I have read a number of stories in the media and on social media about sacked employees successfully prosecuting unfair dismissal claims even though the Fair Work Commission found that there was justification for the sacking.
This happens a lot (even to large employers) and it is because, according to the law, it is not just about whether the sacking is justified (substantive fairness), it is also about how the sacking takes place (procedural fairness).
So, here are some tips on due process (ie what you need to do to demonstrate procedural fairness):
- Properly investigate matters ensuring that you have evidence to present as underpinning the allegations of underperformance or misconduct.
- Advise the employee that you will be meeting with them at a date/time/place to discuss significant issues regarding their work performance and that they have the opportunity to have a support person present.
- Have a management representative present at the meeting (especially if the employee is likely to be contentious) to act as a witness to proceedings and to sign off on meeting notes as a true and accurate record.
- Present the employee with the allegations and the specific evidence/examples of occurrences in detail to respond to. Note, in circumstances where the allegations are particularly serious or complex or could have serious consequences (eg termination of employment), it can be appropriate to provide advice of these in advance of the meeting to allow the employee the opportunity to obtain advice.
- Consider what the employee has had to say and determine what you believe the facts to be based on that response (on the balance of probabilities) and other evidence and what course of action needs to be taken eg if new information is presented that would warrant further investigation, adjourn the meeting to undertake the investigation or, if that is not necessary, determine what course of action is appropriate in the circumstances.
- If additional investigation was necessary, present the findings and associated evidence back to the employee when you re-adjourn, repeating steps 4 and 5.
- Once the investigation is completed and the employee has had the opportunity to respond to all of the evidence, make a final determination as to what the facts of the matter are “on the balance of probabilities” and what the appropriate action to take in the circumstances would be.
- Advise the employee of your findings and the action that you propose to take, asking the employee if they can provide any reason as to why you should not take that action. One of the things that needs to be considered is the question of the severity of the impact this action would have on the employee having regard to their personal circumstances (eg terminating a mature age worker with little prospect of alternative employment and a low level of financial sustainability could have serious consequences for that person and the FWC has been taking such matters into consideration in relation to the harshness of the penalty).
- Having heard and considered what the employee has had to say, advise them of the action that you have decided to take, having considered everything that has been presented in the process.
- Confirm the outcome in writing including, if a warning is involved, what the performance improvement expectations are and what the consequences are if those expectations are not met including advice of a reasonable period for review and implement it.
This should all be underpinned by a clear and practical written disciplinary procedure which is provided to everyone and is followed religiously without exception. Those responsible for investigating concerns and complaints and initiating disciplinary action all require training and access to professional advice.
There could also be circumstances where it would be appropriate to stand the employee in question down with pay if termination of employment appeared to be a likely outcome and/or if the continued presence of the employee in the workplace would interfere with the proper or efficient conduct of the investigation.
Have a look at our article on substantive fairness as well for as simple approach as you will find for determining what action is justified – “The 3 tents test”
And for small businesses with less than 15 employees, the Small Business Fair Dismissal Code provides a checklist for you to follow: Small-Business-Fair-Dismissal-Code-2011.
Following the type of process that we have set out in this article won’t guarantee that you won’t still get an unfair dismissal claim from a terminated employee. However it will help you to defend that claim and minimise the cost of settlement.
It also sends a really positive message to your employees that you understand your legal obligations and that you will give your people a fair go and honour those obligations.
Sacking someone is not an easy thing to do and, for most managers, it isn’t something that you do often so don’t be afraid to call out for help. A small investment can make a world of difference to the outcome.
Note: We are not qualified lawyers and this article does not constitute legal advice. It is intended to provide inexperienced employers and managers without access to professional workplace relations advice with some tips on the sorts of things that they need to take into account procedurally in dealing with matters of this sort. We are of course able to assist with developing the right procedures for your business, training your managers and supervisors and providing professional advice and support as needed.
All modern awards which do not already have a casual conversion clause will have one from 1 October 2018.
This means that employees who are engaged as casuals on a regular and systematic basis for 12 months can apply to convert to full-time and part-time employment.
An employer can refuse such a request on reasonable business grounds but these grounds are quite limited. In essence, if the employee would continue in employment beyond 12 months on much the same basis as a casual without any expectation of that arrangement changing, it would be difficult to reasonably decline a request for conversion.
This is a particular challenge for labour hire firms who typically engage most of their hired out workforce as casuals.
That challenge has been heightened in the minds of many by a recent decision of the Full Bench of the Federal Court in the case Workpac v Skene. In that case, the Court decided that a labour hire casual who worked regular and predictable hours was a permanent employee at law, and was therefore entitled to paid annual leave, and other permanent employment rights.
This was a fly in fly out worker who was engaged on successive rosters for 6 months, 12 months and 12 months on regular and systematic hours. That really isn’t characteristic of a real casual employment relationship and that is what the court found.
In another case in South Australia (Apostolides v Mantina Earthmovers & Constructions Pty Ltd) earlier this year, the employee who had been engaged as a casual for 15 years but worked full-time over that period was also found to be a permanent employee and was awarded annual leave for the entire period of employment.
Our advice to businesses is that, rather than trying to avoid the issue, be proactive about it and here are some tips:
- Be realistic about the nature of the engagement – if it is going to be a regular and systematic arrangement where the employee works the same hours week in and week out ongoing, it isn’t really casual employment.
- Don’t be frightened by the myth that you want to keep employees as casuals to avoid unfair dismissal. The truth is it doesn’t matter whether an employee is engaged on a permanent or casual basis as they can both claim unfair dismissal if engaged for 12 months for businesses with less than 15 employees or 6 months for businesses with 15 or more employees.
- Have written employment contracts for all employees and ensure that they clearly state the nature of the engagement. Also ensure that you comply with any award provisions that stipulate information to be provided to casual employees on engagement.
- Have a system for dealing with the casual conversion election process and lead it to get each casual employee to make the decision, clearly spelling out what the differences would be if the employee converts to full-time/part-time employment or elects to remain casual. Many will decide to stay casual to get the 25 % casual loading.
Casual employees must be given a copy of the new clause within the first 12 months of their employment, or if already engaged, by 1 January 2019.
At Ridgeline HR, we have put quite a bit of thought into ways in which we can help labour hire businesses and any others with significant levels of casual employment to minimise the risks and treat their workforces ethically by ensuring they are informed about their rights and giving them fair choices.
Contact us using the form below if you would like us to discuss ways in which we might be of assistance with this issue.
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A decision by a Federal Circuit Court Judge has thrown the car rental industry into confusion about the award coverage of its workers.
For over a decade, the Fair Work Ombudsman and its predecessor government agencies have held that customer service staff are covered by clerical awards and car cleaners are covered by vehicle industry awards. Where a staff member might perform both customer service and car cleaning duties, they were paid according to whichever award/classification attracted the higher rate.
Now, because of the decision made in this case, (SURACE v PEOPLESMOVE PTY LTD), the Fair Work Ombudsman has changed its mind and, on their website, is advising:
The Retail Award covers employees of car rental businesses who:
- perform administrative work at the business retail premises, for example the shop front where you hire the vehicle
- organise bookings, receive payments and sell extra products or services to customers
- work as car washers and detailers.
The Clerks Award covers employees of car rental businesses who perform administrative work away from the business retail premises, for example in the head office.
Why is it a problem?
Sure there are new legal precedents that come along but the problems here are threefold:
- The decision appears to be flawed (and I’m not a lawyer but I don’t need to be to reach that conclusion in this case based on the evidence)
- The Fair Work Ombudsman’s interpretation of the decision also appears to be flawed
- The effect of the decision (if applied as the Fair Work Ombudsman has determined it should be) is to really complicate award designation in the industry unnecessarily.
What was this case about?
Mr Surace brought an underpayment of wages claim against his former employer Peoplesmove Pty Ltd (trading as Carhood). He performed a mix of customer service, car cleaning and supervisory/team leader duties and claimed that he was covered by the Clerks – Private Sector Award 2010. That was opposed by the former employer who argued that he was award-free or, alternatively, covered by the Miscellaneous Employees Award 2010.
So the Judge had to first determine the question of award coverage for this worker.
What is the basis for the decision?
There appears to have been conflicting evidence about just how much time this worker spent on supervisory duties versus customer service versus car cleaning functions.
The Clerks – Private Sector Award 2010 was ruled out as it technically covers employees “wholly or principally engaged in clerical/administrative duties” and the Judge felt that this was not the case with Mr Surace, notwithstanding the long history of clerical award coverage of customer service functions in the industry.
Then the Judge considered the question of the “Retail Award” :
- The Respondent submits that the Retail Award is not applicable to the Respondent’s business, because cl.3.1 of the Retail Award “defines explicitly and with limitation the establishment must be one of the below definitions”. This submission misconceives the ordinary meaning of cl.3.1 of the Retail Award. The list of businesses specified in cl.3.1 of the Retail Award under the definition “general retail industry” are clearly not an exhaustive list of businesses that fall within the scope of the Retail Award. This is made clear by the opening words in the definition of general retail industry: “general retail means the sale or hire of goods or services to final consumers for personal, household or business consumption including…” (emphasis added). Clearly, by the use of the word “including”, the identified retail businesses do not exhaust the type of retail business which may fall within the meaning of “general retail industry”.
- The ordinary meaning of the definition of “general retail industry” can be read as meaning “the sale or hire… of services to final consumers for personal… or business consumption”. I am satisfied that the Respondent’s business involves the hire of a service (car-sharing) to final consumers (traveling to and from the airport) for their personal or business consumption. The fact that the business of the Respondent is novel does not preclude its service from falling within the definition of “general retail industry.”
- Accordingly, I find that the Respondent operates a business within the meaning of “general retail industry” of cl.3.1 of the Retail Award.
What is wrong with that decision?
The decision correctly notes that “general retail means the sale or hire of goods or services to final consumers for personal, household or business consumption”.
However, that clause in the General Retail Industry Award 2010 also lists a number of exclusions (not mentioned in the decision) and one of those exclusions is: “motor vehicle retailing and motor vehicle fuel and parts retailing”.
So, if retailing includes “hire of goods or services” and “motor vehicle retailing” is specifically excluded from coverage of this award, how can car rental be covered by the General Retail Industry Award 2010?
The simple answer is that logically it can’t, notwithstanding this judicial decision.
Why the Judge ignored that very explicit exclusion in the Award is a mystery.
What then is wrong with the FWO interpretation of this decision?
- The Judge made a decision in an individual case based on a particular mix of duties – it was about that worker, not the entire industry and it should be viewed as such.
- If there is a concern about whether that decision affects traditional award coverage of the industry, perhaps that question should be referred to the Fair Work Commission whose role it is to determine award matters. That would provide greater clarity for the industry.
- The decision did not consider award coverage of car cleaning functions at all – there is no mention of that and it specifically did not address coverage under the Vehicle Manufacturing, Repair, Services and Retail Award 2010 which has car cleaner classifications and includes in its coverage “the repair and servicing of motor vehicles in the establishment of an employer ……who is engaged in the motor vehicle rental business”.
- As the decision did not in any way comment on award coverage of car cleaning activity let alone make any decision on that, how could the FWO reasonably determine that the current award provisions are not applicable and that car cleaning at a retail site now falls under the General Retail Industry Award 2010?
Are there deeper problems?
Unfortunately, yes there are.
Our Award system remains ridiculously complicated and difficult to navigate for the average business owner or employee. That was a significant contributing factor in the decision in question – the Judge had to make a determination of award coverage for an employee whose duties spanned multiple awards (according to traditional award coverage determinations) and seemingly looked for an easy solution to this, even if it was technically the wrong answer.
The irony in this case is that the Judge could have made an alternate decision that would have made much more sense and actually simplified the Award coverage issues for the industry.
The Vehicle Manufacturing, Repair, Services and Retail Award 2010 has Salesperson classifications but the authorities have traditionally held the view that Sales did not include rental sales. If the Judge had applied the retailing definition in the General Retail Industry Award 2010 (ie including hire of goods and services) to the Vehicle Award which otherwise covers car rental and so designated the Vehicle Award as the industrial instrument in this case, the industry would have one award to cover most activities.
An opportunity missed.
By Peter Maguire
In the backwash of the banking royal commission, the investigations into paedophilia in religious institutions, ongoing domestic violence and gender inequality, much publicised cases of underpayment of wages by rogue employers and gig businesses and rorts by members of parliament and government officials, there is a lot of talk about “trust” and Australia having a “crisis of trust”.
Interestingly, one of the primary qualities that great employers have is trust and there is a great opportunity for businesses to make a difference in our community by leading change through the practice of trust.
Are there things that you as an employer can do differently to be more trusting in your people and to be more trusted by your people?
Here are a few suggestions for any leader.
Respect my views
Seek my opinions and ideas, listen to any concerns I have and always ensure that you understand what I am saying and why. Respond to me in a timely, polite and constructive way. Never leave me wondering where I sit with you and any issues of concern.
Believe in me
I want to do a good job and want you to help me do that. Accept that sometimes I might make mistakes but that, with your help, I will learn from them. See me as someone worthy of investment and optimism rather than through the lens of risk and micro management.
Let me be myself
All of us have our own styles and strengths and that diversity is powerful. Give me opportunities to use my strengths so that I can enjoy and succeed in my work, grow in my own way and enhance my value to the business.
Let’s get to know each other (appropriately)
If we understand who each other is, what each other’s strengths are and what we rely on each other for, we have the foundation for building a positive and constructive relationship. I may be able to help you with something that you are struggling with just as I expect you as my employer to support me.
Give me clarity
I want to know where we are going and what it is that you need me to do to help you get there. Put a plan in place and help me to do my part by having clear goals and responsibilities and a plan of action. Catch up with me regularly to coach me and support me to deliver on the plan. Celebrate successes and capture the improvement opportunities.
Give me a sense of belonging
Have clear statements of purpose and values that tell me what the organisation stands for (ie why it exists and how it behaves). Engage me by living that purpose and values every day in every way so that I am inspired to perform for you and go the extra yard.
If I tell you something, believe that I am telling you my truth. If I tell you I can’t come in today, believe that I have a good reason for that. If I tell you that I am unwell, don’t make me go to the doctor to prove I am unwell – let me get better. If I am struggling to get the desired outcome with something, accept that I am trying my best and look at how you can help me to deliver what you want.
Our EngageMentality coaching and organisational development model focuses on peoples’ strengths and building respectful and productive relationships in the workplace. Building trust is a central element of the process. To find out more, call Peter Maguire on 0438 533 311.
All modern awards have been varied with effect from 1 August 2018 to provide all employees including casuals with an entitlement of up to 5 days unpaid leave per annum to deal with family and domestic violence.
The changes keep coming in the field of workplace relations:
Annual Wage Review
There are a number of changes taking effect from 1 July 2018 as a result of the decision in the 2017-2018 Annual Wage Review as follows:
- The national minimum wage and award rates have been increased by 3.5%.
- The filing fee for dismissals, general protections and anti-bullying applications made to the Fair Work Commission increased to $71.90.
- The high income threshold in unfair dismissal cases increased to $145,400 and the compensation cap to $72,700.
The next wave of Sunday penalty rate reductions flowing from last year’s penalty rates decision also take effect from 1 July 2018 as follows:
Fast Food Industry Award 2010
- Level 1, full-time and part-time employees: 145% > 135%
- Level 1, casual employees (including casual loading): 170% > 160%
- Other levels: no change
Hospitality Industry (General) Award 2010
- Full-time and part-time employees: 170% > 160%
- Casual employees stay at 175% including casual loading
General Retail Industry Award 2010
- Full-time and part-time employees: 195% > 180%
- Casual employees (inclusive of casual loading): 195% > 185%
Pharmacy Industry Award 2010
- Full-time and part-time employees: 195% > 180%
- Casual employees (inclusive of casual loading): 220% > 205%
Extension of ATO’s contractor reportable payments scheme
On 9 May 2017 the Government announced that from 1 July 2018 businesses that supply courier or cleaning services will need to report payments made to contractors if the payments are for courier or cleaning services.
These payments must be reported to the ATO each year using the Taxable payments annual report.
Businesses in the building and construction industry have been subject to this requirement for a number of years.
Labour hire licensing
The Victorian Labour Hire Licensing Act has been passed by Parliament and is expected to come into effect by no later than 1 November 2018.
This means that labour hire firms will not be able to legally operate in Victoria unless they have a licence having passed a fit and proper person test and satisfied a number of other requirements.
Similar legislation is already operating in Queensland and in the process of implementation in South Australia.
Long service leave
The Long Service Leave Act 2018 makes a number of changes to long service leave entitlements in Victoria. These include:
- Employee access to long service leave after 7 years of eligible service (down from 10 years).
- The existing entitlement to payment in lieu on termination of employment after 7 years’ eligible service remains.
- Unpaid parental leave will count as service (whereas currently it does not count but doesn’t break service).
- If an employee resigns and is reemployed within 12 weeks, service will be deemed to be continuous (currently that only happens if the employee is dismissed and reengaged within 12 weeks).
- Long service leave service will transfer from one employer to another where there is a transfer of tangible and/or intangible assets and the employee performs duties in connection with those assets (currently only tangible assets matter).
- The method of calculating entitlements where there have been changes in an employee’s working hours is changing.
- The ability of an employer to apply for an exemption will be abolished.
- Penalties for non-compliance will go from being civil penalties to being criminal penalties.
This legislation is expected to come into operation on or about 1 November 2018.
Portable long service leave in some industries
There is already a statutory portable long service leave scheme in the construction industry – see Coinvest.
The Victorian Long Service Benefits Portability Bill 2018 (Bill) will, if passed, extend portable long service leave benefits to employees in the the community services, contract cleaning and security industries.
In essence, this means that a worker in those industries will be eligible for long service leave once they have 7 years’ industry service regardless of how many employers that might be with.
Employers will have to contribute to a fund run by a statutory authority which will manage workers’ entitlements.
Domestic Violence Leave
The Fair Work Commission has approved an award entitlement to unpaid domestic violence leave of up to 5 days per annum as part of the 4 year review of modern awards. More to come on this regarding when it will take effect but it should be some time soon.
The Fair Work Commission also made a decision on a model clause for conversion of casuals to full-time or part-time employees in 2017 but it is yet to be flowed on to awards. Again that is something that should happen soon.
There is a lot that has changed and a lot more coming employers’ way. We will be issuing regular updates on new developments so please subscribe if you want to be kept informed. Scroll down to the right bottom of the page to do that.