Monthly Archives: August 2015

Protected industrial action sends Melbourne off its rails

Posted on by

Today Melbourne’s vibrant tram network will grind to a halt as the Fair Work Commission (“ FWC”) has refused to prevent a four-hour strike planned by the Rail, Tram and Bus Union (“RTBU”).

The application by tram operator, KDR Victoria Pty Ltd (better known as “Yarra Trams”) to have the FWC suspend or terminate the protected industrial action was brought under s424(c) of the Fair Work Act 2009 (Cth) (“FW Act"). Under this section, the FWC has an obligation to make such an order if it is satisfied that the proposed action will “threaten to endanger the life, the personal safety or health, or the welfare of the population or part of it.”

Commissioner Lee of the FWC heard the application late Tuesday evening in Yarra Trams’ final effort to quell the disruption. When presented with the arguments that this action would satisfy the requirements of s424(c) Commission Lee was not persuaded and applied the typically stringent threshold necessary for the FWC to find that there was a real threat to the population arising from the tram strike. 

The protected industrial action is expected to last from 10am to 2pm Thursday and will affect all of Melbourne Trams. It is unclear whether there will be further actions but RTBU divisional secretary, Phil Altieri, has indicated the parties are still fairly far apart.

The most recent offer by Yarra Trams of a 15% pay rise over four years, if staff agreed to work a 14-day roster, was rejected by the RTBU. 

HR Managers beware: personal exposure for following the company line

Posted on by

In late June, we reported on a decision (Cerin v Aci Operations Pty Ltd & Ors [2015] FCCA 1654) in which the Federal Circuit Court (the “Court”) held that a human resources manager may have a penalty imposed on her personally for her role in dismissing an employee in breach of the National Employment Standards.

While a decision on penalties in that case has not yet been handed down, another decision of the Court earlier this month has again highlighted the real and personal threat human resources managers face if they are involved in breaches of the Fair Work Act 2009 (Cth).

The decision

In Director of the Fair Work Building Industry Inspectorate v Baulderstone Pty Ltd & Ors (No 2) [2015] FCCA 2129, the Court fined two human resources managers $3,500 each for their role in coercing an employee off his salaried contract of employment and onto an enterprise agreement under which he would be paid wages in breach of the FW Act’s general protections regime. 

The employee was told by his HR managers that his “role as a Safety Officer and being on a salary [didn’t] work” when, in fact, the central reason for the employer’s decision was a complaint made by a union delegate following the employee’s resignation from the union. The Court found that in taking adverse action against the employee, the employer exploited the “vulnerable situation in which [the employee] found himself’, gave him “no choice in the matter” and made him feel“compelled to sign the documents”.

Following company line no excuse

Interestingly, the Court rejected an argument that the human resources managers should not be personally fined because they were following their employer’s direction. The Court held that the human resources mangers “had a choice of not implementing the decision, but failed to implement that choice”. 

Determining the penalty

  • While the employee was not awarded compensation because he had suffered no financial loss, inpenalising the human resources managers, the Court held that it was important to take into account the need for “general deterrence to deter persons in subordinate positions from complying with directions from superiors to engage in conduct that may involve contraventions of the FW Act”. 
  • Additionally, the employer was fined $25,000 for its “deliberate and concerted” contravention of the general protections regime.

​Dual system of drug testing upheld

Posted on by

Construction, Forestry, Mining and Energy Union – Construction and General Division v Port Kembla Coal Terminal Limited [2015] FWCFB 4075

In a timely decision following PCS’ August webinar on drug and alcohol testing in the workplace, the Full Bench of the Fair Work Commission (the “Full Bench”) has upheld Port Kembla Coal Terminal’s (“PKCT”) policy of randomly drug testing its employees using both urine and oral fluid methods of testing, albeit on different grounds to those on which the policy was upheld in an earlier decision of the Fair Work Commission (“FWC”) in April this year.

Methods of testing: urine vs. oral fluid 

Debates over drug testing in the workplace have often centred on the fact that urine testing tends to detect historical drug use, while oral fluid testing tends to detect recent drug use. It has thus been argued that urine testing is an inappropriate method of testing because:

  • it involves an invasion of employees’ privacy by potentially detecting drug use well outside work hours; and 
  • may not return results related to an employee’s level of “impairment” at work. 

These types of arguments were run by the CFMU in this case.

The original decision

PKCT’s policy was first challenged by the CFMEU in April this year. In its first instance decision, the FWC upheld PKCT’s policy on the basis that both methods of testing were reasonable as a positive result would:

  • detect some level of “intoxication”; and
  • lead to a “logical inference” of “some impact on capacity to perform work related functions, irrespective of the time period that may have elapsed since the drug was taken”.

In regard to the CFMEU’s arguments in respect of employee privacy, the FWC concluded:

  • “a blunt distillation of the contest in this case and its determination can be described as a choice between private lives or saving lives and I have opted for saving lives”.

The appeal

The CFMEU challenged the FWC’s decision on the basis that it had mistaken expert evidence by concluding that a positive test result was an indication of “intoxication”. Additionally, the CFMEU reiterated its argument that urine testing was an unreasonable intrusion on employee privacy.

The Full Bench accepted that the FWC had mistaken the expert evidence, holding that a positive test result “merely indicates the presence of a substance”, not “intoxication”, and set aside the FWC’s decision on that basis.

However, reconsidering the case, the Full Bench again upheld PKCT’s policy for the following reasons:

  • the purpose of the random testing policy was deterrence and utilising both urine and oral fluid methods of testing reinforced this;
  • the policy was aimed at PKCT fulfilling its work, health and safety (“WHS”) obligations to its employees in a high-risk workplace;
  • urine testing is common in the industry; and
  • significant weight was given to PKCT’s adoption of a “case management approach [to positive test results] which will have regard to the circumstances of individual workers.” The Full Bench held that, “while acknowledging that in some circumstances a non-negative result could lead to disciplinary action, other outcomes could include rehabilitation, counselling, participation in the Employee Assistance Program, scheduled testing and the development of a return to work plan”. 

Lessons for employers

This decision is significant for suggesting that arguments in respect of employee privacy are unlikely to be successful in future cases on drug and alcohol testing in the workplace, especially in high-risk industries. However, as discussed in our August webinar, the decision also highlights the importance of:

  • context; and
  • the way in which a policy is framed,

in determining its reasonableness.

It remains the case that:

  • the nature of an employer’s industry and WHS obligations will be vital in determining whether the drug and alcohol testing policy it wishes to implement is reasonable; and 
  • effective policies should be framed in terms of employee safety, and as educative, not just punitive, tools. 

Can I have wine with that?

Posted on by

Drugs and alcohol may be “introduced” into the workplace through a variety of means ranging from your staff’s attendance at company events or work-related functions (conferences, client gatherings, etc) where alcohol might be served, to personal use of recreational drugs, self-medication with alcohol or even more commonly, prescription medicines.

Given the risks that intoxication and impairment may pose to your brand or organisation, what rights and obligations do you have in relation to drugs and alcohol in the workplace?

We will explore:

  • why you should draw the line and where to draw the line;
  • how to implement and enforce zero tolerance policies;
  • case law on drug and alcohol testing in the workplace; and
  • best practice tips on managing drugs and alcohol in the workplace.

Update: Retrenched employees receive annual leave windfall

Posted on by

Centennial Northern Mining Services Pty Ltd v Construction, Forestry, Mining and Energy Union [2015] FCAFC 100

Last week Justices Tracey, Flick and Katzmann of the Full Federal Court upheld the decision of Justice Buchanan, in relation to an employer’s obligation to pay annual leave on termination of employment pursuant to section 90 (2) of the Fair Work Act 2009 (Cth) (“FW Act”).

This decision confirms that “the intention of the legislation is that untaken annual leave is payable at the rate at which it would have been paid had the employee taken it at the time the employee was eligible for it regardless of whether this amount was in excess of the minimum annual leave entitlement required under section 90(1) of the FW Act.

What this means for employers

  • Annual leave paid out at termination of employment must include loadings, such as annual leave loading if the employee would have entitled to such loadings while employed

 

 

FWC makes first formal ruling in anti-bullying jurisdiction

Posted on by

CF and NW and Company A and ED [2015] FWC 5272

More than 18 months after the anti-bullying jurisdiction was introduced, the Fair Work Commission (“FWC”) has made its first formal finding of bullying, having found that two employees were subjected to bullying and harassment by their manager, and issued orders to stop the bullying. As well as being the first case in which the FWC has made a formal finding of bullying, this is just the third anti-bullying order to be issued by the FWC since the inception of the anti-bullying jurisdiction in January 2014.

In this matter, the Applicants alleged that their manager had engaged in belittling conduct, swearing, yelling and inappropriate language, interference with and undermining of their work, physical intimidation, attempts to incite victimisation of other staff members and threats of violence. Following an investigation of the Applicants’ complaints, their employer moved the manager to another branch of its real estate agency. The Applicants took leave from work to receive medical treatment and claimed workers’ compensation in respect of their manager’s behaviour.

In finding that the Applicants’ allegations were founded and that the manager’s conduct constituted bullying, the FWC held that the manager’s behaviour created a risk to the Applicants’ health and safety and that that risk was ongoing because, although the manager had moved offices, there was “common ownership of the businesses” which made the threat of “future work related interactions… real”.

The FWC ordered that, for 24 months:

  • the manager and the Applicants must not make contact with each other;
  • the manager must not attend the Applicants’ workplace and the Applicants must not attend the manager’s workplace;
  • the manager must not be given access to the Applicants’ portfolios when they return from leave;
  • the employer must, by 1 September 2015, provide anti-bullying training to all its employees and update its anti-bullying policy, including its grievance procedure; and
  • the employer must provide the Applicants with written clarification of reporting arrangements upon their return to work.

This decision is also interesting because it provides some insight into how the FWC may seek to manage the sensitivities surrounding the disclosure of the identity of the parties the subject of a bullying application moving forward. In this matter, the FWC ordered the identity of the parties remain suppressed despite the finding of bullying. This was because:

  • the suppression of the parties’ identity had been an important factor in the employer conceding that the manager’s behaviour could be dealt with under the FWC’s anti-bullying jurisdiction; and 
  • the stop-bullying orders had been developed with the parties’ consent with a view to the resumption of a productive working relationship between the Applicants and the employer.

Lessons for employers

This case demonstrates that, when anti-bullying applications cannot be resolved by mediation, the FWC is willing to impose wide ranging orders to stop conduct that constitutes bullying in the workplace. Such orders will not necessarily be limited to the relationship between the bullying and bullied parties and may, as here, impose material obligations on employers.

It is essential that organisations develop behaviour and culture policies which highlight the responsibility of employees to refrain from bullying conduct in the workplace, thoroughly train employees on their obligations under such policies and enforce these policies effectively.

“But you promised!” When workplace policies become binding

Posted on by

A recent decision of the Supreme Court of Queensland’s Court of Appeal, in Gramotnev v Queensland University of Technology [2015] QCA 127, has served as a timely reminder that courts are willing to find that, in certain circumstances, workplace policies impose contractual obligations on employers.

Mr Gramotnev argued that the University had breached his employment contract in eleven ways during nine years of employment. While finding that Mr Gramotnev’s claims against the University were “lengthy, convoluted and highly repetitive”, the Court of Appeal set aside the original judgment dismissing the proceeding. In doing so, it held that the primary judge was incorrect to decide that the University’s Senior Staff Disciplinary Policy (the “Policy”) did not form part of Mr Gramotnev’s employment contract.

The Policy set out, in concrete terms, four phases to be followed in the management of allegations of misconduct made against senior employees. While Mr Gramotnev’s interpretation of the Policy was misguided (in that he argued that it required the University to take certain steps in respect of a complaint made by him, rather than guaranteeing that a particular procedure would be followed in respect of disciplinary procedures leading to his dismissal) the Court of Appeal held that there was nothing to suggest “that if the [University] refused to comply with the procedures of the policy, a staff member who suffered loss or damage could not claim damages for breach of contract”. In reaching this conclusion, it appears significant that Mr Gramotnev’s employment contract stated that his “employment conditions include the provisions of the Manual of Policies and Procedures and relevant University Statutes and Policies as current from time to time”.

Lessons for employers

Whether a workplace policy forms part of an employment contract will depend on

  • the language of the policy; and
  • the terms of the contract.

Policies expressed in “promissory terms” may be held to create contractual entitlements and obligations unless there is a good reason to hold otherwise. In order to ensure they are not inadvertently bound by policies, employers must ensure their employment contracts are drafted to stipulate that policies do not impose contractual obligations on the organisation. Failing to do so can expose organisations to hefty claims for damages if policies (including policies on bullying and harassment, disciplinary procedures, and work, health and safety) are not followed.

FWC Full Bench denies employee with pending criminal charges unfair dismissal remedy

Posted on by

Dr Daniel White, Executive Director of Catholic Schools and legal representative of the Catholic Education Office, Sydney v Mr Gerald Mahony [2015] FWCFB 4952

In a decision which departs from previous approaches, the Full Bench of the Fair Work Commission (the “Full Bench”) has held that a school teacher with pending criminal charges relating to children cannot pursue an unfair dismissal remedy following the termination of his employment in 2013.

At first instance, the Fair Work Commission (the “FWC”) rejected the argument of the Catholic Education Office (the “CEO”) that the applicant’s contract of employment had been “frustrated” (that is, terminated by an event entirely outside the control of the parties) by the introduction of the Child Protection (Working With Children) Act 2012  (NSW) (the “Child Protection Act”). On its terms, the Child Protection Act prevented anyone charged with offences relating to children from performing child-related work. The FWC held that the contract had not been frustrated because the action which brought it to an end was the CEO sending the applicant a termination of employment letter explaining the reasons for his dismissal. Commissioner McKenna said:

“How the contentions about the doctrine of frustrations as against what was, in form and substance, a dismissal for cause –the reasons… described… in the CEO’s letter advising of the termination of employee – are to be reconciled is not immediately apparent… A contract of employment cannot be terminated twice”.

In a judgment comprising just seven paragraphs, the Full Bench overturned the FWC’s decision. The CEO argued not in terms of frustration, but on the basis that the applicant’s employment was “not permissible” under and “inconsistent” with the Child Protection Act. The Full Bench agreed, holding that the Child Protection Act made the continuing employment of the applicant illegal. It could therefore not be said that the applicant’s employment had been unfairly terminated at the initiative of the CEO.

Lessons for employers

  • Although this case is significant in that it means that the employment of employees working with children will automatically terminate if they are charged with offences relating to children, in considering whether the reasoning of the Full Bench will extend to other types of criminal charges, the terms of relevant legislation will be of prime importance. The Child Protection Act is unusual in that it allows for termination of employment prior to a final conviction.
  • Employers should ensure that their contracts of employment include provisions which allow them to take disciplinary action against employees who fail to promote the best interests and reputation of the organisation, both during and after work hours.

457 sponsors: comply with your obligations or you may pay a high price

Posted on by

Adriana Bedon, Senior Associate

The recent and unprecedented decision of the Federal Court in Minister for Immigration and Border Protection v Choong Enterprises Pty Ltd (No 2) [2015] FCA 553 (“Choong”) serves as a timely reminder of the risks employers face in sponsoring employees under visa programs and failing to comply with their obligations as a sponsor.

The Migration Regulations 1994 (Cth) (the “Regulations”) impose stringent sponsorship obligations on employers who register in the 457 visa program and sponsor ex-pat employees. The sponsorship obligations are ongoing for the period an approved sponsor employs a 457 visa holder. However, implementing and maintaining appropriate employment practices that assist in complying with these obligations can be tedious and, as a result, is often neglected by sponsors.

In Choong (the facts of which are set out below), the Department of Immigration and Border Protection (“DIBP”) prosecuted the employer for failure to comply with several of its sponsorship obligations under the Migration Regulations 1994 (“Migration Regulations”), resulting in a $175,000 civil penalty being imposed on the employer, and the employer being required to reimburse the affected employees for migration fees that the employer had attempted to claw back by way of deductions from their pay. The employer was also ordered to pay the costs of the proceedings.

The decision in Choong demonstrates the potentially significant legal, financial and reputational consequences for employers for failing to ensure that  their employment practices are sufficiently robust to ensure compliance with their sponsorship obligations.

This article examines the legislative framework of the 457 visa program, the impact of the decision in Choong and what steps employers who sponsor ex pat employees under the 457 visa program can take in order avoid a similar outcome.

Failing to comply with sponsorship obligations: how high are the stakes?

The Migration Act 1975 (Cth) (“Migration Act”) currently provides that any person who fails to satisfy the prescribed sponsorship obligations, such as those set out in the Regulations, will be subject to a maximum penalty of 60 penalty units (currently $10,200) for each contravention of those obligations.

Further, where a sponsor has committed a contravention that is founded on the same facts of another contravention, or forms part of a contravention with  a ‘similar character’, the Migration Act provides than an eligible court may order one penalty for the related contraventions. In these circumstances, the overall penalty cannot be greater than the sum of the individual penalties if the contraventions had been pursued separately.

The decision in Choong

Choong Enterprises Pty Ltd (“Choong Enterprises”) operated a number of restaurants and cafes in Darwin. A large proportion of its employees were 457 visa holders.

On review of Choong Enterprises’ employment records it was found that it had failed to comply with a number of its sponsorships obligations, as follows:

  • Sponsor to ensure terms of 457 visa holder’s employment are equivalent to that offered to comparable Australian employees: Regulation 2.79 of the Regulations requires that a sponsor ensure a 457 visa holding employee is subject to equivalent terms and conditions of employment that an Australian citizen or permanent resident employee would received in their nominated role.
  • The review revealed that sponsored employees employed by Choong Enterprises were being paid below that of their Australian counterparts. The remuneration was in fact below what the sponsored employees were eligible to receive under an applicable modern award and even the legislated minimum wage. Additionally, the sponsored employees were not paid over-time allowances, personal leave entitlements or superannuation payments.
  • Record keeping obligations with respect to wages: Regulation 2.78 of the Regulations requires that a sponsor keep ‘independently verifiable’ records of wages paid to sponsored employees. In this matter, Choong Enterprises failed to keep any records and paid its employees by way of cash in envelopes with relevant annotations.
  • 457 employees to perform nominated roles: Regulation 2.68 of the Regulations requires that sponsored employees perform work that is relevant to their nominated occupations. Choong Enterprises, however, was found to have nominated their sponsored employees for roles that were more substantial and attracted higher pay than the roles being performed. The sponsored employees were recruited as chefs and café managers when, in fact, they were found to be performing the work of fast food takeaway restaurant cooks and assistants. As a result, Choong Enterprises obtained a monetary benefit and underpaid the sponsored employees.
  • Prohibition from recovering migration agent fees from sponsored employees: Regulation 2.87 of the Regulations prohibits sponsors from taking any action to claw back or recover costs associated with obtaining sponsorship registration. The examination of Choong Enterprises’ records revealed that it was making deductions from the sponsored employees’ wages to reimburse migration agent costs.

Based on these findings, the Court imposed a total penalty of $175,000, and ordered that Choong Enterprises reimburse the sponsored employee(s) for their migration agent fees in the amount of $6,400.

The Court also ordered that Choong Enterprises pay the costs of the proceedings.

Why is this decision significant?

The Choong decision has taken the 457 sponsorship and migration agent community by surprise, not only because of the extent of the penalty imposed, but also because it is unprecedented for the DIBP to seek penalties in the Federal Court for non-compliance with sponsorship obligations.

With respect to this decision, Senator Michaelia Cash, Assistant Minister for Immigration and Border Protection, has stated:

“This is the first civil penalty application my Department has undertaken in the Federal Court, and is the largest civil penalty any court has imposed for a breach of sponsor obligations”.

The decision has also been handed down amidst an influx of negative publicity surrounding the 457 visa program. This is possibly due to numerous allegations about the exploitation of foreign workers working in Australia under such visa programs that are commonly at the forefront of our daily media-feed. The working visa system has also been the subject of further scrutiny by virtue of the Independent Review of Integrity of the 457 Visa program that commenced in March this year, and this too may have contributed to the negative perception of the 457 visa program.

What is clear is that this decision was intended to provide a warning to employers about the aggressiveness with which Australian government officials are now willing to pursue 457 sponsorship violations. This is confirmed by the Assistant Minister’s further statements:

“The stiff penalty this company has received should send a warning to other sponsors: if you fail to meet your requirements, my Department may impose administrative sanctions, issue an infringement notice, execute an enforceable undertaking, or apply to the federal court for a civil penalty order”.

One further item to note in considering the significance of the Choong decision is that the penalty regime applied in Choong is different to that outlined above, to the extent that when the contraventions in Choong occurred corporations were exposed to a maximum penalty of 300 penalty units for breaches of their sponsorship obligations, and individuals to a maximum of 60 penalty units. The distinction between legal persons has since been removed so that the maximum penalty of 60 penalty units applies to sponsor corporations and individuals alike.

While this may reduce the potential maximum penalties to which employers can be exposed for failing to comply with their sponsorship obligations, it does not reduce the extent of their obligations or the risk that they will be prosecuted for those failures.

What can employers do to avoid a similar outcome?

The Choong decision means that it is now too risky for employers to not be fully across their sponsorship obligations and resources should be devoted to ensure that employment frameworks are sufficiently robust to ensure ongoing compliance with those obligations.

As part of that process, sponsors should be sure to consult with their migration and employment lawyers in respect of the following:

  • when drafting an employment agreement for a non-resident employee, namely a 457 visa holder or applicant and with respect to claw-back provisions;
  • when amending employment conditions pertaining to a 457 visa holding employee; and
  • in undertaking a precautionary audit of their migration records to ensure they have a well established process, in case, amongst other things, they receive a monitoring request.

Key Takeaways

  1. Sponsoring employees under the 457 visa program imposes significant ongoing obligations on employers, which may change from time to time. Failure to comply with sponsorship obligations can be costly for an employer from a legal, financial and reputational perspective.
  2. There is now increased risk for employers in the compliance space with the regulators seemingly more willing to take action in respect of any failures to comply with their sponsorship obligations.
  3. Employers must take steps to ensure that they are aware of their sponsorship obligations at all times, and that their employment frameworks are sufficiently robust to guarantee compliance with those obligations.

 

No shoes, no shirt, no service: managing employees’ appearance in the workplace

Posted on by

Alison Spivey, Associate Director and Michael Starkey, Graduate

Employees are the human face of any organisation and the way in which employees present themselves can be perceived as a reflection of an organisation’s culture. As such, it is natural that employers be concerned with how their employees look in the workplace. But when it comes to managing employee appearance – what is it, and what is it not, okay for employers to do?

Two recent high profile cases – James Felton v BHP Billiton Pty Ltd [2015] FWC 1838 (“Felton”) and Kuyken v Chief Commissioner of Police [2015] VSC 204 (“Kuyken”) – have drawn attention to the often sensitive issue of managing employee appearance in the workplace, and the importance of employers developing and implementing appropriate policies to deal with it.

The facts and circumstances in Felton and Kuyken are extracted in more detail below. In summary:

  • Felton considered the termination of the employment of an underground mine worker after he refused to comply with a requirement under a work health and safety (“WHS”) policy that he be clean-shaven; and
  • Kuyken involved a discrimination claim by a Victorian police officer in respect of a grooming policy that banned male police officers from having long hair or a beard.

In both cases, the employer’s policy on workplace appearance and the measures it took to enforce that policy were upheld as lawful. However, the significance of the decisions in Felton and Kuyken is that they show that the particular factual and legal circumstances are vital when it comes to determining the cans and cant’s of managing employee appearance in the workplace.

This article examines the types of issues that your organisation should consider if it wishes to develop and implement an effective workplace appearance policy.

Issues to consider

A workplace appearance policy, and the manner in which it is intended to be enforced, must be appropriate for the nature of the work that is performed by the organisation and in light of the regulatory context in which it will operate.

By considering the following, employers can devise policies on workplace appearance in a way that minimises legal risk while maximising their ability to ensure the way their workforce looks reflects organisational values.

Anti-discrimination legislation

In developing and implementing policies such as those applying to an employee’s appearance, employers must consider whether the aspect of employee appearance they are trying to regulate might relate to a particular characteristic an employee possesses that is protected under anti-discrimination legislation, for example, their sex, race or religion. Policies which appear to apply to workers equally may nevertheless result in “indirect” discrimination. For example, a policy that employees must have short hair, even if applied to all employees, may “indirectly” discriminate against employees of certain ethnic groups.

It is vital for this purpose that employers are aware of what characteristics are protected under anti- discrimination legislation in their jurisdiction. For example, in Victoria, both religion and physical appearance are protected characteristics, while in New South Wales, neither is protected.

Employers should also always consider whether there is a “less discriminatory” way of achieving a desired outcome. For example, in the interests of food safety, employees in fast food establishments may be required to wear hairnets rather than cut their hair short if this does not otherwise impact the employer’s WHS obligations.

The employment contract

Another highly significant consideration will be how an organisation’s contracts of employment treat workplace policies and whether those contracts allow disciplinary action to be taken for breaches of workplace policies, or for employee conduct which threatens the organisation’s reputation.

Contracts of employment should make clear that employees are to be aware of and abide by all workplace policies and that disciplinary action may be taken against them if they fail to do so. They should also oblige employees to not conduct themselves in a manner which may harm the reputation of the organisation. Such provisions need to be combined with clear disciplinary procedures which give employees the chance to alter their behaviour before their employment is terminated.

By combining such contractual provisions with a clear vision of the image they want their organisation to embody, employers may gain leverage in the management of employee appearance. For example, in Liza Gaye Fairburn v Star City Casino [2003] AIRC 479, Star City’s decision to dismiss an employee who refused to remove her tongue stud was upheld because it was accepted that Star City had a “5 star image” to uphold.

Your industry

As the decision in Felton demonstrates, it will always be more reasonable for employers to attempt to regulate employee appearance if they have a sound legal reason for doing so. Policies on workplace appearance which aim to ensure the health and safety of workers are unlikely to be seen as unreasonable.

In determining what level of regulation is appropriate in their organisation, employers should consider the nature of the work being performed by their employees and ask questions like whether the work is dangerous, or whether it requires a high degree of interaction with customers. For example, it may be more reasonable for organisations to impose strict dress regulations on front-line customer service representatives than backroom administrative employees.

The importance of any workplace appearance policy being tailored to your organisation is best demonstrated by considering what the outcome of the decisions in Felton and Kuyken may have been if the facts were altered slightly. Imagine the following scenarios:

  1. Mr Felton is a retail employee of Company X, which operates a chain of clothing stores. Company X directs Mr Felton to shave his beard to comply with its newly introduced clean-shaven policy. In such circumstances, Mr Felton’s refusal to do so would be unlikely to give rise to the same WHS concerns as in the actual circumstances of the case. Those concerns removed, the FWC may be more likely to hold that Mr Felton’s dismissal was unreasonable and therefore unfair for the purpose of his claim.
  2. Victoria Police tightens its grooming standard, but the changes are never enshrined in legislation. In such circumstances, the provision under the EO Act that acts permitted by other legislation are not discriminatory would no longer apply and Victoria Police would be forced to defend the policy on other grounds.

Case summaries

A Ban on Beards: James Felton v BHP Billiton Pty Ltd [2015] FWC 1838 (“Felton”)

The Fair Work Commission (“FWC”) upheld BHP’s decision to dismiss Mr Felton, an underground mine worker who refused to comply with a clean-shaven requirement in BHP’s Respiratory Protection Policy (“RPP”), which forms part of BHP’s WHS framework.

Facts

  • The RPP relevantly required all mine workers to be clean shaven daily to ensure that the respirators they were required to wear sealed properly.
  • Following the roll out of the RPP, Mr Felton twice failed to attend a scheduled “fit test” clean-shaven. After advising BHP in a formal meeting that he would continue to refuse to shave, Mr Felton was stood down on full pay.
  • At a second formal meeting, Mr Felton offered to purchase his own air helmet instead of shaving, but was advised that this was not in accordance with the RPP. After again attending for work unshaven, Mr Felton was advised that his employment was at risk of being terminated if he continued to refuse to comply with the RPP.
  • After being asked to show cause as to why his employment should not be terminated, Mr Felton wrote to BHP advising that he would not shave his beard, writing: “My facial hair is my personal attribute, it is who I am and my liberty of right”.
  • Three days later, Mr Felton’s employment was terminated. Mr Felton made an unfair dismissal application to the FWC in respect of the termination of his employment.

Decision

In considering whether Mr Felton’s dismissal was “unfair” – that is, whether it was “harsh, unjust or unreasonable” – the FWC had regard to:

  1. BHP’s contention that its direction that Mr Felton comply with the RPP was a lawful and reasonable direction;
  2. BHP’s WHS obligations;
  3. Mr Felton’s “individual rights and preferences” with respect to wearing a beard; and
  4. Mr Felton’s offer to purchase his own air helmet.

In upholding BHP’s decision to dismiss Mr Felton, the FWC held that:

  1. BHP’s WHS obligations to ensure the safety of its mine workers outweighed Mr Felton’s preference as to his personal appearance;
  2. BHP’s efforts to enforce the RPP, designed as it was to ensure BHP complied with its WHS obligations, were lawful and reasonable, particularly given the number of opportunities Mr Felton was afforded to comply with the RPP; and
  3. allowing employees to provide their own personal protective equipment was not a workable solution, given the size and complexity of BHP’s operation and the potential for this to “undermine the integrity of the policy”.

An Employee in Uniform: Kuyken v Chief Commissioner of Police [2015] VSC 204 (“Kuyken”)

In Kuyken, the Supreme Court of Victoria (“Court”) held that the grooming policy of Victoria Police, which banned male officers from having long hair and beards, was not discriminatory.

Facts

  • In January 2012, Victoria Police changed its grooming standard to ban male officers from having long hair and beards.
  • In July 2012, the new grooming standard was enshrined in changes to the Police Regulation Act 1958 (Vic) (“PR Act”).
  • In August 2012, Victoria Police informed Mr Kuyken, who had a goatee, that he was to comply with the grooming standard, lodge a complaint with the Victorian Civil and Administrative Tribunal (“VCAT”) or face disciplinary action.
  • Mr Kuyken lodged a complaint with VCAT alleging that he had been discriminated against on the basis of his physical features contrary to the Equal Opportunity Act 2010 (Vic) (“EO Act”).

Decision

  • The Court upheld VCAT’s decision to dismiss Mr Kuyken’s claim.
  • Although it was accepted that facial hair constituted a physical feature under the EO Act, that the grooming standard entailed differential treatment based on that physical feature, and that the threat of disciplinary action constituted less favourable treatment against Mr Kuyken, the grooming standard was not unlawfully discriminatory because it was permitted by the PR Act.
  • The Court held that the PR Act granted the Chief Commissioner of Victoria Police an “explicit statutory power to superintend and control matters affecting the appearance of members of the police force” and that that power was “plain and unambiguous”.

Key Takeaways

  1. Know the legal and factual context: In crafting policies on workplace appearance, employers must be aware of their obligations under anti-discrimination legislation and the Fair Work Act 2009 (Cth), as well as their obligations under WHS legislation.
  2. Combine culture and contract: By making employees aware of their obligations with respect to organisational reputation and developing policies which promulgate a well-defined vision of organisational culture, employers can give themselves room to move in regulating employee appearance.
  3. Maintain fairness in disciplinary procedures: Employees must be given a chance to change conduct which violates policies on workplace appearance lest any ultimate termination of their employment be held unfair.