• The Devil Is In The Detail - When Workplace Redundancy Alternatives Just Don't Cut It

    An employer has been ordered to pay full redundancy entitlements to employees despite offering them other employment arrangements.

     

    The recent decision of Lee Crane Hire Pty Ltd v Sneek and Ors [2020] FWC serves as an important example of when an employer will be required to pay redundancy entitlements to employees, despite offering them alternative means of employment.

     

    What the Fair Work Act 2009 (Cth) Says:

    Section 120 of the Fair Work Act provides a mechanism for employers to apply to vary the amount redundancy pay owing to an employee (which may be reduced to nil) in circumstances where the employer obtains other acceptable employment for the employee (and they reject it) or the employer simply cannot pay the amounts owing.

     

    What is ‘Other Acceptable Employment’?

    If an employer is able to prove that it offered an employee other acceptable employment and the employee rejected such employment and sought payment of their redundancy entitlements instead, an employer could request the Fair Work Commission reduce the redundancy pay potentially to nil.  

    The onus of proving that the alternative employment is acceptable rests with the employer. There is a body of case law which has set the bar particularly high and involves consideration of a range of non-exhaustive factors including, pay levels, hours of work, seniority, fringe benefits, workload, job security, work location, continuity of service, accrual of benefits, probationary periods, as well as the employee’s skills, experience and physical capacity. The location of the other employment must also not be unreasonably distant from the employee’s original place of work.

     

    So What Happened in Lee Crane v Sneek?  

    Lee Crane v Sneek is a prime example of how the Fair Work Commission assesses ‘other acceptable employment’ and is a cautionary tale for employers, particularly those who may wish to offer casual or far away employment to soon-to-be redundant employees. Here’s what happened:  

    • Lee Crane Hire operates a mobile crane hire business in Gladstone and operates another depot at Biloela (121kms inland from Gladstone). There had been a downturn in business of the Gladstone Depot such that the business could no longer guarantee full time work to the employees based at the Depot. The owner of the business decided to close the Gladstone Depot and operate all his business through the Biloela depot.
    • Employees Sneek, Wiemers and Kennedy worked at the Gladstone depot and were offered two alternatives to a redundancy:
      1. continue in the same role, but be based out of Biloela and Gladstone with the only Depot being in Biloela. This option would include payment for time spent travelling to work and accommodation, the same hours of work, a company vehicle supplied, the same salary and leave entitlements. Additionally, as the role was the same mobile crane operations role, the travel to different sites would be largely unchanged; or
      2. to take on casual employment for Lee Crane Hire in Gladstone, this would involve the employees performing the same work, however there would be no guaranteed hours of work.
    • Sneek, Wiemers and Kennedy declined the above options and were terminated on the 31st of March 2020.
    • Lee Crane Hire filed an application in the Fair Work Commission seeking the redundancy pay of Sneek, Wiemers and Kennedy be reduced on the grounds that it offered them ‘other acceptable employment’.
    • When assessing the alternatives offered to the employees, the Fair Work Commission viewed both alternatives in the negative, and stated: 
      • [29] It is the devil’s alternative: move to a new location some 121kms away and incur a practical detriment on a continuous basis or, keep your job, but as a casual with no assurance of work in an evidently declining market. This should not be classified as acceptable alternative work that would release the employer from their obligation to pay out a redundancy entitlement. In short, the travel to Biloela makes the options, in line with the authority cited, unreasonably distant.
      • [35] My considered view is that the two employment options offered by Lee Crane Pty Ltd are not ‘acceptable other employment’ for the purpose of s.120(1)(b)(i) of the Act.

    Ouch.

    • Lee Crane Hire were ordered to pay Sneek, Wiemers and Kennedy their full redundancy entitlements which equalled 16, 12 and 7 weeks respectively.

    Triple ouch.

    What’s the lesson?

    Employers need to tread very carefully when navigating redundancies and further, they need to ensure that any offers for other employment are indeed ‘acceptable’ based on the Fair Work Commission’s assessment criteria.

     

    It goes without saying that if you are wondering if your redundancy process is correct or you are wishing you had some expert assistance to ensure your redundancy alternatives are not labelled “the devil’s alternative”, do not hesitate to contact Enterprise Legal’s Principal Workplace Relations Advisor, Amie Mish-Wills:

    ☎️ (07) 4646 2425

    ✉️ Submit an Online Request

  • Casual employment has been a hotly contested topic for quite some time, particularly following the controversial decision in WorkPac Pty Ltd v Rossato (‘Rossato’), which was handed down on 20 May 2020.

    In a nutshell, the decisions of Workpac Pty Ltd v Skene [2018] FCAFC 131 and Workpac Pty Ltd v Rossato [2020] FCAFC 84 found that casual employees who work regular, consistent hours with a firm advance commitment to work, may be owed leave and other entitlements such as redundancy pay even where they have received a 25% casual loading (double dipping drama).

    There will be no easing of casual employment controversy in 2021 as the Rossato decision is off to the High Court and further, the Australian Government recently introduced the Fair Work Amendment (Supporting Australia’s Job and Economic Recovery) Bill 2020 (the Bill) to Parliament.

    If the Bill passes Parliament, it will bring about various changes to casual employment, including certainty to employees and employers regarding the rights and obligations of both parties and the definition of a casual employee is proposed to be amended to where an offer of employment is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work.

    Relevant factors to whether there is a firm advanced commitment to work include:

    • the ability to accept or reject work;
    • whether the employee will work only as required; and
    • whether a casual loading is paid;

    assessed at the time the engagement is entered into.

    If the Bill is successful and in good news for employers, employers will also have the ability to set off any claim for annual leave, personal leave and redundancy pay against the 25% casual loading in an attempt to reduce the potential for “double dipping”.

    The laws are currently proposed to work retrospectively, however, there are no guarantees that this will be held to be valid. The Bill also proposes a number of changes to provisions regarding casual conversion, flexible work directions and enterprise agreements – important but less controversial topics.

    It is recommended that employers continue to stay up to date with the developments in the casual employment sphere and be prepared for changes in the future. At this stage, the Bill is only proposed and may change before coming into force.

     

    For advice and support with managing your casual workforce, contact our Workplace Relations team at Enterprise Legal today for a complimentary introductory consultation:

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • Enterprise-Legal-Can_An_Employer_Direct_an_Employee_to_get_the_COVID-19_Vaccination

    As discussed during our recent Workplace Relations Video, whether a private employer can direct its employees to get the COVID-19 vaccination is a complex issue, with the primary issue being whether or not an employer’s direction for staff to receive the COVID-19 vaccination is lawful and reasonable.

    It is commonly understood that employers can direct their staff to do certain things as part of their employment and employees have a legal obligation to comply with their employer’s directions if those directions are lawful and reasonable.

     

    What Makes a Direction Lawful and Reasonable?

    A number of matters are considered when determining whether or not a direction is lawful and reasonable, including (but not limited to):

    • the express and implied terms of the employee’s contract of employment;
    • the nature of the employment;
    • established custom and practice in the workplace, trade or industry; and
    • the employer’s workplace health and safety obligations;
    • the employer’s duty of care;
    • the terms of relevant instruments (eg a modern award and enterprise agreement), and any applicable legislation.

    Some examples of directions that might be given by an employer to an employee include a direction to:

    • participate in a workplace investigation;
    • undertake a medical examination for the purpose of assessing fitness for work;
    • comply with work health and safety laws;
    • stay away from work or work from home to prevent the risk of exposure to, or spread of a contagious illness;
    • report misconduct;
    • prioritise projects in a particular way; and
    • adhere to a dress code.

     

    In the case of a direction for staff to receive the COVID-19 vaccination, whether such a direction is lawful and reasonable will vary depending on the circumstances of the employer, employee, the workplace and the industry.

     

    As discussed in our video, what is reasonable in the context of an aged care facility, will differ significantly from a marketing office and understandably, one size does not fit all.

    Various factors may impact the lawfulness and reasonableness of a direction for staff to receive the COVID-19 vaccination, including:

    • whether the employer’s genuine and reasonable work health and safety obligations dictate a particular response;
    • whether the employee can reasonably perform the inherent requirements of their role without being vaccinated;
    • whether the employer’s common law duties of care owed not only to the employee but their clients dictate a particular response; and
    • whether there are legislated or government-issued directions in place that require compliance.

    Employers also need to be mindful of whether or not the direction constitutes discrimination or an infringement on a protected human right.

     

    What if it is 'Reasonable' and the Employee Disobeys?

    Breach of the implied duty of obedience is by its very nature a breach of the contract of employment, and in principle will attract the normal remedies for breach of contract. More often, employers will consider the following options in response to a failure to obey lawful and reasonable directions:  respond to a breach by either:

    • declining to take action;
    • disciplining the employee.

    Before taking disciplinary action against an employee for disobeying a direction, employers should always consider:

    • Whether the direction lawful and reasonable;
    • For directions contained in a workplace policy, was the employee required to read and acknowledge the policy? Was the employee trained in the policy and was it consistently enforced?
    • Was the employee made aware of the consequences of failing to comply with the direction?
    • Would the proposed disciplinary action be proportionate in the circumstances?
    • Is the employee of long-standing with a good employment record?
    • Can adjustments be made to the employee’s role or can they be suitably redeployed into a position where the vaccination is not required?

     

    As you can see, the issue of whether or not an employer can direct staff to receive the COVID-19 vaccination is not straight forward and it is important employers navigate this issue with caution.

    The issue has not yet been determined by the Fair Work Commission, and the matter of Glover v Ozcare [2021] FWC 231 may shed some much needed light on the issue if it proceeds to a formal decision as the employee, in this case, was dismissed after they refused to get the influenza vaccine on medical grounds.

     

    Enterprise Legal's Workplace Relations team can assist with assessing whether or not such a direction is lawful and reasonable based on your workplace, employees and industry. Our team can also assist with issuing and managing the rollout of such a direction, assisting you every step of the way.

    Reach out to us today:

    ☎️ (07) 4646 2621

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  • Big Changes to Casual Employment, Care of the Watered-Down IR Bill

    The Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Act 2020 (Act) is now law, a watered-down version of the Federal Government's original IR Omnibus Reform Bill (the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 (Bill)) having passed through both houses of Parliament on the 22nd of March 2021.

    Whilst it won’t commence until it received Royal Assent, we thought we would summarise some of the key points relating to the big changes for casual employment.

     

    Finally, a Definition of a Casual Employee

    Excitingly, the Fair Work Act will now define a casual employee as an employee who accepts an offer of employment which makes 'no firm advance commitment to continuing and indefinite work according to an agreed pattern of work'.

    This is very important and exciting as up until now, the Fair Work Act has not defined a casual employee and this has caused much contention and pain for employer, employees and the Courts.

    To work out if there is a 'firm advance commitment' only the following factors can be considered:

    • whether the employer can elect to offer work and whether the person can elect to accept or reject the work;
    • whether the person will work only as required according to the needs of the employer;
    • whether the employment is described as casual employment; and
    • whether the person will be entitled to any casual loadings or a specific casual rate of pay under the offer of employment or a Fair Work instrument.

    A regular pattern of hours does not of itself indicate a 'firm advance commitment'.

    The question is to be assessed at the time of the offer and acceptance of employment, and without regard to any party's subsequent conduct during the employment.

     

    Casual Conversion

    Employers (other than small business employers (less than 15 employees)) will be required to offer to convert any casual employee to full-time or part-time employment if the employee:

    • has been employed for at least 12 months; and
    • for at least six of those 12 months, has worked a regular pattern of hours on an ongoing basis that, without significant adjustment, could continue to be worked as a part-time or full-time employee,

    unless there are reasonable grounds not to do so.

    Casual employees will also have a residual right to request conversion to full or part-time employment themselves. Employers can only refuse such requests on reasonable grounds (set out in the Fair Work Act) and must respond in writing within specified timeframes. In the event of a refusal, employers must consult with the casual employee before formally refusing their request for conversion.

    There is a 6 month transition/lead time for employers to make offers of conversion to all existing eligible casuals, unless they have reasonable grounds not to.

     

    New Information Sheet

    Similar to the Fair Work Information Statement (which is required to be provided by employers to all new employees), employers will need to provide a copy of the Fair Work Ombudsman Casual Employment Information Statement to casual employees before, or as soon as practicable after their commencement. This information sheet is yet to be published and it will be interesting to see what it contains.

    Incorrect characterisation and offset provision

    If a court finds that a current or former employee has been incorrectly characterised as a casual, the court will be able to offset any identifiable casual loading paid to the employee against claims for certain entitlements.

    Importantly, the employer must have properly attributed the loading as being paid for that purpose.

    It is vital, now more than ever, to ensure employers have in place well drafted contracts of employment as they will be imperative in enforcing this provision – particularly with respect to carving out the casual rate of pay and loading and defining what the loading is in fact compensation for.  

     

    Where to From Here?

    Employers who have not yet taken steps to review their casual workforce, their rosters and contracts of employment should do so now.

    For advice and support on how these changes may impact your workplace and to implements measures to support and safeguard your business, contact Enterprise Legal’s Workplace Relations team today:

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • Enterprise Legal - Deliveroo Decision Delivers a Spicy Punch to the Gig-Economy

    For a long time now we have seen delivery giant Uber successfully fend off claims from delivery drivers claiming they were employees and not independent contracts.

    This time, it was Deliveroo Australia Pty Ltd (Deliveroo) who was on the menu before the Fair Work Commission and in an explosive decision, the Commission ruled that a Deliveroo driver was an employee, rather than an independent contractor.

     

    What Happened?

    Mr Franco had worked for Deliveroo for approximately three years when he suddenly received an email notification from Deliveroo indicating his “supplier agreement” would be terminated on the grounds that he was too slow at delivering orders.

    Mr Franco subsequently filed a claim for Unfair Dismissal in the Fair Work Commission, challenging his termination.

    The hurdle – Was Mr Franco an employee or independent contractor?

    Independent contractors are not protected by the Unfair Dismissal provisions contained the Fair Work Act 2009 (Cth) and therefore Deliveroo objected to the unfair dismissal application on the basis that Mr Franco was an independent contractor, rather than an employee.

    When looking at the relationship between Deliveroo and Mr Franco, Fair Work Commissioner Cambridge (the Commissioner) affirmed the longstanding principle that determination of whether a person is an employee or independent contractor requires consideration of various identified indicia, with no single factor being decisive, to form a view about the overall impression of the relationship.

    Some of the key points that turned in Mr Franco’s favour included:

    • Contract was not king: Whilst the agreement between Deliveroo and Franco stated that the relationship between the parties was one of principal and independent contractor, it was given little weight; 
    • Presentation as part of the business: Although not mandatory, Deliveroo expects its delivery riders (including Franco while he was engaged) to wear Deliveroo branded attire and use branded equipment. The Commissioner therefore formed the view that they in effect presented to the world as part of the Deliveroo business and was held to be a factor likened to an employee;
    • Equipment: Mr Franco technically provided his own equipment, however this was limited to a smartphone and motorcycle and therefore the Commissioner held that, as he would use such equipment personally as well, this did not represent a ‘substantial investment in capital equipment’ and therefore it could not be relied upon to firmly establish a contractor relationship; 
    • Control: Although Mr Franco had significant autonomy over the work he performed as he was able to log onto the Rider app and choose when and where he would make deliveries, Deliveroo still had the primary ability to exercise control through an online system, which required riders to book engagement sessions in advance and this system provided preferential treatment to those who met performance measures. Although Deliveroo had ceased using this system and this is likely going to be one of the many sticking points for when Deliveroo appeals the decision (which it has confirmed it will be), the Commissioner focused on the fact that it had the ability to reintroduce the system;
    • Ability to work for others: Despite the fact that Mr Franco was actively working for competitors at the same time that he was engaged with Deliveroo, the Commissioner determined that this was not significant enough to prevent the finding of the existence of an employment relationship when considered in the context of the current gig-economy and digital world.

     

    The Decision

    Ultimately, the Commissioner formed the view that Franco was an employee and was not a contractor carrying on a trade or business of his own. Quite significantly, the Commissioner subsequently ordered Mr Franco be reinstated, which only happens in less than 15% of Fair Work Commission cases. Deliveroo was also ordered to pay Mr Franco for lost pay and his continuity of service was also not broken.

     

    What Could This Mean For You?

    Whilst Deliveroo have openly stated that they intend to appeal the decision, if upheld, the decision will have wide-reaching ramifications for gig workers and digital businesses who rely on a contractor and principal model.

    It is becoming more and more important to ensure that businesses get the distinction between employee and contractor right as the misclassification of a worker can lead to significant unexpected liabilities including (but not limited to):

    • Fines and penalties under the Fair Work Act
    • Underpayment and back pay of wages
    • Payment of unpaid superannuation entitlements
    • Workplace Health and Safety liabilities

     

    If you would like assistance with reviewing your current contractor arrangements, start a conversation with our dedicated Workplace Relations team:

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • Enterprise Legal | Fair Work Commission Wage Increase Announced – 2.5%

    The Fair Work Commission has just announced that the National Minimum Wage and all wages in Modern Awards will increase by 2.5%.

    The new National Minimum Wage will be $772.60 per week or $20.33 per hour from 1 July 2021.

    The increases for Modern Awards will be staggered across a select number of Awards.

    The General Retail Industry Award 2020 wages will increase by 2.5% on 1 September 2021.

    The following Awards will have their minimum wages increased by 2.5% on 1 November 2021:

    • Air Pilots Award 2020
    • Aircraft Cabin Crew Award 2020
    • Airline Operations – Ground Staff Award 2020
    • Airport Employees Award 2020
    • Airservices Australia Enterprise Award 2016
    • Alpine Resorts Award 2020
    • Amusement, Events and Recreation Award 2020
    • Dry Cleaning and Laundry Industry Award 2020
    • Fitness Industry Award 2020
    • Hair and Beauty Industry Award 2010
    • Hospitality Industry (General) Award 2020
    • Live Performance Award 2020
    • Mannequins and Models Award 2020
    • Marine Tourism and Charter Vessels Award 2020
    • Nursery Award 2020
    • Racing Clubs Events Award 2020
    • Racing Industry Ground Maintenance Award 2020
    • Registered and Licensed Clubs Award 2020
    • Restaurant Industry Award 2020
    • Sporting Organisations Award 2020
    • Travelling Shows Award 2020
    • Wine Industry Award 2020

    All other modern awards will have their minimum wages increased by 2.5% on 1 July 2021.

    Learn more about the wage increase: Join Amie Mish-Wills – Principal Legal Advisor Workplace Relations and Alistair Green – Director FocusHR on the 1st of July 2021 for the Chamber of Commerce Fair Work Legislation Update Breakfast. 

    Register Online Now

     

    The Toowoomba Chamber Fair Work Legislation Business Breakfast July 2021

     

  • Enterprise Legal | Changes to the Fair Work Act Requiring Casual Conversion

    Changes made to the Fair Work Act 2009 (Cth) earlier this year have introduced provisions to provide a pathway to permanent employment for casual employees.

    Employers now have an obligation to make an offer to convert a casual employee to either full-time or part-time employment (based on their regular work patterns) in circumstances where the employee:

    1. has been employed by the employer for 12 months; and
    1. during the last six months, has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time or part time employee (based on their regular work patterns).

    While the obligation does exist, an employer is not required to make an offer where there may be “reasonable business grounds” to not do so. Businesses may rely on reasonable business grounds including:

    1. the employee’s position will cease to exist in the period of 12 months after the time of deciding not to make the offer;
    1. the hours of work which the employee is required to perform will be significantly reduced in that period;
    1. there will be a significant change in either or both of the following in that period:
      1. the days on which the employee’s hours of work are required to be performed;
      2. the times at which the employee’s hours of work are required to be performed;

    which cannot be accommodated within the days or times the employee is available to work during that period;

    1. making the offer would not comply with a recruitment or selection process required by or under a law of the Commonwealth or a State or a Territory.

    Employers will need to provide casual employees with notice of their decision to not make an offer within 21 days following the end of the employees first 12 months of employment. Any such notice should indicate that an offer will not be made and provide detailed reasons as to why.

     

    What Does This Mean For Small Businesses?

    While small businesses, being those employers who employ less than 15 employees, are not required to offer conversion to casual employees, casual employees are entitled to request casual conversion if they satisfy the grounds to do so.

     

    When Does This Come Into Action?

    A six-month transition period is in place, so employers must assess whether casual employees employed before 27 March 2021 are eligible to convert to permanent employment by 27 September 2021.

     

    If you would like assistance with these changes to casual employees, start a conversation with our dedicated Workplace Relations team:

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request