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Focus: Workplace Relations

30 November 2011

In this issue: we look at work health and safety laws harmonisation; redeployment obligations in a redundancy; employer rights to determine where on-site union meetings are held; and whether asserting a right under an employment contract can ground an adverse action claim.

Key issues in OHS harmonisation

In brief: The beginning of 2012 will see the commencement of harmonised occupational health and safety laws in Australia. Now is a timely opportunity to provide an update on the progress of the harmonisation process. Partner Simon Dewberry and Lawyer Andrew Stirling report.

How does it affect you?

  • Broader responsibility for the health and safety of all workers within a business, not just employees.
  • Positive duties on officers to exercise OHS due diligence.
  • Increased maximum fines, with the possibility of imprisonment for some breaches.
Who's in and who's out?

At the time of writing, the Commonwealth, Queensland, New South Wales and the ACT have enacted the Work Health and Safety Bill (the model Bill), and the Bill is before the parliaments in South Australia, Tasmania and the Northern Territory. It is expected that Victoria will introduce the legislation at some stage, but not in time for a 1 January 2012 commencement. Western Australia may not introduce the laws because of its government's opposition to them. Queensland made only minor amendments to the model Bill, but retained separate legislation for electrical safety, petroleum and gas, and mining. NSW implemented the model Bill, but included a limited right for unions to prosecute OHS offences, and reduced the maximum fine for some offences.

What is the primary duty?

The primary duty to ensure health and safety will fall on persons conducting a business or undertaking (PCBU). A PCBU will be responsible for the health and safety of its employees, plus:

  • its contractors and subcontractors;
  • the employees of its contractors and subcontractors;
  • labour hire employees working in the PCBU's business or undertaking;
  • its outworkers;
  • any apprentices or trainees working within the PCBU's business or undertaking;
  • students gaining work experience; and
  • any volunteers.

If more than one PCBU has responsibility for the health and safety of an individual worker, they must consult and cooperate with each other.

However, there is an important limitation on the primary duty in circumstances where there is more than one duty-holder. The duty of each duty-holder will only extend as far as its capacity to influence and control the work. If the duty-holder has no capacity to influence or control the work, its duty becomes theoretical. Conversely, if the duty-holder is the person with the most capacity to influence or control the work, it will be the person primarily responsible for ensuring the work is done safely.

Officer liability

For the first time, officers of PCBUs will have a duty to address OHS issues proactively by exercising due diligence. Failure to meet that duty is a criminal offence, punishable by a fine and (in the most severe cases) imprisonment.

Due diligence will require more than being kept informed about OHS incidents. Officers will need to understand the operations of the undertaking and the risks that are involved, and be actively engaged in the PCBU's OHS processes.

Officers must be satisfied that the PCBU has effective OHS systems in place and monitor that those systems are implemented and effectively control risks. Importantly, officers will be directly responsible for ensuring sufficient resources are dedicated to OHS issues.

Other key features
  • The obligation to notify the OHS regulator about a serious incident is placed on the PCBU or PCBUs, not just on the employer. Serious incidents must be reported by the fastest means possible, whether by telephone or in writing (including electronically).
  • In a change for some states, the OHS regulator may require a person to answer a question, even if the answer is incriminating.
  • The model Bill makes significant changes to the penalty regime in the event of a successful prosecution. Penalties will now be characterised according to severity, and the fines for the most severe offences are potentially larger than currently exist.

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Reasonable to redeploy to lower paid and lower status position

In brief: In a jurisdictional challenge by an employer to an unfair dismissal application on the ground the dismissal was a genuine redundancy, Fair Work Australia has found that it would have been reasonable for the employer to redeploy the employee, despite the only option being redeployment to a lower paid and lower status position. Senior Associate Stacey Van der Meulen reports.

How does it affect you?

  • Whether it is reasonable for an employer to redeploy an employee is an objective test.
  • If the redundant employee has the necessary skills for the position, he or she should be considered for redeployment to the alternative position.
  • It is a risk for an employer to assume an employee will not be attracted to an offer of redeployment – even where redeployment is to a position with lower pay and status.
Background

The applicant, Ms Iryna Margolina, made an unfair dismissal claim under the Fair Work Act 2009 (Cth) (the Act) against Jenny Craig Weight Loss Centres Pty Ltd arising out of the termination of her employment. Jenny Craig raised a jurisdiction objection to the claim, on the basis that Ms Margolina's dismissal was a genuine redundancy, and therefore outside the scope of the unfair dismissal regime under the Act.

A genuine redundancy is defined in section 389 of the Act. Relevantly, a dismissal will be a case of genuine redundancy if:

  • the person's employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise; and
  • the employer has complied with its consultation obligations in any applicable modern award or enterprise agreement; and
  • it was not reasonable in all the circumstances for the person to be redeployed within the enterprise of the employer or a related business.

A dismissal will not be a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer's enterprise.

The decision

At the hearing, the applicant argued that the dismissal was not a case of genuine redundancy because:

  • Jenny Craig had not complied with its consultation obligations under an applicable modern award; and
  • reasonable redeployment was available.1

In relation to the first issue, there was a dispute between the parties about which modern award applied to the applicant's employment. Commissioner Ryan, of Fair Work Australia, found that the applicant's employment was covered by the Clerks - Private Sector Award 2010 (the award) and that Jenny Craig had failed to comply with the consultation obligations under that award. However, in the event Commissioner Ryan was incorrect about the application of the award, he went on to consider the redeployment issue.

Jenny Craig's evidence was that there were alternative positions available, but which were of lower pay and lower status. Jenny Craig did not offer those positions to the applicant, even though she had the necessary skills to perform the roles, because it did not want to insult her.

The applicant's evidence, which was accepted by Commissioner Ryan, was that she would have accepted a lower paid position, including an entry level position or a part-time job.

Commissioner Ryan found that it would have been reasonable in all the circumstances for the applicant to be redeployed. Commissioner Ryan noted that, in many cases, a presumption that a redundant employee in a high status and high paid position will not want to accept redeployment to a lower pay and lower status position may be reasonable and may subsequently be found by a court to be correct. However, where an employer acts upon the basis of a presumption, the employer risks being proven to the contrary.

Instead of presuming to know the mind and the financial circumstances of the applicant in this case, Jenny Craig should have asked the applicant if she was prepared to accept redeployment to a lower paid position which was available.

The applicant's dismissal by Jenny Craig was therefore not a case of genuine redundancy and Jenny Craig's jurisdictional challenge was dismissed.

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Refusal to allow lunch room union meeting reasonable

In brief: A Fair Work Australia Full Bench majority has upheld the reasonableness of an employer request that union officials meet with employees in rooms outside communal areas, notwithstanding close proximity to management. Lawyer Emma Reilly reports.

How does it affect you?

  • Although unions may have a preference for a more 'visible' location to meet with employees, employers may request unions to use other locations, so long as the request is reasonable.
  • In determining a reasonable location, employers may have regard to the views of non-members who are opposed to union meetings being held in communal areas.
Background

In a recent Fair Work Australia (FWA) Full Bench decision, the Transport Workers' Union of Australia (the TWU) appealed a FWA finding that a request by DHL Supply Chain (Australia) Pty Limited (DHL) for TWU officials to meet with employees in rooms close to management (rather than in the lunch room) was reasonable.

The initial decision

The TWU made an application to FWA under section 505 of the Fair Work Act 2009 (Cth) (the Act), which gives FWA the power to deal with a dispute about the operation of the right of entry provisions. The TWU sought orders to allow its officials access to the lunch room to hold discussions with workers and a direction that DHL not monitor employee attendance at such meetings.

The application required Commissioner Harrison of FWA to decide whether the request by DHL that TWU officials use rooms in the administrative area of the premises was a 'reasonable request' under s492 of the Act.

In determining whether an employer's request is reasonable, FWA is required to take into account all of the circumstances and consider whether the room is fit for the purpose of conducting interviews or discussions and if the request is made with the intention of intimidating or discouraging employees from participating.

Commissioner Harrison found that the request by DHL was reasonable and declined to make the orders sought. In making his decision, the Commissioner referred to a number of matters, including:

  • that there were no restrictions on employees accessing the administrative area, which was in close proximity to the lunch room;
  • that there was no persuasive evidence of monitoring of meetings by management so as to intimidate or discourage employees from participating in discussions with TWU officials; and
  • a petition signed by 38 of 45 warehouse employees at the site objecting to meetings taking place in the lunch room.2

The TWU sought to appeal the decision.

The appeal

A FWA Full Bench majority upheld Commissioner Harrison's decision and refused the TWU leave to appeal, finding that although it might be more preferable from the TWU's perspective for it to have a more 'visible' location to meet with members, it is reasonable for an employer to require other rooms to be used.

The Full Bench majority also found that it was appropriate for the Commissioner to give weight to the views expressed by employees on site that no meetings should be held in the lunch room.3

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Is a common law contract a 'workplace instrument' for adverse action purposes?

In brief: The Federal Court recently confirmed that a common law contract cannot be regarded as a 'workplace instrument' for the purposes of adverse action claims under the Fair Work Act 2009 (Cth). Senior Associate Veronica Siow and Law Graduate Ishwar Singh report.

How does it affect you?

Employees who:

  • are not covered by an award or enterprise agreement; and
  • are employed under a common law contract,

cannot rely solely on their rights under a common law employment contract to bring an adverse action claim against their employer.

Background

The applicant in the case, Mr Barnett, was employed by the respondent, Territory Insurance Office, in the position of 'Manager, Claims Operations – Property' on 31 May 2010. Mr Barnett's employment was not covered by an award or an enterprise agreement, and the terms of his employment were set out in a common law employment contract. On 10 August 2010, Mr Barnett's employment was terminated with notice by Territory Insurance Office.

Mr Barnett brought an adverse action claim against Territory Insurance Office under section 340 of the Fair Work Act 2009 (Cth) (the Act). Among other things, s340 provides that an employer cannot take adverse action against an employee because the employee has or has exercised a workplace right. The Act defines a 'workplace right' as including a right that arises out of a 'workplace instrument'.

Mr Barnett argued that his common law contract of employment was a 'workplace instrument' recognised by the Act. Mr Barnett further argued that he had a workplace right under his employment contract because he had the role or responsibility of managing staff. He alleged that Territory Insurance Office took adverse action against him when it dismissed him because he had exercised a workplace right in carrying out his role or responsibilities under his employment contract.

The court rejected Mr Barnett's arguments and held that a common law employment contract is not a workplace instrument for the purposes of adverse action protections under the Act because:

  • it is unlikely that Parliament intended the expression 'workplace instruments' to refer to the common law contract of employment, since this would broaden enormously the scope of operation of the adverse action provisions; and
  • it is more likely that 'workplace instruments' are intended to refer to statutory instruments which are created or given effect under relevant legislation.

On this basis, Mr Barnett's application was dismissed.4

Footnotes
  1. Iryna Margolina v Jenny Craig Weight Loss Centres Pty Ltd [2011] FWA 5215 (8 August 2011).
  2. Transport Workers' Union of Australia – New South Wales Branch v DHL Supply Chain (Australia) Pty Limited [2011] FWA 1417 (10 March 2011).
  3. Transport Workers' Union of Australia – New South Wales Branch v DHL Supply Chain (Australia) Pty Limited [2011] FWAFB 3376 (24 August 2011).
  4. Barnett v Territory Insurance Office [2011] FCA 968 (24 August 2011).

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