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Focus: Workplace Relations – December 2003

In this issue: We look at the High Court's consideration of redundancy issues; casual employees and unfair dismissal; a review of this year's directions in OHS; unfair contract jurisdiction; and maternity leave and part-time work.

High Court to decide on redundancy payments

In brief: The High Court is soon to consider the meaning of redundancy and the right of employees to severance benefits on a sale or transmission of a business. On 12 December 2003, the High Court granted Amcor special leave to appeal the Federal Court's Amcor1 decision. Lawyer Rosemary Bryant-Smith reports.

At trial, the Federal Court held that 800 Amcor employees were entitled to redundancy pay as the result of a demerger, despite the employees being offered employment with the new employer on terms and conditions identical to those they enjoyed with Amcor. Regardless of the offer of employment on identical terms and conditions, and the preservation of the employees' accrued benefits, the Federal Court found that the redundancy clauses in the Amcor certified agreement entitled employees to severance benefits. The Federal Court acknowledged that the decision may be contrary to common sense, but felt constrained by the terms of the agreement. An appeal to the Full Court yielded a similar result.

Following the successful application for special leave to appeal, the High Court now has the opportunity to provide guidance on the interpretation of such clauses. Given the general nature of the provisions in the Amcor agreement, the decision is likely to provide guidance on a broad range of similar agreements and policies in workplaces throughout the country.

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Rostered casuals and unfair dismissal

In brief: Recent amendments to the Workplace Relations Act 1996 and its Regulations have clarified the definition of 'casual employees' who are excluded from accessing the unfair dismissal provisions. Lawyer Rosemary Bryant-Smith and legal clerk Tanya Josev report.

Before the amendments

Before the recent amendments, the Regulations stipulated that casual employees engaged for a period of less than 12 months were not entitled to access the unfair dismissal provisions of the Workplace Relations Act 1996 (Cth) (the Act). However, a number of recent decisions of the Australian Industrial Relations Commission2 have shown that, regardless of the length of employment, the mere fact that an employee's engagement is described as casual, or casual rates are being paid, does not necessarily equate to the employment being of a casual nature.

Where the engagements are regular, and the employee has a reasonable expectation of continuing employment, an employee may be deemed by the Commission not to be a casual at all. In the McNamara case, the existence of a monthly roster that reflected similar patterns in the hours of work for the employee led to the Commission finding that the employee was not casual.

The amendments

The Act has been amended with the intention of broadening the scope of the exclusion in light of the Commission's increasingly narrow view of casual employment.3 As of 27 November 2003, the Act excludes casuals who have been working for fewer than 12 months, even if the employee was engaged on a regular and systematic basis.

However, employers that dismiss and then re-engage casuals within three months (where the first period of employment was less than 12 months), presumably for the purposes of allowing the twelve-month exclusionary period to run again, should be aware that the Act includes anti-avoidance provisions applying in these circumstances.

Limited protection

Employers should note that the protection from unfair dismissal claims by casual employees exists only during the first 12 months of employment. Care must therefore be taken after this period to ensure that valid reasons, appropriate notice and procedural fairness are afforded to casuals on termination, to minimise the prospect of unfair dismissal claims.

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Directions in OHS – the year in review

In brief: This year, New South Wales, Queensland, South Australia, Victoria and the Australian Capital Territory amended or commenced reviews of their occupational health and safety (OHS) legislation. While the reviews and amendments cover many areas, the important issues include inspectors' powers, new and alternative penalties, and specific targeting of workplace deaths through industrial manslaughter offences. Are there any nationally consistent policy and legal directions? Consultants Dr Kirk Lovric and Ric Morgan report.

Industrial manslaughter

The Australian Capital Territory is the first jurisdiction to introduce industrial manslaughter laws. 4 The laws provide for $5 million fines, coupled with 20 years' imprisonment, for individuals (including workers, managerial employees and company officers), and come into force on 1 March 2004.

Federal Workplace Relations Minister Kevin Andrews put considerable pressure on the Australian Capital Territory legislature in an attempt to prevent the introduction of the changes, arguing that OHS laws were adequate to deal with the issue. Employer groups warned that employers would move to avoid jurisdictions imposing such penalties.

South Australia's Industrial Relations Minister, Michael Wright, has stated that he is considering adopting similar measures. Although Victoria is yet to introduce such laws, it is currently reviewing its OHS laws, and this may involve consideration of the issue.

Despite the earlier resolve of New South Wales Industrial Relations Minister John Della Bosca against any such move, there is now a legal panel examining workplace deaths. The recent death of a 16-year-old during his first few days at work, coupled with the successful introduction of industrial manslaughter laws in the Australian Capital Territory, has brought renewed pressure for New South Wales to follow suit.

Inconsistent direction

The federal Productivity Commission5 argued that national uniformity of OHS legislation would create efficiencies because multi-state employers could better understand their obligations and any changes to them. The savings obtained from these efficiencies could then be used to purchase much needed OHS consulting services.

Despite the potential benefits, recent changes do not contain recommendations or proposals for national uniformity. In fact, comments by those undertaking the current Victorian review have suggested that there may be benefits in the independent development of state-based laws that arise from the 'leap frogging' that occurs.

Areas of consistency

Despite the overall lack of uniformity, two consistent trends are emerging. First, inspectors are being given greater investigatory powers. For example, in South Australia and Queensland there was a shift towards providing inspectors with additional powers to investigate and enter workplaces. The Queensland amendments include providing inspectors with powers to investigate incidents that were previously given to the police. The Victorian review also includes consideration of the powers of inspectors to enter a workplace.6

The second trend is that alternatives to monetary penalties are being introduced. For example, in Queensland and Tasmania, there are penalty provisions providing for adverse publicity and undertakings. The regulator can use these in the absence of a conviction. Similar powers and penalties are also on the agenda in the current review of Victoria's legislation. While South Australia has also moved in this direction, its legislation only provides the power to compel an organisation to complete an undertaking after the courts have made a conviction.

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Unfair contract jurisdiction

In brief: The Full Bench of the New South Wales Industrial Relations Commission has recently handed down two decisions regarding the unfair contract jurisdiction. Partner David Cross reports.

Lease not an unfair contract

In the first case7, a majority of the Full Bench reluctantly accepted the line of reasoning favoured by the Court of Appeal in earlier litigation. As a result, the claimant's original victory was overturned.

Background

The claimants were lessees of a hotel on the New South Wales central coast. They brought proceedings in the unfair contract jurisdiction against the lessor. The unfair contract jurisdiction applies to contracts or arrangements under which work is performed in New South Wales. The lessor argued that the hotel lease was not such a contract and, accordingly, was beyond the jurisdiction. At first instance, the Commission found that the lease was a contract amenable to the unfair contract jurisdiction. Mitchforce, the lessor, appealed to the Full Bench.

Appeal

The Full Bench denied leave to appeal without exploring the merits of the appeal. Mitchforce then took the claim to the New South Wales Court of Appeal, with some success. Although the Court of Appeal could not change the ruling on jurisdictional grounds, it expressed, in unusually strong terms, its disagreement with the Commission and the Full Bench.

The Court of Appeal suggested that the Full Bench re-hear the matter. Such a re-hearing is possible because the Full Bench did not at any stage determine the merits of the appeal, but had merely rejected a request for leave to appeal.

Full Bench decision

The matter went back to the Full Bench and, this time, the members of the Bench analysed the earlier authorities upon which the Commission based its decision. Two of the members of the Full Bench, though not accepting that the Commission was necessarily wrong, found that it was important (in the interests of judicial comity) to follow the Court of Appeal's views.

The third member of the Full Bench ruled that the Commission's original decision was correct and that the interests of judicial comity did not require the Full Bench to follow the Court of Appeal's views.

But still no clarity

In spite of the result, the scope of the unfair contract jurisdiction is still not entirely clear. The result in the litigation seems to have been determined largely out of interest of judicial comity, and not necessarily a careful review of the limits of unfair contracts claims. While there is some encouragement that the Commission's jurisdiction is not unlimited, it is unlikely that a restrictive approach will be applied in future.

Federal award employees

A Full Bench of the New South Wales Industrial Relations Commission has again had to consider whether federal award employees can bring an unfair contract claim.8

Background

The case9 involved an appeal brought by former mine employees from a decision to dismiss their unfair contract claims.

The employees had been made redundant and had claimed that the redundancies were inconsistent with certain provisions in the federal award and certified agreement that applied to their employment. They sought an order that the provisions of the award and certified agreement formed part of their contracts of employment and that the employer had behaved unfairly in relation to those provisions. In the alternative, the employees claimed that they had been the subject of unfair and unconscionable treatment and should be awarded compensation in the form of greatly increased pay in lieu of notice and severance pay.

The Commission held that the award and certified agreement had not become part of the contracts of employment. The Commission rejected the alternative claim on the basis that it would not be possible for it to order increased pay in lieu of notice and severance pay, because these were matters dealt with exhaustively by the award and certified agreement. Because the award and certified agreement are federal instruments, they apply to the exclusion of any state provisions.

Full Bench decision

On appeal, the Full Bench agreed that the award and enterprise agreement had not become part of the individual contracts of employment.

The Full Bench also agreed with the Commission's rejection of the alternative claim – although the Full Bench did express caution about the way in which federal/state inconsistency should be assessed. Merely because an employee is covered by a federal award or enterprise agreement does not automatically mean that he or she is incapable of bringing unfair contract proceedings. If the employee is applying for a more substantial benefit of a kind provided by the award or agreement, then inconsistency will exist. However, it is possible that the employee might allege contractual unfairness on the basis of the absence of a benefit that is not covered by the award or certified agreement. Such a claim might remain open. The issue can only be assessed properly by looking at the federal award or agreement and considering whether it truly intends to oust all other provisions.

When dealing with federal award employees, it is unsafe to assume that an unfair contract claim will always be off the agenda.

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Beware the illegal acts of third parties

In brief: A recent decision of the NSW Industrial Relations Commission demonstrates that employers may be liable under the NSW Occupational Health and Safety Act, even if the risk to employees stems from the unlawful acts of non-employees10. Law graduate Louise Keats reports.

Background

In June 2002, an armed robbery took place at the ANZ branch in Brookvale, NSW. The offenders were able to access the cash handling area of the bank by scaling the anti-jump barrier screen and squeezing through a 40cm gap between the top of that screen and the ceiling. Proceedings were brought against the bank under the Occupational Health and Safety Act 2000 (NSW) (the Act) for failure to ensure a safe workplace for its employees.

The robbery at the Brookvale branch was preceded by robberies at the Katoomba and Annandale ANZ branches earlier in 2002. In both cases, the offenders had also climbed over the barrier screen, which did not reach the ceiling. In May 2002, the bank engaged a consultant to visit 86 branches (including Brookvale) and take measurements for the installation of aluminium mesh to fill in any gap between the ceiling and the barrier screen. On the day of the Brookvale robbery, the consultant provided the bank with a quote for the installation of mesh at a number of branches, including Brookvale, but the mesh was not installed until after the robbery.

The bank pleaded guilty to the charge and so the Commission only had to determine the appropriate penalty.

Commission's findings

The Commission imposed a penalty of $156,000, which was calculated by looking at:

  • the seriousness of the bank's breach of its duty to ensure the health and safety of its employees;
  • the need for general deterrence;
  • the likelihood of reoffence by the bank (which it found required a penalty of $240,000); and
  • the bank's early guilty plea and its prior good record.

Based on this review, the Commission decided that the objective penalty should be reduced by 35 per cent to $156,000.

Other cases

As this case illustrates, the Act is not restricted to internal workplace hazards, such as employees injuring themselves on workplace equipment. It also confirms that an employer may be liable under the Act for the consequences of criminal actions of a third party over whom it has no control. This follows an earlier decision11 of the Commission holding that the NSW Police Service breached the Act by not adequately training two police officers who were fatally shot while responding to an emergency call. The Commission rejected the Police Service's argument that the Act was not directed to risks created by the unlawful actions of a third party, especially in the context of police officers 'whose main role is to deal with unlawful activity'.

The ANZ Brookvale decision is also consistent with the reasoning in an earlier decision12 finding that an employer breached the Act by not adequately ensuring the safety of a teacher stabbed to death by a student while conducting a hospitality cooking course. The student had previously been charged with having custody of a knife in a public place and attempted murder of her mother with a kitchen knife. The Commission held that the student should never have been placed in a class involving the use of knives, and that the employer was liable in failing to protect the teacher from the risk arising from this situation.

Implications for employers

Employers need to take steps to protect their employees from risks to their health and safety arising from the unlawful activities of third parties. As these decisions demonstrate, the criminal act of a non-employee will not be a defence to liability arising under the Act, particularly if employees are exposed to the general public.

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Positive discrimination out of favour

In brief: Refusing an employee's request to return to work part-time after maternity leave is not discriminatory, so long as there are reasonable grounds for the refusal, according to a judgment handed down this month in the Federal Magistrates Court13. Law graduate Scott Aspinall reports.

No obligation

Although some recent decisions have emphasised the importance of employers making reasonable efforts to accommodate employees with family responsibilities, the Federal Magistrates Court found that failing to grant an employee's request for a part-time position after maternity leave was a refusal to provide a benefit to an employee, rather than the imposition of a detriment. There was no obligation for an employer to discriminate positively in favour of such an employee.

Background

The employee, after 40 weeks of maternity leave, sought to have her contract as a full-time employee varied to allow her to work part-time. When the employer refused, the employee claimed that this amounted to constructive dismissal, since it made it impossible for her to return to work at all – forcing her to abandon her employment under duress.

Claim dismissed

In dismissing that part of her claim, the court found that, although it was unlawful to impose a condition, requirement or practice to the detriment of an employee because of maternity leave, merely to maintain the status quo did not amount to discriminatory conduct. In the particular workplace in question, it was very uncommon for senior positions to be filled on a part-time or a shared basis.

The position may have been different if previously the employer had allowed other employees in a similar position to the applicant to work part-time. In that event, the requirement that the applicant work full-time would constitute a discriminatory condition, requirement or practice.

Welcome counterweight

This decision is a welcome counterweight to the trend in the Federal Magistrates Court to regard part-time work on return from maternity leave as a right available to the employee on demand.

Footnotes
  1. See Focus: Workplace Relations, June 2002, for a summary of Justice Finkelstein's decision at trial, and see CFMEU v Amcor (2003) FCFCA 57 for the Full Federal Court's judgment.
  2. Cetin v Ripon Pty Ltd t/a Parkview Hotel (AIRC, Full Bench, 25 September 2003 (PR933650), McNamara v Roc International t/a Bath Arms Hotel (AIRC, Harrison SDP, 28 November 2003) (PR941271).
  3. See Workplace Relations Act 1996 (Cth), ss 170CBA(1)(d) and 170CBA(3).
  4. Crimes (Industrial Manslaughter) Amendment Act 2002 (ACT).
  5. Productivity Commission (2003), National Workers' Compensation and Occupational Health and Safety Frameworks, Interim Report, Commonwealth of Australia.
  6. Maxwell C M QC, (2003) Occupational Health and Safety Review-Discussion Paper.
  7. Mitchforce Pty Ltd v Starkey (No. 2) [2003] NSWIRComm 458.
  8. Section 106 of the New South Wales Industrial Relations Act.
  9. Burgess & Ors v Mount Thorley Operations Pty Ltd [2003] NSWIRComm 432.
  10. Geoff Derrick v Australian and New Zealand Banking Group Ltd [2003] NSWIRC 406.
  11. WorkCover Authority of New South Wales (Inspector Keelty) v Crown in Right of the State of NSW (Police Service of NSW) (No 2) [2001] NSWIRC 90.
  12. WorkCover Authority (NSW) (Inspector Stewart) v The Crown in Right of the State of NSW (Department of Education and Training, Department of Juvenile Justice and TAFE) [2002] NSWIRC 259.
  13. Kelly v TPG Internet Pty Ltd [2003] FMCA 584.

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