​Assessing compensation for contraventions of the Racial Discrimination Act

recent decision of the Federal Circuit Court outlines the principles to be applied in assessing the amount of compensation payable for contraventions of the Racial Discrimination Act in the workplace.  

In the initial determination of liability, Australia Post was found to be vicariously liable for conduct that included racial taunts such as calling the Sri Lankan applicant a “f**king black bastard” and describing his work as “slave labour”. These comments restricted his right to a work environment free of racism. 

Despite what was described as their “exemplary policies”, Australia Post was held vicariously liable as they failed to take reasonable steps to investigate the applicant’s complaints.

In the proceedings with the respect to assessment of damages, the applicant sought $100,000 for general damages and a further $100,000 in aggravated and/or exemplary damages. Ultimately the applicant was awarded $40,000 in compensation as the court viewed the abuse as extensive and significant. 

In response to the claim for aggravated damages, the Court observed that if Australia Post had acted promptly on the applicant’s complaints, the damage to the applicant would have been lessened, but found that to award additional damages would constitute “double dipping”. The court rejected the claim for exemplary damages on the basis that exemplary damages are only available for the most “egregious” cases in order to “punish a wrongdoer and deliver a measure of moral retribution or deterrence.” 

Lessons for employers: 

  • Exemplary policies and education initiatives will not prevent an employer being held to be vicariously liable if it fails to investigate a complaint that raises reasonable grounds regarding a contravention. 
  • The well-known case of Richardson v Oracle Corporation Australia Pty Ltd introduced new principles for the assessment of damages that were widely considered likely to result in higher awards for discrimination, however this has not yet eventuated in instances of contraventions of the Racial Discrimination Act. 
  • Very few Australian cases have led to awards of exemplary or aggravated damages.

Workplace gender equality reporting underway

Michael Starkey, Associate

With the beginning of April comes reporting season under the Workplace Gender Equality Act 2012 (Cth). Relevant employers have until 31 May 2016 to submit their reports, and this year brings a number of changes to reporting requirements.

Do I have to report?

All private sector employers who have employed 100 or more employees in Australia for any six months during the reporting period 1 April 2015 to 31 March 2016 are required to submit a report to the Workplace Gender Equality Agency (the “WGEA”).

All full-time, part-time and casual employees must be included in an organisation’s count of its employees, but from this year, independent contractors do not.

Changes to reporting requirements

From this year, relevant employers are no longer required to report remuneration data for their:

  • CEO;
  • managers more senior than the CEO and who report to a person overseas; and
  • managers employed on a casual basis.

However, there are new requirements for relevant employers to report on:

  • the number of appointments made, by gender and manager/non-manager status;
  • the number of promotions and resignations, by gender, employment status and manager/non-manager status; and
  • the number of employees who ceased employment at the end of a period of parental leave, by manager/non-manager status.

The WGEA hopes that this new data will “shine a light on drivers of workplace discrimination that ultimately lead to unbalanced outcomes for women such as gender pay gaps and a lack of women in management”.

Strategies for increasing women’s workplace participation

While data reporting and analysis is undoubtedly important, organisations should also consider more practical strategies they might implement to help improve gender diversity in the workplace. Such strategies might include:

  • leading from the top: senior leaders should articulate a clear vision for gender diversity, and organisations should adopt that vision in formal policies;
  • implementing flexible work practices: if feasible, allowing employees to work reduced or altered spread hours, or to work from home, can help increase the workplace participation of individuals with family or caring responsibilities; or
  • establishing recruitment targets for women: while strict quotas have the potential to be arbitrary, organisations may consider establishing recruitment targets (and analysing why they are not met if that turns out to be the case) to help overcome structural discrimination.

For help implementing strategies like these in your workplace, or for assistance meeting your reporting obligations, contact one of the PCS Team today.

Congratulations to PCS Team Member, Erin Lynch

People + Culture Strategies is pleased to announce that Erin Lynch has received the much deserved promotion to the role of Associate Director and in that capacity has now joined the Leadership Team of the firm.

Having been with us for over 3 years, Erin continues to be a tremendous asset to our firm, particularly through her development of client relationships and her mentoring of junior lawyers.

On behalf of the team at PCS we congratulate Erin on this promotion.

Congratulations to PCS Team Member, Michael Starkey

Congratulations to PCS Team Member, Michael Starkey who has recently been admitted to the New South Wales Supreme Court.

Michael joined People + Culture Strategies in February 2015 and is based in our Sydney offices. 

On behalf of all of PCS, we would like to wish Michael all the best in celebrating this important step in his legal career. 

Congratulations to PCS team member, David Weiler

Congratulations to PCS team member, David Weiler who has today been admitted as a Lawyer of the Supreme Court of New South Wales.

David has been with PCS since February and is participating in our 2015 Graduate Program, a two year development program which sees participants mentored by the PCS Senior Legal Team.

On behalf of the team at PCS, we congratulate David on this milestone in his career.

The Great Penalty Rate Debate Continues

The introduction of a new public holiday in Victoria this weekend (Grand Final Eve public holiday on 2 October 2015) and the imminent public holidays in other Australian states and territories have stirred further debate about penalty rates and their role in a modern workplace relations system.

Most Australians are excited about the prospect of a public holiday, and consumers expect that supermarkets, retailers, restaurants and cafés will still be trading on public holidays and weekends. For example, how would Melbournians fare if they weren’t able to get their usual piccolo latte while picking up a last minute outfit down Chapel Street for their Grand Final Day BBQ the next day? 

However, public holidays can come at an enormous cost to the national economy and business owners, with little thought given to matters such as who bears the increased cost of wages when public holiday penalty rates are applied. 

According to PwC Australia, the new Grand Final Eve public holiday alone may cost the economy as much as $852 million as a result of the closure of businesses that would normally be open on a Friday. 

The cost to businesses that remain open is also potentially significant, given that a majority of employees are likely to be entitled to penalties rates of as much as two and half times their regular wages for working on a public holiday. 

The Australian Government is under increasing pressure from stakeholders in affected industries (including retail, hospitality and entertainment) to make changes to the current penalty rates system, particularly with respect to new public holidays and Sunday penalty rates. 

In August of this year, the Productivity Commission’s draft report into Australia’s workplace relations framework was released. This included, amongst other things, recommendations that:

  • employers not be required to pay for leave or any additional penalty rates for any newly designated state and territory public holidays; and
  • Sunday penalty rates that are not part of overtime or shift work be set at Saturday rates for the hospitality, entertainment, retail, restaurants and café industries. 

Defenders of the penalty rate regime argue that it is necessary to compensate employees working “unsocial” hours and that the increase in revenue for businesses that attaches to public holidays largely offsets any increase in wages.

The position of those who support the removal of penalty rates is that, for many, what was once “unsocial” is now “preferred” as a result of the changing nature of society and work. For example, for many groups, such as university students, working weekends and public holidays often fits in better with their existing commitments. 

Further, with increases in technology and globalisation allowing people to work from anywhere at any time and across multiple time zones, the concept of a regular working week with set social and unsocial hours is becoming more and more diluted. 

It is also argued that it is far from guaranteed that businesses will experience sufficient increases in trade to offset the penalty rates that are payable. The alleged increase in revenue, unlike the resulting penalty rates, is not a one size fits all approach. 

With most workers having the day off on Friday in Melbourne and Monday in other major metropolitan areas (including Sydney), tumbleweeds are predicted to be rolling down the main streets of the CBD. This may not bode well for many café owners and retail outlets and others within affected industries. 

It is unlikely that these issues will be resolved in the immediate future and, while the debate continues, penalty rates still apply. It therefore remains critical for employers to understand and comply with their obligations in relation to penalty rates. 

PCS can assist you if you have any questions about your business’ obligations in relation to penalty rates or how to comply with them. 

Protected industrial action sends Melbourne off its rails

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. 

Update: Retrenched employees receive annual leave windfall

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

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.