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Focus: Workplace Relations

9 December 2013

In this issue: we look at employees' workplace rights under the adverse action provisions of the Fair Work Act; when employers may stand down employees; the scope of an order requiring industrial action to stop; whether wearing a union t-shirt in the workplace is industrial action; the offshore reach of the Fair Work legislation; and changes in the way employers should respond to defective adverse action claims.

Watch out for those workplace rights

In brief: Recent decisions of the Federal Circuit Court have shed further light on employees' workplace rights under the adverse action provisions of the Fair Work Act. Senior Associate Veronica Siow and Lawyer Michael Whitbread look at three recent cases that illustrate why an employee who refuses to break the law is not exercising a workplace right, but an employee who is complaining about their job is. 

How does it affect you?

  • Workplace rights are rights that arise under workplace laws and workplace instruments.
  • Workplace laws are laws that regulate the relationship between an employer and their employees (such as the Fair Work Act 2009 (Cth), workplace health and safety legislation and discrimination laws that apply to the employment relationship).
  • Employers cannot take action that is adverse to an employee because the employee has exercised a workplace right, or to prevent the employee from exercising that right.
  • Workplace rights include an employee's right to complain about their employment. Employers need to be mindful not to treat an employee adversely because they make a complaint.

 
No right to refuse to break the law

Mr Daw was employed as an engineer. He refused to complete work because by doing so he would breach the Professional Engineers Act 2002 (Qld), since his supervisors were not qualified in the way required by that Act. Mr Daw was dismissed after refusing to work without adequate supervision. He brought an adverse action claim against his employer on the basis that he had a workplace right not to work if, by doing so, he would be breaking the law.

Mr Daw was unsuccessful in his claim.1 The Federal Circuit Court held that the Professional Engineers Act 2002 (Qld) was not a workplace law and, accordingly, Mr Daw was not exercising a workplace right.

The right to complain

Mr Daw also alleged that his employer treated him adversely after he exercised his workplace right to complain. He made several complaints and comments to his employer about the way he was supervised. The court acknowledged that, by making these complaints, Mr Daw was exercising a workplace right. However, this adverse action claim failed, as Mr Daw was not dismissed because he made the complaints. Rather, he was dismissed because he refused to follow the his employer's instruction.

The right to complain has been addressed and discussed in detail in several other recent cases; most notably, by the Federal Magistrates Court in Harrison v In Control Pty Limited2 and the Federal Circuit Court in Dubow v Aboriginal and Torres Straight Islander Legal Service.3

In Harrison, Mr Harrison complained that the business he worked for  lacked direction and his manager did not possess the leadership skills necessary to run the business. Mr Harrison's employment was terminated, and he brought an adverse action claim alleging he was fired because he exercised his workplace right to complain. The Federal Magistrates Court, in dismissing his claim, explained that Mr Harrison's complaints were not complaints about his employment but about the business generally and, as such, he was not exercising a workplace right in making these complaints.

Harrison was distinguished in the later Dubow case. In that case, Ms Dubow was employed by the Aboriginal Legal Service (the ALS) and made a series of complaints about the performance of her manager. After investigating these complaints, the ALS concluded that they were unsubstantiated and possibly vexatious. The ALS then commenced a protracted disciplinary process against Ms Dubow, which she took issue with and made further complaints about (including complaints to the Fair Work Ombudsman). Ms Dubow brought an adverse action claim against the ALS. The court distinguished Ms Dubow's complaints from those of Mr Harrison, explaining:

In that case [Harrison] I was quite adamant in my view that an employee does not have a workplace right to make a complaint at large ... A complaint at large I think was amply demonstrated in that case where the employee there sought to complain about the direction in which the employer sought to take the business. ... In this case the complaints do relate to the employment relationship. They related to, for instance, the manner in which the employee says she was disciplined, the basis for discipline, the penalty that was imposed and, more particularly, the penalty that was proposed in respect of discipline. I think they are the sorts of complaints and inquiries in respect of employment which are meant to by governed by s.341(1)(c)(ii),

Employers need to be particularly careful when dealing with employees who have made complaints. If employers decide to performance manage, discipline or dismiss an employee who has made a complaint about their employment, the reasons for the performance management, disciplinary action or dismissal must not relate to the fact that the employee has made a complaint. Importantly, employers should document clearly the reasons for their action and their decision-making process, as such documentation will be critical evidence in defending against any adverse action claim that might eventuate.

Limits on employer rights to 'stand down' employees

In brief: A recent Fair Work Commission decision highlights that employers may stand down employees only in circumstances beyond their control, unless the parties have agreed otherwise. Senior Associate Andrew Stirling and Law Graduate Brent Reading report.

How does it affect you?

  • As a general rule, employers may stand down employees only in circumstances beyond their control.
  • If an employer wants greater flexibility to stand down employees (eg during expected maintenance at a work site), it must ensure that an applicable enterprise agreement or contract of employment permits it to do so.

 

Background

Australian Helicopters Pty Ltd (AH) is a helicopter charter company. It employs mechanics and pilots to service the operation of its business. Some of those employees are members of the AMWU and the Australian Federation of Air Pilots (AFAP).

In September 2012, AH determined that heavy maintenance would be required on one of its helicopters. The maintenance resulted in certain employees having little work to do during that period. After considering a number of options, including directing employees to take annual leave, AH stood down the affected employees for the period of the heavy maintenance. Employees are not paid while they are stood down.

AMWU and AFAP brought proceedings in the Fair Work Commission, claiming unpaid wages on behalf of the relevant employees.4 The unions argued that the heavy maintenance was a routine and planned procedure done according to AH's normal system of maintenance. As such, the unions submitted that standing down the employees was in breach of the 'stand down' provisions of the relevant enterprise agreements and the Fair Work Act 2009 (Cth). The union argued that, since there were not valid grounds for the stand down, the employees should be paid as if they had worked.

In contrast, AH argued that the heavy maintenance was beyond its control. The maintenance was carried out to comply with a contract it had with a client. AH therefore argued that the stand down was not in breach of the enterprise agreements or the Act, and it should not be required to pay employees for the stand down period.

The decision

The court found that neither the enterprise agreements nor the Act entitled AH to stand down the employees.

Evidence was given at the hearing by various experts confirming that the heavy maintenance was scheduled many months before the employees were stood down. Further, it was found that AH would have had to undertake the heavy maintenance on its aircraft even if the maintenance had not been contractually required.

Accordingly, AH was required to pay the employees their ordinary rate of pay for the period in which they were stood down. The unions' claim that the employees should also be paid allowances was dismissed because the employees had not done the work required to trigger those allowances.

 

Full Bench limits scope of order stopping industrial action

In brief: A recent Fair Work Commission Full Bench decision limited the scope of an order requiring industrial action to stop, because the evidence did not support the full terms of the order. This highlights the importance of employers adducing evidence in support of any orders they may seek. Senior Associate John Naughton and Law Graduate Timothy Leschke report.

 

How does it affect you?

  • The Fair Work Commission does not have jurisdiction to make a section 418(1) order outside of the scope of its findings (eg where a particular party has not engaged in or threatened industrial action, an order cannot be made preventing that party undertaking industrial action).
  • To obtain a s418(1) order, employers will need to adduce evidence of the industrial action happening, threatened or being organised, identifying particular conduct of particular parties.
  • Employers should ensure there is sufficient evidence to support the orders being sought before making an application.

 


Background

On 30 May 2013, Patrick Stevedores applied for an order under s418(1) of the Fair Work Act 2009 (Cth) that industrial action stop, not occur or not be organised for a period at its Port Botany site. Such an order must be made by the Fair Work Commission where it finds that industrial action (other than protected industrial action):

  • is happening; or
  • is threatened, impending or probable; or
  • is being organised.

On 4 July 2013, a broad order was made by Vice President Watson, covering the MUA and its representatives, including preventing them from engaging in industrial action. The MUA appealed, arguing that the evidence did not support his Honour's findings and that the terms of the order went beyond what was jurisdictionally permissible under s418(1).

The appeal

On appeal, the Full Bench upheld his Honour's findings of fact, but greatly limited the scope of the s418(1) order.5

The Full Bench accepted his Honour's finding that covert industrial action had occurred and continues to occur, and that the MUA was a participant in the organisation of that industrial action. His Honour relied on evidence of productivity limitations from around mid May 2013, and a two-day period of unusually high absenteeism.

However, the Full Bench considered some terms of his Honour's order were not open on his findings of fact and others were beyond his power. In particular, the Full Bench found that while the MUA had organised industrial action, it had not engaged in it. Accordingly, an order preventing the MUA from engaging in industrial action was outside his Honour's jurisdiction. Further, the Full Bench found that an order that each employee be available for and perform work as required by the employer (without any qualification that the requirement be lawful and reasonable) was clearly beyond the court's power. The Full Bench also took issue with the definition of 'unprotected industrial action' in the order.

Accordingly, the Full Bench varied the original order to significantly limit its scope.

A practical difficulty for employers is the haste with which it is usually necessary to:

  • make a s418 application to the Fair Work Commission in the event of unprotected industrial action taking place; and
  • gather evidence in support of such an application.

Commonly, the application is made as soon as possible after the unprotected industrial action occurs, and these matters are regularly heard by the Fair Work Commission on the same day as the application. Despite this, it is necessary for evidence in relation to such matters to be gathered immediately and be of sufficient quality to support any proposed orders.

 


 
Why wearing a union t-shirt isn't industrial action

 

In brief: In a recent case, the Federal Court decided that wearing a union t-shirt in the workplace was not industrial action. Senior Associate Veronica Siow and Lawyer Michael Whitbread explain why.

How does it affect you?

  • Subjecting an employee to ridicule or harassment can constitute adverse action.
  • Employers who treat their employees adversely because they have engaged, are engaging or propose to engage in industrial action risk an adverse action claim under the general protections provisions of the Fair Work Act 2009 (Cth).
  • 'Industrial action' that attracts these provisions is action that is taken during the enterprise bargaining process or an industrial dispute. Employees can take industrial action in a number of ways, including by:
    • performing work differently from the way the work is usually performed;
    • adopting a practice that restricts, limits or delays the performance of work; or
    • failing or refusing to attend for work or refusing to perform any work.
  • Importantly, industrial action does not include any action the employer has approved.
  • While wearing a union campaign t-shirt can, in some circumstances, constitute industrial action, it will not be industrial action if the employer agrees to its employees wearing it.

 

Background

Ms Sofie Antonakis, an executive assistant employed by the Metropolitan Fire and Emergency Services Board, claimed her employer had engaged in adverse action in breach of the general protections provisions of the Act by exposing her to ridicule and harassment because she wore a union t-shirt in the office.6 At the time Ms Antonakis wore the t-shirt, the union was negotiating a revised enterprise agreement with her employer.

Ms Antonakis had worn the t-shirt (which had been handed out by the union) over her work attire because she was cold and/or 'to see if it would provoke a reaction' from her manager. She alleged that another executive assistant had dragged her into the CEO's office to draw attention to the t-shirt.

The decision

While the Federal Court accepted that subjecting Ms Antonakis to humiliating behaviour was adverse action, it did not come within the scope of the general protections provisions. In the circumstances of this case, it could only be unlawful adverse action if the action was taken because Ms Antonakis had engaged in industrial action. However, since administrative staff like Ms Antonakis were allowed to select their own clothing, and no company policy existed that banned the wearing of union clothing, the court found that Ms Antonakis had not engaged in industrial action. The court observed that if Ms Antonakis had been instructed not to advertise the union in the workplace, she would have been engaging in industrial action by wearing the t-shirt (as was the case in Mornington Peninsula Shire Council).7

Lessons

Employers who are in the process of negotiating an enterprise agreement should recognise when employees might be engaging in industrial action. Employers need to be mindful that they cannot act prejudicially against an employee because of any industrial action that the employee might have taken or is proposing to take. Defending adverse action claims can be expensive and time consuming – particularly because FWC or the court (whichever hears the matter) must presume that the adverse action was taken because of a prohibited reason unless the employer can prove to the contrary. 

Reach of the Fair Work legislation

In brief: The Federal Court has found that Filipino workers on board drilling rigs operated by Maersk Drilling Australia Pty Ltd in Australia's exclusive economic zone were not covered by the provisions of the Fair Work Act. Special Counsel Eleanor Jewell reports.

How does it affect you?

  • The Fair Work Act 2009 (Cth) (the FWA) may apply to employees working in the exclusive economic zone (the EEZ), even if they and their employer are not Australian. Whether the FWA applies will partly depend on a range of factors, including whether the employees are working on a ship, a fixed platform, or neither.
  • If the employees are working on a fixed platform, they will be covered by the FWA.
  • If the employees are working on a ship, there must be a relevant connection to Australia in order for the FWA to apply. Such a connection includes if the operator is incorporated in Australia and the majority of the crew are Australian residents.
  • The FWA will apply in these circumstances, even if the employees and employer are not Australian residents and the employment contracts are entered into outside Australia.
  • If there is no connection, the FWA will not apply. This means unions will have limited ability to apply industrial pressure to employers on these facilities.

 

Background facts

Four Filipino nationals had been engaged to work as painters on two drilling rigs in the EEZ. The rigs were located in seas off the north west coast of Western Australia, outside Australia's 12 nautical mile territorial sea limit. The rigs were registered in countries other than Australia.

The painters were employed by Pocomwell Limited, a company incorporated in Hong Kong, under contracts of employment formed outside Australia. They were working on a cycle of 28 days on, 28 days off. For each of those days they were paid at the rate of approximately A$5.36 per hour.

The Fair Work Ombudsman (the FWO) brought proceedings alleging the painters were underpaid under the FWA and the Hydrocarbons Industry (Upstream) Award 2010 (the award). The FWO argued that the FWA and the award applied on the basis that the rigs were either fixed platforms or ships that had an adequate connection with Australia.

Application of the FWA

Section 33 of the FWA extends the application of the FWA to fixed platforms and some categories of ships (such as Australian flagged ships) in the EEZ. A fixed platform is relevantly defined as a '...structure permanently attached to the sea-bed...'. Regulation 1.15E of the Fair Work Regulations 2009 (Cth) further extends the application of the FWA to ships (other than excluded ships) of which:

  • the majority of the crew are residents of Australia; and
  • the operator is a resident, has its principal place of business in, or is incorporated in Australia.

Each of the rigs was operated by Maersk, which was incorporated in Australia. The FWO argued that the majority of the crew on the rigs were Australian residents.

Meaning of 'fixed platform' and 'crew'

The distinction between a fixed platform and a ship was considered in detail by the court.

The respondents argued that the drilling rigs were not fixed platforms, as they weren't permanently attached to the seabed. The evidence demonstrated that each rig could be relatively easily disengaged from the sea bed and they were only in place during exploration. One of the rigs was able to move from place to place independently and the other could be towed from one place to another.

The respondents largely conceded the rigs were ships. They argued, however, that the FWO had not led evidence adequately demonstrating that the majority of the crew on the rigs were Australian residents. A matter in dispute was how 'crew' should be defined for the purposes of regulation 1.15E.

The decision

The court found:8

  • The rigs were not fixed platforms, as they were only temporarily, and not permanently, attached to the seabed.
  • 'Crew', for the purposes of regulation 1.15E, includes all persons present and working on ships at material times, not including those who should not be considered part of the crew (eg the master or pilot).
  • The question of whether a majority of the 'crew' were Australian residents is a question of fact. The evidence led by the FWO did not adequately demonstrate that the majority of the crew were Australian residents.

On this basis, the claims by the FWO were dismissed.


How to deal with defective adverse action claims

 

In brief: The Fair Work Commission has held that it does not have the power to dismiss general protections claims for want of jurisdiction. Partner Peter Arthur and Lawyer Michael Whitbread explain how a recent case and recent amendments to the Fair Work Act will change the way employers should respond to defective adverse action claims.

How does it affect you?

  • Following Hewitt v Topero Nominees,9 employers will be forced to attend a conciliation conference in an adverse action claim in almost every situation. Except where the application is out of time, the Fair Work Commission (the FWC) no longer has the power to determine an employer's objection to its jurisdiction.
  • After 1 January 2014, employers should utilise new laws that enable defective adverse action claims to be dismissed quickly by the Federal Circuit Court.



Background

After resigning from her employment, Ms Hewitt filed a claim alleging that the termination of her employment constituted adverse action, because she had made a complaint about her employment conditions to the Fair Work Ombudsman. An adverse action claim under section 365 of the Act is available only where the employee is dismissed.

At, or before, the initial conciliation conference, the employer objected to Ms Hewitt's claim, on the jurisdictional ground that she had resigned and was not dismissed.

Commissioner Bissett determined this jurisdictional issue in a preliminary hearing of evidence adduced by the parties, and concluded that no dismissal had taken place. Consequently, she refused to provide a certificate under s369 of the Act, which would have allowed Ms Hewitt to proceed with her claim in the Federal Circuit Court. In this way, the Commissioner effectively dismissed Ms Hewitt's application.

The Full Bench of the FWC held that Commissioner Bissett did not have power under the Act to determine this jurisdictional issue. Rather, the effect of the Full Bench's decision was that if a claim has been made within time, the Commission can only conciliate the dispute, order mediation and advise the parties about their likely prospects at the final hearing.

What does this mean for employers?

Hewitt means increased costs for employers in defending general protections claims. Employers may be required to participate in conciliation and mediation before their dispute is taken to the Federal Circuit Court. Only once the matter reaches the court can they apply to have the claim struck out, if it is defective on some jurisdictional ground. 

It is likely that the Fair Work Commission will see an increase in the number of general protections claims. Hewitt means employees can force their employer to engage in conciliation in the Commission even if they are not entitled to bring a general protections application under the Act.

Don't despair!

On 1 January 2014, ss 368, 369 and 595 of the Act will be amended to give the FWC greater flexibility in the way it deals with general protections applications. Attendance at conciliation conferences will no longer be mandatory in all cases. Where jurisdiction is being challenged, we expect that the Commission will issue a certificate without requiring the parties to attend a conciliation conference at all.

Additionally, these amendments will allow the Commission, rather than the Federal Circuit Court, to hear and determine general protection disputes but only with the consent of both parties.

Footnotes
  1. Daw v Schneider Electric (Australia) Pty Limited [2013] FCCA 1341 (17 September 2013).
  2. Harrison v In Control Pty Limited [2013] FMCA 149 (8 March 2013).
  3. Dubow v Aboriginal and Torres Straight Islander Legal Service [2013] FCCA 1357.
  4. Australian Federation of Air Pilots v Australian Helicopters Pty Ltd; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU) v Australian Helicopters Pty Ltd [2013] FWC 7863 (15 October 2013).
  5. The Maritime Union of Australia v Patrick Stevedores Holdings Pty Limited [2013] FWCFB 7736 (11 October 2013).
  6. United Firefighters Union of Australia v Easy [2013] FCA 763 (2 August 2013).
  7. [2011] FWAFB 4809 (22 July 2011).
  8. Fair Work Ombudsman v Pocomwell Limited (No 2) [2013] FCA 1139 (1 November 2013).
  9. Ms Delwyn Hewitt v Topero Nominees Pty Ltd t/a Michaels Camera Video Digital [2013] FWCFB 6321 (3 September 2013).  

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