Australia: 5 must-know employment law outcomes favouring employers

In brief - What employers can learn from emerging case law and recent statutory amendments to help manage HR issues

There's never a shortage of change in the fast-paced employment law and industrial relations space. During 2018 we saw many judicial outcomes that were problematic for employers, but in this article we point out several recent developments that were favourable for employers and are worth retaining in the HR toolkit in 2019.

  1. Game on with new statutory offset clause

The Federal Government has introduced a statutory solution to deal with the "double dipping" issues that arose in WorkPac v Skene [2018] FCAFC 131, in which a casual employee who contested his classification was awarded annual leave entitlements but also retained the casual loadings paid to him.

On 17 December 2018, an amendment to the Fair Work Regulations 2009 (Cth) came into effect, which as of 18 December (including retrospectively) operates to allow a Court to make a declaration that an employee who was characterised as "casual" but was in fact part time or full time, can have casual loadings offset from one or more claims to be paid National Employment Standards entitlements.

The new regulation applies where all of the following criteria are met:

  • an employee is employed by their employer on a casual basis
  • the employee is paid a casual loading that is clearly identifiable as being an amount paid to compensate the person in lieu of entitlements that casual employees are not entitled to under the NES, such as personal or annual leave
  • despite being classified by the employer as a casual, the employee was in fact a full-time or part-time employee for some or all of their employment for the purposes of the NES, and
  • the employee has made a claim to be paid for one or more of the NES entitlements (that casual employees do not have) that they didn't receive for all or some of the time that they were incorrectly classified as a casual

However, the new regulation is not a complete answer. The offset only works in relation to NES entitlements, not other entitlements that could be claimed by alleged breach of awards or enterprise agreements, such as shift loadings, overtime, penalty rates etc. Employers will also need to be able to rely on documentary evidence in the form of pay slips or written employment contracts that clearly identify the casual loading component payable.

While it is good news for employers for now, the amendment could be short lived. It is a "disallowable instrument", which means that within 15 days of the next Parliamentary sitting period (in February 2019), a senator or member of the House of Representatives can give notice to disallow the regulation in whole or part. If this occurs, the regulation will be of no effect.

  1. No place for punctilious puzzling over enterprise agreements

Section 188 of the Fair Work Act 2009 (Cth) has been amended to make it slightly easier for employers to have enterprise agreements approved without the need to defend minor procedural deficiencies. The amendments give power to the Fair Work Commission to approve enterprise agreements despite "minor procedural or technical errors" (for example, where the Notice of Employee Representational Rights is placed on company letterhead), provided employees are not likely to be disadvantaged by the errors. The amendment will rectify errors such as defective Notices of Employee Representational Rights and minor pre-approval errors that would not have affected the outcome of the vote.

  1. Prevention by suspension

In Avenia v Railway & Transport Health Fund Ltd [2017] FCA 859, an employer was lawfully able to suspend an employee while undertaking a workplace investigation, despite there being no express suspension clause in the written contract.

Justice Lee of the Federal Court of Australia held that at common law an employer has a right to temporarily suspend an employee on full pay for as long as is necessary to undertake and conclude an investigation. This includes situations where the employer is seeking reasonably to determine issues or find facts relevant to allegations or suspicions of employee misconduct.

The case confirms a direction to suspend an employee on full pay will be reasonable in circumstances where it is taken to enquire into or investigate allegations of inappropriate behaviour when such behaviour could constitute a risk to the safety, health and welfare of its staff or the duty to provide a safe workplace.

  1. Employee led up garden path

In Grace Worldwide (Australia) Pty Limited v Steve Alves [2017] NSWSC 1296, it was lawful to place a senior employee on three months' gardening leave when he announced his resignation to join a competitor, even though the employee alleged "repudiation" (breach of contract), because no such clause was contained in the written employment contract.

The Court ruled in favour of the employer, finding it had an implied right to direct the employee to take a period of gardening leave because implying the term was "reasonable and equitable and necessary to give business efficacy to an employment contract so as to avoid contact between an employee and a competitor".

  1. Out of sight, out of mind resolves bullying claim

In a recent anti-bullying decision, the FWC held that an employee of the Australian Taxation Office (ATO) was unable to succeed in obtaining anti-bullying orders because the proactive conduct of his employer meant there was no risk that the alleged bullying would continue.

After investigating the allegations, the ATO took steps to transfer the employee to a suitable alternative role within the ATO, which had the effect of ensuring the employee would work in a different business line, and on a different floor, to the two alleged bullies.

The decision stands for the proposition that the anti-bullying jurisdiction is not designed to punish people, but rather is centred on stopping future bullying behaviour. Depending upon contractual or industrial restrictions that may require consideration, unilaterally transferring an employee to a suitable new position where they will have no contact with the alleged bully is an effective way to resolve claims in this jurisdiction.

Employers should proactively manage HR issues as they arise

As we head towards a Federal election in May 2019, employment and industrial relations issues will continue to be at the forefront of the political landscape, creating more change in the year ahead. However, employers are encouraged to seek legal advice to proactively manage employment issues as they arise, relying on useful and emerging case law and statutory amendments to support objective and lawful outcomes in the workplace.

Paul O'Halloran
Workplace relations
Colin Biggers & Paisley

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.

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