Workplace Relations Gazette - 2nd edition

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Workplace Relations Gazette
2nd edition
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Workplace Relations Gazette www.carternewell.com
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The material contained in this Gazette is in the nature of general comment only, and neither purports nor is intended to be advice on any particular matter. No
reader should act on the basis of any matter contained in this publication without considering, and if necessary, taking appropriate professional advice upon
their own particular circumstances. © Carter Newell Lawyers 2016
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Bullying
James Willis v Marie Gibson; Capitol Radiology Pty
Ltd; Peita Carroll [2015] FWC 1131 and [2015] FWC
3538
Notwithstanding initial findings of bullying in the course of
disciplinary action, significant improvements meant no ongoing
risk and no basis for bullying order.
YH v Centre and Others [2014] FWC 8905
Application for an order to stop workplace bullying rejected where
interpersonal conflict and ‘very heavy-handed’ performance
management was insufficient to justify an order.
Rachael Roberts v VIEW Launceston Pty Ltd [2015]
FWC 6556
Real estate agent found to have been bullied at work through
unreasonable behavior by the office administrator, including defriending
on Facebook.
CF and NW v Company A and ED [2015] FWC 5272
First contested bullying orders made by FWC where there
was ongoing fear for safety notwithstanding a change in the
employment of the perpetrator.
Breach of contract
Commonwealth Bank of Australia v Barker [2014] HCA
32
The High Court held that there is no implied duty of mutual trust
and confidence in the terms of employment in Australia.
Dmitri Gramotnev v Queensland University of
Technology [2015] QCA 127
The Queensland Court of Appeal finds that, with one exception,
EBA terms, policies and international covenants are not part of a
contract of employment.
Russo v Westpac Banking Corporation [2015] FCCA
1086
Federal Circuit Court finds the wording of an employment
contract incorporated a policy on discretionary bonuses and was
binding, and that discretion must be exercised reasonably.
Penalties and sentencing
Commonwealth of Australia v Director, Fair Work
Building Industry Inspectorate; CFMEU v Director,
Fair Work Building Industry Inspectorate [2015] HCA
46
High Court clarifies that submissions by the prosecution on
penalty, including joint submissions agreed as part of plea deal,
are admissible in civil penalty matters.
Fair Work Building Industry Inspectorate v Foxville
Projects Group Pty Ltd [2015] FCA 492
Assessment of penalty for breach of the FW Act for failing to
provide Fair Work Information Statements to employees.
Unfair dismissal
Ben Loakes v CFMEU, Qld and NT Divisional Branch
[2015] FWC 5058
FWC dismisses unfair dismissal application of CFMEU employee
notwithstanding procedural failings.
Phillip McClelland v International Parking Group Pty
Ltd T/A Metro Parking Management Pty Ltd [2015]
FWC 3708
The FWC upheld the employer’s jurisdictional objection to an
application for an unfair dismissal remedy, finding that although
the relevant casual employee had regular and systematic
employment, there was no expectation of ongoing employment.
Maria Panera v Qantas Airways Limited [2015] FWC
4527
The FWC upheld the dismissal of an employee dubbed ‘Lady
Bountiful’ notwithstanding a rushed termination process designed
to avoid a redundancy payment.
Tamer Selcuk v Epworth Foundation T/A Epworth
Hospital [2015] FWC 4367
FWC orders an employer to pay the employee’s legal costs on
a party-party basis following an unsuccessful application for
permission to appeal, but finds in the particular circumstances
that it has no power to order costs against the employer’s
representative.
General protections
RailPro Services Pty Ltd v Flavel [2015] FCA 504
Federal Court finds that normal human reactions such as
nervousness are insufficient to put an employer on notice of a
disability in an adverse action claim.
Work health and safety
Brett McKie v Munir Al-Hasani & Kenoss Contractors
Pty Ltd (in liq) [2015] ACTIC 1
The ACT Industrial Court dismissed the charge against Mr AlHasani,
finding that he was not an ‘officer’ for the purposes of the
Work Health and Safety Act 2011 (ACT).
Contents
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Workplace Relations Gazette www.carternewell.com
We are delighted to publish the
2nd edition of the Workplace
Relations Gazette.
As with the 1st edition of the
Gazette, which was extremely
well received by our firm’s insurer,
broker, professional and corporate
clients, this edition considers
recent decisions involving a wide
range of professionals, including
medical practitioners, real
estate agents and senior bank
managers.
In this edition, we provide
employers and insurers with
a synopsis of practical and
noteworthy cases with a focus on
unfair dismissal, bullying, adverse
action, breach of contract, general
protections and penalties and
sentencing, and work heath and
safety.
This Gazette contains recent
decisions considered by the
courts and highlights the
importance of not only having in
place appropriate policies and
procedures but ensuring that they
are put into practice. Regardless
of the merits of a position taken
by an employer, the failure to
apply appropriate policies and
procedures can be deleterious.
As a premier legal service provider
with teams in both Brisbane in
Sydney, we trust the 2nd edition of
the Workplace Relations Gazette
will be a useful resource for our
readers. We would welcome your
feedback on this edition and any
suggestions for our future editions
([email protected]).
Michael Gapes
Partner
From the Partner
The material contained in this Gazette is in the nature of general comment only, and neither purports nor is intended to be advice on any particular matter. No reader should act on the
basis of any matter contained in this publication without considering, and if necessary, taking appropriate professional advice upon their own particular circumstances.
© Carter Newell Lawyers 2016
Contributing Editors
Michael Gapes
Partner
Mark Brookes
Partner
@ @
07 3000 8305
[email protected]
07 3000 8301
[email protected]
Matthew Payten
Special Counsel
@
07 3000 8482
[email protected]
Andrew Shute
Partner
@
Michelle Matthew
Associate
@
07 3000 8315
[email protected]
07 3000 8371
[email protected]
Lara Radik
Senior Associate
@
07 3000 8441
[email protected]
Contributing Researchers
Rosalie Grace
Law Clerk
William Hopkins
Law Clerk
Special thanks to past contributing editor
Stephen Hughes, Special Counsel
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Case Note
James Willis v Marie Gibson; Capitol Radiology
Pty Ltd; Peita Carroll [2015] FWC 1131 and
[2015] FWC 3538
Bullying
Notwithstanding initial findings of bullying in the course of disciplinary action, significant
improvements meant no ongoing risk and no basis for bullying order.
Mr Willis was a recently employed radiologist working
for Capitol Radiology, embedded within a GP practice.
He had recently moved to take up the new role, and
was still in probation. The General Manager (GM) and
Human Resources Manager (HRM) of the employer
arrived unannounced at the particular workplace and
‘berated’ Mr Willis while undertaking investigations
regarding his performance. A disciplinary process was
commenced, and some days later a letter of warning
was issued.
Mr Willis initiated a bullying complaint before the Fair
Work Commission (FWC). The employer applied to
have the complaint struck out on the basis that the
actions complained of were reasonable management
actions undertaken in a reasonable manner, and thus
excluded from the scope of bullying and outside the
FWC’s jurisdiction.
In considering the employer’s objection, Commissioner
Lewin noted that Mr Willis had been placed in an
ambiguous and confusing situation in which he was
required to take direction from the practice manager
of the GP despite not being his employer. The issues
in question were largely as a result of his very recent
commencement, and could have been addressed
through more benign communication. The FWC was
critical of the way the investigation had been undertaken
and the lack of forewarning to the employee, and
considered the conduct of the GM and HRM to be
‘unreasonably abrupt and threatening’. Accordingly, it
was not reasonable management action carried out in
a reasonable manner and the jurisdictional objection
was dismissed.
Some months later the application progressed to a
substantive hearing. Following on from the consideration
of the jurisdiction, Commissioner Lewin reiterated that
the initial actions of the employer were not reasonable
management action done in a reasonable way, and
concluded that in the circumstances the conduct
satisfied the test for bullying. Particular regard was had
to the vulnerability of the worker while on probation
after having recently moved, and the escalation of
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initial performance management to discipline.
However, since the initial finding on jurisdiction
the employer had taken a very different approach.
The disciplinary notice had been withdrawn. The
two managers originally involved had no further
involvement, and the matter had received direct
attention by senior management. A reasonable
performance management and review process
had been implemented and considerable restraint
had been shown in the face of inflammatory
communications by the employee. The subsequent
management action could not be faulted. In those
circumstances, the Commissioner concluded that
there was no risk of further bullying and therefore
no legal or factual basis for any order.
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Workplace Relations Gazette www.carternewell.com
Case Note
YH v Centre and Others [2014] FWC 8905
Bullying
Application for an order to stop workplace bullying rejected where interpersonal conflict
and ‘very heavy-handed’ performance management was insufficient to justify an order.
Workplace Relations Gazette www.carternewell.com
www.carternewell.com Workplace Relations Gazette
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The facts
YH, a Melbourne childcare centre worker, sought an
order to stop workplace bullying against her co-worker
ET for ‘hostile’ behavior and against the centre’s
director, Ms LI, as a result of the way Ms LI handled
YH’s complaint against ET.
YH claimed that ET’s bullying behavior covered a three
year period from 2010, when ET allegedly asked YH
inappropriate questions about a co-worker’s sexuality
and, on another occasion, interrupted her by shouting
‘this is all nonsense!’. YH also claimed that ET had
undermined YH’s credibility and put her down in front
of other staff at a Christmas party.
ET responded that YH avoided certain tasks that she
was required to perform in the centre and in 2014, ET
had raised a number of complaints about YH with LI.
YH received warnings as a result of those complaints.
When YH apologised to Ms LI, stating that this was the
first time she had made one of the identified errors,
ET contradicted YH, said she had done it before and
called her a liar.
A meeting was held in February 2014 to discuss
the verbal warning issued to YH about her work
performance, and to discuss YH’s attitude towards
ET and the need for her to be more considerate
towards other staff. YH subsequently raised the
bullying allegations against both ET and LI. In
response, the centre’s committee of management
conducted an investigation and found the claims were
unsubstantiated.
Issue
1. Did the actions of ET and LI constitute either
workplace bullying or ‘unreasonable behaviour’?
Decision
The Fair Work Commission (FWC) found that YH’s
evidence lacked credibility and held little weight.
YH seemed to be difficult to supervise and avoided
unpleasant tasks in the workplace. ET, in all likelihood,
was quick to express criticism and sometimes used an
angry voice or body language. Overall it was observed
that YH and ET probably did not like each other and
may have even been mutually hostile towards each
other.
Despite evidence of poor behavior, the FWC was
unable to determine who started the unpleasant
behavior and was also unable to discern that it
amounted to unreasonable behavior, let alone
repeated unreasonable behaviour with a risk to health
and safety. It was observed that although in some
cases interpersonal conflicts or workplace gossip can
be bullying behaviours, the ones exhibited in this case
were not.
The FWC decided that LI’s disciplinary practices were
not examples of unreasonable behavior towards YH
nor did they create a risk to health and safety. In making
this finding, the FWC considered that LI’s disciplinary
steps were ‘very heavy-handed’ and did not sufficiently
acknowledge the possibility that the matters reported to
her by ET might be incorrect. It was also observed that
the centre’s committee of management would benefit
from the provision of training around supervisory
communication styles and methods. Nevertheless, it
was found that it was not unreasonable of LI to pursue
the complaints and that communications to YH were
not carried out in an objectively unreasonable manner
or in a way that would create a risk to health and safety.
On that basis the FWC dismissed YH’s application.
‘Despite evidence
of poor behaviour,
the FWC was
unable to determine
who started
the unpleasant
behaviour and
was also unable
to discern that
it amounted to
unreasonable
behaviour.’
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Workplace Relations Gazette www.carternewell.com
Case Note
Rachael Roberts v VIEW Launceston Pty Ltd
[2015] FWC 6556
Bullying
Real estate agent found to have been bullied at work through unreasonable behavior by
the office administrator, including de-friending on Facebook.
Ms Roberts was a real estate agent with View
Launceston. She alleged that over a 14 month period
she was repeatedly bullied primarily through the
unreasonable behaviour of the office manager, Mrs
Bird. She particularised eighteen separate allegations
of bullying. The Fair Work Commission (FWC)
analysed each of them in turn, and found that nine of
the eighteen were substantiated. While the exercise
was factually driven, the unreasonably behaviour
substantiated included:
• Being belittled, and responded to in an aggressive
and rude manner;
• Having administrative work on her property listings
delayed to make her look unprofessional;
• Referring one of Ms Roberts’ clients to a collection
agency when Ms Roberts had made arrangements
for delayed payments;
• Being spoken to abruptly and in a condescending
manner, being ignored, and being treated
differently from others in terms of day to day office
activities.
Matters came to a head in January 2015 following
Ms Roberts raising a concern with the principal
about her listing not being given adequate window
space. Ms Roberts alleged an altercation then took
place the following day between her and Mrs Bird,
and that Mrs Bird was aggressive and accused her
of being disrespectful and undermining her authority.
Ms Roberts alleged she was humiliated and in a very
distressed state and left the office crying. A short
time later she sought to check if Mrs Bird had made
a Facebook comment about the incident, only to find
that Mrs Bird had deleted her as a Facebook friend.
In contrast, Mrs Bird asserted that when she asked Ms
Roberts about her concerns she became argumentative
and that things got heated on both sides. Mrs Bird
acknowledged that she had told Ms Roberts that her
behaviour reminded her of ‘… a school child or girl
going to the teacher to tell on the other child.’
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9
The Commission commented:
‘The evidence of Ms Roberts as to Mrs Bird
defriending her on Facebook immediately after the
incident is supported by a contemporaneous text
message between Ms Roberts and Mr Bird. It was
not refute (sic) by Mrs Bird in evidence. This action
by Mrs Bird evinces a lack of emotional maturity
and is indicative of unreasonable behaviour, the
like of which I have already made findings on. The
‘school girl’ comment, even accepting of Mrs Bird’s
version of events, which I am not, is evidence of an
inappropriate dealing with Ms Roberts which was
provocative and disobliging.’
It should be noted that half of the allegations of bullying
were not accepted. Putting aside those rejected for
lack of evidence, various other actions asserted as
bullying were found to be not unreasonable:
• Not being allowed to adjust the temperature
settings on the air conditioner;
• Not being permitted to take a laptop home;
• Locking of the petty cash and stamps draw;
• Being required to wear a uniform when others
were not required to do so;
• Directing potential clients away from her towards
new starters;
• Overhearing telephone conversations (in a small
office).
The FWC concluded that the claimant had been
subjected to repeated unreasonable behaviour over
an extended period of time. Having received evidence
of a diagnosis of depression and anxiety, with
medication and treatment by a psychologist, the FWC
was satisfied that behaviour posed a risk to health and
safety. Accordingly the statutory test for bullying was
satisfied.
The employer contended that because an anti-bullying
procedure and manual had been established since
the incident, there was no risk of bullying behaviour
occurring at work in the future.
The FWC commented:
‘I respectfully disagree with this submission.
The evidence at the hearing was that [the
respondents] did not consider that any of the
behaviour complained of constituted bullying.
A lack of understanding as to the nature of the
behaviour displayed at work has the proclivity to
see the behaviour repeated in the future by Mrs
Bird. I conclude that there is a risk of Ms Roberts
continuing to be bullied at work.’
A stop bullying order was proposed. The matter was
referred for a conference as to other practical orders to
be made in the context of the specific business.
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Workplace Relations Gazette www.carternewell.com
Case Note
CF and NW v Company A and ED [2015] FWC
5272
Bullying
First contested bullying orders made by FWC where there was ongoing fear for safety
notwithstanding a change in the employment of the perpetrator.
The facts
In CF and NW v Company A and ED the Fair Work
Commission (FWC) issued a stop bullying order for the
first time following a contested hearing. In this matter,
two female employees of a real estate company
alleged that their supervisor, a property manager,
engaged in bullying behaviour by belittling them,
swearing and using other inappropriate language,
engaging in physical intimidation and slamming of
objects on desks, and by threats of violence. Neither of
the two employees felt they could safely return to the
workplace, and both had sought medical treatment.
In response to the complaint, the property manager
resigned and took up employment with a related
company at a different location, but there was ongoing
interaction between the two businesses and the
property manager was seconded back to the original
business for a short period.
Issue
1. Does the perpetrator ceasing employment with the
employer mean that there is no ongoing risk of
bullying so as to prevent an order being made.
Decision
Commissioner Hampton found that bullying had
taken place and that, notwithstanding the change
in employment status of the perpetrator, given the
ongoing interaction between the businesses there
was a material risk of further bullying in the workplace
by the relevant individual. On the evidence, the
Commissioner was satisfied that ‘without measures
being implemented to set and enforce appropriate
standards of behaviour in the workplace there was a
risk of further relevant unreasonable conduct’.
Two types of orders were made. The first related to the
specific behaviour and minimising the contact between
the perpetrator and the two employees involved going
forward. The second type related to the broader culture
of the business, and required the implementation of
anti-bullying policies, procedures and training, and
ongoing reporting arrangements. The orders were
issued with an expiry date of 24 months.
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Matthew Payten is a Special Counsel in Carter
Newell’s Litigation & Dispute Resolution team,
specialising in workplace relations, occupational
health and safety and significant commercial
disputes. Matthew has over 15 years experience
acting for corporations, insurers and GOCs with a
particular expertise in the resources, industrial and
construction sectors. His broad experience extends
across all aspects of the workplace including
incident management, prosecution defence
(occupational health and safety, wage claims and
environmental harm), employment terminations,
injuries, discrimination and restraint of trade. More
broadly he has extensive commercial litigation
experience handling contractual and other
disputes for a range of mining, industrial and
construction firms.
Prior to joining Carter Newell, Matthew was
in-house legal manager and corporate counsel
for a worldwide diversified natural resource
company.
Matthew Payten
Special Counsel
Staff profile Litigation & Dispute Resolution, Workplace Relations
07 3000 8482
0423 280 295
07 3000 8440
@ [email protected]
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Workplace Relations Gazette www.carternewell.com
Case Note
Commonwealth Bank of Australia v Barker [2014]
HCA 32
Breach of contract
The High Court held that there is no implied duty of mutual trust and confidence in the
terms of employment in Australia.
The facts
Mr Barker was made redundant by the Commonwealth
Bank of Australia (CBA) in April 2009, after some 27
years employment. It was a term of his employment
contract that he would be entitled to a retrenchment
payment if CBA was unable to redeploy him into an
appropriate alternative position.
Due to a lack of administrative foresight, Mr Barker’s
work email account was suspended shortly after he
was notified of the potential redundancy resulting in
him not receiving a number of emails regarding his
redundancy, redeployment opportunities, and the
availability of Career Support etc. CBA’s allocated
Career Support employee received the emails
intended for Mr Barker, however she did not make any
attempt to speak to or see him prior to the termination
of his employment.
Only one employment opportunity of relatively
commensurate level was available prior to Mr Barker’s
termination. However (as the court at first instance
found) it was unlikely that he would have successfully
secured that role given his lack of relevant knowledge
and experience in that area of banking operations. In
the absence of achieving redeployment, Mr Barker
was paid a retrenchment package of approximately
$180,000 in accordance with his contract.
Mr Barker subsequently commenced proceedings
against CBA in the Federal Court alleging, amongst
other matters, that CBA was ‘in breach of the implied
term of mutual trust and confidence and resulted in [Mr
Barker] being denied the opportunity of redeployment
and the opportunity to thereby retain his employment…’
Essentially Mr Barker argued that CBA had not been
sufficiently proactive, cooperative and accommodating
in finding an alternative position for him and that such
failures amounted to a breach of (the asserted) implied
term of mutual trust and confidence; entitling him to
damages over and above his retrenchment package.
Issue
1. Do all Australian employment contracts include an
implied term of mutual trust and confidence?
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13
Decision
The High Court acknowledged that there was an
implied duty of mutual trust and confidence recognised
in English common law. The High Court observed
however that whilst UK Courts had found it necessary
and appropriate to imply such a duty in their jurisdiction
it did not mean that such a duty ought also be implied
into Australian employment contracts. The High Court
commented that Australian courts must ‘subject
[foreign rules] to inspection at the border to determine
their adaptability to native soil’.1
The High Court held that in order for a duty of mutual
trust and confidence to be implied into Australian
employment contracts, it must be demonstrated
that in the absence of such an implied term, ‘the
contract would be deprived of its substance, seriously
undermined or drastically devalued’.2
Given the existence of fiduciary elements in the
employment relationship, the already accepted (in
Australia) implied duties of fidelity and cooperation,
and an extensive body of legislation and industrial
instruments, the High Court was unwilling to find that
a further implied term of mutual trust and confidence
was necessary in order to give meaning to Australian
employment contracts.
The High Court noted that the Australian legislature
has (since 1994) made provision for employees to
make unfair dismissal claims, albeit with a restriction of
availability to employees earning less than a specified
amount (currently referred to as the ‘high income
threshold’). As Mr Barker’s earnings exceeded the
high income threshold, he was excluded from making
a statutory unfair dismissal claim and thus sought
instead to rely on the common law for his cause of
action. The High Court held, however, that:
‘…the Australian parliament has determined what
remedies are to be provided for unfair dismissal
and it has determined who may seek them…
Contrary to [Mr Barker’s] contention, this does not
create a gap which the common law can fill.’
The High Court did, however, hold that the CBA had
breached the terms of his employment contract by
failing to pay Mr Barker four weeks’ notice in addition
to the retrenchment package and ordered that the CBA
pay Mr Barker an additional amount of approximately
$11,700 plus interest.
1
Per French CJ, Bell and Keane JJ at paragraph 18.
2
Per French CJ, Bell and Keane JJ at paragraph 29.
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Workplace Relations Gazette www.carternewell.com
Case Note
Dmitri Gramotnev v Queensland University of
Technology [2015] QCA 127
Breach of contract
The Queensland Court of Appeal finds that, with one exception, EBA terms, policies and
international covenants are not part of a contract of employment.
The facts
Mr Gramotnev had been employed by the Queensland
University of Technology (QUT) for a period of
approximately 11 years prior to his dismissal for
misconduct on 3 July 2009.
Mr Gramotnev commenced proceedings against QUT
in the Queensland Supreme Court, raising numerous
allegations of breach of contract in the period between
2004 and his dismissal in 2009.
Mr Gramotnev argued, amongst other matters, that
QUT breached:
• The terms of the relevant enterprise bargaining
agreements (EBA) by failing to properly consider
his several applications for promotion and by
failing to provide a safe work environment. Mr
Gramotnev argued these terms formed part of the
employment contract;
• The terms of QUT’s policies and procedures
regarding promotions, code of conduct, vision
goals and organisational values, and equal
opportunity and diversity. Mr Gramotnev argued
these terms formed part of the employment
contract;
• A number of articles of the International Covenant
on Economic, Social and Cultural Rights. Mr
Gramotnev argued that these articles formed
implied terms of the employment contract; and
• An implied term of the employment contract
requiring QUT to create and maintain a safe work
environment.
Issues
1. Do the terms of an EBA form part of the employment
contract?
2. Do policies and procedures form part of the
employment contract?
3. Do international conventions form implied terms of
the employment contract?
4. Does an implied term of health and safety form
part of Australian employment contracts?
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15
Decision
The Court of Appeal considered the terms of Mr
Gramotnev’s letter of offer, which relevantly provided
that ‘the terms and conditions of your employment
are prescribed by the relevant enterprise bargaining
agreements’. While the court accepted that some
terms of the EBAs formed part of the employment
contract, the majority of the terms relied upon by Mr
Gramotnev in this case were found in the objects
clause and provided that the objectives of the EBA
were to, amongst other things, ‘foster the development
of a positive and productive workplace culture’. Where
terms of an EBA are aspirational, the court held that
there can be no promissory obligation that might
operate as a contractual term.
The court also considered the terms of Mr Gramotnev’s
letter of appointment, which relevantly provided that
‘your employment conditions include the provisions
of [QUT’s policies and procedures]’. Again, the
court accepted that some terms of QUT’s policies
and procedures formed part of the employment
contract, including the provisions of the Senior Staff
Disciplinary Policy requiring that any allegations of
misconduct or serious misconduct would be dealt with
by the procedures outlined in the policy. However,
the majority of QUT’s policies and procedures set
out expectations or aspirations as to the standards
it expects staff members to achieve. They did not
comprise contractual promises by QUT.
Following the decision of the High Court in
Commonwealth Bank of Australia v Barker [2014]
HCA 32, the court held that articles of the International
Covenant on Economic, Social and Cultural Rights
should only be implied if those implied terms were
necessary to give business efficacy to the contract.
The court held the implication of the articles was
not necessary and, in any event, observed that
the Australian law of contract is not affected by the
operation of international conventions in the absence
of explicit legislation to that effect.
The court acknowledged that it has long been accepted
that, in addition to the corresponding duty of care in
tort, an employer also owes a contractual duty to take
reasonable care for the safety of an employee. The
implied term advocated by Mr Gramotnev, however,
required QUT to create and maintain a healthy and
safe workplace environment. The court held this
was more onerous than the contractual obligation
acknowledged by previous cases, and further held it
was not necessary to imply the more onerous obligation
in order to give business efficacy to the contract.
As a general comment, the majority of the arguments
advanced by Mr Gramotnev were premised on a
fundamental misunderstanding of provisory obligations
capable of forming contractual terms. Mr Gramotnev’s
arguments would have required the employer to
guarantee that each and every individual employee
comply in all respects with its policies and procedures,
something no employer could do.
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Case Note
Russo v Westpac Banking Corporation [2015]
FCCA 1086
Breach of contract
Federal Circuit Court finds the wording of an employment contract incorporated a policy on
discretionary bonuses and was binding, and that discretion must be exercised reasonably.
The facts
Mr Russo commenced employment for Westpac
in May 2009 as a senior manager. Pursuant to his
employment contract, Mr Russo was entitled to a
salary of $200,000 gross per annum plus a bonus of up
to $70,000 gross per annum ‘at the absolute discretion
of Westpac’.
In the 2009/2010 financial year, Mr Russo achieved his
full bonus of $70,000.
On 20 October 2011, Mr Russo’s position was made
redundant. Had he remained employed by Westpac,
his bonus for the 2010/2011 financial year would have
become payable on 1 December 2011. Mr Russo’s
supervisor elected not to pay Mr Russo any bonus in
respect of the 2010/2011 financial year, claiming that
Mr Russo was not entitled to a bonus in circumstances
where Mr Russo’s employment had ceased prior to the
bonus becoming payable, and Mr Russo had in any
event failed to meet performance targets. Westpac
defended its decision on the basis that the bonus was
only payable ‘at the absolute discretion of Westpac’
and it is not the role of the court to second-guess
business judgments made by Westpac.
Mr Russo argued that he was entitled to a bonus
payment on the grounds that:
• His employment contract provided that, upon
termination for redundancy, Mr Russo’s
entitlements ‘will be determined’ in accordance
with Westpac’s policies. One such policy was
Westpac’s incentive policy;
• Although the employment contract also provided
that ‘policies do not form part of the contract of
employment’, the rules of contractual interpretation
dictate that general exclusionary clauses do not
override specific inclusionary clauses. Accordingly,
while the policies may not have had contractual
force at any other time, they did have contractual
force upon redundancy as per the redundancy
clause. As such, any breach of policy by Westpac
would amount to a breach of contract;
• Westpac’s incentive policy provided that, in the
event of redundancy, an employee is entitled to a
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pro rata bonus payment;
• Westpac’s incentive policy further provided
that, in assessing an employee’s bonus
entitlement, Westpac must conduct regular formal
performance appraisals and must assess the
employee’s performance against specific criteria.
In Mr Russo’s case, Westpac failed to conduct the
regular performance appraisals as required, failed
to assess Mr Russo’s performance against the
relevant criteria, and assessed his performance
against various other criteria which did not form
part of the incentive policy;
• Had Westpac complied with the terms of the
employment contract and the terms of the
incentive policy, Mr Russo would have received
a bonus payment in respect of the 2010/2011
financial year.
Issues
1. Do policies and procedures have contractual
force?
2. Where a bonus is discretionary in nature, does an
employer have unfettered discretion in relation to
payment of the bonus?
Decision
The court rejected Westpac’s arguments that its
policies and procedures were aspirational and did not
have contractual force. The court accepted that this
may well be the case in another scenario, however in
the context of a redundancy the employment contract
specifically incorporated Westpac’s policies and
procedures and obliged Westpac to follow them.
The court further rejected Westpac’s argument that
its managers had an ‘absolute discretion’ in relation
to decisions regarding bonus payments. Relevantly,
the discretion was limited by the requirement that
Westpac comply with the terms of the employment
contract and its policies and procedures. Further,
even in the absence of policies and procedures, if
an employment contract provides for a discretionary
bonus, the discretion ‘…should not be construed so
as to give the appellant a free choice as to whether to
perform or not a contractual obligation…There may be
many circumstances in which it would be legitimate,
and conformable with the purposes of the contract,
not to pay the bonus…What, however, would not be
permitted is an unreasoned, unreasonable, arbitrary
refusal to pay anything, come what may…’.1
The court held that Westpac had exercised its discretion
in a manner that was not in line with its policies and
had therefore breached the employment contract.
The court therefore ordered Westpac to pay Mr Russo
his full bonus of $70,000 plus legal costs.
In a subsequent decision (Russo v Westpac Banking
Corporation (no. 2) [2015] FCCA 1668), the court
considered whether Westpac should be ordered to
pay Mr Russo’s costs on an indemnity basis following
Westpac’s rejection of an offer of compromise in the
amount of $50,000.
Westpac argued that costs should not be ordered
on an indemnity basis on the grounds that it was
not unreasonable for Westpac to reject the offer in
circumstances where there was a large degree of
uncertainty surrounding the amount of bonus which
would have been payable, if it was payable at all. The
court rejected this argument, noting that:
‘There is great uncertainty in the outcome of
most, if not all, genuinely contested cases. To
allow uncertainty in the outcome of litigation as a
reason for displacing the presumption in favour of
indemnity costs would remove from most genuinely
contested cases the incentive…to parties to
seriously consider and attempt to compromise their
disputes.’
Accordingly, the employee’s costs incurred after the
date of the offer were ordered to be paid by Westpac
on an indemnity basis.
1
Per Allsop P in Silverbrook Research Pty Ltd v
Lindley [2010] NSWCA 357 [5-6].
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Case Note
Commonwealth of Australia v Director, Fair
Work Building Industry Inspectorate; CFMEU v
Director, Fair Work Building Industry Inspectorate
[2015] HCA 46
Penalties and sentencing
High Court clarifies that submissions by the prosecution on penalty, including joint
submissions agreed as part of plea deal, are admissible in civil penalty matters.
It had long been the practice of counsel for the
prosecution to make submissions to a court regarding
an appropriate sentence, or range of sentences, in
the circumstances of a particular case. In negotiating
a plea of guilt, it was common for respective counsel
to reach agreement as to the appropriate penalty.
While such agreements were never binding and were
in the nature of a joint submission to the court, and
the ultimate sentencing decision was always a matter
for the independent discretion of the court, it was
highly persuasive and usually adopted. This played
an important role in the plea bargaining process, as
leniency in the sentence often accompanied a guilty
plea, and without some measure of certainty as to the
likely penalty a defendant may be less likely to plead
guilty.
However, in Barbaro v The Queen1 the High Court
rejected this practice for criminal matters on the basis
that such submissions were mere statements of
opinion and were not statements of law or fact which a
sentencing court could properly consider.
Questions remained as to whether this principle
extended also to civil penalty matters such as those
found in the Fair Work Act 2009 (Cth) and the Fair
Work (Building Industry) Act 2012 (Cth). In May 2015,
the Full Court of the Federal Court2 held that it did,
on the basis that there was no substantive reason to
differentiate in this respect between criminal and civil
remedy proceedings. However, the High Court has
now unanimously rejected that proposition, finding that
sentencing submissions, including joint submissions
on ‘agreed’ penalties, are appropriate in civil penalty
matters:
‘there is an important public policy involved in
promoting predictability of outcome in civil penalty
proceedings and that the practice of receiving and, if
appropriate, accepting agreed penalty submissions
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increases the predictability of outcome for
regulators and wrongdoers … such predictability of
outcome encourages corporations to acknowledge
contraventions, which, in turn, assists in avoiding
lengthy and complex litigation and thus tends to
free the courts to deal with other matters and to
free investigating officers to turn to other areas of
investigation that await their attention.’
The decision is an important one in practice, enabling
parties to negotiate outcomes in civil penalty matters
with a greater degree of certainty.
1
[2014] HCA 2.
2
Director, Fair Work Building Industry Inspectorate v
CFMEU [2015] FCAFC 59.
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Case Note
Fair Work Building Industry Inspectorate v
Foxville Projects Group Pty Ltd [2015] FCA 492
Penalties and sentencing
Assessment of penalty for breach of the FW Act for failing to provide Fair Work Information
Statements to employees.
Section 125 of the Fair Work Act (FW Act), part of
the National Employment Standards, requires an
employer to provide its employees with a prescribed
‘Fair Work Information Statement’ before, or as soon
as practicable after, commencing employment. In
Director, Fair Work Building Industry Inspectorate
v Foxville Projects Group Pty Ltd the defendant, an
interior fit-out and plastering contractor to various
construction projects in Sydney, plead guilty to failing
to meet employment entitlements under an enterprise
agreement, failing to maintain records, and failing to
issue the requisite Fair Work Information Statement to
its employees.
Of interest, the penalty issued by the Federal Court for
failing to distribute Fair Work Information Statements
was set at $20,000 (four times the $5,000 which had
been agreed between the parties as part of a plea deal).
Penalties for a breach of this obligation have typically
been modest and viewed as a breach of a procedural
nature, less significant than substantive breaches such
as those relating to payment obligations. However,
the court here expressed some concern regarding
the approach of the defendant towards compliance,
described as ‘at least cavalier’ if not wilful, to the
disadvantage of its employees:
‘A significantly different approach, it will be noted,
has been adopted in determining the appropriate
penalty for the failure to provide a Fair Work
Information Statement. The requirement imposed
by s 125 of the Fair Work Act to provide such a
Statement to an employee, it is respectfully
considered, is an important means to ensure
employees are informed of their rights. This may
be seen as assuming even greater importance
where the work-force consists of many persons not
fluent in English. The provision of such Statements,
translated into different languages, at least provides
some measure of assurance that they are made
aware of their rights. A failure to be made aware
of one’s rights places an almost insurmountable
obstacle in the path of those who may need to
exercise those rights.’
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Under the FW Act, an employer is
required to give each employee a
prescribed Fair Work Information
Statement before, or as soon
as possible after, the employee
starts employment.
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Case Note
Ben Loakes v CFMEU, Qld and NT Divisional
Branch [2015] FWC 5058
Unfair dismissal
FWC dismisses unfair dismissal application of CFMEU employee notwithstanding
procedural failings.
Mr Loakes was an employee and elected organiser
for the Construction, Forestry, Mining and Energy
Union (CFMEU). He was responsible for the Central
Queensland region, which included major LNG
construction sites at Curtis Island near Gladstone. He
was terminated from his employment for performance
related issues and ‘gross neglect of duties’, which
included failing to attend work sites and failing to
respond to members’ needs.
Other than a peek behind the curtain of the CFMEU to
observe their inner working, the case is perhaps most
interesting in terms of the process followed by the
CFMEU in terminating the organiser. Mr Loakes had
not been issued with any written warnings regarding
his performance. He was invited to a meeting via text
message, without any indication of what the meeting
was regarding. He was not invited to bring a support
person. Loakes was confronted at the meeting with
various allegations regarding his performance and
asked to respond, before being given a pre-prepared
letter by the CFMEU Branch Secretary terminating his
employment. In the letter of termination, the CFMEU
purported to withhold payment of notice and benefits
until all union property in his possession was returned.
The CFMEU had not followed their own procedure
regarding the dismissal of elected officials, which
required a meeting of the Divisional Branch Executive
(Executive). After the requirements of the CFMEU
rules were raised by Mr Loakes, a hearing before the
Executive took place (which Mr Loakes refused to
attend on the basis of prejudice and that the outcome
was predetermined) which confirmed his dismissal.
On any other occasion, the CFMEU may have been
quite critical of these matters and advocated that such
procedural flaws ought to render the dismissal unfair.
It is interesting then to see the CFMEU make contrary
arguments when it is the employer. Ultimately, and
perhaps fortunately for the CFMEU, the employee
and his advocate were their own worst enemies. The
Fair Work Commission (FWC) concluded that it was
satisfied that there was a valid reason for dismissal
and that any concerns with the initial process were
overcome by the hearing before the Executive and
outweighed by the substantive evidence against
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Mr Loakes. While it was accepted that he had not
been formally warned about his performance or that
his position was in jeopardy, and that he was not
given much time to consider the allegations before
responding, the FWC concluded ‘he could have been
under no illusions that his performance was not what
the Union hierarchy expected’ given the accepted
evidence of informal warnings. The FWC considered
that it was ‘a bit rich’ for Mr Loakes to seek to impugn
the process when some of his own explanations for
his conduct were withheld and only raised for the first
time in the FWC hearing itself. Criticism of the CFMEU
for failing to follow its own rules was rejected given
that when the rules were subsequently followed the
employee refused to cooperate, actions that the FWC
viewed as ‘foolhardy and risky’.
Ultimately, this case is a strong example of the
impact the candour and credibility of a party and their
representatives have in a jurisdiction which is dealing
with notions of ‘fairness’. Mr Loakes was found to be
an ‘argumentative, evasive and unresponsive witness,
whose evidence as to the complaints against him
was either implausible, contrived or both … (and)
particularly prone to exaggeration’. His approach was
referred to as ‘disingenuous and sanctimonious’ in
failing to acknowledge a single instance of mistake,
fault or error of judgment on his own behalf even in
the face of corroborating evidence. The FWC was also
strongly critical of the employee’s industrial advocate
and the way in which the matter was argued. It is clear
that notwithstanding what on their face may have been
reasonably strong arguments as to potential procedural
unfairness, neither Mr Loakes nor his advocate did the
case any favours. It is perhaps best summarised in the
following passage:
‘I might have found myself with much more
sympathy for the applicant if he had been honest
with himself and this Commission and at least have
accepted some fault - no matter how small. But
when clear and undoubted evidence is available
to contradict the ‘spin’ and implausible excuses, he
should not be a bit surprised by the outcome.’
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Case Note
Phillip McClelland v International Parking Group
Pty Ltd T/A Metro Parking Management Pty Ltd
[2015] FWC 3708
Unfair dismissal
The FWC upheld the employer’s jurisdictional objection to an application for an unfair
dismissal remedy, finding that although the relevant casual employee had regular and
systematic employment, there was no expectation of ongoing employment.
The facts
Mr McClelland had been employed by Metro Parking
Management as a casual car park attendant for a
period of approximately nine months, when he was
informed by his employer that no more shifts were
available.
Mr McClelland’s letter of appointment stated that he
was being engaged to work at Liverpool Hospital
car park in order to fill a gap caused by the long
term illness of a permanent employee. When the
relevant employee returned to work, Mr McClelland
was transferred to work at St George Hospital car
park, where another employee was on extended sick
leave. Following this employee’s return to work, Mr
McClelland was transferred to Randwick Hospital car
park, where another employee had resigned due to a
serious illness.
Mr McClelland worked at Randwick Hospital car
park for a period of approximately four months, while
the employer made arrangements for a permanent
employee to fill the role of the employee who had
resigned.
In February 2015, Mr McClelland was informed that a
permanent employee was to fill the role vacated by the
sick employee and that Mr McClelland would therefore
not be offered any further shifts.
Mr McClelland argued that he was protected from
unfair dismissal because he had served the minimum
employment period as a casual employee working
regular and systematic hours and he had expected
that his employment would be ongoing.
The employer argued that Mr McClelland was not
protected from unfair dismissal because:
• It was always their intention to contact Mr
McClelland if any further shifts became available.
Accordingly, Mr McClelland had not been
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dismissed at the initiative of his employer; and
• Mr McClelland’s period of service as a casual
employee did not count towards the minimum
employment period because there was no
reasonable expectation of continuing employment.
Issues
1. Was the employee dismissed at the initiative of the
employer?
2. Was there a reasonable expectation of continuing
employment on a regular and systematic basis?
Decision
In considering whether the employee was dismissed
at the initiative of the employer, the Fair Work
Commission (FWC) accepted that Mr McClelland had
been specifically informed by his employer that he
was not being dismissed. However, the reality of the
situation was that the employer did not intend to offer
Mr McClelland any shifts for the foreseeable future. In
those circumstances, the FWC queried ‘how long is it
reasonable for a casual employee to wait without an
offer of a shift before the employee considers that the
employment relationship has been brought to an end
by the employer?’.
The FWC held that the answer will depend on the
nature of the engagement, but in circumstances where
an employee has enjoyed regular and systematic
shifts, it would be reasonable for an employee to
consider the employment relationship at an end ‘when
the employer elects not to provide the shifts anymore’.
Accordingly, the FWC was satisfied that Mr McClelland
had been dismissed at the initiative of his employer.
In considering whether there was a reasonable
expectation of ongoing employment, the FWC
recognised that there was a continuing employment
relationship between the parties for so long as Mr
McClelland was required to cover for employees
who were absent due to illness. He knew his casual
engagement was to fill one or more short term gaps.
Although Mr McClelland had expressed the hope and
desire to be converted to a permanent employee,
there was nothing to suggest that Mr McClelland ‘could
have reasonably expected to have been retained in
employment in the absence of a staffing gap’.
The jurisdictional objection was upheld and the
application for unfair dismissal remedy was therefore
dismissed.
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Case Note
Maria Panera v Qantas Airways Limited [2015]
FWC 4527
Unfair dismissal
The FWC upheld the dismissal of an employee dubbed ‘Lady Bountiful’ notwithstanding a
rushed termination process designed to avoid a redundancy payment.
The facts
Ms Panera commenced work at Qantas in 1986
when she was 25 years old. In April 2014, Ms Panera
expressed interest in a voluntary redundancy. Qantas
accepted, and provided Ms Panera with written notice
that her employment would cease on 10 June 2014, at
which time she would be paid a severance payment
and any accrued entitlements.
Ms Panera was employed in the position of a Customer
Service Agent Ticketing and Sales at the Sydney
International Airport. Her role largely involved day
of travel bookings and did not involve making travel
bookings at large.
Shortly before her employment was due to cease,
Qantas conducted an investigation which revealed at
least nine instances of Ms Panera booking discounted
airfares for friends, family, acquaintances and
colleagues by:
• Overriding the reservation system in order to book
discount fare classes which were not available on
the relevant flights;
• Backdating fare quotes in order to access early
bird pricing which was not otherwise available;
• Allowing stopovers at no extra charge contrary to
the fare rules; and
• Failing to charge cancellation and change fees
which were otherwise payable.
Qantas terminated Ms Panera’s employment with effect
from 6 June 2014, thereby avoiding the obligation to
pay a severance payment on 10 June 2014.
Qantas argued that dismissal was justified and
characterised Ms Panera’s actions as ‘misconduct
relating to provision of discounted tickets and a
failure to charge for booking changes that did not
appropriately arise in the course of Ms Panera’s duties
or for any authorised operational reason’.
Ms Panera argued that there was no valid reason for
dismissal in circumstances where Qantas had never
clearly communicated that the ticketing techniques
and procedures she had used were not permitted.
Ms Panera further claimed her dismissal was unjust or
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unreasonable because Qantas had failed to monitor
compliance with its policies and manage its risk and
had failed to provide her with a fair termination process.
Finally, Ms Panera claimed her dismissal was harsh
in circumstances where the dismissal rendered her
ineligible to receive a redundancy payment.
Issues
1. Was there a valid reason for dismissal?
2. Is an employer required to proactively monitor
compliance with its policies?
3. Did the truncated termination process render the
dismissal unfair?
4. Did the impending redundancy payment render
the dismissal harsh?
Decision
The Fair Work Commission (FWC) was satisfied that
there was a valid reason for dismissal, having found
that:
• Ms Panera’s conduct involved deliberate breaches
of policy and fare rules; and
• Although Ms Panera did not make any personal
financial gain from her conduct, she ensured that
her friends, family, acquaintances and colleagues
received a financial benefit while Qantas suffered
a corresponding financial detriment.
In determining whether the dismissal was harsh,
unjust or unreasonable, the FWC acknowledged that
Ms Panera had a long and unblemished employment
history with Qantas, and further acknowledged that
her termination had a particularly devastating effect in
circumstances where she would have otherwise been
entitled to a significant severance payment. This was
not, however, sufficient to render the termination harsh
in the circumstances.
The FWC found that the procedures adopted by
Qantas were inadequate in terms of providing Ms
Panera with an opportunity to respond. Although she
had been given an adequate opportunity to respond to
the allegations of misconduct, she was provided with
only approximately 24 hours to address what outcome
should arise from Qantas’ findings of misconduct.
However, the FWC held that ‘no further opportunity to
make submissions on merit or mitigation could, should
or would have made any difference to the decision to
terminate Ms Panera’s employment’.
Accordingly, the FWC upheld the termination and
dismissed Ms Panera’s application for unfair dismissal
remedy.
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Case Note
Tamer Selcuk v Epworth Foundation T/A Epworth
Hospital [2015] FWC 4367
Unfair dismissal
FWC orders an employer to pay the employee’s legal costs on a party-party basis
following an unsuccessful application for permission to appeal, but finds in the particular
circumstances that it has no power to order costs against the employer’s representative.
The facts
Mr Selcuk was terminated from his employment, with
the employer citing serious misconduct as the reason
for dismissal.
Mr Selcuk made an unfair dismissal application, which
ultimately found that Mr Selcuk’s conduct did not rise
to the level of serious misconduct as alleged. The Fair
Work Commission (FWC) did, however, find that Mr
Selcuk had engaged in misconduct and that there
was a valid reason for a dismissal. For a number of
reasons, including the failure by the employer to
apply consistent disciplinary sanctions against other
employees involved in the misconduct, and the failure
by the employer to provide Mr Selcuk with a proper
opportunity to consider and respond to the material
relied upon in support of the dismissal, the FWC found
the dismissal was harsh, unjust and unreasonable.
The employer sought permission to appeal the
FWC’s decision but permission to appeal was refused
because the employer failed to convince the Full
Bench that there was an appealable error or any issue
of importance of general application so as to enliven
the public interest. The Full Bench further expressed
the opinion that the grounds of appeal did no more
than voice the employer’s ‘dissatisfaction with the
result at first instance’.
Following the unsuccessful application for permission
to appeal, Mr Selcuk sought costs orders against the
employer and the employer’s legal representative.
Issues
1. In what circumstances will costs orders be
available against a party following an unsuccessful
application for permission to appeal?
2. In what circumstances will costs orders be available
against a party’s legal representative following an
unsuccessful application for permission to appeal?
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29
Decision
The FWC observed that, as a statutory tribunal, it has
no inherent power to make costs orders. Any such
costs orders must therefore derive from the Fair Work
Act 2009 (Cth) (FW Act).
Mr Selcuk relied upon s 401 of the FW Act in support
of his application for costs against his employer’s legal
representative on the grounds that the representative
caused costs to be incurred:
• Because the representative had encouraged the
employer to continue the matter in circumstances
where it should have been reasonably apparent
that the employer had no reasonable prospects of
success; or
• Because of an unreasonable act or omission of
the representative in connection with the conduct
or continuation of the matter.
The FWC was ultimately not required to inquire into
the reasonableness of the representative’s conduct,
having found that s 401 only confers power on the FWC
to make costs orders in relation to the unfair dismissal
proceedings itself. As Mr Selcuk was seeking a costs
order in relation to an application for permission to
appeal, the FWC had no power to make a costs order
against the employer’s representative.
In relation to the application for costs against the
employer, Mr Selcuk argued pursuant to s 611 of the
FW Act that:
• The employer made the application for permission
to appeal vexatiously or without reasonable cause;
or
• It should have been apparent to the employer that
the application for permission to appeal had no
reasonable prospect of success.
The FWC accepted that proceedings will be considered
vexatious where the predominant purpose of the
proceedings is to ‘harass or embarrass the other party,
or to gain a collateral advantage’. The FWC was not
satisfied that the application for permission to appeal
was vexatious in the circumstances of this matter.
The FWC also accepted that a proceeding cannot
be said to have been without reasonable cause or
without reasonable prospects of success simply
because the argument proves unsuccessful. However,
in circumstances where the Full Bench had observed
that the grounds of appeal did no more than voice
the employer’s ‘dissatisfaction with the result at first
instance’, the FWC held that it ought to have been
reasonably apparent to the employer at the time of
filing that the application for permission to appeal had
no reasonable prospect of success.
The FWC therefore ordered that the employer pay
Mr Selcuk’s costs in respect of the application for
permission to appeal on a party-party basis.
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Case Note
RailPro Services Pty Ltd v Flavel [2015] FCA 504
General protections
Federal Court finds that normal human reactions such as nervousness are insufficient to
put an employer on notice of a disability in an adverse action claim.
Under s 351 of the Fair Work Act (FW Act), an employer
is prohibited from taking action adverse against an
employee because of a defined attribute, such as race,
sex, age, physical or mental disability or marital status.
A reverse onus of proof applies, in that it falls to the
employer to prove that their reasons for taking action
were not unlawful. As a result of this reverse onus, the
adverse action laws have proven a fertile ground for
employees. The recent decision in RailPro Services
Pty Ltd v Flavel provides a useful illustration of the
operation of the adverse action laws in the context
of allegations of discrimination, and the difference
between adverse action discrimination under the FW
Act and the State and Federal anti-discrimination laws.
Flavel was an experienced train driver who commenced
employment with RailPro in April 2011. In October
2011 while undergoing training he was involved in an
incident in which the train he was driving collided with
another train, causing approximately $5m damage.
Separately, Flavel had been in training far longer
than usually expected, and had failed to demonstrate
competent knowledge of the train routes. Internal
investigations into the incident concluded that Flavel
and a supervisor were at fault, that their conduct was
sufficient to justify termination of employment, but that
as a result of mitigating circumstances a final warning
should be issued and competency assessment
undertaken. Following the incident, Flavel was offered
counselling, which he declined. He did not sustain any
physical injury or take any time off work, although his
wife had written to the company indicating Flavel was
‘punishing himself and overwhelmed with grief’. In late
November 2011, Flavel was required to undertake
competency assessment on various train routes. On
the first attempt, on being told that consistent with
company policy he could not use his notes, he refused
to drive the train and advised the assessor that he
‘felt violently ill’ about the prospect of doing so. On
completion of the journey, Flavel was called into a
meeting with senior management, at the conclusion
of which his employment was terminated because of
his failure to demonstrate competence in the driving
of his allocated routes. Some months later he was
diagnosed as suffering from Post Traumatic Stress
Disorder (PTSD) as a result of the original rail incident.
Flavel commenced action against RailPro on various
bases, including s 351 of the FW Act, asserting that
adverse action was taken against him by reason of his
mental disability.
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At first instance, Judge Simpson of the Federal Circuit
Court considered RailPro management to have
knowledge of Flavel’s psychological condition by virtue
of his complaint of feeling violently ill, the note from his
wife, and by virtue of the company’s evidence that it
was aware that accidents may have adverse mental
effects on individuals. The court went on to find RailPro
breached s 351 of the FW Act as follows:
‘I find that the respondent’s termination of Mr
Flavel’s employment was because of Mr Flavel’s
mental and physical disability which reason for
dismissal is unlawful pursuant to s15(2) of Disability
Discrimination Act 1992 (Cth). This reason for
dismissal is in breach of s351 of the Act.’
Issues can immediately be seen with this reasoning.
Whether or not there was a breach of the Disability
Discrimination Act1992 (Cth) is not the relevant test in
an adverse action case under the FW Act. State and
Federal discrimination legislation is in different terms,
and includes extended definitions of discrimination to
include indirect discrimination (which may arise where
there is no intent to discriminate per se, but where
the imposition of a requirement has a discriminatory
impact on one person when compared with others).
On appeal to the Federal Court, Justice Perry
confirmed that discrimination under the FW Act is
more restrictive, and applies only where an employer
acts directly ‘because of’ the relevant attribute, such
attribute being a ‘substantial and operative reason’
for the decision. While s 351(2)(a) of the FW Act does
provide that there is no breach of the FW Act by action
which is not also unlawful under applicable State or
Federal discrimination laws, that essentially adopts the
defences available under those legislative schemes,
rather than broadening the scope of discrimination
under the FW Act itself.
Furthermore, Justice Perry noted that RailPro’s
management could not act ‘because of’ a disability that
they did not know existed, nor could reasonably have
known existed given the minimal symptoms observed
at the time. A disability under the FW Act ‘does not
include ordinary human responses to particular
circumstances, such as nervousness’. Merely because
Flavel had an ‘attack of nerves’ on one occasion was
no reason to conclude that the employer’s managers
had knowledge of a disability, particularly given the
absence of any other complaint, any time off work,
and the refusal of counselling. Accordingly, the claim
for discrimination under s 351 of the FW Act was
dismissed.
Ultimately, Flavel did have some measure of success
on other grounds. He had a legal duty under the
Occupation, Health, Safety and Welfare Act (SA)
to take reasonable care to protect the health and
safety of himself and others at work, and to withdraw
himself from work if he was unfit for duty. Accordingly,
separate to discrimination, he alleged that adverse
action was taken against him because of the
exercise of a workplace right under s 340 of the FW
Act.1
While the Federal Court accepted RailPro’s
argument that Flavel’s competence or lack thereof in
the performance of his duties was a valid reason for
terminating his employment in these circumstances,
the court concluded that RailPro had failed to address
whether Flavel was unfit for duty on the day in question
(which was a separate consideration to whether or not
they had knowledge of a disability) and whether that
was one of the operative reasons for the decision to
terminate. Accordingly, the employer had not satisfied
the reverse of proof, and Flavel was entitled to succeed.
As a result of the appeal and the more limited findings,
damages for distress and hurt for the dismissal
were reduced from $25,000 to $7,500. Damages for
economic loss attributable to the dismissal (as distinct
from those attributable to the injury itself) were remitted
to the trial judge for determination.
The moral of the story is that the adverse action regime
under the FW Act remains a minefield given the reverse
onus of proof, such that employers must be very clear
(and careful) as to the reasons why decisions are
taken and ensure that appropriate evidence regarding
those reasons is led at any hearing. However, there
are some positives. The recognition that broader
concepts of discrimination in State and Federal antidiscrimination
laws, such as indirect discrimination,
have no relevance to considerations under the FW
Act is welcome and confirms other recent decisions,2
as is the recognition that normal human reactions to
stressful situations, such as nervousness, nausea,
sadness, etc are by themselves insufficient to find that
an employer had knowledge of a disability. As the test
of whether adverse action was ‘because of’ a disability
necessitates some level of knowledge regarding
the disability, the level at which the manifestation of
symptoms triggers the requisite knowledge remains an
important factual issue.
1
A workplace right is defined to include a responsibility
under a workplace law. A workplace law includes
State OHS laws.
2
Hodkinson v Commonwealth [2011] FMCA 171.
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33
The facts
Mr Lasovski had been employed as an electrician for Pro Electrical for a period of approximately 16 months when
he was terminated on the grounds of redundancy.
Prior to making Lasovski’s position redundant, Pro Electrical had failed to win two major contracts, necessitating a
reduction in the size of its workforce.
Several other employees were made redundant at the same time as Lasovski, however Pro Electrical failed to
consult with the employees as required pursuant to Pro Electrical’s enterprise agreement.
Issue
1. Does a failure to follow consultation procedures render a termination harsh, unjust or unreasonable in
circumstances where any such consultation would not have altered the outcome?
Decision
The Fair Work Commission (FWC) found that there were compelling operational reasons for Pro Electrical to reduce
the size of its workforce and that there were no alternative positions to which Lasovski could have been redeployed.
The FWC was satisfied that, although Pro Electrical failed to comply with consultation procedures, such noncompliance
was not conscious or deliberate.
Notwithstanding that any consultation would have ultimately resulted in Lasovski being made redundant in any event,
the FWC held that the failure to consult meant that it was not a case of genuine redundancy within the meaning of
the Fair Work Act 2009 (Cth), and the dismissal was therefore harsh, unjust or unreasonable.
The FWC held that, if Pro Electrical had complied with its consultation obligations, Mr Lasovski would not have
remained employed for any more than one further week. Pro Electrical was accordingly ordered to pay compensation
of $1,000.
Michelle has acted in personal injury claims,
professional negligence actions, disciplinary
proceedings, employment practices liability claims,
defamation, misrepresentation, breach of contract,
property damage claims and fraud and fidelity
claims.
Michelle has a special interest in employment
practices liability claims and has represented
employers before the Australian Human Rights
Commission and Anti-Discrimination Commission
of Queensland in respect of sexual harassment and
discrimination claims, as well as actions pertaining
to bullying, harassment, wrongful dismissal, sham
contracting and claims alleging underpayment
of statutory entitlements before the Fair Work
Commission, the Federal Circuit Court and the
Federal Court of Australia.
Michelle also provides advice on policy construction
and interpretation to insured entities, insurers and
underwriters.
Michelle Matthew
Associate
Staff profile Insurance and Workplace Relations
07 3000 8315
0439 390 747
07 3000 8478
@ [email protected]
34
Workplace Relations Gazette www.carternewell.com
Case Note
Brett McKie v Munir Al-Hasani & Kenoss
Contractors Pty Ltd (in liq) [2015] ACTIC 1
Work health and safety
The ACT Industrial Court dismissed the charge against Mr Al-Hasani, finding that he was
not an ‘officer’ for the purposes of the Work Health and Safety Act 2011 (ACT).
The facts
Mr Al-Hasani was employed as a project manager
by Kenoss Contractors Pty Ltd (Kenoss) and was
responsible for managing a number of projects,
including a major road resurfacing project.
As part of the road resurfacing project, two compounds
were established by Kenoss. The main compound
housed site offices, while the second smaller
compound was used solely for the purpose of storing
construction materials.
On 23 March 2012, a worker, Michael Booth, died at
the smaller compound in the following circumstances:
• Mr Booth, being an employee of a contractor to
Kenoss, was instructed to deliver materials to
the main compound, but for whatever reason he
delivered the materials to the smaller compound
instead;
• Prior to 23 March 2012, Kenoss had instructed
workers to stop using the smaller compound. The
evidence demonstrated, however, that the smaller
compound was not locked or decommissioned
and workers had continued to use the smaller
compound;
• There were a number of live electrical wires
overhanging the smaller compound at a relatively
low height, which were obscured by foliage. In
addition, on the day of the accident, there were
significant wind gusts which would have set the
lines into motion;
• There was no signage or other warning in the
smaller compound regarding the presence of low
hanging live electrical wires; and
• When Mr Booth tipped his load, the bucket of the
truck contacted with the electrical wires and Mr
Booth was electrocuted.
Despite being aware of the presence of the electrical
wires, and despite having been personally served with
a prohibition notice in 2008 regarding working near
power lines, Mr Al-Hasani failed to take any adequate
measures to ensure the safety of workers attending
the smaller compound.
He was prosecuted for a category 2 offence under the
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35
harmonised Work Health and Safety Act 2011 (ACT)
(WHS Act) in his capacity as an ‘officer’ of Kenoss.
Issues
1. When will a person be considered an ‘officer’ for
the purpose of the WHS Act?
2. Was Mr Al-Hasani an ‘officer’ for the purpose of
the WHS Act?
Decision
The Industrial Court held that Kenoss had a clear duty
of care to all persons visiting the smaller compound.
The court further held that duty was clearly breached
by failing to take adequate measures to address
the risk posed by live overhead electrical cables.
Accordingly, the court found the offence proved in
relation to Kenoss.
However, in relation to the charge against Mr Al-Hasani
the court required proof beyond reasonable doubt that
Mr Al-Hasani was in fact an ‘officer’ for the purpose
of the WHS Act, and that he had failed to relevantly
exercise due diligence in his capacity as an ‘officer’.
While the court was satisfied that Mr Al-Hasani’s
multiple failures to ensure safety compliance proved
a lack of due diligence on his part, the court was not
satisfied that Mr Al-Hasani was an ‘officer’ for the
following reasons:
1. Although the WHS Act does not require that an
‘officer’ be a director as contemplated by the
Corporations Act 2001 (Cth), it does require that
the person:
(a) Participates in making decisions that affect
the whole or a substantial part of the
business; or
(b) Has the capacity to affect significantly the
financial standing of the business; or
(c) Be a person in accordance with whose
instructions or wishes the directors of the
business are accustomed to act.
2. The evidence did not demonstrate that the
directors of Kenoss were accustomed to acting
in accordance with Mr Al-Hasani’s instructions or
wishes, nor did the evidence demonstrate that Mr
Al-Hasani had the capacity to affect significantly
the financial standing of Kenoss.
3. In determining whether Mr Al-Hasani participated
in making decisions that affect the whole or a
substantial part of Kenoss, the court observed:
(a) Although Mr Al-Hasani had operational
responsibility for the delivery of
projects by Kenoss, ‘…the concept of
an officer should be viewed through the prism
of the organisation as a whole rather than a
particular function in which the individual was
engaged’;
(b) There was no evidence that Mr Al-Hasani had
power to engage or terminate employees,
commit corporate funds, provide direction
as to which projects should be pursued by
Kenoss, or sign off on tenders;
(c) Mr Al-Hasani’s participation in the business
was operational. Whether it went beyond that
to being organizational was speculative and
unproven.
The court observed that Mr Al-Hasani had
responsibilities as an employee of Kenoss, but he had
not been charged in his capacity as an employee. As
the court could not be satisfied beyond a reasonable
doubt that Mr Al-Hasani was an ‘officer’, the charge
against him was dismissed.
36
Workplace Relations Gazette www.carternewell.com
Carter Newell presentations
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9 March 2016
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9 March 2016
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Upcoming Legalwise presentations
Ethical dilemmas – Learn from others’ mistakes
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Nola will also be chairing the ‘Advocacy Skills Master Class’
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23 March 2016
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22 March 2016
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