Recent developments in employment law

The latest issues, decisions and proposed changes impacting business and workplace risk 13 min read

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Multi-employer bargaining: Full Court endorses FWC's 'broad discretion' 

By Katherine Dommerson and Reuben Gregg-McQueen 

Full Court confirms FWC decision to compel mining employers to bargain together

The Full Court of the Federal Court of Australia (Full Court) has endorsed a decision of the Full Bench of the Fair Work Commission (FWC) to issue a single interest employer authorisation (SIEA) compelling three employers in the black coal mining industry to bargain together for a single interest employer agreement.¹ 

Key takeaways

• The Federal Court's jurisdiction to review a decision of the FWC to issue an SIEA is limited to determining whether there is jurisdictional error—it cannot assess the merits of the decision.
• The FWC has a broad discretion when applying the statutory tests for an SIEA, being whether:
  • the employers have 'clearly identifiable common interests' (assuming the provisions specific to franchisees are not applicable);
  • it is contrary to the public interest to make the authorisation; and
  • the operations and business activities of each of those employers are 'reasonably comparable'.
• The scope of the proposed agreement informs the application of the statutory tests and, where a presumption operates, the onus is on the employers to displace the presumption.

The decision of the FWC

The Association of Professional Engineers, Scientists and Managers, Australia (APESMA) filed an application under section 248 of the Fair Work Act 2009 (Cth) (FW Act) for an SIEA covering certain employees of one of four black coal mining employers in NSW.

It was the first significant contested application since the SIEA provisions were introduced by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth).

In August 2024, the FWC granted the application and made the SIEA. However, it excluded one employer on the basis it was not satisfied that all of the relevant requirements were met in respect of that employer.

The Full Court's review

The three employers that were covered by the SIEA lodged an application for judicial review in the Full Court, arguing that the FWC misapplied the statutory tests and did not take key evidence into account when deciding to issue the SIEA.

In framing its review, the Full Court reiterated that its role was to assess whether the FWC's decision involved jurisdictional error, and not to consider the merits of the FWC's findings.

In considering the relevant statutory tests, the Full Court found:

• 'Common interests' – is a term of 'broad import' and that this test requires the Commission to undertake 'a broad evaluative exercise' to determine 'whether the Respondent Employers have joint, shared, related or like characteristics, qualities, undertakings or concerns that will impact or influence them in relation to bargaining for an enterprise agreement that will cover the SIEA employees', and where the presumption applies, a consideration of whether any 'circumstances of difference' between the employers are sufficient to displace the presumption.
• 'Public interest' – the FW Act does not require the Commission to have regard to any particular considerations in deciding whether an SIEA is not contrary to the public interest and, where the presumption applies, it is for employers to prove why the public interest would not be served, and why, based on evidence, the FW Act’s objects would not be achieved if an SIEA was issued.
• 'Reasonably comparable' – properly construed, this requires that both the operations and business activities of the employers, understood broadly, be generally equivalent, alike or similar, such that joint bargaining will be facilitated.

The Full Court found that the FWC applied the above tests correctly in relation to APSEMA's application and it was open to the FWC, taking into account the statutory presumptions and the evidence before it, that the three employers had 'clearly identifiable common interests' and 'reasonably comparable operations and business activities'. It also found that the employers' submissions regarding the public interest were insufficient to displace the presumption that issuing the SIEA would not be contrary to the public interest.

Ultimately, this case confirms the FWC has a broad discretion when considering an application for an SIEA and the importance of having regard to the scope of the proposed agreement when addressing the statutory tests.

IT company hit with maximum penalty for failure to engage with FWO

By Sarah Lunny and Leila Zraika

Maximum penalty for failing to comply with Fair Work Ombudsman's notice

The Federal Circuit and Family Court of Australia (Federal Circuit Court) has imposed the maximum penalty on an employer that failed to comply with a notice issued by the Fair Work Ombudsman (FWO), determining that the highest available penalty was warranted in light of the employer's 'deliberate and intentional' non-compliance.²

Key takeaways

• One of the FWO's enforcement powers under the FW Act is issuing a compliance notice to a person (including a corporation) where it reasonably believes the person has contravened a workplace law. The notice may require the person to take specified action to remedy the contravention or produce evidence of the person's compliance with the notice.
• As the requirement to comply with a compliance notice is a civil penalty provision of the FW Act, failing to comply without a reasonable excuse exposes employers to significant pecuniary penalties. This decision suggests the FWO is willing to pursue, and courts are willing to impose, significant penalties where there is evidence that an employer has deliberately or intentionally failed to comply with a compliance notice.

Background

In early 2023, the FWO commenced an investigation into My IT Partner Pty Ltd (My IT Partner) in relation to potential underpayments of an employee. In or around June 2023, having formed a belief that the relevant employee had not been paid in accordance with the applicable modern award, the FWO issued My IT Partner with a compliance notice, requiring it to remediate the underpayments and produce reasonable evidence of compliance with the notice.

On multiple occasions before and after issuing the compliance notice, the FWO attempted to engage with My IT Partner in relation to the underpayments, including by:

• issuing My IT Partner with a notice of failure to comply and requesting that it provide a reasonable excuse for the non-compliance; and
• contacting My IT Partner to foreshadow that it was contemplating taking legal action in relation to the failure to comply with the notice.

My IT Partner did not respond to the FWO's contact attempts. It also did not take steps to remediate the relevant underpayments.

In July 2024, the FWO commenced proceedings against My IT Partner for its failure to comply with the compliance notice. In response, the sole director of My IT Partner sent the FWO an email which, amongst other things, threatened to commence a class action lawsuit against the FWO if it did not withdraw the proceeding.

Maximum penalty justified for 'intentional defiance'

Referring to well-established authorities in relation to the purpose of civil penalties,³ the Federal Circuit Court decided to impose the maximum penalty of $41,250, finding that My IT Partner:

• had demonstrated a 'deliberate intention to disregard [its] legal obligations', including because it had advanced no reasonable excuse for its conduct, despite being given multiple opportunities to engage with the FWO; and
• did not have a 'corporate culture conducive to compliance', as demonstrated by the lack of cooperation with the FWO and involvement of senior management in the 'continued defiance', including the email threatening to commence a class action against the FWO.

Notably, despite the FWO only seeking a penalty in the range of 75% to 85% of the maximum, the Federal Circuit Court decided to impose the maximum penalty amount on My IT Partner. The Federal Circuit Court suggested that a penalty of 'the lesser amount' sought by the FWO would not have been appropriate to achieve specific deterrence, for which there was a 'very real need' in this case.

QIRC awards $150,000 in landmark sexual harassment case

By Emma Gillman and Anoushka Rastogi

Significant compensation awarded in civil case following criminal conviction

The Queensland Industrial Relations Commission (QIRC) recently awarded $150,000 in damages to a former restaurant employee who was sexually harassed and assaulted by her employer.

Key takeaways

• The quantum of damages being awarded in sexual harassment cases is trending upwards. This reflects a growing recognition of the serious impact on victims, and the need for compensation that aligns with community standards.
• Aggravated damages may be awarded in sexual harassment cases where the offending conduct is particularly egregious.
• If a person has been convicted of an offence, the person will be taken to have committed the acts which constituted the offence for the purposes of a civil proceeding relating to the same matter.

Background

The complainant was employed as a waitress at King of Grill restaurant in Brisbane during parts of 2018 and 2019. During a shift in 2019, the complainant was subjected to inappropriate and non-consensual conduct by her employer. Prior to the incident, the employer had locked the restaurant doors to prevent the complainant from leaving.

Following the assault, the complainant made a complaint to the Queensland Police Service. The employer was charged with several offences but pleaded guilty to one count of sexual assault arising out of the incident.

The complainant then made a complaint to the QIRC alleging that the employer had contravened the Anti-Discrimination Act 1999 (Qld) (Anti-Discrimination Act) by sexually harassing her at work. She sought compensation for non-economic loss for pain and suffering, and costs.

Decision

The employer did not respond to the case against him in writing, nor did he attend the hearing. However, as the employer had previously been convicted of sexual assault in relation to the incident, he was taken to have committed the acts that constituted the offence for the purposes of this proceeding.

The QIRC found that the employer had engaged in unwelcome and unsolicited conduct of a sexual nature towards the complainant. It also found that the employer had engaged in the conduct in circumstances where a reasonable person would have anticipated the possibility that the complainant would be offended, humiliated or intimidated by the conduct. The QIRC's findings were made on the basis of (among other factors) the power imbalance arising from the employment relationship between the complainant and the employer. The conduct was therefore sexual harassment for the purposes of the Anti-Discrimination Act.

In considering its award of damages, the QIRC noted that the incident had a profound and ongoing impact on the complainant's 'quality of life', including her health, relationships, ability to engage with her community and future employment. The QIRC also noted that the sexual harassment engaged in by the employer was 'serious and egregious and represented a gross breach of the trust and confidence' that the complainant had in the employer. This included because the employer had locked the doors to the restaurant prior to the assault to prevent the complainant from leaving.

Accordingly, the QIRC awarded the following compensation in favour of the complainant:

• $140,000 in general damages
• $10,000 in aggravated damages
• approximately $26,500 in legal costs.

Remote work refusal not bullying

By Tegan Ayling, Olivia Mueller and Jamie Seo

Employer's refusal to continue a remote working arrangement and agree to a second job was not bullying

The Fair Work Commission (FWC) confirmed that an employer's refusal to allow an employee to continue their remote working arrangement and to work another job was not unreasonable and did not create a risk to health and safety.⁴

Key takeaways

• This decision supports that even if requirements to attend the workplace and not engage in outside employment were unreasonable, the threshold for finding bullying conduct is higher.
• In a reminder of what is and isn’t bullying, the FWC has reinforced that the behaviour should contain an element that is 'intrinsically of a bullying nature' and must create a risk to health and safety. In this case, being upset that a request was refused did not equate to a health and safety risk that would justify the granting of a stop bullying application.

Background

The employee, Ms Craig, worked for Mallee Family Care Ltd (Mallee). Ms Craig applied for a stop bullying order against Mallee and a named individual under section 789FC of the Fair Work Act 2009 (Cth) (FW Act). Ms Craig argued that Mallee's refusal to allow her to get a second job and to continue her remote working arrangement was bullying.

Ms Craig claimed that Mallee had acted unreasonably and that, as a result, she had developed symptoms of anxiety and emotional distress. She produced a medical certificate stating that these symptoms were consistent with an experience of bullying.

What is bullying at work?

Bullying at work occurs if an individual or group engages in repeated, unreasonable behaviour towards a worker or group of workers, while they are at work, that creates a risk to their health and safety. Reasonable management action carried out in a reasonable manner is not bullying.

The FWC may make a stop bullying order if it is satisfied a worker has been bullied at work and there is a risk the worker will continue to be bullied at work.

Decision

In rejecting Ms Craig's application, the FWC said this was simply a dispute about working arrangements. The criteria for the FWC to make a stop bullying order were not met because:

• Ms Craig had not been subjected to repeated unreasonable behaviour at work. Even if Mallee's requirements for Ms Craig to attend the workplace and not engage in outside work were unreasonable, they did not amount to bullying; and
• despite the medical certificate stating that Ms Craig's symptoms of anxiety and emotional stress were consistent with the experience of bullying and that she was upset, this did not establish that Mallee's conduct had created a health and safety risk.

Full Bench dismisses third zombie agreement extension 

By Eden Sweeney and Angelina Sporer

FWC dismisses zombie agreement extension after new enterprise agreement not approved

The Full Bench of the Fair Work Commission (FWC) has dismissed a third extension application for a 'zombie agreement' made by a café chain because the application no longer met the extension requirements under the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act).⁵

Key takeaways

• Zombie agreements refer to certain industrial instruments that were made prior to 1 January 2010 and still remain in operation.
• The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 introduced sunset provisions that all zombie agreements would expire on 7 December 2023, unless an extension was granted by the FWC.
• If a zombie agreement expires (including because extensions are no longer granted) and a new enterprise agreement is not in place at the time of the agreement's expiry, the employees covered by the zombie agreement will have the applicable modern award apply to them from the date of expiry.

Background

A café chain employer, Dome, had a zombie agreement in place with respect to its employees and sought to have the expiry of the agreement extended beyond the 7 December 2023 sunset date.

Under the Transitional Act, an extension can be provided if:

• the employees would be better off under the agreement than the applicable modern award;
• active negotiations for a replacement agreement are underway; or
• it is otherwise reasonable to extend the agreement.

The relevant history of the employer's extension applications was as follows:

• First application for extension: in March 2024 the FWC approved a first extension on the basis that the employer was actively negotiating a new enterprise agreement with the relevant union, satisfying the requirements of the Transitional Act for an extension of time.
• Second application for extension: after the new enterprise agreement had been made, a further extension was granted by the FWC in January 2025 to allow the employer time to seek agreement approval from the FWC.
• Third application for extension: the third extension application was lodged while the FWC approval process for the replacement agreement was still underway.

Decision

The new agreement was ultimately rejected by the FWC in March 2025, as it failed the better off overall test. Accordingly, the FWC decided there was no longer a valid basis to extend the zombie agreement as it did not meet the requirements for an extension.

The employer itself conceded this point and the application was dismissed. As a result, the relevant employees will now have the Restaurant Industry Award 2020 apply to them unless a new enterprise agreement is made.