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Focus: Workplace Relations

5 May 2016

In this issue: we look at an adverse action case; why a redundancy does not necessarily constitute a termination; the importance of a consistent process to deal with bullying in the workplace; the fairness of a dismissal for failing workplace drug tests; and when a company can prevent an employee from going to work for a competitor.

Adverse action and workplace rights must have sufficient connection

In brief: The Federal Circuit Court of Australia has confirmed that an employee will have suffered adverse action because of a workplace right only if the two are sufficiently connected. Senior Associate Michelle Metham and Graduate Lawyer Rebecca Kok report.

 
 

How does it affect you?

  • Under the Fair Work Act 2009 (Cth), an employer must not take adverse action against an employee because the employee has a workplace right or has exercised or proposes to exercise such a right. 
  • If the employer cannot prove that the adverse action was not taken because the employee had a workplace right, the adverse action is deemed to be taken for that reason. 
  • An employer's miscommunication can lead to an employee mistakenly believing that they are being targeted because they have exercised a workplace right. 

Background

Ms Celand was a dealer at Skycity (a casino in Adelaide) and was later promoted to supervisor. She claimed that:

  • over a five-year period, she was subjected to various forms of adverse action including:
    • the denial of promotion, overtime and access to her personnel file;
    • being required to attend a health and safety investigation meeting;
    • being the subject of a false complaint; and
    • constructive dismissal; and
  • that this adverse action was taken against her because of various employee representative positions she had taken on (eg as a union representative and work health and safety delegate).
The decision

The Federal Circuit Court of Australia (the FCC) dismissed Ms Celand's claims.1 It found that:

  • some of the incidents Ms Celand complained about were not adverse action by Skycity. For example, Skycity's initial denial of promotion and access by Ms Celand to her personnel file were immediately resolved by Skycity; and
  • any adverse action was not taken because of Ms Celand's workplace rights.

The FCC found that when Ms Celand acted as a support person, she did so as a volunteer and not as part of her union membership or because of any responsibility under a workplace law. In any event, there was no connection between her acting as a support person, or her involvement in a sexual assault investigation or litigation, and any of the alleged adverse action.

Although the FCC decided that Ms Celand was exercising a workplace right when she engaged with management in her capacity as a work health and safety representative, her refusal to attend a work health and safety meeting, and her failure to perform her role as work health and safety delegate, were not workplace rights.

When is a redundancy not a termination?

In brief: The Federal Circuit Court has confirmed that making a position redundant does not automatically amount to a termination of employment. Senior Associate Tristan Garcia and Law Graduate Miranda Scott report.

 
 

How does it affect you?

  • A decision to make an employee's position redundant does not, of itself, amount to a termination of that person's employment.
  • Inserting a clause into employment contracts that allows a company to vary an employee's position and responsibilities is one way to reduce the risk of a redundancy triggering the automatic termination of the person's employment.
  • An employee who rejects an offer of suitable alternative employment may not then be able to claim a redundancy payment on the basis that their employment was terminated.

The facts

Mr Adcock was employed as Blackmores' Commercial Manager for Asia. That position was abolished following a corporate restructure of its Asian operations. From July to September 2014, Blackmores consulted with Mr Adcock regarding how his duties would be restructured. Mr Adcock had a term in his employment contract stating that his position and responsibilities may change during his employment.

Mr Adcock was invited to apply for several alternative roles within the company. It was agreed that these were genuine offers for roles that Mr Adcock was suitably qualified to perform and were on terms no less favourable than his previous role. Mr Adcock rejected these offers on the basis that he was not interested in the roles. Instead, he asked that a new role be created for him. Blackmores advised Mr Adcock that the new role he contemplated was not a viable option under their new corporate strategy.

Towards the end of the redeployment negotiations, and after seeking external legal advice, Mr Adcock asserted that if an acceptable role could not be identified, he was entitled to a redundancy payment under Blackmores' Enterprise Agreement. In September 2014, a meeting took place between Blackmores senior executives and Mr Adcock to discuss a further redeployment possibility. Mr Adcock  was not interested in exploring that option and left Blackmores' premises stating that he would not be returning.

Mr Adcock then commenced proceedings in the Federal Circuit Court of Australia alleging that Blackmores had repudiated his employment contract by refusing to make a redundancy payment to him. In response, Blackmores argued that Mr Adcock was not entitled to such a payment because his employment had not been terminated by Blackmores, on the basis of redundancy or otherwise.2 

The decision

Mr Adcock's application was dismissed.

The court decided that Blackmores' action in making Mr Adcock's position redundant did not trigger the automatic termination of his employment. On the contrary, Blackmores had made a number of genuine attempts to redeploy him to a suitable alternative role, all of which Mr Adcock rejected. In addition, Mr Adcock had not established that Blackmores repudiated the employment contract in any way. Rather, it was Mr Adcock himself who terminated his employment by stating that he would not be returning to work. Accordingly, since Mr Adcock's employment had not been terminated by Blackmores by reason of redundancy, he was not entitled to a redundancy payment.

Worker who bullied colleague gets his job back

In brief: The Fair Work Commission has reinstated an employee dismissed for inappropriate workplace behaviour, despite the employer having a valid reason for the dismissal and following a fair procedure to effect the dismissal. Senior Associate Chloe Wilton and Graduate Lawyer David Hunt report.

 
 

How does it affect you?

  • Employers must ensure that they take appropriate actions to deal with inappropriate workplace behaviour when it is first reported.
  • Employees engaging in inappropriate workplace behaviour should be warned that their conduct is unacceptable and that further inappropriate behaviour may lead to disciplinary action, including termination of employment.
  • Workplace policies regarding standards of workplace behaviour should be reinforced through regular training and discussion.

Background

Mr Johnpulle was employed by Toll Holdings Ltd (Toll) as a dockhand. His employment was terminated following an investigation into allegations against him of inappropriate workplace behaviour.

The investigation found that Mr Johnpulle had made a number of inappropriate comments about Islam and the Taliban to an Afghani colleague. As a result, the investigation concluded that he had breached the Toll Code of Practice and Workplace Behaviour Standard.
Mr Johnpulle's behaviour towards his colleague had previously been raised several times with Toll management, but none of those occasions had led to formal disciplinary action being taken.

Following the termination of his employment, Mr Johnpulle made an unfair dismissal claim and sought reinstatement.3 

Was the dismissal unfair?

The Fair Work Commission (the Commission) decided that there was a valid reason for Mr Johnpulle's dismissal and that, while not perfect, the process followed to effect the dismissal was not unfair. However, the Commission decided that the dismissal was unfair overall because:

  • appropriate formal disciplinary action should have been taken against him following his previous inappropriate workplace behaviour, so that he was fully aware that his conduct would not be tolerated; and
  • the dismissal had severe personal consequences on him, given his service, age and financial circumstances.

The Commission also noted that while Toll had policies in place purporting to discourage and redress inappropriate workplace behaviour, these matters should have been reinforced through regular training and discussion to ensure all employees understood what is unacceptable.

The Commission ordered that Mr Johnpulle be reinstated with backpay, reduced by three months' pay to reflect that his actions were inappropriate and might otherwise have justified his dismissal. The Commission also recommended that Mr Johnpulle not be placed in an area where he may come into contact with the employee to whom he had made the inappropriate comments.

Dismissal for illicit drug use not unfair

In brief: The Fair Work Commission has upheld an employee's dismissal for serious misconduct after he failed two drug tests, even though he was not given an express opportunity to respond to the reason for his proposed dismissal. Senior Associate Chloe Wilton and Graduate Lawyer David Hunt report.

 
 

How does it affect you?

  • If an employee is not dismissed following misconduct, he or she should be clearly warned that a failure to rectify the misconduct could result in disciplinary action, including the termination of their employment.
  • If employers wish to rely on a company policy to justify a dismissal, they should ensure that they comply with the policy themselves.

Background

Mr Haslett was employed by SuperSealing Pty Ltd as a 'crack sealer'. His employment was terminated after he failed two drug tests and failed to attend for a third.

Two months before Mr Haslett's dismissal, in a meeting with SuperSealing's CEO regarding behavioural concerns, Mr Haslett admitted that he had been using illicit drugs and 'would not pass a drug test'. Following this admission, it was agreed that Mr Haslett would take a period of leave and not return to work until he had passed a drug test. Mr Haslett subsequently failed to attend for drug testing on five occasions.

The first drug test Mr Haslett did attend revealed the presence of illicit drugs. As a result, he was given a written warning that this constituted serious misconduct under SuperSealing's Drug & Alcohol Policy and that any failure to rectify this could result in the termination of his employment.

The second drug test he attended produced the same result and, after failing to attend a third test, Mr Haslett was informed that his employment had been terminated.

Following his termination, Mr Haslett made an unfair dismissal claim.4

Was the dismissal unfair?

The Fair Work Commission (the Commission) decided that there was a valid reason for the dismissal, namely Mr Haslett's failed drug tests amounting to serious misconduct. The Commissioner considered that SuperSealing had complied with its Drug & Alcohol Policy even though it had not taken all steps contemplated by the policy to assist Mr Haslett. Importantly, Mr Haslett had responsibilities for his rehabilitation in addition to SuperSealing and SuperSealing had given him multiple opportunities to improve his conduct rather than taking a 'zero tolerance' approach.

While there was not a final conversation in which the possibility of a dismissal was put to Mr Haslett for him to respond, the Commission decided that:

  • the earlier warning about the consequences of a failed drug test would have put him on notice regarding the possibility of his termination; and
  • there was sufficient discussion between the company and Mr Haslett to enable him to express any views that he wanted the company to take into account.

In these circumstances, the Commission decided that Mr Haslett's dismissal was not unfair.

Taking up employment with a competitor

In brief: The Supreme Court of NSW granted an interlocutory injunction preventing a former senior technical employee of SBS from providing services to the ABC or any other media organisation. Senior Associate Michelle Metham reports.

 
 

How does it affect you?

  • Courts may grant injunctions preventing former employees from taking up employment with competitors in certain circumstances.
  • Usually this would occur if the employee had a post-employment restraint or had misused the employer's confidential information. However, it is also possible for an employer to obtain an injunction if the employer claims the employment contract has not been validly terminated and so remains on foot.
  • It may be difficult for either an employer or employee to maintain an implied right to terminate an employment contract without cause on reasonable notice if the employment contract is for a fixed term with no express right of termination.

Background

Mr Corbett was a senior technical employee of SBS who was engaged under a fixed term contract that did not end until June 2017. He had no express right to terminate his contract, but he nonetheless gave five weeks' notice of his resignation in February 2016. After leaving SBS, Mr Corbett commenced providing services to the ABC in early April 2016. 

SBS sought an interlocutory injunction5 restraining Mr Corbett from:

  • working for the ABC or any other media organisation or competitor of SBS for the remainder of his employment agreement; and
  • restraining him from disclosing SBS's confidential information.
The decision

The Supreme Court granted the interlocutory injunction that SBS asked for.

Mr Corbett argued that his contract included an implied term that it could be terminated on 'reasonable notice'. However, because there was no express clause to that effect and Mr Corbett had himself required the fixed term, SBS had a sufficiently arguable case that he could not terminate the contract before the fixed term expired.

The court also considered that:

  • SBS did not delay in commencing proceedings, taking only one day to do so after discovering that Mr Corbett was working for the ABC;
  •  an injunction would not be a great hardship for Mr Corbett given that the restraint only applied to the media industry and the final hearing was less than four weeks away;
  • SBS undertook to pay Mr Corbett while the injunction applied; and
  • damages would not be an adequate remedy, because it would be difficult for SBS to prove what damage it had suffered by having Mr Corbett start at the ABC early or misuse its confidential information. 
Footnotes
  1. Celand v Skycity Adelaide Pty Ltd [2016] FCCA 399.
  2. Adcock v Blackmores Limited [2016] FCCA 265.
  3. Johnpulle v Toll Holdings Ltd T/A Toll Transport [2016] FWC 1507.
  4. Haslett v SuperSealing Pty Ltd [2016] FWC 1622.
  5. Special Broadcasting Service Corporation v Andrew Corbett [2016] NSWSC 461.

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