A recent decision of the Federal Court of Australia involving a
breach of grievance procedure has highlighted the importance of
employers reviewing the terms of industrial instruments when
dealing with their employees.
Mr Van Efferen started employment with his employer,
CMA, in 2002. In around June 2006, Mr Van Efferen
was appointed as a Barge Master for a project CMA was undertaking
for John Holland in Western Australia. Shortly afterwards,
Mr Van Efferen entered into an Australian Workplace
Agreement (AWA) and common law contract of
employment with CMA.
One of the terms of the AWA, which was key to
Mr Van Efferen's claim, was a grievance procedure
that CMA was required to follow if CMA had concerns about the
behaviour of its employees.
The contract between CMA and John Holland allowed John Holland
to require CMA to remove an employee from the project if John
Holland considered an employee to be unsatisfactory. In
September 2006, John Holland exercised its right to have the CMA
employee who was the marine supervisor removed, and CMA
subsequently appointed Mr Van Efferen as the marine
supervisor, noting that Mr Van Efferen was an
experienced marine supervisor. Shortly afterwards,
CMA also appointed a new project manager who did not have
experience in maritime work.
Mr Van Efferen had a number of disagreements with the
new project manager over safety matters. On a number of
occasions, the project manager disagreed with
Mr Van Efferen's recommendations, and in most
instances Mr Van Efferen's concerns were proven to be
In early October 2006, the project manager approached
Mr Van Efferen and advised that
Mr Van Efferen's appointment at the project was not
working out and that Mr Van Efferen was to be sent back
to his home base. Towards the end of October 2006,
Mr Van Efferen's employment was terminated for reason
The project manager subsequently argued that the reason for
removing Mr Van Efferen from the project was a belief
that John Holland would exercise its right to have
Mr Van Efferen removed from the project, however the
court rejected this, and found that Mr Van Efferen's
removal was due to his disagreements with the project manager
(where Mr Van Efferen had raised legitimate safety
issues). Further, the court found that John Holland was
unlikely to have requested the removal of an experienced marine
supervisor such as Mr Van Efferen.
The court also found that if CMA had complied with the grievance
procedure in Mr Van Efferen's AWA,
Mr Van Efferen's employment would not have been
terminated. Accordingly, Mr Van Efferen was
entitled to damages. The court awarded
Mr Van Efferen $274,288 in damages, representing the
remuneration Mr Van Efferen would have received to the
end of the project that CMA was undertaking for John Holland.
The decision of the court is currently the subject of an
Implications For Employers
Under the Workplace Relations Act 1996, a court could
only award an employee damages for a breach of an industrial
instrument if that industrial instrument was an AWA (or an
individual transitional employment agreement). With the
commencement of the Fair Work Act 2009 (Cth) on 1 July
2009, a court now has the power to award damages for a breach of
any industrial instrument (which includes collective enterprise
agreements and awards).
As a result, now more than ever, employers need to ensure that
are familiar with the terms of the industrial instruments
applicable to an employee's employment
comply with the terms of those industrial instruments in all of
their interactions with employees.
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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