Employment Law Update – Winter 2019

The Launch Of The Latest Review Into The Industrial Relations System

In the wake of seeming radio silence on the liberal government’s IR policy leading to the federal election, Prime Minister Scott Morrison announced that Australia’s new minister for industrial relations, Christian Porter, will be undertaking a review into Australian workplace laws. 

On 27 June 2019, Mr Porter (who also holds positions as Attorney-General and Leader of the House of Representatives) confirmed that a review into Australian workplace laws will be ‘sensible and evidenced-based’ and will take place over the next six to nine months.

The following areas are set to be considered for reform as part of the review:

1. The ambiguity surrounding casual employment, including the introduction of a statutory definition of a ‘casual’ employee.
2. The existing enterprise bargaining system and the statutory “better off overall test” which, in its current form has been applied inconsistently at the Fair Work Commission. This has resulted in uncertainty and delay.
3. The general protections provisions (e.g. adverse action claims) within the Fair Work Act.
4. Whether there are adequate provisions to protect small business employers from unfair dismissal claims within the Small Business Fair Dismissal Code.

Changes From 1 July 2019

From the first pay period on or after 1 July 2019:

1. A new National Minimum Wage of $19.49/hour ($740.80/week) took effect.
2. Rates of pay within modern award increased by 3% from the previous year.
3. The maximum superannuation contribution base increased to $55,270 per quarter.
4. The high-income threshold under the Fair Work Act increased to $148,700.

Please visit our 1 July 2019 Updated Key Thresholds article for further information.

Modern Award Changes

Real Estate Industry Award 2010

The FWC amended the Real Estate Industry Award 2010 as follows:

1. From 30 April 2019:
   1. Employees who can be employed on a commission-only basis are limited to those who have “been engaged in property sales or commercial, industrial or retail leasing as a Real Estate Employee Level 2 or higher with any Licenced Real Estate Agent, or has operated his or her own real estate business, for at least 12 consecutive months in the 3 years prior to entering into a commission-only agreement”
   2. “Real estate business” means “a business involved in the sale of real property or businesses”.
2. From 30 June 2019, commission-only employees can no longer be employed on a part-time basis.

General Retail Industry Award 2010

Employers in the retail industry should take note that penalty rates for ordinary hours under the General Retail Industry Award 2010 will change throughout the 2019/20 financial year:

	Monday to Friday		Saturday	Sunday	Public Holiday
	(before 6pm)	(after 6pm)
Permanent Dayworker	100%	125%	125%	165%	225%

 

Casual Dayworker (Inclusive of casual loading)	M-F (before 6pm)	Monday to Friday (after 6pm)			Saturday			Sunday	Public Holiday
		1/7/19  to 30/9/19	1/10/19 to 29/2/20	1/3/20  to 30/6/20	1/7/19  to 30/9/19	1/10/19 to 29/2/20	1/3/20  to 30/6/20
	125%	130%	135%	140%	140%	145%	150%	175%	250%

 

	Monday to Friday			Saturday	Sunday	Public Holiday
	Non-baking production:  shift start between 6pm and 5am	Baking production:  shift start   before 2am	Baking production:  shift start between 2am and 6am
Permanent Shiftworker	130%	130%	112.50%	150%	190%	225%
Casual Shiftworker	155%	155%	137.50%	175%	215%	250%

Hospitality Industry Award 2010

Employers in the hospitality industry should take note that Sunday penalty rates for ordinary hours under the Hospitality Industry Award 2010 have changed during the 2019/20 financial year:

	Monday – Friday			Saturday	Sunday	Public Holiday
	7am to 7pm	7pm to 12am	12am to 7am
Permanent Employee	100%	110%	115%	125%	150%	225%
Casual Employee	125%	135%	140%	150%	175%	250%

Pharmacy Industry Award 2010

Employers in the pharmacy industry should take note that Sunday penalty rates for ordinary hours under the Pharmacy Industry Award 2010 have changed during the 2019/20 financial year:

	Monday – Friday			Saturday				Sunday		Public Holiday
	8am to 7pm	7pm to 9pm	7am to      8am             and 9pm to 12am	7am to 8am	8am to 6pm	6pm to 9pm	9pm to 12am	7am to 9pm	9pm to 12am	7am to 12am
Permanent Employee	100%	125%	150%	200%	125%	150%	175%	165%	200%	225%
Casual Employee	125%	150%	175%	225%	150%	175%	200%	190%	225%	250%

In addition to the 3% increase to base rates of pay under the National Minimum Wage Decision, base rates for employees classified as Pharmacist, Experienced Pharmacist, Pharmacist in Charge and Pharmacist Manager increased by 2.5% on 1 July 2019 and will increase by another 2.5% on 1 October 2019.

Fast Food Industry Award 2010

Employers in the fast food industry should take note that Sunday penalty rates for ordinary hours under the Fast Food Industry Award 2010 have changed during the 2019/20 financial year:

	Monday – Friday			Saturday	Sunday		Public Holiday
	6am to 10pm	10pm to 12am	12am to 6am		Level 1 Employees	Level 2 & 3 Employees
Permanent Employee	100%	110%	115%	125%	125%	150%	225%
Casual Employee	125%	135%	140%	150%	150%	175%	250%

 Health Professionals and Support Services Award 2010

The FWC amended the Health Professionals and Support Services Award 2010 as follows:

1. From 1 January 2019, “private medical, dental, pathology, physiotherapy, chiropractic and osteopathic practice” means “the practice of any practitioner, such as medical centre, general practice, specialist practice, family practice, medical clinic, dental practice, pathology practice, physiotherapy practice, chiropractic practice, osteopathic practice and women’s health centre, but does not include medical imaging practices, hospitals or hospices”.
2. From 9 July 2019:
   1. The ordinary hours of work for a day worker in a “private medical, dental, pathology, physiotherapy, chiropractic and osteopathic practice” will be:
      1. between 7.30am and 9.00pm Monday to Friday, and between 8.00am and 4.30pm on Saturday; and
      2. where the work location of a practice services patients on a seven day a week basis, the ordinary hours of work for an employee at that location will be between 7.00am and 9.00pm Monday to Sunday
   2. Saturday and Sunday penalty rates for ordinary hours under the Health Professionals and Support Services Award 2010 will be 150% for permanent day workers, and 175% for casual day workers (inclusive of casual loading).

Business Equipment Award 2010

From 1 July 2019, the casual loading in the Business Equipment Award 2010 will increase from 23% to 24%.

 

The New Victorian Labour Hire Licencing Regime

On 20 June 2018, the Victorian Parliament passed legislation implementing labour hire licensing requirements. This makes Victoria the second State to do so following the introduction of similar laws in Queensland, with South Australia recently re-commencing their scheme.

The Labour Hire Licensing Act 2018 (Vic) introduces obligations for both labour hire providers (Providers) and their users (Hosts), including that Providers must not operate without a labour hire licence, and Hosts must not engage any Provider who does not have a labour hire license.

The Legal Definition Of Provider

A Provider is defined as a person who “in the course of conducting a business, supplies one or more worker to another person (the host) to perform work in and as part of a business or undertaking of the host.”

To determine whether a worker is performing work “in and as part of” another business, we consider:

1. Whether the worker is performing activities as:

• a cleaner in a commercial premises;
• a working in the horticulture industry; or
• a worker in a meat manufacturing or meat processing establishment.

2. Whether a worker is working at a Host’s business or undertaking and the work meets the following non-exhaustive factors:

• is performed at the Host’s premises;
• is subject to the Host’s direction;
• is supervised by the Host or another labour hire worker supervised by the Host;
• is of a low-skilled or low-paid nature and thus does not constitute provision of a specialised service;
• is a key function of the Host’s business or undertaking; or
• is of a similar nature to work performed or previously performed by the Host’s own employees.

For example, a person who, in the course of conducting a business, supplies individuals to a Host, to work alongside a Host’s own employees on a production line, performing the same work as the Host’s employees, and supervised by the Host, provides labour hire services within the meaning of the Labour Hire Licensing Act 2018 (Vic).

The Legal Definition Of Worker

An individual is a ‘worker’, for a Provider, if—

• an arrangement is in force between the individual and the Provider under which the Provider supplies, or may supply, the individual to one or more other persons to perform work; and
• the Provider is obliged to pay the individual (in whole or part) for the performance of the work by the individual, whether directly or indirectly through one or more intermediaries.

A person is not a ‘worker’ for the purposes of the Labour Hire Licensing Act 2018 (Vic) in the following circumstances:

1. The person is a secondee, being a worker who:

• is provided to another workplace on a temporary basis; and
• is engaged as an employee by the Provider on a regular and systematic basis; and
• has a reasonable expectation that the employment with the Provider will continue; and
• primarily performs work for the Provider, other than as a worker supplied to another person to do work for that other person.

2. The person provided by the Provider to another person to do work in the circumstances where the Provider and the other person are each part of an entity or group of entities that carry on business collectively as one recognisable business, other than where the Provider is predominantly in the business of providing the services of workers to other persons where those persons include persons that are not part of the entity or group

The following examples are provided to illustrate those who do not fall within the definition of ‘worker’ under the Labour Hire Licensing Act 2018 (Vic):

1        A lawyer employed by a law firm is seconded for a period of time to a client of the law firm to do work for the client.

2        A consultant employed by a consultancy business is supplied to a business to conduct a review for the other business.

3        A farmer who assigns a worker (the secondee) to work on a neighbouring farm to fulfil an immediate need at the neighbouring farm which may be fully or partly on a goodwill basis.

Provider Obligations

Providers must successfully obtain a licence with the Victorian Labour Hire Licensing Authority (Authority) by 29 October 2019.

Providers can apply for a licence through the website of the Authority: https://labourhireauthority.vic.gov.au/

Given that the online registration process may take some time, all Providers should pro-actively commence their registration.

The Authority has prepared application guides and checklists for Sole Traders and Organisations to assist with the application process.

Host Obligation

The Labour Hire Licensing Act 2018 (Vic) also places obligations on Hosts to ensure that they do not enter into an arrangement for the provision of labour hire services unless the proposed Provider of the labour hire services is the holder of a licence that is in force.

If a Host breaches their obligations they are liable for a penalty equivalent to 800 penalty units for an individual and 3200 penalty units for a body corporate. At the time of publishing these penalties are equal to $132,176 and $528,704 respectively.

Hosts are advised to obtain a copy of a Provider’s licence prior to any arrangement being entered into for the provision of labour.

Latest Underpayment Claims

In the last couple of months, there have been a number of high profile individuals and brands caught up in wage underpayment claims.

Riley Gall v Domino’s Pizza Enterprises Ltd (VID685/2019)

A Federal Court class action was launched on 24 June 2019 alleging that:

• Domino’s Pizza Enterprises Ltd (the Domino’s franchisor) had informed a number of its franchisees to apply various certified/collective agreements instead of the Fast Food Industry Award 2010.
• Those franchisees could not have been covered by those certified/collective agreements and should have paid in accordance with the Fast Food Industry Award 2010;
• Franchisees had underpaid its delivery drivers or in-store workers between 24 June 2013 and 23 January 2018.
• The franchisor is therefore liable for each and every wage underpayment of its franchisees.

Domino’s said in a statement that it “is of the view that those industrial agreements applied to its franchisees at all relevant times”, and intended to defend the action.

Whether an employee is covered by a collective/enterprise agreement will depend on the coverage of the agreement, whether the agreement is in operation and other situational factors such as when an employee transfers their employment to another employer after a sale of the business.

The first directions hearing will take place on 22 August 2019.  We’ll keep you updated.

This case is also important for franchisors because it highlights the very difficult issue of how far does one go to provide information to its franchisees when that information could be characterised as legal advice and the value of having a law firm sign off on that legal advice.

Made Establishments Pty Ltd

The restaurant company owned by high profiled celebrity chef George Calombaris has admitted to the FWO that it had underpaid 524 employees over a period of six years around $7.8m.

The restaurant group comprise of seven restaurants, including:

• The Press Club, Melbourne
• The Press Club Projects, Melbourne
• Gazi, Melbourne
• Hellenic Republic Kew, Williamstown, Brunswick East and Brighton

The primary wage underpayment arose from an incorrect interpretation of the annualised salary clause in the Restaurant Industry Award 2010.

That Award provided an annualised salary clause which stated that if an employee was paid a salary that was 25% above the minimum weekly rate in the Award, no penalty rates or overtime pay would be payable, save that employees must not receive in a year less than what they would have received if minimum penalty rates and overtime pay had been applied taking into account their hours of work.

While Made Establishments may have paid each its employees a salary that was 25% above the minimum Award weekly rate, the salaries became inadequate to cover the minimum safety net entitlements provided by the Award as time passed.

Through the voluntary undertaking given to the FWO, Made Establishments agreed to:

• conduct self-audits
• conduct training for its manager level employees on workplace law compliance
• give reports to the FWO
• publish an apology through its websites, mainstream stream and social media channels,
• make a $200,000 contrition payment, which in itself drew some controversy

Furthermore, as part of the undertaking, Mr Calombaris will enter into 7 public speaking engagements at one or more of the following public events:

• Fine Food Australia – September 2019
• Food & Hospitality Queensland – 4-5 August 2019
• Foodservice Australia – The Industry Event
• National Restaurant Conference
• Foodpro
• Hospitality Expo & Conference

After the news broke, it was reported that Mr Calombaris lost a sponsorship deal with WA tourism and failed to secure a new contract with Masterchef.

This was a very costly award interpretation mistake that could have been easily avoided through a number of ways, including by seeking expert advice from specialist employment lawyers.

Ahmed v Al-Hussain Pty Ltd t/as The Cheesecake Shop Tuggerah

 A cheesecake shop franchisee in Tuggerah, NSW, was ordered to pay more than $250k by the Federal Court after it lost a wage underpayment claim dispute with its former pastry chef, Mr Jameel Ahmed.

See our news article on this story here.

Other FWO Activity

The FWO has recently been invigorated in its mission and has launched a number of surprise compliance inspections including at:

• 489 businesses in take-away food outlets, cafes and restaurants, retail businesses, pubs and bars, in Albury-Wodonga, Ballarat and Wollongong
• 50 bars, restaurants and cafes in Brisbane’s west end food district
• 80 businesses in the university suburbs of Geelong
• 1,385 businesses in Latrobe-Gippsland and Shepparton (Vic), Southern Highlands and Shoalhaven (NSW), and Wide Bay and Ipswich (Qld).
• 6 bars along Chapel street Melbourne in one night.

 

Kent v Tal & Ors [2018] FCCA 3218

For administrative efficiency, employers will often pay their staff a salary or rate of pay that is above the minimum entitlement described in the applicable modern award, with the intention to compensate for all award entitlements that would otherwise apply (such as penalty loadings, overtime and allowances).

However, if this intention is not clearly articulated in the employee’s employment contract, the risk remains that an employee could, later on, make a claim for minimum entitlements over and above their salary.

The recent decision in Kent v Tal & Ors [2018] FCCA 3218 serves as an important reminder of this risk.

In this decision, the Federal Circuit Court held that an account manager was entitled to weekend penalty rates and overtime entitlements despite being paid an annual salary that was higher than the employee’s minimum Award base rate.

The letter of appointment issued to the employee characterised the employee’s remuneration as follows:

“$50,000 plus super plus 1.5% commission on all sales to new and existing clients. Salary to be paid weekly on Fridays. Commission to be paid once clients have paid their accounts and superannuation to be paid quarterly… 40 hours per week (on average)”

The Court found, based on the content (or lack thereof) of the appointment letter, that there was no evidence to demonstrate that at the time the employer had agreed to pay a salary to the employee, it was made clear to the employee that the salary would satisfy all overtime and penalty rate entitlements under the relevant modern award.

The Court held:

Where there is a payment made for ordinary hours of work which is in excess of the award obligation, the excess cannot be set-off against a claim for underpayment of overtime unless at the time of the payment of the excess, the employer designates that that excess over the amount of the award obligation is paid for the purpose of satisfying any entitlement to overtime payments

This decision follows an earlier judgement of the Western Australia Industrial Relations Court’s (see Simone Jade Stewart v Next Residential Pty Ltd [2016] WAIRC 00756) where an employer’s letter of appointment was deemed to be deficient along similar lines.

The law in this area has become largely settled.  Employers should proactively manage this risk by ensuring that their employment contracts contain an effective set-off clause and seek legal advice from a specialist employment lawyer.

 

Mercer v Belgravia Health & Leisure Group Pty Ltd [2019] FCCA 2112

In a recent decision of the Federal Circuit Court, MST Lawyers assisted its client, Belgravia Health & Leisure Group Pty Ltd (Belgravia), in successfully defending a general protections application filed by a former employee, Ms Julie Mercer.

The general protections application alleged that Ms Mercer was dismissed for the prohibited reasons of seeking to prevent her from:

• raising concerns about the actions of a management employee;
• making a complaint or inquiry in relation to compliance with policies and legislation;
• initiating a dispute resolution process under a certified agreement; and/or
• taking the matter to the “next level” of the organisation.

Belgravia contended that the decision to dismiss was made because Ms Mercer had engaged in serious misconduct and for no other reason.

The decision lays out the existing approach taken by Courts in deciding these types of applications, namely to:

• determine whether the applicant can make out the case that adverse action was taken and that a workplace right was exercised or had existed;
• identify the decision maker(s) behind the adverse action; and
• determine whether the respondent’s evidence sufficiently discharges the reverse onus of proof imposed by section 361 of the Fair Work Act 2009.

In this case, the Court accepted that the decision to terminate the employment of Ms Mercer was made by one person (Mr McIntosh), and that the reasons for the dismissal did not include any prohibited reason.

The Court held the view that Mr McIntosh was a steady, moderate and plausible witness, and accepted that the reasons for dismissal related to the manner in which Ms Mercer conducted herself as opposed to the complaints she wanted to make.

The Court also noted that Ms Mercer was unrepresented and had significant difficulty appreciating that the focus of the Court’s inquiry was on the whether or not her dismissal was for a prohibited reason, instead of whether or not her dismissal was carried out in a procedural fair manner.  The Court stated:

“This was not an unfair dismissal case, but Ms Mercer, particularly in her cross-examination of Mr Webb and Mr McIntosh, dealt with the evidence as if it were an unfair dismissal case, notwithstanding the Court’s advice that she needed to focus upon whether or not the dismissal was for a prohibited reason or reasons. General protections claims are quite specific and technical, and for the reasons set out above, it has not been established that there was a contravention of a general protection in this case. The proceedings demonstrate, and not for the first time, the dangers for self-represented litigants in pursuing proceedings in relation to their dismissal from employment without the benefit of proper advice as to the initiation and conduct of those proceedings.”

Whether you are an employer or an employee, MST Lawyers can assist you with any employment law disputes.  Please feel free to contact the MST Lawyers Employment Law team by email or call +61 3 8540 0200 to speak with a specialist employment lawyer.