ECONOMIC DEVELOPMENTS
Visa Grants Decrease: Is the Two-Speed Economy Shifting Gear?
The latest Department of Immigration statistics have revealed a
25 percent decrease in the number of 457 visas granted in FY2013.
In particular, the number of 457 visas granted in the mining and
construction sectors declined by 42 percent and 40 percent
respectively, but 69 percent of 457 visa recipients took up work as
managers and professionals. The redistribution of 457 visas across
the economy suggests a declining growth in the mining states, and
the geographic distribution of those visas supports
this.
Seventeen percent of all 457 visa recipients took up work in
Western Australia, but 62 percent commenced employment in New South
Wales and Victoria. As to the nations from which 457 visa holders
come, 23 percent arrived from India, 18 percent from the United
Kingdom and 6.5 percent from China. The redistribution of 457 visas
may reflect a growth in the professional services distributed
across the east coast of Australia and a commensurate decline in
mining and construction works taking place in Western Australia and
Queensland.
The same statistics have revealed that the mining sector still
pays the highest base salary, $138,700, to its 457 workers. The
financial services sector follows, paying $117,000 and the
utilities sector pays $116,100 as its average base rate. Western
Australia, however, is no longer paying the highest rates. That
honour belongs to New South Wales, followed by the Northern
Territory, Queensland and Victoria. Employers should be aware that
the Federal Government may, in light of these statistics, consider
decreasing the number of 457 visas in the coming financial
year.
IN THE PIPELINE—HIGHLIGHTING CHANGES OF INTEREST TO EMPLOYERS IN AUSTRALIA
Fair Work (Amendment) Bill Passed by House of Representatives
The Fair Work (Amendment) Bill 2014 (Cth), which we
have previously reported on, has been passed by the House of
Representatives. The Bill now awaits approval by the Senate. In
July, we reported that the Senate Standing Committee on Education
and Employment recommended to the Senate that it pass the Bill
without any amendments. Accordingly, it is almost certain that the
Bill will be passed on the next Senate sitting date.
The Bill, in the words of the Attorney-General, "protects and
restores" the rights of the individual in the workplace. As
discussed in our
March and
May Updates, the Bill prevents unions from taking
greenfields agreements to the Fair Work Commission unless they have
negotiated with an employer for three months. It also prohibits
unions from entering workplaces unless they are covered by an
enterprise agreement or are invited onto the premises by a member.
It also expands the matters to which an IFA applies and dilutes the
power of unions to limit their application. The Bill is expected to
become law before the end of the year.
HOT OFF THE BENCH—DECISIONS OF INTEREST FROM THE AUSTRALIAN COURTS
Fivefold Increase in Damages for Sexual Harassment: Full Federal Court of Australia
In the most significant decision for employers this year, the
Full Federal Court has increased the damages available for pain and
suffering in a sexual harassment claim by a factor of five.
In Richardson v Oracle Corporation Australia Pty Ltd
[2014] FCAFC 82, a female manager employed by Oracle, Rebecca
Richardson, was found to have been sexually harassed by a male
sales consultant based in Melbourne for six months in 2008. The
harassment ceased only when Richardson reported the conduct to her
manager. Both the trial judge and the Full Court were critical of
Oracle's investigation in four key respects. Firstly, Oracle
permitted contact between Tucker and Richardson during the
investigation. Secondly, Tucker was required only to give a
written, evasive apology. Thirdly, Tucker was not dismissed but
given a first and final warning. Finally, Oracle representatives
encouraged Richardson not to visit its Melbourne offices again.
Richardson resigned and took up elsewhere shortly after the
completion of the investigation.
The trial judge found that Oracle was vicariously liable because
it had not done everything reasonable to prevent the harassment of
the sales manager. Accordingly, the trial judge awarded her $18,000
in damages for pain and suffering. The trial judge noted that he
would have awarded her $30,000 for economic loss caused by taking
up a lower paid position if the evidence proved a link between that
decision and the harassment.
Richardson appealed many aspects of the decision but succeeded
upon two, namely that damages for pain and suffering were
inadequate and that there was evidence establishing economic loss
such that she should have been awarded the $30,000. As to pain and
suffering, Justice Kenny of the Full Court held that the award did
fall within the range of damages available for pain and suffering.
However, that range was now inadequate. Community standards now
placed a higher value on quality of life than when the range was
first set down. Furthermore, a restrictive approach to damages is
inconsistent with the beneficial intent of the Sex Discrimination
Act under which the claim was made.
Accordingly, it was found that the pain and suffering Richardson
endured merited an award under this head of $100,000 instead of
$18,000. As to there being no evidence of the harassment causing
economic loss, Justices Besanko and Perram found that statements
made by Richardson to others at the time of the
investigation—that she had lost confidence in Oracle and her
acceptance, soon after, of lower paid employment—established
the necessary link.
Key Takeaway
The key takeaway for employers is that there are two points at
which they may mitigate their exposure to a sexual harassment
claim. The first is at the stage of establishing vicarious
liability, and the second is in the damages calculation. To prevent
a finding of vicarious liability, employers should demonstrate that
they have done everything reasonable to prevent the sexual
harassment. To do this, employers should hold sexual harassment
seminars regularly to warn employees of the seriousness of that
conduct.
Furthermore, the contract of employment should provide that proven
sexual harassment will justify summary dismissal. As to minimizing
damages, employers should prevent the subjects of investigations
from contacting complainants. Those complainants, whether or not
their claims are substantiated, should be given counseling at the
employer's expense. Implementation of these strategies should
help employers to avoid sharing the fate of Oracle.
Supreme Court Takes Dim View of Employee Disloyalty
Justice Kelly of the South Australian Supreme Court has awarded
at least half a million dollars to Artcraft Pty Ltd, whose
production manager was found to have breached his contract, his
fiduciary duties and wrongfully converted his employer's
property by selling it to a recycling firm for his personal
profit.
Artcraft produces road signs and employed Benjamin Dickson in its
Adelaide branch to manage the production of those signs. Dickson
decided to sell the scrap metal by-products found at Artcraft's
premises to Ferris Metal Recyclers and pocketed the proceeds for
four years, which Artcraft was able to prove at trial. Justice
Kelly found for Artcraft on all three claims against Dickson.
Notably, Justice Kelly awarded exemplary damages in respect of the
claim for conversion, calling it a "fraud of the most
egregious kind". Justice Kelly also held that Dickson's
wife had been an accessory to the fraud and was also ordered to pay
$59, 800 to Artcraft.
Key Takeaway
The key takeaway for employers is that they should have confidence
that courts will appropriately compensate employers for claims of
dishonest conduct on the part of their employees, provided that
sufficient evidence is gathered in respect of such misconduct.
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.