaterally terminate enterprise agreements”.
In that context, SERC observed, “it is apparent that this is done by employers in order to significantly reduce employee wages and conditions, often for the purpose of obtaining an advantage in negotiations for a replacement agreement”.
Currently, an application to terminate an enterprise agreement can be made unilaterally by any employer or employee covered by the instrument under section 225. Section 226 sets out that the FWC must make an order to terminate an expired enterprise agreement if it is satisfied that it is not contrary to public interest to do so and the FWC considers it is appropriate taking into account all of the circumstances, including the views of the employees and the employers, and the likely effect termination will have on each of those. SERC concluded that the FW Act does not clearly articulate the public interest issues the Commission should or must consider in making its decisions. In SERC’s view, amending section 226 will have the effect of protecting the living standards of workers and providing a safeguard from the “ruthless industrial strategies” that lower the bargaining floor and effectively allow employers to coerce employees into accepting anything better than the legal minimum.
Rotten result for former fruiterer
The Federal Circuit Court recently handed down penalties of more than $660,000 to the former owner-operator of a Melbourne fruit market and his company after it was determined that he had deliberately ignored warnings from the Fair Work Ombudsman (FWO) about the underpayment of an Afghan refugee.
The Court determined that the owner of the Sunshine Fruit Market, Mr Abdulrahman Taleb, paid the refugee nothing for a number of weeks in early 2012 and later, a flat rate of $10 per hour for up to 12 hours a day in his role of moving and stacking produce.
The employee should have received hourly rates of $17 for normal hours, up to $35 on weekends, and up to $43 on public holidays. The sum of the underpayment was $25,588.
Handing down the decision, the Judge stated that Mr Taleb had taken advantage of the worker, who was “a vulnerable employee in that he was a recent arrival to Australia and totally lacked fluency in English, and could reasonably be understood to be most unlikely to be aware of any entitlements at law”.
Mr Taleb was penalised $16,020 and his company, Mhoney Pty Ltd, $644,000.
The overall penalty of $660,020 is the largest ever achieved as the result of FWO litigation.
Essential services exempt from code compliance
The Federal Government has authorised a notable change to the Building Code to provide an exemption for the construction of essential services infrastructure from the need to be code-compliant.
Unions like the CFMEU and the ETU have mounted a sustained opposition campaign to the Code, which amongst other things, prescribes prohibited content for enterprise agreements which apply specifically in the construction industry. Businesses, employees, and unions are required to comply with the Code on all projects from the first time the business submits an expression of interest or tender for Commonwealth-funded building work.
The Code for the Tendering and Performance of Building Work Amendment (Infrastructure Exemptions) Instrument 2017 was made by the Minister for Employment, Michaelia Cash, in August 2017.
The revision relevantly provides that, upon receipt of an application, the Commissioner of the Australian Building and Construction Commission must grant an exemption from the Building Code if it is satisfied that:
• the principal business of the building contractor or building industry participant involves performing work for the provision of essential services related to supply of electricity, natural gas, water, waste water, or telecommunications; and
• the principal building work of the building contractor or building industry participant involves performing work for the provision of essential services infrastructure.
Reforms proposed to make super more secure
The federal government has introduced the Fair Work Amendment (Recovering Unpaid Superannuation) Bill which aims to make a number of changes to the superannuation system.
The proposed changes include:
• the closure of a loophole allowing employers to count voluntary contributions as employer contributions;
• the removal of the exemption from making superannuation contributions that currently exists when an employee earns less than $450 in a calendar month for that month;
• making superannuation contributions part of the National Employment Standards; and
• making it easier for employees to track when their superannuation contributions are made.
Introducing the bill to Parliament, the federal member for Mayo, Ms Rebekha Sharkie, stated that “there are a least 2.4 million workers in this country who have been underpaid their super, ripping out $3.6 billion from retirement savings”.
Shake-up in store for long service leave in Victoria
In August 2017, the Victorian Industrial Relations Minister introduced the Long Service Leave Bill 2017 into the Victorian Parliament. If passed, the new legislation will fundamentally change the way long service leave (LSL) is accrued, when it can be taken, and how it can be taken. A number of key reforms are set out below.
The legislation in Victoria currently provides that an employee may only take leave in one period, unless an agreement is reached with their employer, in which case they may access their LSL entitlement in two or three separate periods. Conversely, the proposed legislation provides that an employee will be able to take a minimum of one day of LSL.
Under the proposal, employees will also be able to access their entitlement to LSL after seven years, rather than 10 years as is the case at present. This will bring the right to take LSL into line with the right to receive payment of accrued LSL upon the conclusion of employment, which presently arises after seven years.
The existing LSL legislation also provides that an employee is entitled to receive payment for LSL based on the greater of the previous 12 months or over the most recent five year period of employment. The new bill recognises that many workers, particularly women, change their hours of work. As a result, the bill provides that the entitlement to LSL will be calculated on the greater of the previous 12 months; the previous five years or the employee’s full period of continuous employment.
Similarly, any form of paid parental leave or unpaid parental leave will count for the purposes of an employee’s continuous service for the first 12 months of that leave. At present, parental leave does not break an employee’s service with their employer for LSL purposes, but it does not count as service either.
Employers should ensure they are aware of the full suite of changes to the LSL regime ahead of the anticipated passage of the bill through the Victorian Parliament.
Suite of amendments to WorkSafe legislation
The WorkSafe Legislation Amendment Act 2017 (Vic) was recently passed by the Victorian Parliament. The Act makes amendments to the Occupational Health and Safety Act 2004 (Vic) (OHS Act) (to come into effect on a day to be proclaimed), the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic), the Accident Compensation Act 1985 (Vic), and the Dangerous Goods Act 1985 (Vic) (amendments came into effect on 27 September).
Broadly, the changes to the OHS Act extend the two-year time limit for prosecuting indicatable offences and the 12-month time limit for the prosecution of other offences, such as a failure to comply with a request by an inspector or a refusal to answer questions asked by an inspector. The legislation also strengthens offences which support enforcement and compliance with principal OHS duties, improves the enforcement of enforceable undertakings, and permits certain notices to be served by email.
The Dangerous Goods Act 1985 (Vic) has been amended to expressly allow for the making of emergency asbestos orders. Additionally, amendments to the worker’s compensation legislation include:
• the introduction of measures to increase benefits for family members;
• clarification around the inclusion of casual loadings in a worker’s pre-injury average weekly earnings;
• clarifying that a member of a medical panel or an expert giving advice to a medical panel cannot be compelled to give evidence relating to their role and function as a member or expert; and
• expanding the reasons to review the approval of an employer as a self-insurer