Employment Law Update – Winter 2018

By Herbert Fischbacher, Principal and Chao Ni, Senior Associate, MST Lawyers

National Minimum Wage And Modern Award Minimum Rates Increase

On 1 July 2018, the federal weekly minimum wage was increased by 3.5% to $18.93 per hour ($719.20 per week).

The 3.5% increase also applies to minimum rates within all modern awards.

These changes may affect your minimum wage obligations irrespective of whether your business is covered by a modern award or a registered agreement.

Family and Domestic Violence Leave

From 1 August 2018, all modern awards (other than public sector and enterprise awards) will provide each employee with five days of unpaid family and domestic violence leave every 12 months. This leave can be used when an employee:

• is experiencing “family and domestic violence”; and
• needs to “do something” to deal with the impact of the family and domestic violence and it is impractical for the employee to do that thing outside of their ordinary hours of work.
• “family and domestic violence” means violent, threatening or other abusive behaviour by a “family member” of the employee that seeks to coerce or control the employee and that causes them harm or to be fearful.
• “family member” means:
  • a spouse, de facto partner, child, parent, grandparent, grandchild or sibling of the employee; or
  • a child, parent, grandparent, grandchild or sibling of a spouse or de facto partner of the employee; or
  • a person related to the employee according to Aboriginal or Torres Strait Islander kinship rules.
• “do something” includes making arrangements for their safety or the safety of a family member (including relocation), attending urgent court hearings, or accessing police services.

This entitlement:

• applies to all employees (including casual employees);
• is not pro-rated for part-time or casual employees;
• resets to 5 days at the start of each 12 months (taken from the employee’s individual start date);
• does not accumulate from year to year; and
• can be accessed before exhausting paid leave entitlement.

High Profiled Underpayment Cases

(1) Maurice Blackburn Lawyers

• In July 2018, Maurice Blackburn admitted that it inadvertently underpaid 400 of its clerical workers in breach of its own enterprise agreement.
• The underpayment mostly related to unpaid overtime which totalled around $925,000 and going back as far as February 2012.
• It has been reported that the firm has contacted more than 220 former employees and 180 current employees about the underpayments.

(2) Lush cosmetics retailer

• In July 2018, retail cosmetics company Lush admitted that it had inadvertently underpaid more than 5000 workers over the past eight years around $2m.
• Lush stated that the underpayments were caused by “serious payroll system errors” relating to the “intricate elements” of the retail and manufacturing awards, including overtime and penalty rates.

(3) UAE Exchange Australia

• UAE Exchange Australia was required to back pay $1.3 million in unpaid wages after an FWO investigation revealed it had been underpaying hundreds of workers over seven years.
• Following the FWO investigation, UAE Exchange undertook an external audit of the wages and entitlements of all its employees between 2011 to 2017 and found a further 240 employees were underpaid around $1.2 million.
• The FWO allowed UAE Exchange to enter into enforceable undertakings to do the following:
  • rectify all underpayments;
  • undertake wage audits for the next two years;
  • train up more HR staff; and
  • reimburse employees up to $500 for costs incurred in obtaining financial advice.
• UAE Exchange is also fighting another legal battle on the side against the Finance Sector Union (FSU) regarding award coverage. The FSU claims that the higher-paying Banking, Finance and Insurance Award 2010 should be applied to UAE Exchange workers instead of the General Retail Industry Award 2010.

Agri Labour Case To Test New Fair Work Vulnerable Workers Laws

A major test case for the new vulnerable workers laws was filed in the Federal Court on 24 July 2018 against labour-hire company, Agri Labour Australia. The legal action is believed to be the first to test the provisions of the law under the Fair Work Act 2009, which commenced in September 2017.

The case involves workers claiming $10m in underpayment of wages against Agri Labour for allegedly subjecting them to dangerous working conditions at a farm in Shepparton.

Agri Labour is alleged to have paid 50 or so farm labourers from Vanuatu $8 an hour.

What this case will actually test is whether the Courts will have an appetite for handing out civil penalties for “serious contraventions” of the Fair Work Act 2009. Such breaches attract a maximum penalty of $630,000 per breach for a corporate entity.

 The Introduction Of Labour Hire Licensing Laws In Victoria, Queensland And South Australia

• Following an inquiry into the labour-hire industry exposing the widespread exploitation of workers, the Victorian Parliament passed the Labour Hire Licensing Bill 2017 on 20 June 2018.
• Once enacted, the new legislation will be called the Labour Hire Licensing Act 2018 (Vic).
• The principal objectives of the Labour Hire Licensing Act are:
  • to protect workers in the labour-hire industry from being exploited by both labour hire providers and their users; and
  • to improve the transparency and integrity of the labour-hire.
• The legislation commencement date is yet to be announced but will be no later than 1 November 2019.
• The Act will introduce obligations for both “labour hire providers” and their users referred to as “hosts”.
• Under the Act, labour hire providers must not operate without a licence. To obtain a licence, a labour-hire provider must:
  • provide information about their business and key personnel;
  • demonstrate compliance with a fit and proper person test, workplace laws, labour hire laws, and (where relevant) minimum accommodation standards; and
  • declare that they will comply with laws relating to taxation, superannuation, occupational health and safety, workplace laws and migration laws.
• Once a licence is obtained, a provider will have an ongoing obligation to:
  • comply with all licence conditions; and
  • report to the regulator annually with information relating to its deployed workers.
• Conversely, under the Labour Hire Licensing Act, hosts cannot use unlicensed labour hire providers that are caught by the licensing scheme.
• Regulations are currently being drafted and will be used to carve out certain arrangements from being captured by the new licensing laws.

 The Exit Of Foodora

• On 17 August 2018, Foodora entered into voluntary administration, suspending two legal proceedings that it was facing at the time.
• The first proceeding was filed by the FWO alleging that Foodora had engaged in sham contracting activities leading to underpayment of workers.
  • The legal action was filed in the Federal Court and related specifically to two delivery workers in Sydney.
  • The FWO alleged that these delivery workers were employees and not contractors, taking into account:
    • the level of control, supervision and direction Foodora exercised over the workers’ hours, location and manner of work;
    • the requirement for the workers to wear a Foodora-branded t-shirt, and use Foodora supplied food storage boxes and bike racks;
    • Foodora had paid the workers either a fixed hourly rate or a fixed amount per delivery and the workers did not negotiate their rates of pay at any time; and
    • The workers were not genuinely conducting their own delivery business, in that they did not advertise or promote their availability to perform deliveries to the public; did not delegate their delivery duties with Foodora to any other person; and did not have their own customer base, business premises and insurances.
  • The second lawsuit was filed by the Transport Workers Union on behalf of two delivery employees who had been dismissed by Foodora. Again, the question of whether they were contractors or employees would have been a focus of the litigation.

 The Workpac Decision – Are Casual Employees Really Casual?

• In the case of Workpac v Skene [2018] FCAFC 131, the Full Court of the Federal Court decided that a casual fly-in fly-out dump-truck operator (Mr Skene) was in fact, a full-time employee of Workpac and therefore entitled to annual leave and personal/carer’s leave.
• A couple of factors led to this decision:
  • Mr Skene had a regular and predictable roster, with working arrangements and shifts set 12 months in advance;
  • Mr Skene’s employment was continuous;
  • Mr Skene’s employment was facilitated by the fly-in fly-out arrangement and the provision of accommodation by WorkPac;
  • the fly-in fly-out arrangement was inconsistent with the notion that Mr Skene could elect to work on any day and not work for others without first making the necessary arrangements with WorkPac’s client;
  • there was an expectation that Mr Skene would be available, on an ongoing basis, to perform the duties required of him in accordance with his roster, until the assignment was complete; and
  • the work undertaken by Mr Skene was not subject to significant fluctuation from one day, or one week, or one month, or one year to the next.
• The facts in the WorkPac case are strikingly similar to the 2010 decision of MacMahon Mining Services v Williams [2010] FCA 1321 in which the Federal Court ruled that a similar casual fly-in fly-out worker was a full-time employee at law.
• The common law principles established in both the Workpac and MacMahon Mining decisions extend beyond the mining industry and potentially affect all casual employees who are engaged for a long period on a regular and systematic basis.

For more information, send an email to our Employment Law team, or call +61 3 8540 0200.