Australia: 2016 – The year that was: an annual workplace relations recap

Last Updated: 14 December 2016
Article by Michelle Dawson

Highlights of significant changes and developments as we farewell 2016, and start to look ahead to 2017.

2016 Workplace Relations Recap

2016 saw a number of changes and developments to the workplace relations landscape. It would be an almost impossible task to comprehensively list all of the year's relevant developments. However, we have chosen to highlight a few significant areas as we farewell 2016, and start to look ahead to 2017.

DEVELOPMENTS

Annual leave

Effective from 29 July 2016, most awards were amended to incorporate new provisions as to annual leave. The new provisions include:

  • a right for employers to direct employees to take annual leave if they have accruals exceeding eight weeks;
  • the ability for employees to take leave in advance with agreement from their employer (and where an employee's employment is terminated before they have accrued the leave taken in advance, the right for an employer to make an appropriate deduction from the employee's final pay); and
  • the inclusion of a cashing-out provision which will permit employers to agree with an award employee to cash out accrued annual leave if they:
    • have a signed written agreement with their employer;
    • have a balance of at least four weeks' annual leave remaining after they have "cashed out"; and
    • don't cash out more than two weeks in a 12-month period.

Award wages increase

Award wages increased by 2.4% from 1 July 2016, increasing the national minimum wage by $15.80 per week to $672.70 (or 41 cents an hour to $17.70). This increase was down on the increase in the previous year of 2.5%.

High income threshold

The high income threshold increased to $138,900 from 1 July 2016.

Maximum Superannuation contribution base

The maximum superannuation contribution base increased to $51,620 per quarter.

Fair Work Information Statement

A new Fair Work Information Statement was introduced on 1 July 2016. Employers should now be using this updated version of the Information Statement, accessible here: https://www.fairwork. gov.au/employee-entitlements/national-employment-standards/ fair-work-information-statement

RSRT

The Road Safety Remuneration Tribunal ceased operating in April after it was abolished by legislation.

Building Code compliance requirements

Building industry participants with enterprise agreements are now (with a grace period until November 2018) being required to comply, and be properly certified as being compliant, with the Building Code 2014.

Fair Work Ombudsman activity

The Fair Work Ombudsman (FWO) has continued to be active in prosecutions for non-compliance, citing figures from the financial year just gone, to evidence that nine out of ten cases pursued accessories (parties other than the employer, including directors, senior managers, accountants, HR personnel etc) to alleged Fair Work Act breaches.

New legislation – Registered Organisations and Building and Construction

The key bills pertaining to the Government's industrial relations reform agenda, and the bills which triggered the double dissolution election, both passed the Senate at the end of November. The passage of the Fair Work (Registered Organisations) Amendment Bill is the most significant industrial relations legislative development since the Fair Work Act's creation in 2009. It will establish a new independent regulator, the Registered Organisations Commission (ROC), to oversee registered organisations and the dealings of persons working within registered organisations such as Unions. It will also include stronger protections for whistle-blowers. The Building and Construction Industry (Improving Productivity) Bill 2013 will re-establish the ABCC.

SOME NOTEWORTHY DECISIONS

Garden leave

The NSW Supreme Court determined that the time served by a senior employee on garden leave did not count toward a prescribed restraint period under the terms of the employee's employment contract. Whilst the outcome of the case turned significantly upon the specific wording of the employment contract, the decision provided a useful lesson to employers

to ensure that, when preparing employment contracts containing garden leave and restraint provisions, they: are mindful of and properly reflect in the terms, the intended interaction between the two provisions; and, where the two are intended to operate "one after the other" (which is the usual intent of such clauses) to draw an express distinction between the termination of the employment contract and the cessation of duties.1

General protections

In one of the largest general protections claims payouts to date, an employer (a subsidiary of Rio Tinto) was required to pay to an employee $1,272,109 for past and future loss of wages, plus $24,626 in interest, together with a penalty of $50,000 to the employee's Union, when it was found to have breached the general protections provisions of the Fair Work Act. The employer stood the employee down just four days after, following protracted litigation against the employer, the employee was awarded significant damages for a back injury sustained some years earlier. The employer maintained that the employee was stood down only to protect health and safety, rather than for the reason alleged by the employee namely that he was stood down for exercising his workplace right to pursue the employer for damages arising from his injury, but was unable to prove to the court's satisfaction that the reason for standing the employee down was other than due to the exercise by the employee of the relevant workplace right. This case served as a reminder to employers to take care when making decisions to an employee's detriment, ensuring that the decision making process and appropriate reasons are adequately documented along the way.2

Accessorial liability

The FWO in November 2016 secured penalties against frozen yoghurt chain Yogurberry, a master franchisee, for its involvement in the exploitative practices of one of its franchisees. This has set the path for further master franchisee prosecutions where the master franchisee is found to have been knowingly involved in a franchisee's exploitative practices.3

Redundancy payouts and casual service

A Fair Work Commission majority controversially ruled that certain previous casual employment must be taken into account when calculating redundancy pay. This represents a departure from the way in which redundancy pay has commonly been calculated, namely by reference to employees' part-time or full-time service only (and not previous casual employment). Relating only to situations where a permanent employee's role is redundant in circumstances where the employee has at some stage during their tenure transitioned from a casual role (and not to casual employees who have always, truly, been casual employees – as true casual employees are not entitled to redundancy pay in any event), the decision renders it necessary for employers to consider redundancy practices and relevant implications carefully where casual-come-permanent employees are concerned.4

Footnotes

1DP World Sydney Limited v Guy [2016] NSWSC 1072 (1 August 2016)

2CFMEU v Hail Creek Coal Pty Ltd [2016] FCA 1032

3Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290

4 AMWU v Donau Pty Ltd [2016] FWCFB 3075 (15 August 2016)

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. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.

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