Allens

Workplace Relations

Focus: Workplace Relations

7 February 2012

In this issue: we consider whether employees can claim redundancy payments when their roles transfer to a new employer as part of a business sale; the circumstances in which comments posted to a Facebook page might justify termination of employment; what considerations apply when an employee pursues more than one set of proceedings arising from a single workplace scenario; and we provide an update on the national work health and safety legislative framework.

Transferring employees not entitled to redundancy pay

In brief: Fair Work Australia has ruled that an enterprise agreement did not require redundancy payments to be made to employees transferring to a new employer as part of a business sale. Partner Simon Dewberry and Senior Associate Andrew Stirling report.

How does it affect you?

  • In a transfer of business scenario, it would be very unusual for an enterprise agreement to require redundancy payments to be made to employees who are offered continued employment with the purchaser on terms of employment that are substantially the same as, and no less favourable than, their current terms.
  • To avoid uncertainty, enterprise agreements should require redundancy payments only in the circumstances provided for in the National Employment Standards.
Background

Svitzer Australia Pty Ltd provided port mooring services at Port Botany. An enterprise agreement applied to its employees at that location.

In December 2010, Svitzer announced its intention to sell its Port Botany business to National Maritime Services (NMS). As part of the sale, NMS agreed to employ half of Svitzer's Port Botany employees. Svitzer announced that employees who were offered employment with NMS would not receive the redundancy payments provided for in the enterprise agreement.

The decision

The Maritime Union of Australia (the MUA) lodged a dispute with Fair Work Australia. It argued that the employees who transferred to NMS should be paid the enterprise agreement redundancy payment. The enterprise agreement provided that redundancy payments would be made '[w]here an employee is surplus to the requirements of the company'. The MUA said that this wording was different from other redundancy provisions and reflected an intention to require redundancy payments to employees even if their role carried on in a new business. The MUA relied on the fact there was no exclusion for an employee who refused an offer to transfer.

A single FWA Commissioner accepted these arguments. Svitzer appealed that decision.

A Full Bench of FWA overturned the single Commissioner's decision.1 It decided that, in the absence of explicit words in the enterprise agreement to the contrary, the redundancy clause of the enterprise agreement should not be interpreted so as to require Svitzer to make redundancy payments to employees who transferred with the business.

It found that the clause required a redundancy payment to be made where an employee's job was no longer required to be performed by anyone. Since the relevant employees' roles were transferring to NMS, the new employer required those roles, and the requirement to make redundancy payments was not triggered.

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Dismissal for employee's Facebook comments unfair

In brief: An employee who was terminated for posting offensive comments about his managers on his Facebook page has been reinstated by Fair Work Australia. Special Counsel Luke Gattuso and Lawyer Emily Harvey report.

How does it affect you?

  • Comments made on social media sites may amount to the infringement of anti-discrimination laws, disparagement of an employer and/or fellow employees, or otherwise have adverse impacts for employers.
  • Whether comments on social media sites provide sufficient grounds to fairly dismiss employees will depend on the nature of the comments and on all of the circumstances in which they were made.
  • Employers should consider implementing a social media policy for their employees, to make clear what is not acceptable when using such sites.
Background

The applicant, Mr Stutsel, made an unfair dismissal claim following the termination of his employment as a truck driver for Linfox Australia Pty Ltd. Linfox dismissed Mr Stutsel for serious misconduct, on the basis of his having posted extremely derogatory remarks about other Linfox employees, and statements that Linfox regarded as sexual discrimination against, and harassment of, one employee in particular. Mr Stutsel maintained that his Facebook account had been set up by his wife and daughter in a way that he believed had the maximum privacy restrictions, such that postings could be read only by a limited class of 'friends'.

Although Linfox relied on a breach of its workplace diversity policy, there was, at the relevant time, no Linfox policy concerning the use of social media such as Facebook.

The decision

Fair Work Australia (FWA) found that:

  • Mr Stutsel's actions did not amount to serious misconduct;
  • there was no valid reason for his employment to be terminated; and
  • the termination was therefore harsh, unjust and unreasonable.2

FWA considered that Mr Stutsel's Facebook page 'was not a web blog, intended to be on public display'. Rather, FWA found that when the comments were read as a whole, in context, it was clear that 'there are several participants... all of whom appear well versed in what the discussion involved... a group of friends letting off steam and trying to outdo one another in being outrageous'. Further, FWA observed that the online exchanges were like 'a conversation in a pub or café, although conducted in an electronic format'.

In relation to the main offending comments of a sexual nature, FWA noted that these had been posted on Mr Stutsel's Facebook page by other persons, and there was also no finding of fault on Mr Stutsel's part in relation to that material.

FWA did not accept Linfox's reliance on its relevant handbook and induction training, concluding that, in today's electronic age, large companies should have detailed social media policies in place.

It ordered that Mr Stutsel be reinstated to his former position, and that he be paid compensation for lost wages between termination and reinstatement.

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Court grants injunction to prevent double-dip

In brief: The Federal Magistrates Court permanently restrained an employee from proceeding with a complaint to the Equal Opportunity Commission of Western Australia, on the basis that the employee was already alleging adverse action against her employer under the Fair Work Act 2009 (Cth). Senior Associate John Naughton and Vacation Student Michelle Crocker report.

How does it affect you?

  • A single scenario, such as the dismissal of an employee, may give rise to claims of unfair dismissal, unlawful dismissal, or adverse action (under the Fair Work Act) or unlawful discrimination.
  • Where an employee pursues more than one proceeding arising from a single scenario (such as their dismissal), courts will review their entitlement to do so carefully.
  • Employers facing multiple proceedings arising from a single scenario should seek advice about whether they can have one proceeding stayed, to avoid unnecessary multiple proceedings about the same matters.
Background

On 31 January 2011, Wesco Electrics (1996) Pty Ltd terminated Ms Birch's employment.

Shortly after her dismissal, she made an unfair dismissal application to Fair Work Australia. However, when the matter remained unresolved after conciliation, she:

  • filed an adverse action claim in the Federal Magistrates Court on 4 May 2011, alleging Wesco took adverse action against her, based on her age and sex (the application); and
  • filed a claim in the Equal Opportunity Commission of Western Australia (the EO Commission) on 19 May 2011, alleging discrimination on the grounds of sex, age and sexual harassment (the EO complaint).

Wesco applied to the Federal Magistrates Court for an injunction restraining Ms Birch from proceeding with the EO complaint, or (in the alternative) for the application to be summarily dismissed.

The legislation

The Fair Work Act contains provisions preventing multiple actions from being pursued in certain circumstances when an employee may have more than one remedy available to them. For example, an employee who has been dismissed may not 'double-dip' when they have multiple potential remedies relating to their dismissal.

Relevantly to Ms Birch's circumstances, section 725 of the Fair Work Act prohibits a person from making a second application or complaint in relation to their dismissal where they have already made an initial complaint, and this complaint has not been withdrawn or failed for want of jurisdiction.

The decision

The Federal Magistrates Court considered that s725 operated to personally restrain Ms Birch from making the EO complaint, as this was made 'in relation to the dismissal'.3 The court considered that the words 'in relation to' required there to be a relevant, sufficient or material connection or relationship (and not merely a causal connection or relationship) between the EO complaint and the dismissal. The court was satisfied that such a connection existed in this case because:

  • Ms Birch's allegations were expressed in almost identical terms in both her application and the EO complaint; and
  • each related directly to her dismissal, and relied on essentially the same factual claims.

Having found that Ms Birch was personally statutorily prohibited from pursuing her claim, the court ordered that she be permanently restrained from proceeding with the EO complaint.

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The work health and safety framework in Australia – an update

In brief: On 1 January 2012, the Model Work Health and Safety Acts commenced in five Australian jurisdictions, introducing changes to the national workplace safety legislative framework. Partner Tim Frost and Lawyer Jonathan Adamopoulos explore some of these changes, and provide an update on developments in the harmonisation of workplace safety legislation in Australia.

How does it affect you?

  • The Model Work Health and Safety Acts (the Model Act) has been enacted by the Federal Government, and the governments of New South Wales, the Australian Capital Territory, Northern Territory and Queensland (together, the Model Act jurisdictions).
  • The remaining jurisdictions (Victoria, South Australia, Tasmania and Western Australia) are expected to enact the Model Act during the course of this year or early next year.
  • When devising a safe system of work, duty-holders should consider both the Model Act and regulations.
  • The codes of practice, which are being released progressively, provide a practical guide for duty-holders.
The Model Act jurisdictions

Currently, the Model Act is in force in the Model Act jurisdictions. Each of these jurisdictions has enacted its own version of the Model Act and regulations. The role of the states and territories in legislating, enforcing and prosecuting has been retained under the new regime. While the Act and regulations largely mirror the model legislation released by Safe Work Australia, there are some variances from jurisdiction to jurisdiction. For example, in New South Wales, there is a limited right for unions to prosecute for certain offences that does not exist elsewhere. In some jurisdictions, separate or additional regulatory regimes have been retained for certain hazardous activities, such as mining and electrical work.

The Federal Government has also enacted its version of the Model Act, although this will primarily only apply to the Commonwealth, Commonwealth authorities and non-Commonwealth licensees. Following a transition period, which has not yet been finally determined, the regulation of non-Commonwealth licensees will return to the states. Since 2006, non-Commonwealth licensees have been regulated under the Commonwealth workplace safety legislation, to the exclusion of the state regimes.

The Regulations

Consistent with the former workplace safety framework, the Model Work Health and Safety Regulations (the Model Regulations) set out supplementary obligations for persons (including companies, partnerships, etc) conducting a business or undertaking (PCBUs). The Model Regulations also prescribe the manner that PCBUs must address certain risks (such as risks associated with working from heights) in order for them to comply with their primary duty to their workers under the Model Act.4 For such risks, a PCBU will generally be required to:

  • identify reasonably foreseeable hazards giving rise to a risk;
  • eliminate those risks or, if it is not reasonably practicable to do so, minimise those risks by implementing control measures such as isolating the hazard, using engineering controls, providing training and adequate supervision, and using personal protective equipment; and
  • regularly review and revise the control measures, to ensure that they are effective.5

If a PCBU fails to follow the prescribed method, it may be in breach of its duty under the Model Act, despite adopting other measures to prevent health and safety risks.

Codes of practice

There are currently 11 model codes of practice that have been finalised by Safe Work Australia. These are:

  • Confined Spaces;
  • Hazardous Manual Tasks;
  • How to Manage Work Health and Safety Risks;
  • How to Manage and Control Asbestos in the Workplace;
  • How to Safely Remove Asbestos;
  • Labelling of Workplace Hazardous Chemicals;
  • Managing Noise and Preventing Hearing Loss at Work;
  • How to Prevent Falls at Workplaces;
  • Managing the Work Environment and Facilities;
  • Preparation of Safety Data Sheets for Hazardous Chemicals; and
  • Work Health and Safety Consultation, Co-operation and Co-ordination.

These codes of practice have been approved and adopted in the Model Act jurisdictions. In the case of the Commonwealth, a modified form of the codes has been implemented in the Work Health and Safety Code of Practice 2011 (Cth).

A further 15 codes are expected to be approved this year. Until such time, pre-harmonisation codes of practice covering the topics the subject of those codes continue to be in force.

Codes of practice are generally not enforceable; however, the failure to follow a code may be used in a prosecution as evidence demonstrating that a PCBU has not taken all reasonably practicable measures to comply with its duty.6

Developments in the remaining jurisdictions

Western Australia

The Western Australian Government has indicated that it supports the Model Act, but has also indicated its disagreement with four areas – namely:

  • the level of penalties in the Model Act, which may be unreasonable for small businesses;
  • the union right of entry provisions, which, it says, are adequately dealt with in existing state industrial relations legislation;
  • the power of health and safety representatives to direct a worker to cease unsafe work; and
  • the provisions on discriminatory conduct, insofar as they place the onus on a PCBU to disprove the impugned conduct being discriminatory.7

South Australia

In November last year, the South Australian Parliament moved to adjourn debate on the Model Act until February 2012.8 The adjournment follows increased concern regarding the potential financial impact that the Model Act will have on the state's building industry. Another issue that is likely to be considered when debate resumes is whether or not the primary duty of PCBUs should be further qualified.

Tasmania and Victoria

In December last year, the Upper House of the Tasmanian Parliament voted to defer the commencement of the Model Act until 2013.9 It is expected that there will be further debate on the Model Act when Parliament resumes.

Victoria has indicated its principled support to the implementation of the Model Act, although it is expected that the Act will not commence until 2013. The Victorian Government is currently working on a regulatory impact statement, which will assess the proposed legislation's impact on that state.

Steps you should consider

Employers to which the new legislation applies should ensure that they address the following steps as a matter of priority:

Development of a plan

Each PCBU should have a WHS plan that addresses each of the issues set out below. The plan should be a written one, and be reviewed regularly to ensure it remains current and relevant.

Consultation

Each PCBU should identify the consultation processes that currently exist, and consider whether it would be practical and effective to adopt an alternative approach, such as the election of a health and safety representative or a health and safety committee.

Identify 'workers' for whom duties are owed

This will include direct employees, as well as persons who are contractors or subcontractors, employees of contractors, and subcontractors whose activities are influenced or directed by the relevant PCBU, and other categories of people who are engaged in performing work in the 'business or undertaking' of the PCBU.

Identify each 'workplace' and any other 'work environment' for which duties are owed

This will include premises the PCBU controls, as well as other places that workers are required to attend, or be present at, for the purpose of their work, including vehicles.

Risk identification

A key element of WHS compliance is to assess the PCBU's operations to identify the risks it poses.

Adequacy of resources and processes

It is obviously critical to ensure that there are adequate resources and processes to address the risks that have been identified.

Identify joint duty holders

PCBUs now have a positive obligation to identify other entities that might have a joint liability in relation to the same process (eg the principal and the contractor might each have WHS obligations in relation to certain work) and to consult with them about the steps to be taken to address any risks.

Special obligations of directors and officers

Directors and officers have special additional due diligence obligations, which, if not satisfied, can result in the personal liability of those directors and officers for any WHS issue. Directors and officers should take advice about the scope and nature of these obligations in the context of their business.

Footnotes
  1. Svitzer Australia Pty Ltd v Maritime Union of Australia, The Northern New South Wales Branch [2011] FWAFB 7947 (16 December 2011).
  2. Glen Stutsel v Linfox Australia Pty Ltd [2011] FWA 8444 (19 December 2011).
  3. Birch v Wesco Electrics (1966) Pty Ltd [2012] FMCA 5 (9 January 2012).
  4. Model Work Health and Safety Act s19.
  5. Model Work Health and Safety Regulations Part 3.1.
  6. Model Work Health and Safety Act s275.
  7. Department of Commerce (WA), Frequently asked questions - harmonised OSH laws, at 24 January 2011
  8. South Australia, Parliamentary Debates, House of Assembly, 29 November 2011, 4804 (Ann Bressington).
  9. Tasmania, Parliamentary Debates, Legislative Council, 1 December 2011.

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