5 September 2018
In this issue: we look at a new form of leave to deal with family and domestic violence; whether your casuals really are casual; a restraint involving an independent contractor; and whether prior continuous service as a casual or seasonal worker counts in redundancy pay.
- Are your employees entitled to unpaid family and domestic violence leave?
- The Workpac decision – are your casuals really casual?
- Confidentiality lost in court – restraining an independent contractor
- Does casuals' service count for redundancy pay purposes?
In brief: All modern award-covered employees, including casual employees, are now entitled to a new form of leave to deal with family and domestic violence. Associate Jessica Light reports.
How does it affect you?
|Employers must allow modern award-covered employees up to five days' unpaid leave each year if they are experiencing family and domestic violence, and need to deal with its impact during their ordinary hours of work.|
|Employers should consider and update any current policy about family and domestic violence leave. If a policy already provides for this type of leave but a lesser amount, award-covered employees will still be entitled to the five days of leave under the modern award.|
Modern award-covered employees are entitled to access five days' unpaid leave each year if they:
- are experiencing family and domestic violence; and
- need to do something to deal with the impact of the family and domestic violence, but it is impractical for them to do that outside their ordinary hours of work.
An employee may take leave to eg make arrangements for their safety or the safety of a family member. In this context, family and domestic violence means violent, threatening or other abusive behaviour by a family member that seeks to coerce or control the employee, and that causes them harm or to be fearful. This type of leave:
- does not accrue throughout the year and does not accumulate from year to year – an employee has a full five days at the start of each 12-month period of employment;
- is available in full to all employees, including part-time and casual employees; and
- requires the employee to give notice and, if required by the employer, evidence about the leave.
Employers must take steps to ensure that information and evidence employees provide is treated confidentially.
What should you do?
In addition to ensuring that modern award-covered employees can properly access this entitlement to leave, employers should consider whether their existing leave policies require amending to reflect the new modern award minimum entitlements.
Employers should also consider whether they have adequate processes in place to ensure that any request for unpaid family and domestic violence is dealt with appropriately and confidentially.
In brief: The Full Federal Court recently decided that a casual fly-in fly-out labour hire worker was not really a casual and was therefore entitled to annual leave. Senior Associate Stephanie Burn reports.
How does it affect you?
|Casual employees who are not in fact casuals might be entitled to various types of paid leave (including annual leave), and notice of termination, redundancy pay, public holidays and, in some circumstances, access to the unfair dismissal regime.|
|Employers should carefully assess whether their casuals have set hours or shifts, or any certainty about being offered work in the future – if they do, they might not be casual. Casuals should not have guaranteed work, a roster set too far in advance, or regular and consistent days and hours of work. Employers who rely heavily on a casual workforce should look closely at these arrangements.|
|It should be made clear to casuals (eg in their contract and/or on their payslip) that their hourly rate includes any applicable casual loading. The contract should allow the employer to 'set off' the amount for the entitlements the employee doesn't receive because they get the loading.|
In 2016, the Federal Circuit Court decided that a casual dump-truck operator at a Queensland mine was entitled to annual leave because of the regular and predictable nature of his work. Over a period of almost two years:
- he worked 12.5 hour shifts, on a seven-day-on and seven-day-off roster set in January for the whole year;
- he worked with the same people each shift, including other labour hire workers and permanent employees;
- his contract provided for termination by one hour's notice; and
- he received no paid leave, his contract classified him as a casual, he had to submit timesheets, and he was paid by the hour according to a flat rate – stated in his contract to include 'a loading in lieu of leave entitlements'.
In April 2012, WorkPac terminated the dump-truck operator's employment. He did not receive a payment in lieu of untaken accrued annual leave and made a claim for compensation for unpaid annual leave. WorkPac was ordered to pay the employee $21,000 in compensation plus interest. WorkPac appealed.
The Full Federal Court dismissed1 WorkPac's appeal and upheld the earlier decision. The court decided that the employee was entitled to annual leave because the employer gave some advance commitment about future work, and there was some regularity in his work pattern and hours. WorkPac was required to pay him the compensation and interest.
The Federal Circuit Court is yet to decide on an appropriate penalty against WorkPac for not paying the employee his accrued annual leave on termination.
In brief: An independent contractor kept and used a client list, but the New South Wales Court of Appeal decided the list had lost its confidentiality because it had been disclosed in court. Senior Associate Tegan Ayling reports.
How does it affect you?
|You should put careful thought into whether a restraint is appropriate for a particular employee or independent contractor. Even more thought should go into drafting the restraint, and deciding what steps to take if the employee or contractor appears to be in breach.|
|To protect specific information that might not otherwise be considered confidential on its own, it is important to set out clearly in writing what information is to be protected (eg in the employment contract).|
Mr Isaac was an independent contractor who Dargan Financial Pty Ltd engaged as a mortgage broker.
After the arrangement ended in November 2016, Mr Isaac began working for RAMS Financial Group Pty Ltd and was a loan writer for nine of Dargan's clients. Dargan went to the Supreme Court, claiming that Mr Isaac had breached his confidentiality obligations because he used and kept a list of its clients. Dargan also claimed that Mr Isaac breached the non-solicitation and non-interference restraints in the agreement they had with him.
Mr Isaac admitted to keeping and using the client list, and to accepting approaches from Dargan's clients in breach of the non-solicitation restraint – but he said the client list was no longer confidential. He also argued that the restraints were unreasonable.
Dargan won in the Supreme Court, the court finding that Mr Isaac had breached his confidentiality obligations and the restraints. As well as paying damages, he was never to disclose or use the client list. Mr Isaac appealed the decision.2
On appeal, Mr Isaac argued that:
- the restraints were unreasonable;
- he had not breached the non-interference restraint; and
- the decision to stop him using the client list permanently was wrong.
The Court of Appeal decided Mr Isaac had not breached the non-interference restraint, partly because it wasn't presented with enough evidence to support that claim. However, since he had admitted to breaching the non-solicitation restraint, the court did not consider that restraint to have been unreasonable.
Generally speaking, the courts take a stricter approach to restraints against an employee – but the same general principles apply to independent contractors. In this case, the Court of Appeal had to decide whether there was a difference between protecting Dargan's legitimate business interests and Mr Isaac's business as an independent contractor. It decided that, since the client relationships were with Dargan, it had a legitimate commercial interest in protecting its business and preserving confidential information.
Importantly, the term 'confidential information' had not been defined in Mr Isaac's agreement. As a result, since Dargan had not specified what information it considered confidential, only information that was confidential in character at the time could be protected. Further, the client list had not lost its confidentiality by the details being accessible on Dargan's database, in Mr Isaac's mobile phone or on his Facebook page. However, since Dargan had not sought court orders to protect the confidentiality of the information submitted in court, the Court of Appeal took the view that the information was no longer confidential, and that it was unnecessary to continue to protect it from use and disclosure by others.
In brief: Further to our Client Update: Beware the risks of converting casuals to permanent employees, a Full Bench of the Fair Work Commission has again considered the issue of whether prior service as a casual or seasonal worker counts as service when calculating redundancy pay, and found that such prior service need not be recognised. Senior Associate Tarsha Gavin and Associate Jessica Light report.
How does it affect you?
|Employers may no longer be liable for increased redundancy payments in circumstances where their employees have converted from casual to permanent status.|
|This decision3 is contrary to an earlier one that considered a similar issue, and so some uncertainty remains. The Full Bench's comment that the interpretation given to the term 'service' in the Fair Work Act 2009 (Cth) will turn on the individual circumstances and wording of the relevant industrial instrument does little to alleviate that uncertainty for employers who find themselves in similar circumstances.|
Five employees were made redundant by their employer, Unilever, in May 2017. The employees were initially engaged on a seasonal basis and were later transferred to being casuals. Each of the five employees then became permanent employees and remained so at the time they were made redundant. The parties were in dispute over whether, when calculating a permanent employee's entitlement to redundancy pay, an earlier period of continuous casual and/or seasonal service was to be counted as service.
The Full Bench determined that the prior casual and seasonal service did not count as service for the purpose of calculating redundancy pay. It referred to the terms of the enterprise agreement that applied to the employees, and excluded casual and seasonal employees from redundancy pay arrangements under the agreement. This differs from a previous decision, AMWU v Donau Pty Ltd  FWCFB 3075, where the majority of the Full Bench decided that for employees in similar circumstances, a period of prior continuous casual employment did count as continuous service for redundancy purposes.
The Full Bench said that this matter turned on its own facts and should 'not be understood as establishing any principle about the application of s22 of the [Fair Work] Act to casual employment, or the approach to calculating service in enterprise agreements'.
Though this decision reflects what many employers understood to be the status quo before the decision in Donau, employers should still consider the risk of such disputes or claims when making decisions about converting casuals to permanent employment. Thought should be given to avoiding or mitigating the risk of claims under the terms offered to the employee at the time their employment status changes, or under the terms of any enterprise agreement during the bargaining process.
- WorkPac Pty Ltd v Skene  FCAFC 131.
- Isaac v Dargan Financial Pty Ltd ATF The Dargan Financial Discretionary Trust (ABN 68 702 047 521) (trading under the name of Home Loan Experts)  NSWCA 163.
- Unilever Australia Pty Ltd v AMWU  FWCFB 446.
- Simon DewberryPartner,
Ph: +61 3 9613 8110
- Veronica SiowPartner,
Ph: +61 2 9230 4135
- Andrew StirlingManaging Associate,
Ph: +61 7 3334 3304
- Sikeli RatuManaging Associate,
Ph: +61 2 9230 5046
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