Employment Law Update Spring 2019

Labour Hire Licence for Victorian labour hire businesses

The Labour Hire Licensing Act 2018 (Vic) (‘Act’) came into operation on 29 May 2019.

The Act requires that from 29 October 2019:

  • Victorian labour hire providers must have registered with the Labour Hire Licensing Authority and obtained a license; and
  • Victorian labour hire hosts must only use licensed labour hire providers.

Both providers and hosts are exposed to penalties for non-compliance.

The Act extends the definition of ‘provider’ of labour hire from the ordinary meaning to all employers who place employees at a host’s worksite to:

  • work ‘in and as part of’ the host’s business; or
  • undertake work in a deemed industry under the Act (i.e. commercial cleaning, meat processing and horticulture in relation to fruit or vegetables), irrespective of whether the employee meets the definition of ‘in and as part of’ the host’s business.

All employers who place employees at another workplace should seek legal advice as to whether they will be defined as a provider for the purposes of the Act.

Prior to accepting any employees onto their worksite, hosts should understand whether the labour hire agency is a provider for the purposes of the Act, and check the current online licence and application register to assess whether the agency is appropriately licenced.

Whistleblower Policy

From 1 January 2020, it will be mandatory for all public companies, large proprietary companies and registerable superannuation entities to have a whistleblower policy that complies with section 1317AI of the Corporations Act 2001 (Cth).

A “large proprietary company” for FY19/20 means a company that satisfies at least 2 of the following conditions:

  1. The consolidated revenue for the financial year of the company and the entities it controls (if any) is over $50 million or more;
  2. The value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) is $25 million or more;
  3. The company and the entities it controls (if any) employs 100 or more employees at the end of the financial year.

A compliant whistleblower policy will need to provide for the following:

  • The protections available to whistleblowers;
  • To whom disclosures can be made and how they can be made;
  • How the company will support whistleblowers and protect them from detriment;
  • How the company will investigate disclosures;
  • How the fair treatment of all employees mentioned in disclosures will be ensured; and
  • How the policy is to be made available to officers and employees of the company.

A failure to implement a compliant whistleblower policy carries hefty monetary penalties under the Corporations Act 2001 (Cth).

Though the mandatory requirement to have a whistleblower policy only applies to public companies, large proprietary companies and registerable superannuation entities, we recommend that all small proprietary companies also implement a whistleblower policy or review their existing policies so that they can appropriately deal with whistleblower disclosures going forward.

Significant Case Updates

 Mondelez v AMWU [2019] FCAFC 138

 In the recent decision of Mondelez v AMWU [2019] FCAFC 138, the Full Federal Court handed down a decision that deals with the method of accruing and taking paid personal/carer’s leave for the purposes of the National Employment Standards contained in the Fair Work Act 2009.

By a 2:1 majority, the Full Federal Court held that all full-time and part-time employees are entitled to 10 individual personal leave days per year of service.

The verdict comes as a surprise to many employers that have continued to calculate and accrue personal leave entitlements in accordance with the provisions of the former Workplace Relations Act 1996, which:

  • capped personal leave accruals for full-time employees at 76 ordinary hours per year of service; and
  • entitled part-time employees to pro-rata personal leave depending on their ordinary hours of work.

In reaching the decision, the Court determined, under the Fair Work Act 2009:

  • Personal leave entitlements protect employee income when they are entitled to be absent from work due to illness or injury (or providing care or support to a family or household member who is ill, injured or suffering from an unexpected emergency).
  • The leave must be calculated in working days, not hours. A working day is the portion of a 24 hour period that an employee would otherwise be working.
  • An employee’s entitlement is expressly based upon time working for the employer and is expressly calculated in days.

For illustration, in terms of the current state of the law, for every day of personal/carer’s leave taken by a permanent employee, an employer is required to deduct one day from the employee’s accrued personal leave balance. If an employee takes a part-day of leave, then an equivalent part-day is deducted from the employee’s accrued leave balance.

The effect of the decision is that personal leave accrues more beneficially for part-time employees, who receive the same personal leave accrual as their full-time counterparts, despite working less.\

The majority reasoning in Mondelez has now been appealed to the High Court, so make sure you watch this space.  It will also be interesting to see whether the Government will amend s.96 of the Fair Work Act 2009 to fix this issue.

Employers should seek legal advice on what implications the Mondelez decision will have on their business, particularly those who employ workers on non-standard patterns of work.

Western Union Business Solutions (Australia) Pty Ltd v Robinson [2019] FCAFC 181

 In the recent decision of Western Union Business Solutions (Australia) Pty Ltd v Robinson [2019] FCAFC 181, the Full Federal Court examined the application of section 351 of the Fair Work Act 2009 and clarified the distinction between a disability, its manifestation and the consequence of its manifestation.

 Background Facts

 The Applicant, Mr David Robinson was employed as CEO by Western Union Business Solutions (Australia) Pty Ltd (WUBS) between February 2013 until his dismissal on 8 May 2017.

In around September 2016, Mr Robinson went on a period of extended sick leave, providing WUBS a series of medical certificates which variously stated that he had “a medical condition”; “significant work-related stress and depression”; and “a major depressive disorder associated with significant anxiety”.

During Mr Robinson’s absence and on three occasions, WUBS requested Mr Robinson to attend for an independent medical assessment.  Mr Robinson did not co-operate with these requests, and ultimately the medical assessment did not take place.

On 8 May 2017, WUBS terminated Mr Robinson’s employment.  The sole decision maker was Ms Victoria Pickles (Head of HR).  The dismissal letter stated “in light of the company’s serious concerns about your capacity to return to work, the company has decided to terminate your employment”.

Mr Robinson then commenced legal proceedings in the Federal Court alleging that WUBS had terminated his employment because of his mental disability in contravention of section 351 of the FW Act.

At the primary hearing, Ms Pickles gave evidence that her reasons for dismissing Mr Robinson were because she had believed at the time:

  • Robinson had unreasonably failed to co-operate with three attempts by WUBS to arrange for him to attend a company arranged medical appointment.
  • Robinson was likely working elsewhere.
  • Robinson was not genuinely unwell.
  • Mr Robinson’s absence from work would continue indefinitely, in particular given the history of him providing unchanging and brief medical certificates.

The First Instance Decision

 At first instance, Judge Flick found that:

  • The lack of capacity of Mr Robinson to return to work was a “manifestation” of his claimed mental disability, which could not be severed from that disability.
  • Though Ms Pickles did not terminate Mr Robinson’s employment because he suffered a mental disability, she did so because of a manifestation of that mental disability (namely his inability to return to work).
  • Adverse action was taken against Mr Robinson because of, or at least for a reason which included, a manifestation of his claimed mental disability and hence for reasons which included his mental disability.

The Appeal

The original decision of Judge Flick was successfully appealed to the Full Bench, constituted by Judges Kerr, O’Callaghan and Thawley.

The full bench found that:

  •  The lack of capacity of Mr Robinson to return to work was not a manifestation of his mental disability, even though it may have been a consequence of it.
  • Not every consequence of a disability should be regarded as a manifestation of it.
  • A manifestation of a disability includes, for example, symptoms such as lethargy or fatigue. A consequential inability to attend work because of lethargy or fatigue is a result of the manifestation and not a manifestation of the disability itself.
  • Given Ms Pickles did not, in this specific case, believe that Mr Robinson was ill and did not have actual knowledge of the manifestations of Mr Robinson’s claimed mental disability, there was no basis for Judge Flick to find that Ms Pickles was motivated by an undisclosed awareness of a manifestation of Mr Robinson’s claimed mental disability when she took action to dismiss him.

Key Lessons

 It is possible to draw a clear distinction between:

  • A disability (as described by its name, e.g. depression);
  • The manifestations of that disability (e.g. lethargy or fatigue); and
  • The consequences of the manifestations of a disability (e.g. inability to attend work or perform certain duties).

Any employer considering taking adverse action against an employee who suffers from a disability should first consider whether it is doing so:

  • Because the employee suffers from a disability; or
  • Because the employee suffers from or experiences the manifestations of a disability (e.g. suffers from or experiences anxiety, lethargy or fatigue due to depression); or
  • Because of a consequence of a manifestation of a disability, including:
    • An employee doing something (e.g. an employee driver falling asleep at the wheel due to fatigue);
    • An employee potentially doing something (e.g. there exists a risk that an employee driver could potentially fall asleep at the wheel due to fatigue);
    • An employee not doing something (e.g. an employee driver failing to drive a vehicle in a safe manner due to lethargy);
    • An employee potentially not doing, or not being able to do, something or (e.g. there exists a risk that an employee driver will not drive the vehicle in a safe manner due to lethargy).

An employer can take lawful adverse action against an employee because of a consequence of a manifestation.

We believe the Full Court decision in Western Union Business Solutions (Australia) Pty Ltd v Robinson to be correct.  Had the decision of Judge Flick been allowed to stand, employers would have had no ability to terminate the employment of any person who absent from work for an indefinite period if that absence was wholly or evenly partially due to a disability.

George Naoum v ISS Security Pty Ltd [2019] FWC 6421

 In Naoum v ISS Security Pty Ltd [2019] FWC 6421, Mr Naoum, an employee of 23 years’ service, was dismissed from his employment after he had been absent from work between November 2015 and May 2019 due to a long-standing knee injury.

Mr Naoum was found by the employer to be unfit for ongoing employment following a medical assessment taking place on 18 April 2019. His employment was terminated by the employer on 10 May 2019.

The termination letter given to Mr Naoum by the employer contained three errors, namely:

  • A reference to “10 Mary 2019” as the date of the letter;
  • An incorrect reference to “Perth” as Mr Naoum’s pre-injury work location, instead of “Melbourne”; and
  • An incorrect statement that Mr Naoum had agreed that he was not fit to return to pre-injury duties.

In determining that Mr Naoum’s dismissal was unfair, Commissioner Cambridge found that there was no valid reason for the dismissal, given that the incapacity of Mr Naoum was not properly established by the employer. As evidenced by the termination of employment letter, the incapacity was based, at least in part, on a false assertion that Mr Naoum had agreed he was not fit to return to pre-injury duties.

The Fair Work Commission also determined that:

  • The employer did not acknowledge that Mr Naoum had actually contested the findings of the independent medical assessment, and he was therefore not afforded the proper opportunity to respond.
  • The meeting on 10 May 2019 represented little more than a “forum for the perfunctory implementation of the predetermined decision” to dismiss Mr Naoum.
  • Even if a medical opinion concerning Mr Naoum’s capacity was properly established, the employer failed to investigate alternative employment options or modified duties reasonably available. This was a “prerequisite to any fair or reasonable determination” that Mr Naoum, as a longstanding employee of some 23 years, did not meet the inherent requirements to continue his employment.

The Commissioner also remarked that “the carelessness with which the termination of employment letter was constructed was reflective of the employer’s general failure to properly establish a sound and defensible basis for the dismissal of an employee with 23 years’ service.”

The employer was ordered to pay monetary compensation to Mr Naoum for eight weeks pay amounting to $8,062.00

Key Lessons

Most notably, the decision serves as a reminder for employers to ensure that all termination letters are accurate and modified to the circumstances of each individual case. In Naoum, the employer could have possibly avoided the time, cost and exposure associated with a lengthy legal dispute if it engaged an employment relations solicitor to settle correspondence issued to the employee.

Employers must appreciate that the content of a termination letter will invariably be scrutinised in the event an employee seeks to challenge a dismissal.

In some cases, employers may consider whether it is appropriate for the content of a termination letter to be as succinct as possible, to reduce the ability of an employee to challenge the employer’s process or identify inconsistencies in the reasons leading to the dismissal.