Mind your language - it could cost your job

The F-bomb seems to be dropped a lot more these days, in both the media and in public places - but a recent Fair Work decision makes it clear that it is not always acceptable, and may even be grounds for summary dismissal.

The case of Macdougall v SCT Pty Limited T/A Sydney City Toyota [2013] FWC 1077 (25 March 2013) involved a Toyota employee getting involved in a heated conversation with a customer where the employee was found to have been “…‘pretty aggressive’, he raised his voice in front of other customers and swore at least twice”, including shouting “have you ordered that f*ing car yet?”

Offensive language can damage your business

The exchange was potentially damaging to the employer’s business as not only did it take place in front of other customers, but the employer was also undergoing a tender process with the customer, a representative of the UNSW Fleet Services, for renewal of its status as a ‘preferred dealer’. This status was important to the car dealership and was a virtual guarantee of future business with the customer. The employer viewed the employee’s behaviour as "conduct which caused an imminent risk to the reputation and profitability" of the company.
The employee’s application to be reinstated was dismissed by the Fair Work Commission.
It is reassuring to see that the employer’s decision in this situation was validated; it was permissible for the company to protect its business and its customers.

Crack down on swearing

There is no doubt that it may be tough for employers to take a hard line in certain industries where swearing may be seen as the ‘norm’. However, where this could impact the employer’s business or its customers (and even other employees), then the employer may be within its rights to discipline those employees up to, and including, summary dismissal in some cases.

Guest blog by Christine Broad, BlandsLaw

Extending the Right to Request: Watch this space

Many Australians are still not aware of the ‘right to request’ flexible work mechanism. The introduction of this right several years ago has not increased the number of requests, and furthermore most requests made are positively resolved, according to the survey data and report recently released by the Centre for Work and Life and the Fair Work Commission respectively.

Ask, and ye shall (not necessarily) receive

So why hasn’t this ‘right’ been exercised substantially more since it was introduced? We could point to the relative infancy of the 10 Standards and that more time is needed for them to gain momentum; more importantly, we could point to the fact that while an employee may exercise the right to put in a written request, the employer is in no way beholden to grant that request – which may prevent many people from asking, if they think they know the answer. The employer must simply give a written response and – crucially - can refuse a request on ‘reasonable business grounds’, to which there is no right of review or appeal.

This last issue was not addressed in mid-February, when Prime Minister Gillard announced new legislation to extend this right to request to a wider range of workers with carer responsibilities. Those workers would include carers of school-aged children, elderly relatives, persons with disabilities, victims of domestic violence and workers over 55 years of age. Gillard's announcement has met with a range of different responses both positive and negative.
  

A soft touch?

How will the proposed changes alter the current landscape? As already mentioned, the mechanism itself does not bestow an absolute ‘right’ to flexible work. The nub of the proposed changes focuses on who can invoke this mechanism by broadening its availability to a larger pool of workers.

The proposed changes are probably an attempt to strike a balance between the many and varied conflicting views on the issue. It could be fairly described as a soft touch approach to introduce the idea of more flexibility without making it compulsory or interfering with an employer’s business decisions.

Opportunity for constructive negotiations

Arguably many businesses, including small businesses, already engaging in flexible work practices could highlight the positive impacts to their business. Indeed one way of viewing this right to request mechanism is that it can provide the necessary opportunity for employers and employees to engage constructively in negotiations that invariably result in a win-win situation.

Watch this space

Personal opinion or political persuasion aside, Australia is following international trends in this area; the UK government recently announced plans to extend its existing right to request to all employees and introduce a code of practice covering the relevant business grounds on which a request may be denied. The Fair Work Act review released last year highlighted the need to expand the right to request and make it more widely available.

We’ll await the details of these draft changes with interest. Until then it would be worthwhile reviewing your workplace policies on flexible work and the processes currently in place for making and responding to requests for flexible work arrangements. 

Guest post by Sarah Waterhouse, Paralegal 

Courts' continued crack-down on sham contracting

We wrote in November 2012 about the necessity for employers to ensure their workers are correctly classified, in order to avoid prosecution for sham contracting arrangements.

Since then both the Federal Magistrates Court and the full Federal Court have come out with decisions that emphasise this principle, and have sent a clear message of deterrence to the community (and small businesses in particular) in setting the penalty to be imposed in cases of sham contracting (Fair Work Ombudsman v Bedington [2012] FMCA 1133 (29 November 2012), ACE Insurance Limited v Trifunovski [2013] FCAFC 3 (25 January 2013)).

Ignore the warnings at your peril

In the Bedington case the employer had previously been warned in a letter from the Fair Work Ombudsman (FWO) regarding the classification of its workers as independent contractors. Despite this, the employer continued to engage the seven employees as independent contractors.

When the case came before the Court the FWO recommended an agreed discounted penalty for Bedington of $7,920.00, which amounted to less than the total amount of underpayment by the employer ($8,288.26). The Court disagreed with this approach and, in addition to finding no evidence of ‘a suitable and credible expression of regret’, commented that the minimum penalty should at least be equal to the amount of underpayment.

The decision of the Court is logical and the point was well made by Federal Magistrate Jarrett when he said: ‘…If I imposed the penalty agreed between the parties the message would seem to be that it is more cost effective to contravene the Act by underpaying employees and meeting a pecuniary penalty than to comply with the obligations imposed by the Act.’

The Court went on to impose a penalty of $17,820.00. 

All pain, no gain

In the Trifunovski case the full Federal Court upheld a 2011 ruling that five insurance sales representatives were employees despite having contracts that said they were independent contractors. This case involved a consideration and weighing up of the factors which indicate whether a person is either an employee or an independent contractor (see our previous blog), leading the Court to find that the workers were in fact employees. The impact to the employer of this decision was that the employees were entitled to more than $500,000 in accrued annual and long service leave.

Message for employers

It is clear that the courts are cracking down on these types of sham arrangements and employers will be penalised if they contravene the legislation.

The message for employers is BE WARNED: it doesn’t really matter what name you give the relationship with your workers or what type of contract you have; the courts will look at how that relationship works in practice, and impose heavy fines if you short-change your workers.   

If you would like further information on this topic or assistance on ensuring your workers are correctly classified as contractors or employees please contact us at enquiries@blandslaw.com.au.

Guest post by Christine Broad, Solicitor

Linfox update: Court confirms negative comments on social media are grounds for termination

We wrote in 2011 about a FWA decision involving social media misuse by a Linfox employee. The case went on appeal and the FWA full bench delivered their decision in October, upholding the finding at first instance that the employee was unfairly dismissed and finding that the orders for compensation and reinstatement were appropriate in the circumstances (Linfox Australia Pty Ltd v Glen Stutsel [2012] FWAFB 7097). The employer, Linfox, has since  filed a federal court appeal against the full bench decision, which will be heard next year.

Full bench decision: Summary

In summary, Mr Stutsel, the employee and a truck driver with Linfox, made a number of inappropriate and offensive comments on his Facebook page concerning two managers at his workplace. Following an investigation by the employer, the employee was dismissed and he subsequently brought an action for unfair dismissal.

Commissioner Roberts, at first instance, found that the dismissal was unfair and ordered that Mr Stutsel be reinstated to his former position and paid compensation for lost wages. In making this finding, the Commissioner noted in particular:

·         the employee’s inadequate knowledge of his Facebook account’s privacy settings;

·         the lack of a company social media policy;

·         the inconsistent treatment of employees engaged in similar behaviour;

·         and the employee’s lengthy and positive employment history.

The full bench had to grant permission to appeal, and in doing so referenced the topic or key issue, namely use of social networking sites. Referring to the parties’ arguments on this point, the significance of the subject matter appears to be the public interest in, and increasing prevalence of, social media in the workplace.

An employee’s negative comments on social networking sites may lead to termination

Turning to the substantive grounds of the appeal, the full bench essentially held that it was open to the Commissioner, on the facts, to find the employee’s dismissal was unfair. Importantly, however, the full bench disagreed with the earlier characterisation of the comments as having the flavour of a ‘pub-style conversation’ and highlighted the public nature of social media commentary and the potential for it to be very widely disseminated. Discriminatory, offensive or derogatory comments made on social media sites by employees, about other employees or their employer, may be sufficient grounds for termination.

The full bench’s view was that in future, the increasingly widespread use of social media and the increased implementation of social media policies in the workplace may mean employees will no longer be able to claim ignorance of privacy settings or social media use as mitigating factors.

The message here to employers is that this case reinforces the importance of having a social media policy and ensuring that it is well implemented. On the facts here a company social media policy could have:

·         established what constituted appropriate behaviour

·         cross-referenced any other applicable company policies covering discrimination and harrassment

·         and established what the consequences would be in the event that the policy was breached.

Put simply, a social media policy accompanied by good training can educate employees on how to engage with social media constructively, harnessing the many benefits to employers whilst simultaneously mitigating the inherent risks.

We will continue to monitor the pending federal court appeal and provide any updates as they occur.

Sarah Waterhouse, Paralegal, BlandsLaw

Too sick for work but fit for TV: Beauty and the Geek contestant wins adverse action claim

A contestant on the reality TV show Beauty and the Geek, who was dismissed from his employment for appearing on the show while absent on sick leave, has won an adverse action claim in the Federal Magistrates Court.

The case is compelling, not only because it involves the popular TV show, but it also raises some interesting issues around the provision of medical certificates by employees and the role of HR practitioners in assessing medical evidence.

In this case the employee’s doctor had been treating him for a number of years and confirmed a history of stress and anxiety-related issues. It was the doctor’s view that, although the employee was unfit for work, he was healthy enough to participate in the show and in fact his condition may improve by doing so. The employer did not accept the medical certificate and dismissed the employee for being absent from work.

Doctor (usually) knows best

It was significant in this case that the doctor providing the medical certificate had known the employee and had been treating him for some time for the condition that led to his absence from work. This is to be distinguished from cases such as Anderson v Crown Melbourne where the dismissal of an employee who obtained a medical certificate to attend a football match was upheld; that particular employee pre-booked tickets and advised fellow employees that he would be taking sick leave in order to go to the match. In that case the doctor providing the certificate was not known to the employee and in fact had been previously disciplined for issuing false sickness certificates.

The lawyer representing the employee in the TV show case summed up the decision as follows:

"At its simplest this is a decision about who is best to assess the medical condition of an employee – their doctor or their HR manager. It also makes clear that employees may be unfit for their normal employment duties, but perfectly fine for other activities - such is the nature of mental illness”.

In this case the employee was reinstated and the employer was ordered to compensate him for lost earnings following the adverse action taken by the employer in terminating him while he was on sick leave.

Tread carefully before rejecting a medical certificate

So the take-away for employers is to tread carefully if considering rejecting a medical certificate provided by an employee. If there is doubt about the veracity of the certificate at the very least it would be prudent to seek further information from the doctor prior to deciding to reject it.

In addition, do not assume that absence from work due to illness requires that an employee not undertake other activities, particularly when the absence relates to a mental illness.

Andrew Bland, Principal, BlandsLaw

Employee or Contractor? Company fined $12,000 for Sham Contractor Arrangement

The Federal Magistrates Court this week found that an agreement between a construction company and one of its workers was actually an employment agreement, despite the company requiring the worker to provide invoices and an ABN in order to be paid.

The worker did not have his own company, had no insurance and did not contribute to superannuation. The hourly rate being paid to the worker was below the award rate.

Interestingly the court commented that there was a significant element of deterrence in the penalty applied because a)  sham contracting arrangements are often difficult to detect,  and b) there is likely to be reluctance on the part of employees to make a complaint for fear it may compromise future employment prospects.

The case acts as a warning to employers who try to get away with these sham arrangements, but also highlights that it is not always obvious whether a worker is a contractor or an employee. As yet the legislators have not clearly defined what the difference is and so employers need to rely on accepted guidelines from case law where there is uncertainty. This involves careful consideration in each situation and includes weighing up how the parties work together with questions such as:

Who has effective control over the way the work is performed, the place of work and hours of work?

1. Can the worker perform work for others or do they have the genuine right to do so?
2. Does the worker have their own place of work or are they available to work in other locations?
3. Does the worker use their own tools and equipment?
4. Is the worker able to delegate or sub-contract the work to others?
5. Can the worker be suspended or dismissed?
6. Does the worker present to the world at large as an employee?
7. How is the worker paid? (for example a weekly wage as opposed to invoice on completion of tasks)
8. Is the worker paid a gross amount or is tax withheld before payment?
9. Does the worker receive paid holiday and sick leave?

The important thing to remember is that it doesn’t really matter what name you give the arrangement; the courts will look to what is actually happening and call it what it really is.

Guest post by Christine Broad, Solicitor, BlandsLaw.

 

New "Fair Work Commission" Announced

This week, Workplace Relations Minister, Bill Shorten, announced amendments to the Fair Work Act. “Fair Work Australia” is no more: Now, the industrial relations tribunal will be known as the “Fair Work Commission”. The changes are the first of several amendment packages expected to implement recommendations made by an independent review panel in June this year.  

Certainly, we have experienced first-hand the general public’s confusion over the terms “FWA”, “FWO”, “Fair Work Australia”, “Fair Work Act” and the Fair Work Ombudsman. This is one of the reasons cited for the name change. The other, according to Fair Work Australia’s President, Justice Iain Ross, is to promote the independence of the Commission in its adjudicative role as opposed to its other administrative functions. Fair Work Australia has been the subject of a lot of criticism over its handling of the HSU investigation. The President is at pains to demonstrate that this should not impact on the authority and reputation of Fair Work Australia – now the Fair Work Commission – in carrying out its judicial role.  

As well as implementing changes to enterprise bargaining and unfair dismissal laws (see our related article), the Minister also announced new powers for the President to intervene in the resolution of matters before the Fair Work Commission and to deal with complaints. 

While the independent panel recommended more than 50 changes to the Fair Work Act and Fair Work Australia, we agree with the opinion of the Minister and the independent review panel that the legislation and the Fair Work Commission are generally working well.   

Watch this space for news on more changes in this area in the coming months.    

 

Guest post by Andrew Gordon, Solicitor, BlandsLaw