Anonymous Tweeting Runs Foul of Obligation to Protect Public Sector’s Reputation

Joanna Knoth, Executive Counsel

Comcare v Banerji [2019] HCA 23 (7 August 2019)

The High Court has upheld an appeal by Comcare against a finding by the Administrative Appeals Tribunal (the “Tribunal”) that the termination of a public servant’s employment, for breaching the Australian Public Service Code of Conduct (the “Code of Conduct”) was unlawful.

Ms Banerji was employed by the Department of Immigration and Citizenship (the “Department”). During her employment, she published over 9000 tweets regarding matters relevant to the Department, using an anonymous twitter handle. The tweets were critical of the Department, its employees, its policies, Government and Opposition policies and members of Parliament.

The Tribunal found that "[s]ome of the tweets are reasonably characterised as intemperate, even vituperative, in mounting personal attacks on government and opposition figures". At least one tweet had been published during Ms Banerji’s working hours.

After investigating the matter, the Department found the tweets constituted a breach of the Code of Conduct and terminated Ms Banerji’s employment.

Ms Banerji subsequently lodged a claim for compensation under the Safety, Rehabilitation and Compensation Act 1988 (the “Compensation Act”) for an "injury" arising out of the termination of her employment.

This claim was rejected by Comcare on the basis that termination of Ms Banerji’s employment was reasonable administrative action taken in a reasonable manner. Accordingly, Ms Banerji was determined not to have suffered an injury within the meaning of the Compensation Act.

Implied freedom

The High Court noted that the Tribunal approached the matter on the basis that the implied freedom of political communication was a “personal right”, similar to the freedom of speech granted by the Constitution of the United States. The High Court held that this approach was incorrect, and that the implied freedom only extends as far as is necessary to preserve and protect the system of representative and responsible government mandated by the Constitution.  That is, the implied freedom of political communication is not a personal right, but rather a limitation on the power of the Parliament to make laws which impact on the freedom.  The Court specifically noted:

“ … Accordingly, although the effect of a law on an individual's or a group's ability to participate in political communication is relevant to the assessment of the law's effect on the implied freedom, the question of whether the law imposes an unjustified burden on the implied freedom of political communication is a question of the law's effect on political communication as a whole. …”

The High Court held that the freedom will not necessarily be breached even if a law significantly restricts the ability of an individual or a group of persons to engage in political communication. The High Court also rejected Ms Banerji’s argument that the anonymous nature of the communications excused her conduct, finding that damage to the Department could occur regardless of whether the author’s identity was exposed.

What does this mean for the Fair Work Act 2009?

To date, the general protection in the Fair Work Act 2009 prohibiting employers from taking adverse action against an employee because of their “political views” has not been tested.

While confined to its facts, the Banerji decision suggests that, if tested, the general protection will not extend to providing employees with an unfettered right to publicly express their political views, at least in circumstances where those views are inconsistent with the employee’s obligations to their employer.

However, employers should proceed with caution. The decision is not authority for the proposition that every employee who broadcasts political (or other) views that are inconsistent with their employer’s views can be dismissed. If an employee engages in such conduct, employers will need to consider all the relevant factual circumstances before deciding what, if any, disciplinary action is appropriate. Importantly, employers should ensure:

  • their contracts of employment and employment policies provide clear direction to their employees with respect to the conduct, including social media usage, that is not acceptable;
  • that conduct which is unacceptable to the employer (and therefore prohibited by the contract or policies) has a legitimate and reasonable connection to the employer’s business and the employee’s role; and
  • employees and all new-starters are provided with regular and comprehensive training with respect to those policies.

 

Dying for Change? Potential New Industrial Manslaughter Laws

Daniel Anstey, Graduate Associate

DYING FOR CHANGE – NEW INDUSTRIAL MANSLAUGHTER OFFENCES

Background

The recent and unprecedented jailing of a director in Queensland under newly-enacted offences in the Work Health and Safety Act 2011 (Qld), serves as a strong warning to organisations that the landscape has shifted when it comes to penalties for WHS offences.

In the wake of several highly-publicised workplace deaths there has been a strong push to introduce industrial manslaughter offences into WHS legislation across Australia. Alongside offences already in force in Queensland and the ACT, amendments are currently making their way through the Victorian and South Australian Parliaments. Although yet to confirm a position, NSW is the state with the highest occurrence of workplace deaths and is likely to follow suit.

Furthermore, Safe Work Australia’s Boland Report Review of the model WHS Laws and the Senate Inquiry into Industrial Deaths, both recommend the introduction of such offences.

Penalties

The Boland Report recommends that potential penalties for employers negligently causing death should be increased. This is certainly the case with the Victorian Government’s proposed law, with companies facing fines of up to $16 million and senior officers in breach their duty of care facing up to 20 years’ jail time.

Another recommendation of the Boland Report is a prohibition on insurance policies which purport to cover liability for monetary penalties under WHS legislation.

How can organisations protect against liability for industrial manslaughter?

Review your organisation’s WHS system and policies: The best way to protect your organisation and its senior officers from liability, is to ensure that your WHS policies and management systems are comprehensive. This will be particularly important regarding the liability of an organisation for the actions of its senior officers. An ability to demonstrate that an officer was engaging in conduct outside the scope of his employment may potentially save your organisation millions in penalties.

Review your workplace’s ‘WHS culture’: Poor work-place culture and attitude towards safety has been a large contributor to many of the tragic incidences of workplace deaths. Cutting corners and saving costs should never be allowed to take precedence over safety. Cultures and attitudes can be hard to change once ingrained in an organisation, and the example must be set from the top.

Ensure due diligence from directors and senior officers: As directors and senior officers with a duty of care to workers may be personally held accountable, they must be thorough with their due diligence to avoid potential prison time. This includes:

  • Having an active role in planning and implementing health and safety initiatives, or if this is not the officer’s role they should make decisions which allow for the appropriate measures to be taken.
  • Being aware of all officers who have WHS obligations, and whether relevant officers are adequately trained and qualified,
  • Ensuring that directors and senior officers understand the nature and extent of their WHS obligations, and ensuring that these obligations are met.
  • The collection of data and reports to guide WHS decision making in an organisation.
  • Frequently consulting and receiving feedback from workers on any WHS concerns they may have within the organisation.

Review incident response plans: While accidents may happen, to minimise legal implications, ensure that your organisation has clear processes in place for when an incident occurs.

Review insurance and risk allocation: As mentioned, the Boland Report not only recommends a significant increase in potential penalties, but also a prohibition on covering the risk through insurance. Make sure to be aware of any changes in this space to avoid severe financial consequences for your organisation.

Conclusion

Despite its harsh appearance, an offence of industrial manslaughter is intended to incentivise businesses with poor WHS cultures to improve and it is hoped it will be an effective deterrent to the kinds of practices that result in tragic workplace deaths.

If you require advice on how to prepare your organisation for these changes, please feel free contact People + Culture Strategies on (02) 8094 3100.

 

Switching Off – “The Right to Disconnect” from Work-Related Communication

Daniel Anstey, Graduate Associate

THE RIGHT TO DISCONNECT?

Most of us in 2019 have heard the clichéd aphorism that smartphones are “blurring the lines” between the workplace and the home, and many of us have experienced this ourselves to some degree. For the modern-day employee, it is becoming second nature to type out an email after dinner or to read “Microsoft Teams” messages while brushing your teeth.

Advances in smartphone technology, and the proliferation of innovative work-related apps have greatly improved the connectedness, productivity and flexibility of workplaces. However, it is becoming clear that being constantly connected in this way can come with a catch. Research has shown that workers who are “always on”, tend to have higher levels of stress and anxiety, and a worse quality of sleep leading to burnout and exhaustion. Indeed, it has been shown that the mere expectation of availability can increase strain for employees and their families, and negatively impact mental health.

The question also arises whether workers are being adequately remunerated for such after-hours work, potentially undermining the historical progress in reducing and limiting the maximum work week. It follows that regulation of the labour market has become more difficult, especially in terms of enforcing the National Employment Standards, calculating hours worked and extracting correct taxation.

But what can we do about it? Are we to all remain at the beck-and-call of the work email at all hours? Is the sanctity of the home and good old-fashioned peace and quiet doomed to fall victim to the indomitable rise of the smartphone?

What can the law do about this?

Several countries have begun to address these concerns by creating a new human right – the right to disconnect. France led the way in 2016 with the famous El Khomri law. Part of the Country’s reformation of its labour laws included a right for employees and unions to negotiate arrangements and policies on technology use outside of the workplace to protect employees’ personal and family time.

The changes have been immensely successful and been used as a model for similar laws subsequently implemented in Italy, Germany, Spain and the Philippines, with dozens more countries currently debating similar bills in Parliament.

Surprisingly, even in the city that never sleeps, the New York City Council is currently debating a bill which would go beyond the El Khomri law to prohibit companies with over ten employees from requiring employees to respond to after hours communications.

Although there has not yet been much discussion on the topic in Australia, it will surely be a matter of time before it is on the horizon, especially since the International Labour Organisation has recently recommended the implementation of such a right in their 2019 report Work for a brighter future – Global Commission on the Future of Work.

Enforcement issues?

While enforcement may be difficult, such laws will have served their purpose if they can change cultures and attitudes in workplaces and facilitate fruitful discussions to give employees what the ILO refers to as time sovereignty.

Differing methods of enforcement have been adopted in France, with some employers simply encouraging workers not to check emails after hours, and others going as far as setting their internal servers not to route emails to employees who are off work.

Concerns have been raised that legislating limits on around-the-clock communications may hurt a company’s bottom line. However, the ILO suggests that providing employees with greater time sovereignty may result in improved health and well-being which in turn may have a flow on effect to the productivity of an organisation.

Annual Wage Review 2018-2019

Rocio Paradela, Graduate Associate

Minimum wage up by 3% from 1 July 2019

On 30 May 2019, the Fair Work Commission (the “FWC”) handed down the decision in its annual wage review.

From the full pay period on or after 1 July 2019, the national minimum wage will be $740.80 per week (or $19.49 per hour). This represents an increase of $21.60 per week.

Following the decision, minimum wage rates in modern awards will be increased by 3%.

What does this mean for employers?

  • Subject to the requirements of relevant modern awards, enterprise agreements and employment contracts, from 1 July 2019, employers must ensure that their full-time employees are paid at least $740.80 per week (or $19.49 per hour).
  • Employers must be aware of the award or agreement (if any) that applies to their employees and ensure wages are paid pursuant to it, noting that minimum wage rates in modern awards will be increased by 3%.
  • An employer who fails to pay wages in accordance with the national minimum wage order or requirements of a relevant award or agreement will be exposed to liability for breach of the Fair Work Act 2009 (Cth).

 

International Bar Association (“IBA”) Annual Employment and Diversity Law Conference 2019 Copy

George Stent, Paralegal 

At the IBA’s recent Annual Employment and Diversity Law Conference, Founder and Managing Principal of People + Culture Strategies, Joydeep Hor was a guest speaker on the topic of Artificial Intelligence (“AI”) bias and data transparency in the legal workplace. Joydeep is Secretary of the IBA Diversity and Equality Law Committee, and he was joined by guest speakers from Latin America, Continental Europe and South Asia. Joydeep spoke to the difficulties that AI presents for managers and HR professionals in terms of the potential for inconsistent treatment, unequal opportunities and ultimately, unlawful discrimination, from the bias of AI in the workplace.

What is AI?

 AI refers to digital computers performing tasks that would usually be performed by “intelligent beings” such as people. At the conference, Joydeep described how AI achieves this by being similar to the neuron connections in the human body. These connections are called synapses and form a complex network. It is through this network that the brain receives and processes information enabling the human to learn. He explained that certain branches of AI work with “artificial neural networks”. It is these programs that imitate the functioning of the human brain. Information is then entered as input on one side, processed, and the result is output on the other side.

 Advantages and Opportunities of AI in the workplace

All businesses, including law firms are investing in AI technology. The Wall Street Journal estimates that spending on AI by companies will grow from $8 billion in 2016 to $47 billion by 2020 – which is an almost 600% increase. Joydeep attributes this increase to AI’s ability to optimise business processes by enhancing efficiency and automating time consuming administrative tasks. For example, in a legal context, AI is able to review contracts and undertake legal research almost instantly. One such software is “ROSS Intelligence”, which was used in a recent test where a partner at a law firm was able to find a matter that was identical to the firm’s case almost instantly, while his own research took ten hours. Joydeep and the panel noted that the research was not only efficient, but highly accurate.

However, at the conference, Joydeep questioned whether productivity control is automatically accompanied by greater effectiveness at the workplace. In making this point, Joydeep gave the example of the Henn Na Hotel, a hotel in Japan almost entirely staffed by robots. The hotel, shortly after opening, had to dump half of the robots due to them “annoying” the guests, not being capable of the jobs they were designed for, or creating more work for their human counterparts.

Risk of AI in the Workplace

 Joydeep also raised the impact that AI has on the hiring, firing and promotion decisions of HR professionals. AI has been introduced recently to screen CVs to find the best possible applicant. Joydeep therefore raised how the lack of transparency in recruitment decisions may cause a problem for employers. In illustrating this point Joydeep highlighted that the vast increase in data sources may result in employers not being aware of what information has been used to make recruitment decisions and therefore what risks may arise. This problem is compounded by the fact employers and work councils often do not understand the numerical codes according to which the algorithm acts. This may mean employers cannot guarantee that an AI system has not made a recruitment decision that does not carry a risk of a discrimination claim. Joydeep recommends that in order to prevent these claims from arising employers should monitor the data input at the very initial levels and regularly review the systems they use. He suggests that employers using AI should prepare themselves to explain why one applicant was hired and another one rejected.

 

Embracing a new approach in handling challenging employment grievances, disciplinary matters and terminations

Roxanne Fisch, Senior Associate

People + Culture Strategies Founder and Managing Principal, Joydeep Hor recently gave a thought-provoking and well-received presentation to leading HR professionals on how employers should rethink handling discipline, termination and grievances in the workplace. In taking the audience through ten key guiding principles, HR leaders were provided with a strong foundation to deal with challenging employee relations situations.

The Challenge

Every HR professional can relate to being asked to reflect on the most challenging employment relationship they have had to deal with. In having this scenario at the forefront of their mind, Joydeep tasked the audience with considering what it was that made it difficult and what tools they could have incorporated that might have yielded a different outcome.

Ten Guiding Principles

The ten guiding principles set out by Joydeep were in strong contrast to how a traditional law firm would approach handling challenging employee relations situations. The focus should be shifted from a compliance-based approach, which tends to view these situations in a vacuum, to an approach which considers the whole context and environment in which it occurred. As noted by Joydeep, this is particularly important as these days people are far better informed about their workplace rights then they used to be, and issues are becoming more prevalent earlier in the employment relationship. The conversation, he surmised, needs to be reframed and his guiding principles provide a practical toolkit in being able to do so.

1. Embrace quadrant methodology
Managing people should be undertaken through a wholistic approach. Instead of simply focusing on the commercial aspects of a decision, consideration should be given to each of the four quadrants: commercial; legal; psychology and sociology. It is often these last two quadrants which are overlooked, yet the importance of understanding how the person thinks or feels as well as considering the bigger impact on the organisation can lead to better outcomes in resolving the issue.

2. Embrace the “Kingdom”
Joydeep provided the audience with the powerful analogy of viewing the workplace as a kingdom, where the ruler (employer) is entitled to impose any rules (policies) they want to apply in their kingdom (of course within limits), the ministers (managers) are to ensure the rules are complied with and the ruler is entitled to evict anyone they wish provided they do so in the right way. The implementation of appropriate company policies are important to ensure the kingdom runs smoothly.

3. The importance of substance over process
HR is often viewed as process driven rather than substance. It is important to challenge this perception so that it becomes more about substance and value over process.

4. Grievances: Understand the core of the issue
HR professionals must seek to understand the root of the grievance. Getting better at going beyond what is being said to find out the core of the issue will assist in being able to improve it.

5. Little things matter
In people management issues, it is always necessary to think about how the employer’s actions will make that person feel. Empathy and common decency can go a long way.

6. Explain, don’t convince
In handling challenging performance related situations, the aim is to infuse your language with words that seek to explain why you have come to the view that you have.

7. Honour the promises you make
Employers often make promises to employees, whether it be at induction, by way of company policies (which should be limited wherever possible) or in their values statement. These promises should be followed through with.

8. Assume nothing and take nothing for granted
This principle is particularly relevant in relation to confidentiality. Whilst HR professionals often do things in a certain way because we are often fixated on the legal quadrant, it is worthwhile investing more time in optics management and counter-messaging.

9. Right and wrong have nothing to do with it
In the context of workplace investigations, it is very easy for the investigation to take on a life of its own where the investigation itself becomes a pseudo institution and the employee’s concerns about their job security is thereby intensified. To avoid this, HR professionals should commit to undertaking an investigation quickly, with minimal fuss and disruption and form a view on the balance of probabilities.

10. Specifics around termination
Often the most unrecognisable yet dominant category in termination decisions is based on the aspect of a lack of a cultural fit in the organisation. More energy should be invested in determining an answer to the question, “what does good look like” in the organisation. If employers invest in answering this question, they can then create the infrastructure necessary to put them in the best possible situation in dealing with termination decisions.

In providing these ten guiding principles, Joydeep provided HR professionals with practical advice to implement within their organisations straight away. People + Culture Strategies can assist with the implementation of Joydeep’s powerful people management strategies. Please feel free to contact us if you are interested on (02) 8094 3100.

Ray’s Rage – Managing Bullying and Harassment by a “Star Employee”

Daniel Anstey, Graduate Associate

The recent allegations of bullying against star radio host Ray Hadley, serve as a reminder to employers of the potential dangers posed by inaction towards complaints of bullying by a star employee. Indeed, the greater the status of an employee, the more an organisation stands to lose if allegations of bullying are not dealt with in line with best practice.

The “fresh allegations” which have surfaced this week, refer to alleged events which occurred many years ago, even dating as far back as 1984, showing that these issues require careful management and cannot simply be swept under the rug.

What are the possible consequences of bullying/harassment?

Bullying has become a buzzword in recent times and any claims against a public figure can attract a frenzy of media coverage. This means that some victims may be hesitant in coming forward with claims for fear of unwanted attention on top of what they might already be dealing with.

Conversely, victims may be motivated to go to the media by the desire to enact revenge, extract financial compensation or take the opportunity to have their moment in the spotlight. This can result in damage to the brand and reputation of an organisation, or of any individuals caught up in the situation.

Employers must be wary of the attitude that star employees are worth protecting from these sorts of allegations, as this will benefit no-one in the long term. If exposed, a cover up will damage the brand and reputation of both employee and employer, and an organisation risks seeing valuable employees walk out the door if they feel that fair procedures are not in place.

Workplace bullying can cause lasting physical, mental and psychiatric harm to victims and their close ones. This may also have a flow-on effect to productivity and culture and within an organisation.

Furthermore, if a victim suffers psychiatric or physical harm and sues in tort, the employer may be found vicariously liable, as well as breaching their own non-delegable duty of care not to expose employees to reasonably foreseeable risks of harm. For example, in the case of Sneddon v The Speaker of the Legislative Assembly an employer was held liable to the tune of $438,613, for past and future economic loss arising when a senior manager was found to have bullied an assistant.

So, what can you do?

It is now increasingly important for employers to manage proactively the reputational damage which can accompany allegations of bullying, and not to be seen to be tolerating or turning a blind eye because a particular employee is a well-known or highly successful individual.

Dealing with the issues and discontent resulting from bullying, internally and before they escalate is crucial in avoiding a situation such as the one 2GB is currently facing. The best practice is to have very clear policies prohibiting bullying as well as accessible and confidential procedures for handling complaints and managing investigations.

Employees who believe they are being bullied also may apply to the Fair Work Commission’s anti-bullying jurisdiction for an order to stop the bullying, but it is always preferable for the parties to deal with the issues proactively themselves.

If you require advice on best practice policies and procedures for your organisation, or on bullying and harassment in the workplace please feel free contact People + Culture Strategies on (02) 8094 3100.

Asians with PhDs: Managing Perceptions of “Difference” in the Workplace

Justin Peñafiel, Senior Associate

Have you recently employed any “Asians with PhDs”? Recent political rhetoric suggests it is a new phenomenon to have a diverse workforce, but whether in metropolitan Sydney, or regional Australia with its skilled labour shortages, nothing could be further from the cosmopolitan truth.

However, unlike most political offerings, here are some practical tips for understanding why controversy about equality and diversity never fades away despite years of promoting it, and managing what people feel and think about their personal differences in the workplace, in spite of strategies to support them.

Does discrimination still occur with “equality”?

This article could have easily been another diatribe about anti-discrimination laws and what not to do, but unless they want to Make America Great Again, what manager actively treats anyone differently or unfavourably based on their physical appearance, apparent cultural background, or a whole host of protected attributes under section 351 of the Fair Work Act 2009 (Cth), and other anti-discrimination laws?

It begs the question, if managers do not actively discriminate against certain employees on an unlawful basis, and HR has been promoting equality and diversity for decades, why the ongoing controversy about “Asians with PhDs” and persistent talk of shattering ceilings of the glass, bamboo and/or pink varieties? The ongoing sensitivity suggests that it is useful to apply two steps from what we call of our four-quadrant model – “Sociology” and “Psychology”, or in other words:

  • considering what people may feel and think about policies and procedures to promote outcomes of equality and diversity (or lack thereof); and;
  • considering how the policies might look internally and externally to different audiences?

Applying the PCS People Management Quadrants: The gap between equal opportunity and hidden differences

There’s no better place to start than the beginning of an employment relationship, the recruitment phase. We could have easily commenced this section with, “statistics show that X percentage of Asians with PhDs change their name when applying for jobs”, but it may be more constructive to ask, “how does it look if people feel the need to change their name to apply for a job at our organisation?”, and “what must they be feeling and thinking about our company if they need to change their names to get a job?”.

Changing one’s name on a resumé is easy, but other differences are too difficult or perhaps impossible to hide – gender, pregnancy, ethnicity, even sexuality. According to the law, these points of difference shouldn’t matter, and managers generally do what they can to convey a sense of equality in the workplace. However, employees may still not see or feel a sense of “equality” despite all that you might have done to promote it. Conversely, employers may not see, know or think to ask about inequality that their employees’ sense or feel because of everything that they have done to promote it. Knowledge is power, and hidden differences can reduce it.

What can we do about differences that we cannot see? Auditing culture, policies and procedures

Asking these questions from the People Management Quadrants could ultimately lead to some uncomfortable home truths for your organisation – what must employees be seeing or thinking (about perceived barriers in the workplace), if they feel that they cannot disclose differences that their managers cannot see, but which might affect their experiences at work, for example, family obligations, domestic violence, cultural differences (e.g.: cultural differences with communicating with management), or their sexual orientation? What can we do about it? Misconception can lead to claims which may have no substance, but which aren’t any less painful to investigate or defend.

Enhancing Employee Engagement and Leadership Development, Coaching and HR Executive Education

People + Culture Strategies can assist you with Strategic HR Consulting in a variety of ways, such as performing a “Culture and Effectiveness” audit which combines a series of staff interviews and collection and review of staff data, or a review of your organisation’s people strategy tailored to your organisation’s needs. We also offer Leadership Development, Coaching and HR Executive, to enhance and improve your skills with engaging and managing your diverse workforce.

If you are interested in ways to engage better with your employees, or any of our traditional services with legal advice, investigations and dispute resolution, please feel free to contact People + Culture Strategies on (02) 8094 3100.

Salaried Staff Shake-Up

Donna Trembath, Executive Counsel

Is your organisation ready for the new rules?

The Fair Work Commission (“FWC“) has decided to vary 22 modern awards to include stricter requirements for salaried employees.

Employers who prefer the administrative ease of paying annual salaries rather than award rates may be surprised by the new rules.

Which occupations and industries are affected?

The decision handed down on 27 February 2019 applies to 22 modern awards including a number of occupational awards, for example the Clerks Award and the Health Professionals Award. The affected industries include restaurants, hospitality, banking, finance and insurance, contract call centres, legal services, mining, salt, telecommunications, water, wool, broadcasting and recorded entertainment, local government, manufacturing, pharmacies, rail, pastoral and horticulture.

What are the new rules

The FWC is in the process of dividing the 22 relevant awards into “Category 1” (relatively stable hours) and “Category 2” (highly variable hours, or where significant penalty rates apply to ordinary hours).

Category 1 awards (including the Clerks Award) will receive the least burdensome model clause. Even so, subject to specified modifications for specific awards, it will require an employer who elects to pay an annual salary that is inclusive of overtime, penalty rates, allowances and loadings to:

  • detail the method by which the annualised wage has been calculated including specification of each separate component of the annualised wage and any overtime or penalty assumptions used in the calculation;
  • set outer limits on the number of penalty-rate attracting hours that an employee may be required to work each pay period or roster cycle (e.g. no more than 3 hours of work on a Sunday each week);
  • set outer limits on the number of overtime hours that an employee may be required to work each pay period or roster cycle (e.g. no more than ten overtime hours per week);
  • pay employees separately for hours not covered by the annual salary, at award rates;
  • conduct a reconciliation every 12 months (and on termination of employment) to calculate the remuneration that would have been payable to the employee under the award, and pay any shortfall to the employee; and
  • keep records of start and finish times and unpaid breaks, to be signed by the employee each pay period or roster cycle.

Category 2 awards will, subject to specified modifications for specific awards, receive a more onerous model clause under which an annual salary can only be provided if the employee agrees in writing. The employee will have the right to terminate the annual salary arrangement with 12 months’ notice and revert to award rates.

When will it take effect

The FWC is still finalising the changes and considering whether transitional provisions are needed. Written submissions are due on 27 March 2019.

Concerns for employers

Some of the criticisms of the new rules include that they are impracticable for small business, obviate the benefit of administrative simplicity which employers seek to obtain by paying an annual salary, and that salaries are often established having regard to market conditions rather than award-related matters.

While various employer parties submitted to the FWC that provisions that are too costly or burdensome will not be used, in our view annual salaries are here to stay. Employers should prepare to adapt to the changes as the FWC has come down firmly on the side of workers and preventing exploitation and wage theft.

Recommendation

PCS recommends reviewing how your organisation employs salaried employees and manages its award compliance and record keeping obligations. It is important that if you pay an employee an annualised salary where there is an underlying modern award, that you comply with the award’s strict requirements once they come into effect. Given other recent changes regarding failures to keep proper employee records, record-keeping requirements for all employees (including non-award employees) should also be reviewed. Please contact us to discuss further.

Here comes 2019: Changes to Remember

Rocio Paradela, Graduate Associate

With the start of the new year upon us and everyone slowly getting back to work, it’s time to reflect on what changes organisations need to keep in mind in 2019.

Fair Work Amendment (Casual Loading Offset) Regulations 2018

The new Fair Work Amendment (Casual Loading Offset) Regulations 2018 (Cth)1 came into force on 18 December 2018. These amendments are the direct result of the Full Court of the Federal Court of Australia decision in Workpac Pty Ltd v Skene2 (discussed in our previous blog) and seeks to address employers’ concerns that wrongly classified employees may be able to “double dip”.

Under the amendments, employers who have wrongly classified an employee as casual, may be able to offset the amount already paid as a casual loading to satisfy entitlements found to be owing to the employee under the National Employment Standard (“NES”).

The Regulation will only apply if all of the following conditions are met:

  • a person is employed on the basis that they are a casual employee;
  • the employer pays the employee an amount (the casual loading) that is clearly identifiable as an amount paid to compensate the employee for not having one or more relevant NES entitlements;
  • during all or some of the employment period, the person was in fact an employee other than a casual employee; and
  • the person makes a claim to be paid an amount in lieu of one or more of the relevant NES entitlements.

The new regulation applies to time worked both before and after 18 December 2018.

Modern Slavery Act

Following our blog on 15 October 2018, the Modern Slavery Act 2018 (Cth) has been passed by the Commonwealth Parliament and commenced on 1 January 2019, imposing new reporting requirements on employers.

Changes in Modern Awards

As part of the Fair Work Commission (“FWC”) four yearly review of modern awards, there have been several changes to some modern awards.

Termination Payments

A new termination payment clause has been included in some modern awards. This clause imposes a requirement that on termination an employer must pay an employee’s outstanding wages and other entitlements no later than seven days after the day the employment was terminated. Common modern awards that now have this clause include:

  • Clerks – Private Sector Award 2010;
  • General Retail Industry Award 2010; and
  • Banking, Finance and Insurance Award 2010.

Casual Conversion

On 1 October 2018, a model casual conversion clause was inserted in 84 modern awards (with others containing a modified clause or already having such a clause). This clause allows certain casual employees to request their employment be converted to permanent, provided they satisfy certain conditions. The employer can refuse to convert a casual employee to permanent status where the employer has consulted with the employee first, there are reasonable grounds to do so, and the refusal is put in writing within 21 days of the request being made.

Flexible Work

A new clause that supplements the flexible working arrangement provisions of the Fair Work Act 2009 (Cth) (the “FW Act“) has also been introduced into modern awards. In our blog of 2 October 2018 we explain the implications of this new clause.

It is worth noting that the FWC will no longer be required to conduct four-yearly reviews of modern awards as the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 20185 passed both houses of Parliament on 5 December 2018 and received Royal Assent on 11 December 2018.

Family and Domestic Violence Leave into NES

The Fair Work Amendment (Family and Domestic Violence Leave) Act 20186 took effect on 12 December 2018. The FW Act now includes the right for workers to take up to five days of unpaid family and domestic violence leave per year as part of the NES. This extends the right to all workers, beyond the coverage of the award system.

If you require any advice as to how these legislative changes may affect you or your organisation, please feel free contact People + Culture Strategies on (02) 8094 3100.


1 Fair Work Amendment (Casual Loading Offset) Regulations 2018 (Cth)
2 http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2018/2018fcafc0131
3 4 yearly review of Modern Awards
4 Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017
5 Fair Work Amendment (Family and Domestic Violence Leave) Act 2018