Australia: Monthly Update - Australian Labour & Employment - January 2016

Last Updated: 26 February 2016
Article by Adam Salter

IN THE PIPELINE—HIGHLIGHTING CHANGES OF INTEREST TO EMPLOYERS IN AUSTRALIA

Labor Foreshadows Tougher Penalties and Imprisonment for Underpayment of Wages

The Federal opposition has foreshadowed that if elected to Government this year, it intends to advance a number of reforms to substantially increase the penalties associated with breaches of the Fair Work Act 2009 (Cth) and the underpayment of wages and employment-related entitlements.

The Labor party argues that current penalties are inadequate. Currently, if an employer fails to pay an employee's wages, they may be fined up to $10,800 as an individual and $54,000 as a corporation. Labor proposes an increase in these fines to $216,000 for an individual and approximately $1 million for a corporation.

Further, Labor's proposed reforms also include a plan to extend the accessorial liability provisions of the Act such that company directors are personally liable for unpaid wages owed to employees by the companies they manage (and civil penalties imposed on corporate employers by the Courts) and the introduction of a criminal offence (carrying up to two years' imprisonment) to cover instances of deliberate and intentional exploitation of migrant labour.

New Legislation to Resurrect the Australian Building and Construction Commission Faces Uncertain Future

In response to one of 79 recommendations made by Commissioner Dyson Heydon in his Final Report to the Royal Commission into Trade Union Governance and Corruption, the Federal Government has introduced a bill to re-establish the Australian Building and Construction Commission (the "ABCC") as the prime regulator of industrial relations within the building and construction industry.

As part of his Final Report, Commissioner Heydon recommended that legislation be enacted conferring a regulatory body with compulsory investigatory and information-gathering powers. This recommendation was made in response to the Royal Commission's uncovering of evidence of "widespread" and "deep-seated" failures in corporate governance within Australian trade unions.

On 2 February 2016, the Building and Construction Industry (Improving Productivity) Bill 2013 was re-introduced into the lower house. The Bill was unchanged from legislation originally introduced by the Abbott Government in 2013 and rejected by the Senate in 2014.

The ABCC will be tasked with promoting respect for the rule of law and for the rights of building industry participants by ensuring participants are held accountable for unlawful conduct. For this purpose, the ABCC will be granted extensive powers of investigation and enforcement to enable it to uphold the Act, designated building laws and the Commonwealth Building Code. Importantly, the ABCC will be able to impose harsher penalties for those participants engaging in unlawful industrial action. This includes penalties for breaches of laws specific to the building industry accompanied by a broadening of the circumstances under which industrial action may attract penalties. For instance, in response to a contravention of the civil penalty provisions (that include unlawful industrial action and picketing, coercion and discrimination), an authorised applicant (such as an inspector or affected person) may apply to a court for orders including pecuniary penalties, compensation orders or any other order the court considers appropriate. Further, a court may make an order for an injunction (including interim injunction) in respect of the contravention. At the same time, the ABCC will work to improve the bargaining framework to facilitate genuine bargaining at a workplace level.

The ABCC was first introduced by the Liberal Government in 2005 (by Prime Minister Howard) and then later abolished by the Labor Government in 2012 and replaced with the Fair Work Building Industry Inspectorate (operating as the Fair Work Building and Construction, or FWBC). In contrast to the dramatically reduced powers of the FWBC, the ABCC had a full suite of coercive capabilities at its disposal, including the ability to serve examination notices on persons the ABCC reasonably believed had information (or documents) relevant to an investigation or who were capable of giving relevant evidence. Such persons could be required to give such information or documents or attend before the ABCC (with a failure to comply constituting a criminal offence).

The Government may have hoped that the outcome of the Royal Commission would persuade cross-bench senators to give their support to the Bill (with the Government needing the support of six out of eight cross-bench senators to ensure its passage). However, on 6 February 2016, the vote on the Bill was delayed after several cross-bench senators sided with Labor and the Greens to have the Bill sent to the Australian Senate's Standing Committee on Education and Employment (which does not report until 15 March 2016).

This move will reduce the time the Government has to debate and pass the Bill before delivery of the Federal Budget on 10 May 2016 and will also further narrow the constitutional window that would permit a double-dissolution of parliament (and send the nation to an early election). Therefore, the fate of the Bill (and the potential resurrection of the ABCC) still hangs in the balance.

HOT OFF THE BENCH—DECISIONS OF INTEREST FROM THE AUSTRALIAN COURTS

Notice of Termination Cannot Run Concurrently to a Period of Leave

In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Kentz (Australia) Pty Ltd [2016] FWC 669 (3 February 2016), the Fair Work Commission ("FWC") found that Kentz (Australia) ("Kentz") was in breach of its enterprise agreement when it gave notice of termination to employees just before a period of rest and recreation ("R&R").

Kentz, an electrical contracting company, which was involved in the Ichthys LNG project, gave 150 fly-in fly-out workers notice of retrenchment directly before a designated R&R period provided for in their enterprise agreement (the "Agreement"). Under the Agreement, the employees worked four weeks "on" followed by one week of unpaid rest. The Electrical Trades Union used the dispute resolution provision of the Agreement to refer the matter to the FWC.

The first question which the Commission was asked to determine was whether the Agreement permitted notice of termination to run concurrently with the employees' period of R&R. The Electrical Trades Union ("ETU") submitted that the employees' entitlement to R&R, which formed part of the working cycle, could not be offset against other entitlements such as notice of termination.

Kentz argued that the matter in dispute was what amount of payment in lieu of notice should be provided rather than whether notice could run concurrently with a period of R&R. Section 117(2)(b) of the Fair Work Act 2009 (Cth) states that the worker must receive his or her full rate of pay for the hours the employee would have worked during the notice period. Since the R&R period is unpaid, Kentz submitted that its employees were not entitled to receive payment where they were paid in lieu of notice for that week (had the notice period run its course, they would not have received payment in this week).

In the alternative, the ETU asked the Commission to determine that the Agreement did not permit employees to be put on a period of R&R where there was less than two weeks' work for the employees remaining on the project.

It was held that Kentz failed to comply with its Agreement because R&R was considered a type of regulated and approved leave and that notice of termination under the Agreement could not run concurrently with a period of leave.

Further, Commissioner Bissett rejected the interpretation of section 117(2)(b) advanced by Kentz. Commissioner Bissett considered that payment in lieu of notice cannot be reduced based on the assumption that the employee is on unpaid leave for part of the notice period.

Additionally, the Commissioner was satisfied under the Agreement that the employees could not be put on R&R within their last two weeks of work. Therefore, where workers were paid in lieu of notice, this had to be calculated as if they had worked for the entirety of the notice period.

Lesson for Employers. This decision is somewhat problematic, as it treats a period of rest mandated by an enterprise agreement as a form of leave. Alternatively, the R&R period can be thought of as the accumulated weekend days the employees missed by working four weeks "on". It will be interesting to see whether Kentz appeals the decision and whether it is upheld by the Full Bench of the FWC.

Nevertheless, the decision demonstrates that employers should take care when planning the implementation of large-scale redundancies. As a result of this decision, Kentz may now be required to pay the 150 retrenched employees substantial amounts in lieu of this additional week of notice of termination.

$200,000 Fine for Essendon Football Club for Endangering Players

The Victorian Magistrates Court has imposed a penalty of $200,000 on the Essendon Football Club ("Club"). The Court found that during its 2011–2012 Supplements Program, the Club risked players' health and failed to keep a safe workplace.

The Club was investigated in 2013 by the Australian Sports Anti-Doping Authority and the World Anti-Doping Agency over its supplements program for the 2012 Australian Football League ("AFL") season and preceding preseason. The Club was found to have injected its players with banned peptide Thymosin beta-4. As a result, 34 of its players who were part of the program were suspended from the AFL, and various other staff members were subject to disciplinary action.

Essendon pleaded guilty to two charges under section 21 of the Occupational Health and Safety Act 2004 (Vic) ("Act") brought by Worksafe Victoria in November 2015 arising from the 2011–2012 supplements program. The charges included failure to provide and maintain for employees a work environment and system of work that is, so far as is reasonably practicable, safe and without risk to health. The maximum fine that could have been imposed was more than $300,000 per offence, although a higher court could have imposed a larger fine.

Magistrate Reardon found that the Club was in breach of section 21 of the Act. He referred to a "blatant disregard" for the safety of players, many of whom were young and vulnerable, and noted that the supplements program was conducted under a veil of secrecy.

In response to concerns raised by senior players regarding the scheme in January 2012, protocols were introduced requiring the informed consent of players, for substances to be cleared by the Club's doctor and for the doctor to advise on the effects of substances and the suitability for individual players. Magistrate Reardon found that those protocols were "totally ignored" and that people at the Club did not proactively ensure that the protocols were being followed. He stated that the case involved "the proactive involvement of an employer intent on doing something to its employees, namely to inject with supplements".

As such, Magistrate Reardon found that the players were exposed to risks to their personal health and safety by Essendon's failure to provide and maintain a safe workplace. The Magistrate ordered the Club to pay $20,000 in legal costs and $200,000 in fines. In setting the penalty, Magistrate Reardon took into account Essendon's lack of prior offences and the penalties it had already faced as a result of the supplements program, including a $2 million fine from the AFL.

This case involved the criminal prosecution of the Club for endangering players' health. It remains to be seen whether any of the 34 players who participated in the supplements program will pursue civil action to recover compensation for their personal and/or financial losses.

Lessons for Employers. Employers have an obligation to provide and maintain a healthy and safe workplace for their employees, regardless of the duties that the employees are performing. This case demonstrates that regulators are not afraid to penalise employers where they do not meet those obligations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Adam Salter
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.