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Employment Law Update – Summer 2020

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  1. New Victorian Workplace Manslaughter Laws

In 2017, Queensland introduced industrial manslaughter laws following the tragic death of two workers at the Eagle Farm Racecourse and four visitors at Dreamworld theme park on the Gold Coast.

The Daniel Andrews led Victorian Labor Party then promised to introduce industrial manslaughter laws as part of its election promise heading into the 2018 Victorian State Election, citing the 2013 incident in which an advertising board and the wall it was attached to was blown over by wind falling onto three pedestrians on Swanston Street.

On 3 December 2019 (after comfortably winning the Election), the Andrews Government fulfilled its promise and passed new Victorian industrial manslaughter laws

The new Victorian industrial manslaughter laws will commence on 1 July 2020, unless proclaimed earlier by the Victorian Government.  The maximum criminal and civil penalties for being found guilty of industrial manslaughter in Victoria will be 20 years’ imprisonment for a natural person and 100 000 penalty units for a body corporate (currently $16,522,000 as at the time of writing).

Notably and elsewhere in Australia:

  1. In South Australia, the Greens Party introduced the Work Health and Safety (Industrial Manslaughter) Amendment Bill 2019 (SA) on 1 May 2019 to include industrial manslaughter in the Work Health and Safety Act 2012 (SA). This Bill has not progressed beyond being introduced as at the time of writing.
  2. In Western Australia, Parliament introduced the Work Health and Safety Bill 2019 (WA), mirroring the model WHS laws adopted by every other Australian State and Territory except Victoria. This Bill contains a two-level industrial manslaughter offence and has progressed to a second reading in the WA legislative council.
  3. In the Northern Territory, Parliament passed the Work Health and Safety (National Uniform Legislation) Amendment Act 2019 (NT) on 27 November 2019 to include industrial manslaughter in the Work Health and Safety (National Uniform Legislation) Act 2011 (NT). These new laws commenced on 1 February 2020.

In preparation for the commencement of workplace manslaughter laws, all employers and its officers should conduct a thorough review of their existing safety processes.

Further information about this topic can be found on our previous article published on 15 January 2020.

  1. New Annualised Wage Arrangement clauses in 21 Modern Awards

From 1 March 2020, annualised wage arrangement clauses in 21 modern awards will be amended to introduce additional employer obligations with respect to their full time salaried employees. 

The affected awards include the Clerks – Private Sector Award 2010, which covers clerical and administration employees in most industries, and the Restaurant Industry Award 2010.

Further information about this topic can be found on our previous article published on 30 January 2020.

Under a new annualised wage arrangement clause, employers may be required to:

  1. Provide all full time salaried employees with written details of: (a) The method of calculation of their annual salary based on their expected hours of work; (b) The specific clauses of the modern award which are to be satisfied by the annual salary; and (c) The outer limit of overtime hours and penalty rated hours that the employee can work in a pay cycle before additional overtime or penalty rates become payable.
  2. Undertake an annual reconciliation of annual earnings to ensure that all full time salaried employees receive no less than the wages that they would have received under the modern award if they had been paid on an hourly basis.
  3. Keep a record of full time salaried employees’ starting and finishing times each day, including their unpaid meal breaks, to enable the above mentioned reconciliation to be undertaken
  4. Rectify any underpayment within 14 days of completing the reconciliation.

A failure to comply with a modern award exposes employers to potential significant penalties under the Fair Work Act 2009 (Cth), which is why it is important for affected employers to act quickly to review existing salary arrangements and template employment agreements.

All employers should review their existing salaried arrangements to assess compliance with the new modern award obligations.

  1. Significant Case Update

Mondelez v AMWU [2019] FCAFC 138

In August 2019, a Full Federal Court (by majority two to one) in its landmark decision of Mondelez v AMWU [2019] FCAFC 138 ruled on the way paid personal/carer’s leave should accrue and what amount should be paid for personal/carer’s leave.

There are two competing interpretations of the word “day” in section 96(1) of the Fair Work Act 2009 (Cth), which provides that employees are entitled to 10 days of personal/carer’s leave for each year of service.

  1. The first interpretation (favoured by the employer Mondelez) is that a day means an average working day, worked out from an employee’s average daily ordinary hours based on a standard 5 day working week (average day construction).
  2. The second interpretation (favoured by the majority in the Full Federal Court) is that a day means a portion of a 24 hour period that would otherwise be allotted to work (Federal Court construction).

In the scenario of an employee who normally works 36 hours per week over 3 shifts of 12 hours, the two competing interpretations produce very different results. 

  1. The average day construction leads to this employee accruing 72 hours of personal/carer’s leave each year.
  2. The Federal Court construction leads to this employee accruing 10 days of personal/carer’s leave each year at 12 hours for each day, totalling 120 hours of personal/carer’s leave each year.

On 13 December 2019, special leave was granted by the High Court for the Federal Court decision to be appealed.  The appeal by Mondelez is joined by the Minister for Jobs and Industrial Relations (currently the Hon Christian Porter MP).

On 31 January 2020, written submissions were filed by Mondelez and the Minister outlining why the High Court should adopt the average day construction instead of the Federal Court construction.  A short summary of the legal arguments were as follows:

  • The word “day” in section 96(1) of the Fair Work Act 2009 (Cth) is ambiguous and so the Court must look at the usual interpretive factors, such as the legislative history, purpose and intention of Parliament. Even if the word “day” had an ordinary meaning, the Court should still examine the usual interpretive factors.
  • The majority decision of the Federal Court was inconsistent with the Explanatory Memorandum to the Fair Work Act 2009 (Cth), which made clear that Parliament had intended for the average day construction to apply.
  • The Federal Court construction does not sit well with other provisions within the Fair Work Act 2009 (Cth) which makes reference to personal/carer’s leave accruing and being paid by each ordinary hour worked by an employee.
  • Employees who work on less than 5 days per week will have more time to deal with their illness or carer’s responsibilities and will require less time off from work. Instead, the Federal Court construction illogically provides such employees more paid time off.
  • Serious anomalies and unfair outcomes result from the Federal Court construction:
  • Employees who work the same number of ordinary hours per week may have different personal/carer’s leave entitlements depending on how their hours are structured.
  • An employee’s accrued leave balance may dramatically increase or decrease if the employee subsequently changes how their hours are structured. This can happen even if their total weekly ordinary hours remain the same.
  • It is possible for part time employees to accrue more personal/carer’s leave than a full time employee. For example, a part time employee who works one 10 hour shift each week will accrue 100 hours of personal/carer’s leave each year.
  • Employees who split their working hours across multiple jobs accrue more leave than employees who work the same hours in a single job. For example, an employee who splits their 38 hour week across five different employers (7.6 hours per day, each day with a different employer) will accrue 50 days (or 380 hours) of personal/carer’s leave each year.
  • If an employee takes one single hour of personal leave during a particular day, that hour will have a different impact on the employee’s personal leave balance depending on when leave was taken. For example, an employee who works 12 hours on Monday and 4 hours on Tuesday.  If the employee takes an hour of personal/carer’s leave on Monday, that equals 1/12th of a personal/carer’s leave day.  If the employee takes an hour of personal/carer’s leave on Tuesday, that equals 1/4th of a personal/carer’s leave day.
  • Full time employees who work 38 hours per week but over more than 5 days per week will accrue less personal/carer’s leave. For example, an employee who works 38 hours evenly across 6 days will accrue 63.33 hours of personal/carer’s leave each year.  Under the average day construction, the same employee accrues 76 hours of personal/carer’s leave each year.

The AMWU’s response is due to be filed by 28 February 2020.  Mondelez and the Minister will have until 20 March 2020 to file a reply.  The case number for the matter in the High Court is M160/2019.

Employers are recommended to take a wait and see approach.  We predict that the High Court will decide fairly quickly on this issue in favour of the average day construction.

Workpac Pty Ltd v Robert Rossato (QUD724/2018)

In August 2018, a Full Federal Court unanimously reached a decision (WorkPac Pty Ltd v Skene [2018] FCAFC 131) that found a casual labour hire worker was a permanent employee entitled to annual leave payments under the National Employment Standards in the Fair Work Act 2009 (Cth).

The employee Mr Skene was awarded annual leave pay in addition to the remuneration he had received from WorkPac because the employment agreement with Mr Skene did not specify that the flat hourly rate paid to Mr Skene included a casual loading amount. 

The Full Federal Court left open the question of whether a casual loading paid to a casual employee could offset annual leave payment entitlements awarded by the Court if that casual employee was retrospectively assessed to have been a permanent employee.

On 4 October 2018, Workpac Pty Ltd filed a separate application in the Federal Court seeking a declaration that casual loading paid to a different casual employee, Mr Robert Rossato, could offset Mr Rossato’s entitlement to annual leave payment.

Then Minister for Jobs and Industrial Relations, Kelly O’Dwyer intervened in the Rossato proceedings.  Final hearing in the proceedings was held over two days on 7 and 8 May 2019, and the Full Federal Court (constituted by Justice Bromberg; Justice White; Justice Wheelahan) has not yet made its decision.

Irrespective of the outcome of the Full Federal Court decision, we anticipate that a further appeal to the High Court will be made.  Employers of long term regular and systematic casual employees are encouraged to assess their legal risks and to consider making casual conversion offers as one method of limiting their exposure.

  1. High profile wage underpayments

High Profiled Restaurants

In the latest restaurant wage underpayment scandal, the high-end restaurant “Dinner by Heston” was found to have underpaid approximately $4.35 million in employee wage and entitlements.

The underpayment was originally discovered by a Sydney Morning Herald Investigation in July 2018, and was subsequently self-reported to the Fair Work Ombudsman by Tipsy Cake Pty Ltd (the employing entity behind Dinner by Heston).

It was reported that chefs were working between 80-90 hour per week and being paid between $15.00 to $17.00 per hour.

As a result of the wage underpayment story, the company’s lease with Crown was terminated by Crown.  The company has since gone into liquidation.

Noting that payroll conditions were allegedly prepared by Tipsy Cake Pty Ltd with Crown’s involvement, we may see other restaurants at Crown be placed under the microscope for workplace law compliance.

The downfall of Dinner by Heston comes off the back of:

  1. Underpayments by the George Calombaris backed company Made Establishment Pty Ltd (also in liquidation) of around $7.5 million; and
  2. Underpayments by Neil Perry backed company Rockpool Dining Group Pty Ltd of around $10 million, of which the company has agreed to back pay $1.6 million.

High profiled retailers

In media reports released on Tuesday, 18 February 2020, retail mammoth Wesfarmers was reported underpaying:

  1. Around 5 per cent of its Coles supermarket and liquor store managers, resulting in a total of around $20 million in wage underpayments; and
  2. Less than 1 per cent of its Target employees, resulting in a total of around $9 million in wage underpayments.

This follows months after Wesfarmers was reported underpaying its employees at its hardware retailer Bunnings and its industrial companies Blackwoods, Workwear Group, Coregas and Greencap. In media reports released on Wednesday, 26 February 2020, the Woolworth wage underpayment scandal has ballooned out to $315m.

We know that wage underpayment is rife across the retail industry and encourage all retail businesses to seek legal advice on their workplace law compliance.

  1. “Regular and systemic” casual engagement

In Angele Chandler v Bed Bath N’ Table Pty Ltd [2020] FWCFB 306, the Full Bench of the Fair Work Commission appears to have made it easier for casual employees to be protected from unfair dismissal.

In an initial decision by Deputy President Mansini, the Fair Work Commission decided that a casual employee was not protected from unfair dismissal because:

“Whilst Ms Chandler worked at least 3 days each week, Annexure A shows the number of days worked each week, the days of the week worked and the duration of the shift on each occasion varied significantly such that no pattern is able to be identified.”

The Full Bench, in overturning the initial decision, took into consideration the following criteria:

  1. The casual employee was regularly engaged to work (it did not matter that the hours or days worked were different week to week);
  2. The employer required the employee to indicate their availability one month in advance; and
  3. The casual employee had entered into a single and ongoing written contract of employment with the employer for a particular position.

The decision indicates that casual employees are likely to be employed on a “regular and systematic” basis if the employee:

  1. Is rostered to work shifts each week;
  2. Is asked to provide their availability in advance; and
  3. Has entered into a written contract of employment with the employer for a particular position.

These are not high thresholds to meet and will likely lead to more casual employees being given the green light to advance their unfair dismissal claim beyond the minimum qualification period jurisdictional objection.

  1. Further modern award changes to come

On 2 September 2019, the Fair Work Commission issued a decision that it will be finalising the 2014 modern award review and releasing new versions of modern awards in 3 groups (‘tranches’).

The first tranche of awards apply from the first full pay period on or after 4 February 2020 and will result in the removal of outdated transitional language from all modern award.

The second and third tranches of specifically varied modern awards will apply from 13 April 2020 and 4 May 2020.  Most changes will be made to clarify how certain award provisions were intended to operate and to promote plain language within the awards.

From the date on which each award is updated, the name of the modern award will change from 2010 to 2020.

A full list of the varied modern awards can be found on the Fair Work Commission website: https://www.fwc.gov.au/awards-and-agreements/awards/modern-awards/modern-awards-list

All employers are encouraged to assess whether these award changes will affect their employment obligations.


Contact Us

If you have any questions in relation to the topics covered, please contact the MST Lawyers Employment Law team by email or by phone on +61 3 8540 0229.