Allens

Employment & Safety

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Focus: Employment & Safety

5 July 2017

In this issue: we look at the Fair Work Commission's power to conciliate and arbitrate disputes; whether redundancy payments are payable if an employee is dismissed through ordinary turnover; and how the Queensland Government's draft Labour Hire Licensing Bill may affect all employers.

Pizza delivery driver fails to win slice of the dough

In brief: The Fair Work Commission had no power to overturn the outcome of a pizza delivery competition. Associate Laura Bereicua reports.

How does it affect you?

  • The Fair Work Commission's power to conciliate and arbitrate disputes depends on the terms of the applicable enterprise agreement and modern award.
  • Employers should avoid referring to incentive schemes in their enterprise agreements and should keep their dispute resolution clauses as narrow as possible.

Background

Ms Hart is a casual pizza delivery driver employed by a local Domino's franchisee. The terms and conditions of Ms Hart's employment are set by the SDA Dominos Pizza Agreement 2009 (the Agreement).

In 2015, Ms Hart was awarded Domino's Delivery Driver of the Year and her prize was a new car. Ms Hart participated in the competition again in 2016. However, over the course of the year, it became apparent that she was not winning. This prompted Ms Hart to make complaints to Domino's about the accuracy of its GPS system. She finished in second place and failed to win the $15,000 prize. 

Ms Hart lodged a dispute with the Fair Work Commission, asking the Commission to overturn the outcome of the competition. Ms Hart argued that the 2016 winner was ineligible and that the outcome was determined based on incorrect GPS data. She also claimed she had suffered a psychological injury as a result.

Domino's asked the Commission to dismiss Ms Hart's application, arguing the Commission had no power to consider it.

Decision

The Commission agreed with Domino's and dismissed Ms Hart's application because:

  • the Commission can conciliate and arbitrate disputes if authorised by the dispute resolution clause of the relevant enterprise agreement. The Agreement's dispute resolution clause allowed the Commission to determine disputes only about matters arising under the Agreement or National Employment Standards; and
  • neither the National Employment Standards nor the Agreement contained any reference to the Delivery Driver of the Year award or incentive schemes generally. As a result, the competition, its rules, eligibility, methodology and outcomes were outside the Commission's jurisdiction and were at the employer's absolute discretion.

The Commission also described the application as 'bizarre and entirely inappropriate' and said it would have dismissed the application on its merits. 


No redundancy pay for termination in ordinary and customary turnover of labour

In brief: An employer has avoided making a redundancy payment to an employee who was retrenched in the ordinary and customary turnover of labour. Managing Associate Andrew Stirling and Law Graduate Roseanna Bricknell report.

How does it affect you?

  • Employers should avoid including clauses in employment contracts that are uncertain or unclear (eg that refer to policies that do not exist).
  • Employers will typically not be required to make redundancy payments if the redundancy is the result of the 'ordinary and customary turnover of labour'.

Background

Mr Buckle was employed by Spotless until 30 June 2016. Spotless had a facilities maintenance contract and Mr Buckle's main duties related to that facility.

The facilities maintenance contract was terminated. Spotless tried to identify acceptable redeployment opportunities for Mr Buckle. When no opportunities could be found, Mr Buckle's employment was terminated.

Mr Buckle claimed that he was entitled to redundancy pay. His employment contract said that if he was made redundant, retrenchment benefits would be payable to him in accordance with Spotless' 'Retrenchment Policy'. Spotless had not made Mr Buckle a redundancy payment, nor did it have any such retrenchment policy. Mr Buckle applied to the Western Australian Industrial Relations Commission for a redundancy payment in accordance with the terms of his employment contract.

The Commission concluded that the employment contract entitled Mr Buckle to 11 weeks' redundancy pay. Spotless appealed the decision.

Decision

A Full Bench of the Commission concluded that Spotless did not have to make any redundancy payment to Mr Buckle under his employment contract.

The Full Bench concluded that the NES could be applied to give the contract meaning and effect, even though Spotless did not have a redundancy policy. However, the NES exempts employers from making redundancy payments if the termination occurs as part of the 'ordinary and customary turnover of labour'. Since Mr Buckle was dismissed in the ordinary or customary turnover of labour, he was not entitled to redundancy pay under the NES or, as a result, under his employment contract.

Labour Hire Licensing Bill may affect all employers

In brief: The Queensland Government's draft Labour Hire Licensing Bill will have a significant effect on the operations of businesses far beyond the traditional labour hire industry and its customers. Managing Associate Andrew Stirling reports.

How does it affect you?

  • A Queensland parliamentary committee is inquiring into the proposed Labour Hire Licensing Bill.
  • Concerns from business have included that the Bill will require an unintended range of businesses to hold a labour hire licence, including businesses that do not operate in the labour hire industry.

Key features of the Bill

At the end of May 2017, the Queensland Government introduced the Labour Hire Licensing Bill.

The key features of the Bill are:

  • it will be unlawful to provide or receive labour hire services unless the labour hire provider is licensed;
  • labour hire licences will include a condition that the labour hire provider comply with laws including the Fair Work Act and other Commonwealth laws (eg migration and anti-discrimination laws);
  • the labour hire licence can be cancelled if the labour hire provider does not comply with those laws; and
  • labour hire providers must report each six months on, among other things, their compliance with those laws.
Concerns with the Bill

The Bill has been referred to a parliamentary committee, which is conducting an inquiry. Allens made a submission to the committee. Our primary concern is that the definition of labour hire services is too broad and will require an unintended range of businesses to hold a labour hire licence. For example, the definition would extend to:

  • the secondment of professional services employees into their clients' businesses;
  • joint venture participants providing their employees to support the operator of the joint venture; and
  • secondments or other provision of employees (eg via a services agreement) within a corporate group.

Please contact us if you would like us to raise any additional concerns with the Bill. The committee intends to report by 24 July 2017.

For further information, please contact:

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