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Focus: Employment Law

3 April 2017

In this issue: we look at the timeframes for employers to comply with the Federal Government's Code of Tendering and Performance Building Work 2016; the court's view of where right of entry discussions with workers can take place; and a company's duty of care to its employees in an 'unforeseeable' situation like an attempted murder. 

Building better enterprise agreements – What the Building Code 2016 means for you

In brief: Employers now have a shorter period of time to ensure their enterprise agreements comply with the Code for the Tendering and Performance of Building Work 2016 Associate Laura Miller and Lawyer Emma Veljkovic report. 

How does it affect you?

  • Companies now have only until 1 September 2017 to ensure that their enterprise agreements comply with Code for the Tendering and Performance of Building Work 2016 (the Code).
  • If an enterprise agreement does not comply with the Code, an employer could try to bargain to vary the non compliant clauses. The CFMEU has already foreshowed requiring expensive trade-offs in exchange for removing non compliant clauses.
  • Other options for agreements that have passed their nominal expiry dates are to bargain for a replacement agreement or to apply to terminate it. 

What sorts of clauses are non-compliant with the Code?

In our previous article (available here), we reported on the reintroduction of the Australian Building and Construction Commission (ABCC) and the new requirements for enterprise agreements imposed by the Code.

To comply with the Code, employers engaged in Commonwealth funded building work must not be covered by enterprise agreements that include clauses that:

  • limit the employers' right to manage its business or improve productivity;
  • discriminate against certain persons, classes of employees, or subcontractors; or
  • are inconsistent with the freedom of association requirements set out in the Code.

The ABCC has issued guidance material to assist employers to understand whether specific clauses of their enterprise agreements are Code compliant.

For example, according to the ABCC's guidance material, a clause that provides employees and contractors with automatic access to more favourable site specific entitlements would not comply with the Code. The guidance material says that this is because those clauses impinge upon an employer's ability to manage their business and improve productivity.

What happens if an enterprise agreement does not comply with the Code?

Enterprise agreements made before 25 April 2014 that have not been subsequently varied, do not need to comply with the Code.

If a company or one of its related entities is covered by a non-compliant enterprise agreement that was made between 25 April 2014 and 2 December 2016, the company may still submit an expression of interest or tender for Commonwealth funded building work. However, for expressions of interest or tenders that:

  • closed prior to 2 December 2016, the company can still be awarded the work;
  • closed between 2 December 2016 and 16 February 2017, the company will not be able to be awarded that work if the work is awarded on or after 29 November 2018; and
  • close between 17 February 2017 and 31 August 2017, the company will not be able to be awarded that work unless the enterprise agreement does not actually apply to the work.

After 1 September 2017, if a company or one of its related entities is covered by a non-compliant enterprise agreement, the company will not even be able to express interest in or tender for Commonwealth-funded building work.

All enterprise agreements made by a company or its related entities on or after 2 December 2016 must be Code compliant for the company to be eligible to express interest in, tender for, or be awarded any Commonwealth-funded building work.

Broad interpretation of 'default location' for right of entry discussions

In brief: The Full Court of the Federal Court has confirmed that right of entry discussions with workers can be held in any room that is used and provided for taking breaks, even if the area is also used for operational purposes. Senior Associate Sikeli Ratu reports.

 
 

How does it affect you?

  • Union officials may insist on holding discussions with workers in any break room or area.
  • Areas provided for multiple or mixed uses that include taking breaks are likely to be areas in which permit holders can hold discussions with workers.
  • Entry permit holders must still comply with reasonable WHS requirements that apply to the site and comply with reasonable requests to take a particular route to the location for discussions. 

Background

Under the Fair Work Act 2009 (Cth.), a right of entry permit holder can enter workplaces to hold discussions with workers. If the occupier of the premises and the union official cannot agree on where the union can hold those discussions, the discussions can be held in any room or area:

  • ordinarily used for taking meal or other breaks; and
  • that is provided for that purpose.

CFMEU right of entry permit holders attempted to enter a company's mining site for the purposes of holding discussions with workers. The officials claimed that they could hold those discussions in a small space behind the driving cab of a dragline. This small space is used by some workers to take breaks.

The company claimed that the cab and the area behind it were operational areas, not true break areas. The company's true break area was located elsewhere on site.

Decision

The Full Court of the Federal Court decided that the area behind the driving cab of the dragline was a break room or area that could be used for holding discussions. The court concluded that:

  • the fact that the area behind the driving cab of the dragline was used for operational purposes was irrelevant;
  • it was not necessary that an area or room be provided for the sole purpose of taking breaks. It was enough that one purpose for which it was provided was for breaks; and
  • it was immaterial that the company subjectively intended for another area or room to be used for taking breaks. The purposes for which an area or room is provided is a question that the court will consider objectively.

This was the first significant appeal court consideration of these provisions of the Fair Work Act. The decision expands the range of spaces that might be used for discussions with workers to include a range of mixed-use spaces. However, it is important to remember that permit holders are subject to certain limitations on how they exercise their entry rights. In particular, permit holders can only enter for specific purposes, must give notice, must comply with reasonable WHS requirements that apply to the site and must follow reasonable requests to take a particular route to a location for discussions.

Court overturns liability for mental harm caused by attempted murder

In brief: The New South Wales Court of Appeal has decided that Optus was not liable for the psychological injury suffered by one of its labour hire employees who was subjected to an attempted murder. Managing Associate Andrew Stirling and Lawyer Christina Badgley report.

 
 

How does it affect you?

  • Companies have a duty of care to protect their employees, labour hire employees and other visitors to the company's premises from suffering reasonably foreseeable personal injury. This is in addition to duties under WHS legislation.
  • To fulfil the duty of care, companies should adopt practices and procedures that a reasonable person would adopt in the circumstances.
  • The company's practices and procedures should include the management of criminal activities and other emergency situations, if those are reasonably foreseeable.

Background

In 2001, Optus held a call centre training session. It was attended by two labour hire employees, Mr Wright and Mr George. Although Mr Wright and Mr George did not know each other before the training, Mr George became fixated on Mr Wright and decided that he would kill him.

During training, Optus employees found Mr George in a trance-like state, pacing on the fourth floor balcony. Mr George asked to speak with Mr Wright. The Optus employees assumed that Mr George knew Mr Wright and asked Mr Wright to help them deal with his unusual behaviour. When Mr Wright went to help Mr George, Mr George tried to throw Mr Wright over the balcony rail. An Optus employee intervened to prevent this from occurring.

Mr Wright suffered a psychological injury as a result of the attempted murder. He sued Optus, claiming that Optus failed to take reasonable care to protect him from the mental harm he suffered. Mr Wright was successful at trial and awarded $3.9 million.

Decision

Optus successfully appealed the decision to the NSW Court of Appeal.

There were three reasons why the appeal succeeded:

  • although Optus owed Mr Wright a duty of care, that duty did not extend to the circumstances of the case. The court concluded that it was not reasonably foreseeable that a call centre worker would assault another call centre worker in a way that would cause mental illness without also causing physical injury;
  • the knowledge that the Optus employees had regarding Mr George's behaviour could not be attributed to Optus itself. As a result, the employees' knowledge of Mr George's behaviour could not extend the scope of the duty of care Optus owed to Mr Wright to the particular circumstances of the case; and
  • since the Optus employees had not breached their own duty of care to Mr Wright, Optus could not be vicariously liable for their conduct.

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