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Focus: Workplace Relations

8 September 2011

In this issue: we look at whether an employer has the right to dismiss an employee for not working on a public holiday; Fair Work Australia's position on intervening in the bargaining process; social media usage in the workplace; proving bullying in an unfair dismissal case; and going to court to restrain a company's board from passing a termination resolution.

Does your business operate at weekends and on public holidays?

In brief: Fair Work Australia has held that an employer was not entitled to summarily dismiss an employee for his refusal to work on the Christmas and Boxing Day public holidays, regardless of the fact that the business operated 365 days a year and the employee was contractually required to work on public holidays. Senior Associate Veronica Siow and Law Graduate Megan Sandler report.

How does it affect you?

  • Employers should clearly communicate to employees, at the time they are being employed, expectations about them working on public holidays.
  • A standardised process for employees requesting not to work on public holidays should be implemented, which would require employees to explain promptly and fully their refusal.
  • The entirety of the employee's circumstances should be considered before deciding that a refusal to work on a public holiday is unreasonable and warrants dismissal.
Background

Transpacific Industries Pty Ltd (trading as Cleanaway) was in the business of waste collection and recycling and it provided these services 365 days a year. Cleanaway employees were often required to work weekends and public holidays, and were contractually bound to do so if so requested.

In January 2006, Mr Pietraszek took up full-time employment as a lift driver there. In December 2010, Cleanaway requested that Mr Pietraszek work on the Christmas Day and Boxing Day public holidays. Such requests are allowed under section 114 of the Fair Work Act 2009 (Cth), provided the request is reasonable. An employee may refuse if the request is not reasonable, or if the employee's refusal is reasonable.

Towards the end of December 2010, it became clear to Cleanaway that Mr Pietraszek was not intending to work on the Christmas Day and Boxing Day public holidays, and when the time arrived, Mr Pietraszek did not attend work on those days. Despite being asked to justify his refusal, he did not explain at the time why he was refusing to work on these public holidays.

After disciplinary interviews in late December 2010 and early January 2011, Cleanaway summarily dismissed Mr Pietraszek.

The decision

Fair Work Australia (FWA) found that, while Cleanaway's request to work the Christmas Day and Boxing Day public holidays was reasonable, Mr Pietraszek had reasonably refused to work them because:

  • he had to look after his sick wife;
  • he thought that he was not required to work public holidays, and had not been asked to do so for more than a year; and
  • he had told Cleanaway before it made the request that he would not be available to work the Christmas and Boxing Day public holidays (evidenced by his advance plans to be away during that period).1

Although Mr Pietraszek never fully explained those reasons to Cleanaway when he was dismissed, the Commissioner held that Cleanaway's decision to summarily dismiss Mr Pietraszek was unfair, as:

  • it is not sufficient for an employer to show that, on the facts available at the time of the dismissal, they had a valid reason to dismiss. Rather, employers must show evidence before FWA of a valid reason. This places employers in a difficult position, since it requires them to be satisfied that they have all the information relevant to their decision to dismiss, including information that the employee might themself be withholding; and
  • Cleanaway's decision to allow Mr Pietraszek to continue working after failing to present for work on the public holidays was difficult to reconcile with its argument that his behaviour demonstrated an intention no longer to be bound by his contract (and was therefore serious misconduct warranting summary dismissal).

FWA awarded Mr Pietraszek compensation in lieu of reinstatement, adjusted to reflect mitigation of his loss through alternative employment obtained following his dismissal.

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Bargaining orders to be used sparingly

In brief: Fair Work Australia recently declined an application for bargaining orders, making it clear that the Fair Work legislation encourages parties to reach their own agreements where possible. Senior Associate John Naughton reports.

How does it affect you?

  • Bargaining will often involve disagreement and debate when issues are being considered.
  • Robust posturing, including in written correspondence, will not result in Fair Work Australia (FWA) issuing bargaining orders if it does not amount to a course of conduct that is damaging to the bargaining process.
  • FWA will be slow to intervene in bargaining processes, as the legislative scheme encourages parties to resolve between them, if they can, matters in dispute.
Background

The National Union of Workers (the NUW) sought orders from FWA against Patties Foods Limited, claiming Patties had breached its good faith bargaining obligations under the Fair Work Act 2009 (Cth) (the Act).

In particular, the NUW alleged Patties had breached section 228(1)(e) of the Act, by corresponding in a manner that was capricious or unfair, or that undermined freedom of association or collective bargaining.

The correspondence

Patties' correspondence followed an earlier letter from the NUW to non-union employee representatives of its newly established bargaining body. The NUW's letter included requests to these representatives for:

  • a notice concerning their appointment as bargaining representatives, in compliance with the Act;
  • a copy of any claims for improvements in wages and conditions that the representatives intended to pursue in the bargaining process; and
  • contact details, so as to facilitate communications between the NUW and the representatives.

Responding to the NUW's letter, Patties' letter noted the NUW's requests for information and flagged to the employee representatives that they need not respond because of regulation 2.06 of the Fair Work Regulations 2009 (Cth) (the Regulations), which protects the independence of bargaining representatives.

The decision

FWA noted that Patties – or, at least, one of the bargaining representatives – took the letter from the NUW as an attempt to exert influence over the other non-union employee bargaining representatives. FWA considered this context was important, observing that the NUW would have preferred to be one of a lesser number of bargaining representatives, so that it had a more prominent role in representing Patties' employees.

FWA observed that the inclusion of regulation 2.06 meant that parties to bargaining should not overreach their roles or overreact to the actions of other parties. On the key issue of whether Patties' correspondence had breached the good faith bargaining requirements, FWA noted that communications might well be 'robust, controversial, and at times even disrespectful or mistaken', but that, in the absence of a pattern of deliberately improper communications, FWA would be slow to intervene by making bargaining orders. Accordingly, it declined to do so in this case.2

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Excessive use of social media in the workplace

In brief: A recent Fair Work Australia decision indicates that employees may be validly dismissed for excessive use of social media during work hours. Lawyer Andrew Stirling and Law Graduate Ali Ridley report.

How does it affect you?

  • Fair Work Australia (FWA) has indicated that excessive use of social media by employees during work hours may constitute a valid reason for dismissal.
  • Before being dismissed, however, an employee must be given an opportunity to respond to an allegation of excessive use, and possibly an opportunity to cease the excessive use.
Background

Richard O'Connor was a landscape architect employed by Outdoor Creations Pty Ltd. Mr O'Connor resigned on 17 January 2011 and was due to cease employment on 11 February 2011. On 10 February 2011, Outdoor Creations accessed his computer and claimed it showed that he had used 'Google chat' on more than 3000 occasions in the previous three months.

Mr O'Connor was dismissed without notice on 10 February 2011. In the letter of termination, Outdoor Creations cited as its reasons that:

  • there had been a 'serious decline' in Mr O'Connor's productivity over the final three weeks of his employment; and
  • he had been accepting wages without undertaking the work he was required to perform, and that this essentially amounted to the 'theft of paid time'.

Mr O'Connor filed an unfair dismissal application with FWA.

The decision

Mr O'Connor did not give evidence. However, his representative submitted that he had not used social media to the extent alleged and that he used Google chat:

  • more than 3000 times in total since 2006 – not 3000 times in the previous three months, as was claimed; and
  • for no more than 20 minutes a day, and that he often worked through his lunch break to compensate for this.

Outdoor Creations did not produce any verifiable evidence regarding Mr O'Connor's use of Google chat. Since neither party gave any evidence on this point, FWA was unable to decide as a matter of fact whether the usage was excessive.

FWA observed that excessive use of social media may constitute a valid reason for terminating an employee. However, FWA noted that even if Outdoor Creations had shown there had been excessive usage, it was still obliged to provide Mr O'Connor with an opportunity to respond to the allegations of misconduct.

Since Outdoor Creations had failed to provide this opportunity to respond, Mr O'Connor's dismissal was found to be unfair.3 However, since his contract was, in any event, due to come to an end the day after his employment was unfairly terminated, his damages were only $171, less applicable taxation.

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Workplace 'bully' unfairly dismissed

In brief: Fair Work Australia has held that an employee was unfairly dismissed for bullying, as the employer had insufficient evidence to identify him as an instigator of, or participant in, the workplace harassment. Special Counsel Rowan Kelly and Vacation Clerk Emma Chamizo report.

How does it affect you?

  • It is not enough merely to have a policy that sets out the standard of conduct expected of employees. An employer should also ensure that the consequences of breaching the policy are well understood and the policy is consistently applied.
  • Investigations into workplace conduct need to be conducted thoroughly and be defensible if challenged.
Background

Mr Lebsanft was employed by Oakey Abattoir Pty Ltd. He was also a senior representative of the Australian Meat Industry Employees Union (the AMIEU), which had a strong presence at the abattoir.

In May 2010, Oakey sought to increase the 'chain speed' on their kill floor from 155 to 157 animals an hour. AMIEU strongly opposed the increase. The dispute was referred to the FWA and Mr Lander, an employee of Oakey, made a statement in support of the proposed increase.

During several days in July 2010, Mr Lander was subject to 'booing' from up to 20 coworkers, which was intended to remind him that they disapproved of his actions. Three employees, including Mr Lebsanft, were dismissed for booing Mr Lander.

In the termination letter provided to Mr Lebsanft, Oakey identified two incidents of booing and alleged that he orchestrated the deliberate humiliation of Mr Lander, to dissuade him from giving evidence to FWA. Oakey also referred to a third instance of misconduct, whereby Oakey accused Mr Lebsanft of falsely manufacturing an allegation against Mr Lander, to damage his credibility.

Mr Lebsanft made an unfair dismissal application to Fair Work Australia (FWA).

The decision

FWA found that there was no valid reason for Mr Lebsanft's dismissal, emphasising that there was no firm evidence identifying Mr Lebsanft as an orchestrator of, or even a participant in, the booing.4

While Mr Lebsanft was identified as a 'booer' by some supervisors and employees, FWA found this evidence unreliable, due to pressure that management had placed on them to identify the 'booers'.

As to the accusation that Mr Lebsanft had falsely manufactured an allegation against Mr Lander, the Tribunal held that there was no evidence to support Oakey's conclusion that the allegation was false or maliciously concocted. Accordingly, the Tribunal held that the balance of probabilities fell in Mr Lebsanft's favour.

FWA also found that when Oakey became aware of the booing, it did not attempt to prevent further instances of it by warning its employees. Rather, it had preferred to allow the conduct to continue, in order to identify the offending employees and discipline them. FWA considered this approach was not reasonable in the circumstances.

FWA also supported the finding of unfair dismissal by reference to:

  • inconsistent treatment of the identified 'booers';
  • Oakey's unsupported conclusion that Mr Lebsanft's authority as an AMIEU representative and his failure to stop the booing indicated that he himself was a 'booer'; and
  • the culture of booing in the abattoir, and the fact that there had been few consequences of such conduct in the past.

This case is a useful reminder that employers must ensure consistency and impartiality in the investigation, enforcement and punishment of workplace misconduct.

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Attempt to restrain board meeting from considering termination premature

In brief: The New South Wales Supreme Court has refused a director's application for an injunction to restrain the board of his company from passing a resolution approving termination of his employment. Senior Associate Stacey Van der Meulen reports.

How does it affect you?

  • In appropriate cases, an employee may be entitled to an injunction restraining breach by an employer of an employment contract. However, persuading a court to grant such an injunction to prevent a dismissal is difficult.
  • An application seeking to restrain or delay a board from meeting to consider whether it will approve a termination of employment will, ordinarily, be premature.
Background

The first plaintiff, Mr Burns, was a director of Integrity Investment Management Pty Ltd (Integrity). He was also a portfolio manager employed by Integrity's wholly owned subsidiary, Integrity Investment Management Australia Limited (Integrity Australia). Mr Burns was, as well, the director of the second plaintiff, Biscuit Tin Pty Ltd, a shareholder of Integrity.

Mr Burns's contract of employment allowed Integrity Australia immediately to terminate his employment for serious misconduct. However, the shareholders' agreement (between Biscuit Tin, Integrity and the other shareholder companies) required Integrity to approve termination of Mr Burns' employment by Integrity Australia.

On 20 June 2011, the managing director of Integrity notified Mr Burns that allegations of misconduct had been brought to the board's attention and that, as a result, his employment was to be terminated. A board meeting was to take place on 23 June 2011, for the board to consider, and, if thought fit, to pass, a resolution giving approval to Integrity Australia to terminate summarily Mr Burns's employment. Four unrelated allegations of serious misconduct against Mr Burns were set out in the board meeting agenda.

A consequence of the termination of Mr Burns' employment would be the compulsory transfer of shares from Biscuit Tin. The value of the shares would be lower if that transfer occurred before 30 June 2011.

Mr Burns and Biscuit Tin applied for an interlocutory injunction against Integrity, Integrity Australia and each of the directors on the board of Integrity, seeking to restrain the defendants from holding the meeting, which was to take place at 9am on 23 June.

The application

Mr Burns sought an injunction restraining the termination of his employment. He also sought orders restraining the board from:

  • passing a resolution for the termination of his employment at any board meeting; and
  • acting upon any resolution passed.

Mr Burns argued, on various bases, that termination of his employment was not justified and that the proposed resolutions, if passed, would be invalid.

He further argued that there was a serious issue to be tried as to whether there were proper grounds for his summary dismissal.

The decision

The court refused to grant the injunction.5

No notice had been given that Mr Burns was to be dismissed. The agenda for the proposed meeting clearly indicated that what was being put before the board were resolutions 'to consider and if thought fit, to pass'. Justice Bergin held that until the board considered the material placed before it, it would be premature to claim:

  • Integrity Australia had acted illegally or invalidly;
  • there was invalidity in the process of the directors considering the material before them; or
  • there was invalidity in ultimately passing a resolution.

Mr Burns also claimed that the variation to the shareholders' agreement and termination of his employment before 30 June was a deliberate course of action designed to limit his potential termination payout. Justice Bergin found this could not be substantiated. There was no evidence of a concerted effort by the defendants to put in place arrangements to damage Mr Burns by terminating his employment at a lesser cost.

Justice Bergin found that the case was not out of the ordinary and the application was dismissed.

Footnotes
  1. Mr Stephen Pietraszek v Transpacific Industries Pty Ltd t/as Transpacific Cleanaway [2011] FWA 3698 (28 June 2011).
  2. National Union of Workers v Patties Foods Ltd [2011] FWA 4103 (1 July 2011).
  3. Richard O'Connor v Outdoor Creations Pty Ltd [2011] FWA 3081 (24 May 2011).
  4. Heath Graham Lebsanft v Oakey Abattoir Pty Ltd [2011] FWA 3717 (23 June 2011).
  5. Shawn Rex Burns & Anor v Integrity Investment Management Pty Limited & Ors [2011] NSWSC 687 (27 June 2011).

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