Employment Law - Mid-sem assessment PDF

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FACULTY OF LAW AND BUSINESS Thomas More Law School North Sydney Semester 2, 2020 LAWS212 Employment Law Assessment Task 1 Name: Komal Kumar Word Count: 2510

Advise Edward on whether he is able to bring an unfair dismissal claim against Acme and the prospects of success in doing so. You are not required to advise on any other potential claim aside from in unfair dismissal for the purpose of this question.

Edward is employed in a small Western Australia town by Acme Engineering Pty Ltd and has been employed with them since the 15 November 2019, considering the events in question happened on the 10 June 2020 this would mean Edward was an employee of the business for 6 months and 26 days. In order to establish whether Edward will be protected from unfair dismissal the employee must be employed by a national system employer under section 14 of the Fair Work Act 2009 (Cth) (FW Act). A national system employer is “employers that are constitutional corporations in Western Australia (including Pty Ltd companies)”1, therefore Acme is considered a national system employer. Subsequently in order for an employee to be protected they must have completed the minimum period of employment and earn less than the high-income threshold or their employment must be covered by a modern award or their employment must be covered by an enterprise agreement.2 Under s. 383 of the FW Act3 Edward is able to make an application for unfair dismissal as he has completed the minimum six-month employment period. Considering the information provided regarding the events, there were twenty of Acme’s other employees who attended the party arranged for Edward. Under s.23 of the FW Act4 a small business is one that employees less than fifteen employees, in this case Acme has over fifteen employees. Although there is limited information surrounding the basis of these employees such as fulltime, part-time or casual due to the fact that Acme is considered a major employer in the local area for this purpose we can assume they are not a small employer.

1 Fair Work Commission, Benchbook Unfair Dismissals (Benchbook 1 July 2020) page 19 2 Ibid page 19 3 Fair Work Act 2009 (Cth) s 383 4 Ibid s 23

Under s.382 of the FW Act5 Edward will be considered to be protected from unfair dismissal as we have established under s.382(a)6 of the FW Act Edward has completed the minimum period with his employer. Under s.382(b)(i)7 Edward’s employment is covered by a modern award which is the Manufacturing and Associated Industries and Occupations Award 2010. Under s.382(b)(iii)8 of the FW Act Edward’s annual rate of earnings is less than the highincome threshold which for the period of 1 July 2019-30 June 2020 was $148,700 and Edward’s current salary is $130,000 (inclusive of super) plus a discretionary bonus of $10,000 which in total is still under the high-income threshold. Now that it has been established that Edward is protected from unfair dismissal under the FW Act9 in order to advise Edward on whether he can bring a claim against Acme Engineering Pty Ltd we must consider whether Edward has been unfairly dismissed under s.385 of the FW Act10 Under s.385(a) of the FW Act11 Edward has been dismissed as he received a letter during a meeting with the Head of Human Resources George that has advised him of the termination of employment. Secondly under s.385(b) of the FW Act it needs to be established that the dismissal was either harsh, unreasonable or unjust. Section 385(c) and s.385(d) of the FW Act12 do not apply to these circumstances. According to the information provided Edward and his manager Freda became intoxicated on 10 June 2020 at a work party which was on work premises. The party was to celebrate Edward’s 70th birthday and the food and drinks which included alcoholic drinks were provided by Acme.

After both Edward and Freda became intoxicated, they started racing fork-lifts at high speed which resulted in both the vehicles crashing into each other. Both Edward and Freda were

5 Fair Work Act 2009 (Cth) s 382 6 Ibid s 382(a) 7 Ibid s 382(b)(i) 8 Ibid s 382(b)(iii) 9 Ibid 10 Ibid s 385 11 Ibid s 385(a) 12 Ibid s 385(c)-(d)

equally involved in the incident and while Edward’s employment has been terminated, Freda received a formal written warning but was allowed to keep her job. To be able to consider whether the dismissal can be considered harsh s.387 of the FW Act13 needs to be studied. Under s.387(a) the reason for dismissal needs to be for a valid reason, which includes conduct which may have effect on the welfare or safety of other employees which in this case Edward’s actions did affect the safety of other employees.14 Section 387(b) of the FW Act15 states that before a termination is made a valid reason must be given to the employee in plain, clear and explicit terms which in this case did not happen. The letter provided to Edward only stated the notice period, and the date on which his employment will be terminated16. Although the incident which happened had occurred out of hours and there are only exceptional circumstances when employers are able to extend their right to supervise over their employees’ private activities. The notion of this has flowed through from the judgement of Appellant v Respondent17.

Key points provided in the judgment from the case of Rose v Telstra18 set out the relevant aspects which need to be considered whether the actions by the employee are relevantly connected to the employment relationship. The incident has caused damages to the employer’s interest and can be seen as conduct which is incompatible with the duty of the employee.19

The conduct by Edward may also be considered as an effect on the safety and welfare of other employees and this may be found to be a valid reason for dismissal under s.387(a) of the FW Act20. Under 1.07 of the Fair Work Regulation (FWR) ‘serious misconduct’ has been defined and regulation 1.7(b)(i) and regulation 1.7(b)(ii) state serious misconduct can be

13 Fair Work Act 2009 (Cth) s 387 14 Fair Work Commission, Benchbook Unfair Dismissals (Benchbook 1 July 2020) page 107 15 Fair Work Act 2009 (Cth) s 387(b) 16 Fair Work Commission, Benchbook Unfair Dismissals (Benchbook 1 July 2020) page 125 17 Appellant v Respondent Print R1221 (AIRCFB, MacBean SDP, Duncan SDP, Deegan C, 1 February 1999), [(1999) 89 IR 407 at p. 416]. 18 Rose v Telstra Corporation Limited Print Q9292 (AIRC, Ross VP, 4 December 1998) 19 Fair Work Commission, Benchbook Unfair Dismissals (Benchbook 1 July 2020) page 113 20 Fair Work Act 2009 (Cth) s 387(a)

considered as imminent risk to the “health of safety of a person”21 or “the reputation, viability or profitability of the employer’s business”22. The conduct of using the forklift while intoxicated did place a risk on Edward himself and others who were at the party. Considering the damage to the forklifts was only $200 there probably wasn’t an issue in regard to the profitability or viability of the business. The case of IGA Distribution (Vic) Pty Ltd v Nguyen23 has illustrated the fact that a termination can be seen as harsh or unjust if the employee has not deliberately caused the accident. In this case Edward was intoxicated although it was at an after-hours party and although the collision was due to him being reckless and careless, he had not deliberately intended on hitting the other forklift.24 Under s.387(b) of the FW Act25 the notification for dismissal was provided to Edward although under 3.387(c) of the FW Act there was no opportunity provided to Edward to respond to the termination decision. Once Edward was notified of the termination in the meeting George said, “This meeting is over” and provided Edward a letter. As seen in Wadey v YMCA Canberra26 the opportunity to respond for an employee provides them an opportunity to defend themselves which may in fact alter the outcome of the termination. Salvin v Horizon Holdings Pty Ltd27 is an example of where no opportunity provided for the employee to respond and although the reason for dismissal was reasonable the termination itself was unfair. Similarly, in the case of Ryan v Logan & Co Pty Ltd28the employee was dismissed solely by reading a termination letter in a meeting and the outcome of the meeting was found to be pre-determined which led to the termination to be found harsh. Similarly, it seems as though Edward’s termination was pre-determined.

21 Fair Work Regulation 2009 (Cth) regs 1.7(b)(i) 22 Ibid regs 1.7(b)(ii) 23 IGA Distribution (Vic) Pty Ltd v Nguyen [2011] FWAFB 4070 (Boulton J, O’Callaghan SDP, Ryan C, 9 September 2011), [(2011) 212 IR 141] 24 Ibid 25 Fair Work Act 2009 (Cth) s 387(b) 26 Wadey v YMCA Canberra [1996] IRCA 568; cited in Dover-Ray v Real Insurance Pty Ltd [2010] FWA 8544 (Thatcher C, 5 November 2010) at para. 85, [(2010) 204 IR 399] 27 Slavin v Horizon Holdings Pty Ltd [2012] FWA 5588 (Lee C, 2 August 2012) 28 Ryan v Logan & Co Pty Ltd [2011] FWA 161 (Cargill C, 11 January 2011)

An issue which may be of relevance is that Edward’s manager Freda had also crashed the forklift during the work party while intoxicated causing similar damage and is allowed to keep her job with a formal written warning. The circumstances surrounding both Edward and Freda’s actions are practically the same and as stated in Sexton v Pacific National (ACT) Pty Ltd29 the Commission must be satisfied that we are comparing “apples with apples”30. The case went on to further elaborate on that evidence must be provided that a proper comparison can be made, which in this case there were other employees present who may be able to provide witness statements. The fact that Edward has just turned 70 may also be a relevant factor when considering the termination as the Commission may take into account the fact that it may be very difficult for Edward at this age to apply for another job. Especially considering the references that will be provided to the new employer will notify them of the termination which may adversely affect Edwards chance of gaining employment.31 Acme is also in a small town in Western Australia where options for Edward to find employment may also be limited and this may also be taken into account as seen in Ricegrowers Co-operative Limited v Schliebs32. Under s.394(2)(a) of the FW Act33 an application needs to be made for the unfair dismissal remedy needs to be made within 21 days after the dismissal took effect, unless there are some exceptional circumstances which do not appear to be relevant in this case.

“The Fair Work Act 2009 is set up to favour employees over small businesses” – explain whether you agree with this statement by reference to any of the matters covered in Weeks 1 to 6.

29 Sexton v Pacific National (ACT) Pty Ltd PR931440 (AIRC, Lawler VP, 14 May 2003) at para. 36 30 Ibid 31 Ricegrowers Co-operative Limited v Schliebs PR908351 (AIRCFB, Duncan SDP, Cartwright SDP, Larkin C, 31 August 2001) at para. 26 32 Ibid 33 Fair Work Act 2009 (Cth) s 394(2)(a)

“The Fair Work Act 2009 is set up to favour employees over small businesses” this statement has been evident through the relevant legislation and minimum work standards that have been provided to employees after the introduction of the Fair Work Act 2009 (Cth) (FW Act). Section 3 of the FW Act34 provides the objective of the FW Act and gives us a better understanding of the framework and purposes for the Act. Section 3(b)35 of the FW Act provides a minimum guarantee and safety net to all employees who are covered by the Act. The introduction of the National Employment Standards (NES), national minimum wages and modern awards has allowed employees to assurance they cannot be taken advantage off. Therefore, placing weight on small businesses in ensuring all employees are treated fairly and there is blanket coverage for all employees across the board. Section 3(c) of the FW Act36 ensures basic guarantees to employees and also states that there can no longer be individual employment agreements and it is not permissible for any individual agreements to be part of the fair workplace relationships systems. Section 3(d)37 of the FW Act ensures to promote work life balance by providing flexible working arrangements to allow employees to meet their family responsibilities. The fifth objective of the Act under s.3(e) of the FW Act38 enables there to be fairness throughout the workplace and prevention of discrimination and unfair treatment in the workplace. There is also an obligation for employers to provide effective dispute resolutions and to resolve grievances.

Part 2-2 of the FW Act declares the NES and they apply to all National System Employees which set out all the minimum working conditions that employees must provide for their employers. When a new employee commences work the employer is required to provide them ss124-125 of the FW Act39 along with the Fair Work Information Statement. NES sets out minimum wages for all award/agreement free employees under s.285(c) of the FW Act, for employees who are covered by enterprise agreements or modern awards the 34 Fair Work Act 2009 (Cth) s 3 35 Ibid s 3(b) 36 Ibid s 3(c) 37 Ibid s 3(d) 38 Ibid s 3(e) 39 Fair Work Act 2009 (Cth) ss 124-125

minimum wages are set out in either their agreement or award. The minimum rate is reviewed by the Fair Work Commission (FWC) every year and the rates for full-timers/part-times vary from casuals and juniors, trainees and employees who have a disability.40

Section 62 of the FW Act sets out maximum weekly hours and an employer must not request any employee to work more than the required hours unless it is reasonable to do so. Employees do also have the right to refuse any additional hours and the reasonability is determined under s.62(3) of the FW Act41. NES allows employees who have had at least 12 months of continuous service to request flexible working arrangements from their employer which can include caring responsibilities, victims of domestic violence, individuals with disabilities or individuals who are over the age of 55. These flexible work arrangements can be made under s.65 of the FW Act42. Sections 114 and 116 of the FW Act43 allow employees to be absent from work on a public holiday and be paid for their absence at their ordinary rate, and the employer can only request and employee to work if the requirement is reasonable. NES sets out under s.87 of the FW Act44 minimum annual leave requirements for full-time and part-time employees, s.96 of the FW Act45 provided personal and carer’s leave entitlements. Legislation further sets out minimum requirements for compassionate leave, parental leave, long service leave, community service leave, family and domestic violence leave.

To further recognise that employees are favoured over small businesses through the FW Act it is important to consider minimum notice periods for employers under s.117(1) of the FW Act46 which states that notice given to employees of termination must be in writing and under s.117(3)(a) of the FW Act47 it sets out minimum notice periods that need to be provided to employees. 40 Ibid s 294 41 Ibid s 62(3) 42 Ibid s 65 43 Ibid s 114,116 44 Ibid s 87 45 Ibid s 96 46 Fair Work Act 2009 (Cth) s 117(1) 47 Ibid s 117(3)(a)

Modern awards are an integral part of employment in Australia and are federal award systems which are industry based. Part 2-3 of the FW Act covers awards and the Fair Work Commission needs to ensure that every four years reviews of the awards are conducted under s.156 of the FW Act48. Similar to the minimum wages under NES, minimum wages under awards are reviewed under s.285 of the FW Act49. Yearly reviews of minimum wages ensure employees are getting paid fairly and on par with rising costs and inflation. The objective of the modern awards as stated in s.134 of the FW Act50 is to work along with NES and ensure that minimum safter standards are met and conditions are kept fair for employees. It is vital for the FWC to take into account the needs for lower paid workers and their living standards, support collective bargaining, increase workforce participation and promote social inclusion and promote flexible, efficient and productive work practises51.

Lastly, we need to consider unfair dismissals and terminations of employment, the FW Act considers unfair dismissals very thoroughly and there is a high level of protection for employees. Many employees are protected from unfair dismissal and unless they are excluded under the high-income bracket or have not met the minimum period of employment and employee is able to make a claim. Unfair dismissal is considered with four elements which are mentioned under s. 385 of the FW Act52 and the legislation requires the FWC to be satisfied that the dismissal was harsh, unreasonable or unjust and that is was not consistent with the small business dismissal code and lastly that the dismissal was not related to a genuine redundancy53.

Assessing the relevant parts of the legislation and understanding what is required from employees and employers it can be confirmed that the FW Act 2009 has been set up to favour the employees as opposed to the small businesses. I feel this type of protection is defiantly needed and as employees are usually either unaware, innocent or either scared are unable to voice up and stand up for basic working conditions which the FW Act has been able to provide for all. 48 Ibid s 156 49 Ibid s 285 50 Ibid s 134 51 Ibid s 134(1)(a)-(d) 52 Ibid s 385 53 Fair Work Act 2009 (Cth) s 385

I still feel there are limitations as to how many people understand that they have these basic employment conditions and due to them being unaware are still taken advantage of by employers....