Offshore worker’s unfair dismissal claim allowed

Offshore worker’s unfair dismissal claim allowed

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Offshore worker’s unfair dismissal claim allowed

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Are you using offshore workers in the belief that they are not covered by Australia’s Fair Work system? Well, you might be right….but then again, you might not.

What has happened?

Deputy President Slevin at the Fair Work Commission has determined that an offshore worker in the Philippines deemed by her contract to be an independent contractor is actually an Australian National System Employee with access to our unfair dismissal jurisdiction.

The case of Ms Joanna Pascua v Doessel Group Pty Ltd involves a worker engaged to do paralegal work for a Queensland law firm which terminated her contract due to alleged breach of contract which was disputed by the worker and resulted in her lodging an unfair dismissal claim.

That led to a jurisdictional hearing as the respondent alleged (among other things) that she wasn’t an employee and so couldn’t be dismissed.

Here is the decision.

Why did the FWC make that determination?

In his decision, the Deputy President goes into quite a bit of detail on the terms set out in the written contract between the parties as well as the duties and working arrangements for the applicant and relevant case law.

One problem for the respondent was that, in parts, the contract referred to the other party as an employee or had provisions which would typically be associated with an employment arrangement.

The Deputy President also made note that the worker was more likely to be an employee because she worked inside the respondent’s business rather than providing services to the business from outside it. That perspective might be a bit of a red flag for the validity of many nominal independent contracting arrangements, whether local or overseas.

Reference was also made to KPIs that were set for the worker and to potential award coverage under the Legal Services Award 2020 with commentary that what the worker was getting paid ($18 per hour) was significantly below the award rate for the classification of work that she was performing as he saw it. Another red flag perhaps given the current federal government’s legislative changes to protect “employee-like workers” and provide the Fair Work Commission with the power to deal with complaints of unfair contractual terms from independent contractors.

The Deputy President concluded: “For the foregoing reasons I find that the relationship was an employment relationship. Accordingly, the Respondent’s objection is dismissed.” I would note that the foregoing reasoning was a lot more extensive than what I have set out above but hopefully my summary gives you the gist of the factors in play. 

What does it mean?

One of the things that has been repeatedly emphasised in the extraordinary range and number of changes that we are experiencing in our workplace relations system is that the focus going forward will be on the true nature of the relationship rather than just what is written in a contract

Another is to provide some level of security and protection and complaints jurisdictions for what have been called “employee-like workers”, those who might not be classified as National System employees because they are nominally not employees.

While we might not have expected that this would extend to offshore workers, this decision brings a whole new rage of considerations to bear in entering into offshore engagement arrangements.

One thing that is very clear from this case is that the poor drafting of the contract between the parties was a significant factor in the Deputy President’s considerations – he literally pulled it to pieces.

So any business entering into independent contractor arrangements whether locally or overseas needs to get professionally drafted contracts that don’t leave any doubt as to the relationship between the parties.

Another issue to consider which has been on our mind. Is one of the potential outcomes of a complaint to the Fair Work Commission re unfair contract terms by an independent contractor, a determination that the worker is a National System employee rather than a contractor? We reckon that might be on the cards. What do you think?

If you need any assistance with this or any other employment or related matter, please contact us on 1300 108 488 or by emailing us at enquiries@ridgelinehr.com.au

Are your contracts current, compliant and complete?

Are your contracts current, compliant and complete?

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Are your contracts current, compliant and complete?

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As we go through the biggest era of change in employment laws and modern awards that we have ever seen, it is becoming increasingly important to have written contracts that clearly set out the pay and conditions applying to each individual employee or contractor. Do yours? And are they current, compliant and complete? 

Why do you need written contracts?

When you engage someone to work for you, whether as an employee or a contractor, it brings into play a hoist of legal obligations covered by the Fair Work Act and a variety of other legislation and, in the case of employees, modern awards and, where applicable, enterprise agreements. 

There are many purposes that contracts serve;

  1.  They educate you about your legal obligations and can be a source of information for decision-making on issues that arise in the relationship with the employee or contractor.
  2. They clearly set out the nature of the relationship between you and the employee (be it full-time, part-time, casual or fixed term) or contractor.
  3. They provide details on any duties or obligations that the employee or contractor is required to satisfy in the relationship with you.
  4. They provide evidence of the employee or contractor acceptance of the pay and conditions as set out in the contract and, assuming the fairness of the contract, can be used in defence of any claim that might be made against you or your business.
  5. There have been around 70 changes in employment law and modern awards and the rules around employment and contracting have undergone an overhaul recently.

The gap between employee and contractor is progressively becoming more blurred so you also want clarity, especially if the individual is not covered by a company (Pty Ltd) structure.

What are the changes that affect contracts? 

Some of the significant changes that need to be considered in contracts are:

  1. New definitions of employee, casual employee and contractor
  2. Prohibition of pay secrecy provisions
  3. A new jurisdiction at the Fair Work Commission for disputes in relation to unfair contract claims
  4. The “right to disconnect” and associated award provisions
  5. Changes to rules in relation to annual shutdowns
  6. Revised casual conversion provisions
  7. New jurisdictions for dispute resolution at the Fair Work Commission regarding sexual harassment, requests for flexible working arrangements, requests for extension of parental leave and complaints regarding the right to disconnect

These are just a few of the issues that need to be considered in constructing contracts and their relevance may well vary according to the industry, business setting, occupation and seniority of the role in question. 

Other considerations

While under the changes that we are currently seeing, we are moving back to multi-factorial assessment of the true nature of a relationship (eg contractor or employee), the contract is still an important piece of evidence in determining such questions.

Remember that one size does not fit all and don’t just adopt a template that you got from somewhere else or that is the standard on the HR compliance system that you use. It is imperative that the contract is a fit with your business arrangements and with the individual concerned – ie ensure that they reflect the reality.

We have also seen a number of prosecutions of corporations in recent years for underpayment of wages related to employees being put on contracts with fixed salaries which did not provide adequate remuneration for the hours that those employees actually worked.

So, if you do want to put people on salaries or you wish to set off any award entitlements that might apply to an employee, you need to both be very specific in the contract about exactly which award provisions are being set off and compensated for by the remuneration provided for in the contract and you have to make sure that the employee is actually better off than they would be if the award was literally applied to their employment, pay and conditions.

Also a heads up if you have restraint provisions that the ACCC is currently considering whether restraint provisions should be regulated or, in some cases, abolished – so watch this space.

How we can help

We have been helping clients with employment contracts for over 20 years.

We can advise you on award coverage, terms in awards that affect remuneration or impose certain conditions and help you in structuring remuneration and benefits so that your offer is compliant.

We can help you to navigate all of the changes that are coming in so that your contracts are current.

And we can help you to decide the style of contract that you want in each case and what needs to go into them to make them complete for that particular circumstance.

If you would like to explore how we can assist you with employment contracts, call us on 1300 108 488 or email enquiries@ridgelinehr.com.au to arrange your free first consultation.

Why we call it people business

Why we call it people business

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Why we call it people business

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Human Resources Management is a business function developed in large organisations with large work forces where scale is important and, in most of those organisations,  policy, process and risk management are the priority. So does that work for SMBs? We don’t think so (in fact, we don’t think it works well in most organisations).      

A story from long ago

Early in my career as what was then called a Personnel Management practitioner, a very wise and loved boss of mine taught me a life lesson. Let’s call him Mike. It was that, if you are going to be successful in the field, you had to earn people’s trust. Mike spent a lot of time getting to know people and letting them get to know him. People came to Mike with all sorts of issues with confidence and he showed them that he was there for them by acting on them or advising them. They would even accept a “no” from him because it was Mike and they trusted him to be honest with them. From an organisational perspective, being informed about things happening out in the business equipped Mike to strategically deal with emerging issues before they became a problem and to lean in and provide support if someone was struggling with something at work or otherwise in life.

That is a lesson that I have used repeatedly in the work that I do.

When Mike moved on, the organisation’s first HR Manager replaced him and he liaised with senior management and issued instructions and policies from his office. People then came to me with their issues, saying “you’re not Mike but we trust you and you are all we’ve got”.

What is Human Resources Management?

According to Wikipedia:

  • “Human Resources Management is the strategic and coherent approach to the effective and efficient management of people in a company or organisation such that they help their business gain a competitive advantage”; and
  • HR professionals manage the human capital of an organisation and focus on implementing policies and processes.”

Not very inspiring, is it?

And the language is hardly engaging, is it?

And not very people focused either?

The concept that people are human resources to be managed is perhaps, in itself, dehumanising, don’t you think?

In too many organisations, HR is seen as the enforcer of corporate risk management via policies and procedures. That approach really sends a message that, rather than people being an organisation’s greatest assets in truth, they are seen as the organisation’s greatest risks.

And that is one of the reasons why HR doesn’t work as it was perhaps intended to – that, in the pursuit of risk management and legal compliance, organisations placed those above people.

What is people business?

In small to medium businesses, the primary driver of success is the quality of the people and the relationships between them and with other key stakeholders like customers and suppliers.

So, unlike traditional HRM, it is very human-centred and that is why we call it “PEOPLE BUSINESS” – it about how we get the right people in the right roles doing the right stuff in the right way so that they and the business flourish together.

Of course, we need some policy and procedures but they are designed to help people to perform and behave to the standards expected so that work is enjoyable and productive for everyone…..and of course there are legal compliance requirements that need to be dealt with and actions that need to occur in the event of non-compliances but they are the footnote rather than the headline.

We use our 4c model to help our clients with their PEOPLE BUSINESS:

  • Commitment – the fundamentals that deliver purpose and compliance
  • Capability – the tools and systems that enable good people practice
  • Competency – the skills and knowledge that deliver positive outcomes for businesses and people
  • Culture – the integration of all of that to deliver everyday employee engagement and high performance.

That is what PEOPLE BUSINESS looks like.

Conclusion

If you are an SMB, you need to assure your compliance with legal requirements but the way that you do that sends messages to your people and you want these to be the right ones.

It isn’t just about making people follow rules – it is about how you get them engaged and happy to follow the rules because they know that the rules are right and they want to be successful in their role and relationships at work.

If you would like to learn more about ways that we can help you with your PEOPLE BUSINESS, please call us on 1300 108 488 or email us at enquiries@ridgelinehr.com.au.

Has the penny dropped for you?

Has the penny dropped for you?

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Has the penny dropped for you?

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One of the most significant changes that has been introduced in the last few years is the new “positive duty” standard of compliance relative to sexual harassment, gender-based behaviour and psychosocial hazards. Current signs suggest that the “penny hasn’t dropped” with lots of organisations about what this really means. Has it dropped with you?

A positive duty means that we have to do things differently

Positive duties have been introduced for 3 reasons:

  1. We have real problems in our workplaces with mental health issues associated with psychosocial hazards and harm caused primarily to women by gender-based behaviour such as sexual harassment
  2. The existing “risk management” model of compliance commonly used by organisations doesn’t work and, in many cases, not only doesn’t help but aggravates the harm and
  3. It is not sustainable in terms of the harm caused to people and the associated costs in lost productivity and escalating health costs.

You see, putting out policies, telling people that they have to follow them and running education sessions on respect at work just isn’t enough.

We have been doing that for decades with issues like bullying and sexual harassment but have they made any real difference where it matters ie in changing behaviour so that they don’t happen in the first place? 

The simple answer to that is “no” as evidenced by the fact that these positive duties have been imposed because we need to do things differently. 

A timely reality check

Former Federal Sex Discrimination Commissioner, Kate Jenkins, conducted the national enquiry into sexual harassment which resulted in the Respect@Work Report,  introduction of the positive duty to prevent sexual harassment, victimisation and gender-based behaviours.

In an article on HR Daily, Ms Jenkins is reported as saying that:

  • many workplace managers told the inquiry that they were tackling sexual harassment through a policy, some training and a complaint procedure
  • organisational processes were primarily a defence mechanism
  • the focus of workplace leaders wasn’t on preventing sexual harassment but preventing complaints
  • for those who are trying to make people more comfortable complaining, her message was “if your focus is on asking people to complain about psychosocial hazard concerns, then your focus is not on preventing them”
  • Leaders should be asking why harassment is occurring and what can we do to change this
  • Of the 7 compliance standards in the Respect@Work Guidelines, leadership is the most important.

What she is essentially saying is that it is about action to change behaviour and that starts with commitment and action from the top. It is about making it real in your workplace culture and not just words in a policy or training session.

Has the penny dropped?

What should you do

Unfortunately, what we are seeing is a “risk management response” from most organisations and HR/WHS Consultants – they are writing new policies, running education sessions and telling people to behave which just perpetuates the problems that the positive duty is intended to address. Clearly, the penny hasn’t dropped.

As with any matter around people and culture, we encourage you to look at these things on 3 levels – organisational, team and individual – and please do that by engaging with your people in determining what the realities for your business and people are and covering off all of the bases. 

Remember it is about your business and your people so don’t just borrow or buy a policy statement from someone else and remember our 4C compliance model because unless you do all 4Cs, you are not truly compliant:

  • Commitment – the fundamentals that deliver purpose and compliance
  • Capability – the tools and systems that enable good people practice
  • Competency – the skills and knowledge that deliver positive outcomes for businesses and people
  • Culture – the integration of all of that to deliver everyday employee engagement and high performance.

We can help

We developed our 4C compliance model 20 years ago and that is how long we have been practising to that standard so it isn’t new for us. We could say that the law has caught up now but the truth is that, while positive duties have brought the flaws in the existing compliance models into sharp focus, we have known that they have been there all along.  

And that is because what we are dealing with is PEOPLE BUSINESS – it is about people and relationships.

We have put together blogs and accompanying explainer videos on each of the 14 psychosocial hazards in the Model code for managing psychosocial hazards at work published by Safe Work Australia. One of those covers sexual harassment. They are designed to give businesses an understanding of the sorts of questions you should be asking in your workplace to identify any issues that you might need to address. You can access them for free on the News Events page on our website and we encourage you to use them to do a preliminary risk assessment.

If you would like to learn more about ways that we help with this or any other HR issue, please call us on 1300 108 488 or email us at enquiries@ridgelinehr.com.au.

Closing loopholes no.2 – The Fair Work Commission and “Employee-like” workers

Closing loopholes no.2 – The Fair Work Commission and “Employee-like” workers

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Closing loopholes no.2 – The Fair Work Commission and “Employee-like” workers

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From 26/8/24, the Fair Work Commission (FWC) will have a new jurisdiction which includes the ability to set minimum standards for “employee-like workers” who perform work for a digital platform and will give those workers access to rights and powers that had previously been unavailable to them. This is part of the Federal Labor Government’s plan to address issues relating to the “gig economy”.

Who does it affect?

The first change being made is to define what an “employee-like worker” is as distinct from an employee and an individual contractor. A worker is considered “employee-like” if they meet two or more of the following characteristics:

  • They have low bargaining power
  • They have low authority over performance of work
  • They receive remuneration at or below the rate of employees performing similar work
  • Have any other characteristic prescribed by regulations

What are the changes?

Previously workers in this space had few rights but they will now have access to the following:

  •  Minimum standards –  A set of minimum standards can now be set to apply to these workers following application by a registered organisation representing employee like workers and their businesses, the Minister for Employment and Workplace Relations, or the FWC. There are limits to what can be included in Minimum Standards and the FWC can only include terms relating to penalty rates, minimum engagement and other similar matters if it is appropriate for the work being performed. Likewise they cannot include terms relating to overtime and rostering.
  • Collective bargaining – Employee-like workers will also be able to collectively bargain through a registered organisation representing them. These will be similar to enterprise agreements and will require the negotiating parties to consult and explain the terms of the agreement before they are approved by the FWC.
  • Unfair deactivation – Employee-like workers will now be able to apply to the FWC for assistance if they believe they have been unfairly de-activated from a digital platform. This will be available to employee-like workers who have been on a contract, or series of contracts, for at least 6-months with the digital platform.
  • Workplace delegates rights – Workplace delegates will now have additional protections while performing their duties and will have a right to reasonable communication with members of their employee organisation and anyone eligible to be members regarding any industrial relations concerns and they will also have a right to reasonable access to workplace facilities. There will additionally be a “Digital Labour Platform Deactivation Code” developed by the Minister of The Department of Employment and Workplace Relations to guide both sides on valid deactivations.

These changes are a significant departure from the current norm for businesses operating in this space. To assist businesses and employee-like workers with the transition, the FWC has set up a Regulated Worker User Group to engage businesses and employee-like workers and explain the changes and keep everyone updated on the progress of the implementation of said changes. Click here for more information.

If you need any assistance with this or similar matters, please call us on 1300 108 488 or email us at enquiries@ridgelinehr.com.au.

Closing Loopholes no. 2 – Unfair Contractual Terms

Closing Loopholes no. 2 – Unfair Contractual Terms

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Closing Loopholes no. 2 – Unfair Contractual Terms

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From the 26th of August 2024 independent contractors will now have the ability to apply to the Fair Work Commission (FWC) to resolve disputes between themselves and principals in matters relating to unfair contract terms in service contracts.

The change has been brought in to provide independent contractors (who earn below the contractor high income threshold) with a more inexpensive and informal pathway to resolving these disputes.

What does the FWC consider in these cases?

The FWC will apply tests to the relationship between the contractor and the principal to determine whether or not there are any instances of an unfair contractual relationship. The dispute, however, has to be about a matter that would be considered a workplace relations matter if the contractor was an employee of the principal:

Here are some of the matters that could be considered by the FWC in these cases:

  • The relative bargaining power of the two parties;
  • Whether the contract is significantly imbalanced in favour of one of the parties;
  • Whether specific contract terms are necessary to protect the legitimate business interests of one of the parties;
  • Whether a contract term is harsh, unjust, or unfair on one of the parties;
  • Whether the remuneration for the parties to the service contract is less than other employees or contractors performing similar work;
  • Any other matters the FWC considers relevant.

If the terms of the contract fail to meet the above criteria then the FWC may either set aside the contract term entirely or change the terms of the contract in order for it to be compliant.

What should I do next?

If your business is one that uses contractors it will be important to review the contracts that you have in place to ensure that it doesn’t contain terms that would fail to meet the above terms. Likewise when developing new contracts they should be made with these terms in mind.

Additionally, while we have no practical understanding of how these disputes will be settled by the FWC at this stage it also possible that it could draw additional scrutiny as to whether the relationship is actually that of an employer and employee as opposed to contractor and principal.

For more information you can visit the Fair Work Commission website regarding this matter by clicking this link

If you need any assistance with this or any other related matter please don’t hesitate to contact us on 1300 108 488 or by emailing us at enquiries@ridgelinehr.com.au