Allens

Employment & Safety

Increase text sizeDecrease text sizeDefault text size

Focus: Workplace Relations

20 November 2013

In this issue: we look at a High Court decision that considers when an injury will have been suffered in the course of employment; whether employer-provided accommodation can be regarded as a payment under Fair Work legislation; the context of a dismissal mitigating a valid reason for termination; the fine line between an abrasive personality and bullying in an unfair dismissal case; and the circumstances under which an employer can ask for an independent medical assessment of an employee.

Workers' compensation not a lay down misère

In brief: The High Court of Australia has overturned a decision of the full Federal Court that granted workers' compensation to an employee injured while having sexual intercourse in a motel room during a work trip. Senior Associate Andrew Stirling and Law Graduate Brent Reading report.

How does it affect you?

  • Workers' compensation regimes typically cover injuries suffered by employees in the course of their employment.
  • An employee will be acting in the course of their employment if the injury is suffered:
    • while the employee is engaged in an activity that the employer had induced or encouraged the employee to engage in; or
    • at and by reference to a place where the employer had induced or encouraged the employee to be.

Background

The employee had been sent by her employer on a business trip. While staying in a motel room that had been booked and paid for by her employer, she suffered facial injuries after a light fitting was pulled onto her while she was engaging in a sexual activity. She subsequently applied for workers' compensation in respect of her injuries.

The employee's workers' compensation claim succeeded in the Federal Court and the full Federal Court (see our article Arising out of, or in the course of, employment).

The decision

The majority of the High Court found1 that an employee will be acting in the course of their employment if the injury is suffered:

  • while the employee is engaged in an activity that the employer had induced or encouraged the employee to engage in; or
  • at and by reference to a place where the employer had induced or encouraged the employee to be.

In this case, the reason that the light fitting injured the employee had nothing to do with the employer. The employer had not encouraged the employee to engage in the sexual activity. Although the employee was at the motel on business, since the injury was suffered because of the activity she was engaged in and not with reference to the motel, the injury was not covered by workers' compensation.

However, the majority said that if the light fitting had been insecurely fastened and simply fallen on the employee, any injury would have then arisen by reference to the motel, so she could have claimed workers' compensation.

The two dissenting judges would have allowed the employee to claim workers' compensation. They argued that it was sufficient that the injuries occurred while the employee was in the motel on a business trip.

Withdrawal of employee accommodation equals adverse action

In brief: The High Court has ruled unanimously that employer-provided accommodation during protected action is not a payment prohibited by the Fair Work Act 2009 (Cth). Special Counsel Eleanor Jewell and Lawyer Dan McDonnell report.

How does it affect you?

  • Employers are prohibited from making payments to employees in relation to a period of protected industrial action.
  • The withdrawal of some types of employment benefits, including employee accommodation, during protected industrial action, may amount to adverse action in breach of the Fair Work Act 2009 (Cth) (the FW Act).
  • This means employers may be obliged to keep employees on site and pay for their accommodation during periods of industrial action on remote projects. This has cost and industrial disruption implications.

Background

Mammoet Australia Pty Ltd was engaged to perform construction work at the Woodside Pluto LNG Project in the Pilbara region of Western Australia. In April 2010, Mammoet received notice that a number of employees intended to take protected industrial action by stopping work for a period of 28 days.

Mammoet notified the employees that it would no longer provide accommodation to them during the period of industrial action. This was on the basis that it was obliged to withdraw the accommodation as it constituted a prohibited payment under section 470(1) of the FW Act. This provision prohibits 'payment' to employees in relation to the total duration of protected industrial action.

The CFMEU claimed that the withdrawal of accommodation to employees during the protected industrial action constituted adverse action in breach of the general protections provisions of the FW Act.

The Federal Magistrates Court, and subsequently the Federal Court, dismissed the claim. The CFMEU then appealed to the High Court.

The High Court decision

The High Court unanimously allowed the appeal2, finding that:

  • The provision of accommodation to employees engaging in protected industrial action is not a 'payment' of the kind referred to in s470(1) of the FW Act. The term 'payment' in that provision means a payment in money and not simply the transfer of any economic benefit from an employer to an employee.
  • Section 470(1) deals only with the period of employment when the employee does not earn remuneration because they are not performing work.
  • In this case, the accommodation was not a benefit tied to a specific period of work. Rather it was tied to the 'continuance of the employer-employee relationship' and the presence on site of the employees, who had acted upon Mammoet's instruction to travel there.
  • Mammoet's denial of accommodation constituted adverse action under the FW Act as it amounted to an alteration of the employees' positions to their prejudice.

Dismissal for distributing pornography unfair

In brief: An appeal decision of the Fair Work Commission Full Bench has indicated that termination for the distribution of pornography in this instance was unfair on the basis that it was harsh, despite that there was a 'valid reason' for dismissal. Special Counsel Luke Gattuso and Law Graduate Timothy Leschke report.

How does it affect you?

  • Even if there is a valid reason for a dismissal, there may be other relevant matters that result in such a dismissal being harsh, unjust, or unreasonable.
  • In particular, employers should not assume that the distribution of inappropriate material contravening a company policy will necessarily provide a defensible basis for dismissal.
  • Ultimately, whether a dismissal is harsh, unjust or unreasonable depends on consideration by a tribunal of all of the relevant facts and circumstances in a particular case.

Background

Three employees ('B', 'C' and 'D') of Australia Post sent a number of emails distributing highly inappropriate pornographic material in contravention of the employer's policies. Following their dismissals, each of them brought a claim for unfair dismissal.

At first instance, Commissioner Lewin of the Fair Work Commission determined that B's dismissal was harsh, amounting to unfair dismissal, but rejected C's and D's claims.

The appeal decision

On appeal, a majority of the Full Bench of the Fair Work Commission found that the dismissals of C and D were also harsh and therefore unfair.3

This conclusion was reached by considering the overall circumstances and, in doing so, the majority distinguished between circumstances going to:

  • the 'reason' for the dismissal – such as acts or omissions constituting misconduct; and
  • other relevant matters – taking into account the broader context, including the personal or private circumstances of the terminated employee.

The majority indicated that while these other relevant matters may not impact upon there being a 'valid reason' for dismissal, they may nonetheless render the dismissal harsh if dismissing the employee is a disproportionate response to the misconduct in all the circumstances of a particular case. In this case, the Commission had regard to the employee's length of service and the absence of any harm arising from the inappropriate conduct as bases for concluding that the decision was harsh.

The dissent

Senior Deputy President Hamberger disagreed with the majority's conclusion, finding that leave to appeal should not have been granted as the requisite public interest test had not been satisfied.

He determined that Australia Post had a legitimate interest in eliminating electronic traffic of a sexually-related or pornographic kind in accordance with its policies, subject to this being done in a fair and equitable manner. Further, contrary to the majority, he found that Australia Post had quite reasonably taken into account the individual circumstances in deciding that C and D should be dismissed for their conduct.

Abrasive personality is not a valid reason for dismissal

In brief: Recent Fair Work Commission decisions regarding unfair dismissal have highlighted that abrasive conduct by a manager will not necessarily involve bullying and harassment justifying dismissal. Employers should bear this in mind when investigating complaints and considering disciplinary action. Senior Associate John Naughton and Law Graduate Timothy Leschke report.

How does it affect you?

  • The Fair Work Commission (FWC) recognises that the workplace comprises persons of different ages, workplace experience and personalities – not 'divine angels'.
  • While the FWC does not endorse a view that 'anything goes' in the workplace, it does recognise there will be robust communications between persons from time to time that will not invite legal sanction.
  • When bullying or harassment in the workplace is alleged, the FWC will look critically at whether there has been a delay between the incident complained of, the complaint, and its investigation.
  • Employers should ensure policies regarding bullying and harassment complaints are up to date and enforced vigilantly, including conducting investigations promptly when allegations are raised.

The facts in Bucknor

Ms Bucknor was employed by Aero-Care from 12 February 2009 until her dismissal on 30 July 2012. Aero-Care considered that she engaged in repeated inappropriate behaviour in breach of its bullying, harassment and discrimination policies. In particular, Aero-Care alleged there were a number of incidents between 30 January and 8 May 2012 when Ms Bucknor allegedly demonstrated a hostile, aggressive and confrontational approach, played 'mind games', and intimidated other staff members. She was stood down on full pay pending an investigation and there were discussions between her and management regarding these incidents.

She returned to work on 4 June 2012 and subsequent complaints were received in a period from 12 – 19 July 2012. They related to allegations that Ms Bucknor, among other things, engaged in bullying and verbal abuse, spoke to certain staff 'like an animal', and told employees that 'monkeys could do their jobs'. Some of these incidents occurred back in mid-June.

The Bucknor v Aero-Care decision

The FWC heard evidence showing that Ms Bucknor had 'an abrasive personality', but nonetheless was not satisfied that the matters raised in the various complaints about her provided a valid reason for her dismissal.4 While the FWC did not doubt that there were occasions when Ms Bucknor was rude to colleagues and subordinates, and spoke to them inappropriately, it was not satisfied on the evidence that this constituted bullying and harassment as described in Aero-Care's policies.

The FWC considered the complaints should, at the most, have resulted in a warning to Ms Bucknor, despite being a reasonable cause of concern for Aero-Care. The FWC also indicated that:

  • the reason for the delay in the complaints in July should have been further investigated; and
  • the delay tended to suggest Ms Bucknor's conduct in connection with incidents was not so serious as to warrant dismissal.

These factors contributed to the FWC finding that Ms Bucknor had been unfairly dismissed.

The Harris v Workpac decision

The FWC adopted a similar approach in Harris v Workpac.5

In that case, Ms Harris allegedly engaged in behaviour from 1 July 2011 to 21 October 2011, and then again in June 2012, described as aggressive, belittling, dismissive and undermining, and including regular swearing and screaming.

It is notable again that the dismissal did not occur until December 2012, and the FWC remarked on the need for employers to take action swiftly to determine the validity of complaints. The FWC also indicated employers should be circumspect about confirming behaviour as constituting bullying and gross misconduct when this behaviour is not pursued with any vigour and involves incidents that occurred some time ago.

Further, the FWC expressed the view that it should guard against creating a workplace environment of excessive sensitivity, recognising that persons in the workplace are not 'divine angels'.

In this case, these considerations resulted in the FWC finding there was no valid reason for Ms Harris' dismissal, and she had also been unfairly dismissed.

When can an employer seek an independent medical assessment?

In brief: A recent decision of the Industrial Relations Commission of New South Wales highlights the importance of employers acting reasonably when directing an employee to attend a medical assessment. Senior Associate John Naughton and Law Graduate Brent Reading report.

How does it affect you?

  • Before issuing a direction to an employee to attend a medical assessment, it will often be necessary to establish that the employee is unfit for work.
  • A direction issued under a legislative instrument may not necessarily displace the operation of the common law, which requires employers to act reasonably when issuing such a notice.

The claim

This matter involved an appeal to the Industrial Relations Commission of New South Wales by a public servant, Ms Schoeman.

Ms Shoeman was dismissed from her employment by the Director-General of the NSW Department of Attorney-General and Justice (the Department) on the basis that an allegation of misconduct against her had been sustained.

The misconduct was said to be that Ms Schoeman had failed to comply with repeated lawful and reasonable directions by the Department for her to attend a psychological assessment. Ms Schoeman had refused to comply with the directions, arguing that they were neither medically or legally justifiable in her circumstances.

Background

In 2007 and 2008, Ms Schoeman was absent from work as a result of stress and psychological injuries. She eventually returned to her position in July 2008. Later, from June 2010, Ms Schoeman was absent from work as a result of wrist injuries caused by repetitive typing.

When she returned to work after this absence, the Department decided that an up-to-date independent medical assessment should be sought of Ms Schoeman's psychological condition. The Director-General then issued Ms Schoeman (on three separate occasions) with legislative directions to attend a psychological assessment.

An investigation by the Department found that Ms Schoeman's behaviour in declining to participate in the psychological assessments amounted to misconduct.

Misconduct and the common law

The NSW Industrial Relations Commission noted that it is necessary first to establish whether the alleged misconduct has occurred, and then to determine whether the punishment enacted is appropriate to the misconduct alleged.6 The Commission observed that this requires an assessment of the reasonableness of the punishment issued. Of course, a breach of a direction may only constitute misconduct if the direction was lawful and reasonable.

The directions recorded that the purpose of the psychological assessment was to help support Ms Schoeman in the workplace. However, the regulations (under which the directions were issued) required that the Director-General must be satisfied that the employee was not fit for work before issuing such a direction.

The Commission observed that the wording of the directions demonstrated that the Director-General did not hold this opinion. Accordingly, the Commission found that the directions had not been issued lawfully, because the Director-General had not formed the view Ms Schoeman was unfit for work. It followed that these directions were also unreasonable.

While deciding the case based on the particular statutory requirements (ie failing to be satisfied that Ms Schoeman was unfit for work), the Commission went on to observe that the same result might be expected under the common law. In particular, the Commission considered that any direction issued to an employee requiring them to attend a medical examination had to be reasonable in the circumstances.7 In particular, the Commission stated that it would not have been reasonable to have referred an employee for medical assessment without having formed the view that they were unfit for work.

Ms Schoeman's appeal was allowed and the decision of the Director-General to dismiss her was set aside. The Department submitted that reinstatement would not be appropriate, as the relationship between Ms Schoeman had broken down irretrievably. However, the Commission held that, since Ms Schoeman had not refused a lawful direction (ie as no lawful direction had been issued), she should be reinstated and paid an amount to compensate her for lost remuneration.

Footnotes
  1. Comcare v PVYW [2013] HCA 41.
  2. Construction Forestry Mining & Energy Union v Mammoet Australia Pty Ltd [2013] HCA 36 (14 August 2013).
  3. B, C and D v Australian Postal Corporation T/A Australia Post [2013] FWCFB 6191 (28 August 2013).
  4. Bucknor v Aero-Care Flight Support Pty Ltd [2013] FWC 6559 (5 September 2013).
  5. Harris v WorkPac Pty Ltd [2013] FWC 4111 (30 July 2013).
  6. Schoeman v Director General, Department of Attorney-General and Justice [2013] NSWIRComm 1018 (26 September 2013).
  7. Referring to Blackadder v Ramsay Butchering Services Pty Ltd (2005) 221 CLR 549 and Thompson v IGT (Australia) Pty Ltd [2008] FCA 994.

For further information, please contact:

Share or Save for later

What are these?

 

To save this publication on your smartphone or
tablet for off-line reading (eg on a plane flight),
we recommend Pocket.

 

 

You can leave a comment on this publication below. Please note, we are not able to provide specific legal advice in this forum. If you would like advice relating to this topic, contact one of the authors directly. Please do not include links to websites or your comment may not be published.

Comment Box is loading comments...