Australia: Monthly Update—Australian Labour & Employment | April 2018

Last Updated: 24 May 2018
Article by Adam Salter and Katharine Booth


In this edition of the Update, we comment on the Labour Hire Licensing Act 2017 (Qld), which was recently implemented in Queensland and obliges labour hire providers to be licensed. We then discuss an enforceable undertaking agreed to by a swim school, and a decision of the Fair Work Commission ("Commission") confirming that medical conditions preventing employees from performing the inherent requirements of their role are valid reasons for dismissal. Finally, we outline the Commission's recent decision to terminate an enterprise agreement.


QLD Implements Labour Hire Licensing Law

In the July 2017 Update, we examined the Labour Hire Licensing Bill 2017 (Qld). In April 2018, the Labour Hire Licensing Act 2017 (Qld) and the Labour Hire Licensing Regulation 2018 came into effect. In short, the Act establishes a licensing scheme to regulate the provision of labour hire services in Queensland.

Section 7 of the Act states that a person ("Provider") provides labour hire services if, in the course of carrying on a business, the person supplies to another person a worker to do work. A "worker" is an individual who enters into an arrangement with a Provider under which the Provider supplies to another person the worker to do work, and the Provider is obliged to pay the worker for the work done.

The Regulations expand on the definition of "worker" in the Act. An individual who is not a worker includes:

  • an individual who earns equal to or more than the high income threshold under the Fair Work Act 2009 (Cth) (currently $142,000);
  • an individual who is an executive officer of a corporation and the only individual the Provider supplies to another person to do work;
  • an in-house employee of a Provider whom the Provider supplies to another person to do work on a temporary basis on one or more occasions—for example, a consultant employed by a consultancy business being supplied to a business to conduct a review for the other business; and
  • an individual whom a Provider supplies to another person to do work if the Provider and the other person are each part of an entity or group of entities that collectively carry on a business as one recognisable business.

This means that Providers of individuals who do not fall under the definition of "worker" do not need to obtain a licence.


Swim School Franchise Signs Enforceable Undertaking in Relation to Underpayment of Wages

Between 2010 and 2016, widespread underpayment of swimming teachers was discovered across the Paul Sadler Swimland franchise network, breaching both the Award and the franchisees' Enterprise Agreements. The underpayments were self-reported to the Fair Work Ombudsman ("FWO") by Paul Sadler, the franchisor, in October 2016. Specifically, the underpayments included a failure to correctly implement age increments for junior employees, a failure to pay employees correctly according to their experience levels and a failure to correctly apply the transitional wage provisions set out in the Award.

Paul Sadler signed a two-year enforceable undertaking with the FWO in April 2017. This undertaking revealed that Paul Sadler had underpaid 1,308 swim instructors a total of $1,425,477. The undertaking includes an agreement by Paul Sadler to allow for third-party audits of its swim schools and also requires Paul Sadler to maintain an email address which current or former employees can use to raise complaints or issues concerning their payment.

Paul Sadler has now rectified all underpayments and has paid all affected staff an additional 5 percent of voluntary repayment. It has also implemented an automated payroll system to ensure that future mistakes which led to the underpayment no longer occur.

Dismissal Not Found Unfair as Worker was Unable to Perform the Inherent Requirements of the Role

Mr Vijayan Kothandan v Transdev Melbourne Pty Ltd T/A Transdev [2018] FWC 2119

Factual Background. Mr Kothandan was employed by Transdev as a bus driver. He suffered a work injury in July 2016 and was employed on modified duties thereafter, until March 2017 when he did not return to work. Mr Kothandan was dismissed in November 2017 on the basis that his restricted medical capacity prevented him from performing the inherent requirements of his role.

Legal Background. Section 385 of the Fair Work Act provides that a person has been unfairly dismissed if the dismissal was harsh, unjust or unreasonable.

In determining whether a dismissal was harsh, unjust or unreasonable, the Commission must (among other things) look to whether there was a valid reason for the dismissal. In CSL Limited T/A CSL Behring v Chris Papaioannou, the Commission established that where a dismissal relates to an employee's capacity, the Commission must consider whether the employee suffered from a medical condition. Courts have found that "capacity" refers to an employee's ability to do the work he or she is employed to do, and confirmed that there can be a valid reason for termination where the employee does not have the capacity or ability to do the job. Where the employer relies upon the employee's capacity as the reason for termination, the substantial position of the role must be considered rather than modified, restricted duties or a temporary position.

Decision. Commissioner McKinnon decided that there was a valid reason for Mr Kothandan's termination and that the dismissal was not harsh, unjust or unreasonable (and consequently was not unfair). Commissioner McKinnon found that Mr Kothandan's restricted capacity prevented him from safely performing his role as a bus driver. He considered that the medical evidence established that at the time of the dismissal, Mr Kothandan's medical condition prevented him from regularly driving buses whilst applying a sustained level of attention, concentration and judgement.

The Commission also considered whether Mr Kothandan was notified of the reason for dismissal and whether he was given the opportunity to respond (in both cases, it was found that he was). Commissioner McKinnon did not consider that additional time or medical evidence that could have been provided by Mr Kothandan would have made any difference to the outcome.

Lessons for Employers. This case confirms to employers that, subject to other considerations noted above, an employee's incapacity to perform the inherent requirements of the role can constitute a valid reason for dismissal. Employers should nevertheless ensure that all medical evidence as to capacity is obtained before terminating the employment of an employee due to his or her not having the capacity to perform the inherent requirements of his or her role.

Termination of the Port Kembla Coal Terminal Limited Enterprise Agreement 2012-2015

Facts. The Port Kembla Coal Terminal Limited ("PKCT") Enterprise Agreement 2012-2015 was approved by the Commission in 2012 and nominally expired in June 2015. The Agreement contained generous superannuation entitlements and "unusual" provisions regarding self-directed working teams. These teams were described by the Commission as "attractive from the point of view of industrial democracy, [but] significantly constrain[ed] [PKCT's] ability to manage its employees, including in relation to performance, discipline, rostering, working time, leave, and promotion".

The parties commenced bargaining for a replacement enterprise agreement in March 2015 and continued to bargain throughout 2016 and early 2017. PKCT provided several proposed replacement agreements to the employees (and their employee organisation, the Construction, Forestry, Mining and Energy Union); however, these agreements were rejected. In April 2017, the employees covered by the Agreement took protected industrial action. In October 2017, PKCT applied to the Commission to terminate the Agreement.

Legal Background. Section 225 of the FW Act provides that if an enterprise agreement has passed its nominal expiry date, an employer, employee or employee organisation covered by the agreement may apply to the Commission for the termination of the agreement. The Commission may terminate an enterprise agreement only if it is satisfied that it is not contrary to the public interest to do so and it considers that it is appropriate to terminate the agreement, taking into account all the circumstances, including the views of the parties to the agreement and the effect that the termination will have on them.

Decision. The Commission held that it would not be contrary to the public interest for the Agreement to be terminated, and expressed concern that the Agreement was not consistent with the "promotion of economic prosperity, especially as its retention in the longer term may jeopardise PKCT's viability".

The Commission concluded that the Agreement needed to be replaced, chiefly because it prevented PKCT from flexibly organising and structuring its working arrangements and utilising its workforce to maximum benefit during working and paid hours. However, the Commissioner delayed the termination of the Agreement for 12 months, in order to maximise the likelihood that the parties would negotiate a new agreement which removed the team system before termination takes effect.

Lessons for Employers. This case demonstrates that the Commission can and will exercise its power to terminate inflexible enterprise agreements which no longer suit the circumstances of employees and/or their employer.

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

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

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”

Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions