• 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

    ✉️ Submit an Online Request

  • 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