Workplace Solutions Quarterly Newsletter – January 2015
Happy New Year and welcome to the inaugural Quarterly newsletter for Carroll & O’Dea’s Workplace Solutions group.
In this, the first edition of our 2015 Newsletter, we report on:
- The long-awaiting decision of the High Court of Australia in Commonwealth Bank of Australia v Barker, which confirmed that the implied term of mutual trust and confidence has no place in Australian employment law;
- The recent decision of Susanna Ma v Expeditors International Pty Limited, in which a senior employee employed obtained an award of damages in excess of a million dollars after her employment was terminated in the absence of an express term of notice;
- The recent decision of Browne v Coles Group Supply Chain Pty Limited, in which a dismissal was found to be harsh, unjust and unreasonable, notwithstanding the fact that the dismissed employee had engaged in workplace violence in clear contravention of a workplace conduct policy; and
- The intended reactivation of the use of secondary boycott actions by the Australian Competition and Consumer Commission.
We hope you enjoy the inaugural edition of our Newsletter.
The Carroll and O’Dea Workplace Solutions Group
No implied term of mutual trust and confidence in Australian law
In September 2014, the High Court handed down its judgment in the decision of Commonwealth Bank of Australia v Barker  HCA 32, and comprehensively determined that there is no basis for an implied term of mutual trust and confidence in employment contracts in Australia.
The decision has been welcome news to employer and employer associations, as the implied term had been frequently invoked by employees during employment disputes dissatisfied by the conduct or decisions of employer or managers. The High Court’s finding will clearly have lingering influence on employee claims involving allegations of constructive dismissal, or where an employee seeks to challenge performance management or disciplinary processes as unreasonable.
In his article on the decision, Workplace Solutions partner, Peter Punch has provided some further thoughts on the High Court’s decision and the likely impact of the loss of the implied term of mutual trust and confidence on employment relationships in Australia. Peter comments on the possible emergence of another implied term in employment contract, namely “the duty of good faith”.
Author: Peter Punch
Significant award of reasonable notice and the meaning of ‘ordinary pay’
In June 2014, the Supreme Court handed down its decision in the matter of Susanna Ma v Expeditors International Pty Limited  NSWSC 859. In doing so, the Court awarded damages in excess of $1.14 million dollars to a senior employee of a large-scale shipping company following the termination of her employment of more than 24 years.
In finding in favour of the employee, the Court confirmed an established line of legal authority relating to the assessment of reasonable notice of termination in the employment context, and applied this authority to award the employee 10 months’ notice of termination. More importantly, the Court clarified the precise meaning of ‘ordinary pay’ for the purpose of the Long Service Leave Act 1955 (NSW), and confirmed that the concept captures all forms of remuneration including bonuses, but excludes compulsory superannuation contributions. The Court also dismissed a cross-claim against the employee involving allegations of misconduct as baseless and lacking reasonable cause.
The decision of Susanna Ma v Expeditors International Pty Limited has particular relevance to Carroll & O’Dea, as the successful employee was a client of the Workplace Solutions Group and was represented by our Peter Doughman throughout the course of her matter. Further information on the decision can be found in this article here.
Fighting on the Job – No longer an automatic basis for dismissal
In the recent decision of Browne v Coles Group Supply Chain Pty Limited  FWC 3670, the Fair Work Commission reinstated a employee who been dismissed for initiating a fight with a colleague whilst at work. In his decision, Vice President Hatcher determined that initiating the fight constituted a valid reason for dismissal, but that the dismissal was harsh because it was disproportionate to the conduct when having regard to the employee’s 18 years’ of service and previous good record of service. The decision may be of particular concerns to employers, as it suggests that workplace violence may not automatically give rise to a valid and defensible basis for dismissal. This may be the case even if the employer has a zero-tolerance policy to workplace violence, and/or it conducts a thorough investigation of the violent incident whilst affording the employee procedural fairness throughout.
This decision also illustrates the evolving approach industrial tribunals have taken to determining employment and dismissal claims involving employee violence. In the past, dismissals involving employee violence have frequently been upheld by the industrial tribunals (such as the Fair Work Commission), irrespective of extenuating circumstances or the impact of the dismissal on the employee. In the article “No Fighting on the Job” – but what of the Fight for Reinstatement. Peter Punch provides some more thoughts on the decision, as well as the evolution of industrial tribunals’ attitudes when dealing with dismissal claims involving workplace violence.
Author: Peter Punch
Secondary Boycott actions under the Competition and Consumer Act 2010
The Australian Competition and Consumer Commission has indicated that it intends to become more active in the area of industrial disputes by reactivating the use of secondary boycott actions.
Pursuant to Section 45D of the Competition and Consumer Act 2010 (Cth), a person must not, in concert with a second person, engage in conduct that hinders or prevents a third person from supplying to or acquiring from a fourth person, goods and services, where the fourth person is not an employer of the first or second person.
In his article, Secondary boycott actions under the Competition and Consumer Act 2010, Workplace Solutions partner Robert McClelland sets out the specific provisions of the statutory prohibition, and details the damages and consequences that flow from successful secondary boycott actions. The article also sets out the legal basis for the prohibition in both the industrial and consumer context, which will be of interest to both trade unions and owners of large-scale enterprises substantially staffed by trade union employees.
Author: Robert McClelland
Employment Law Refresher
Entitlement to Accrued Sick Leave Entitlements
Sub-Division A of Division 7 of the Fair Work Act 2009 provides that all employees “other than casual employees” are entitled to paid personal leave. Section 96 of the Fair Work Act provides that:
- For each year of service with his or her employer, an employee is entitled to 10 days of paid/carer’s leave.
- An employee’s entitlement to paid personal/carer’s leave accrues progressively during a year of service according to the employee’s ordinary hours of work and accumulates from year to year.”
Section 97 of the Fair Work Act relevantly confirms that paid personal/carer’s leave applies in respect to both an illness of an employee and the illness of an immediate family member or an unexpected emergency affecting a family member.
Ability of an Employer to Request Evidence of Illness of an Employee
Section 107 of the Fair Work Act 2009 provides that an employer is entitled to require an employee who has taken personal/carer’s leave to provide evidence of reasons for taking that leave. The Fair Work Commission has determined that, in the case of illness, an employer is entitled to request an employee to provide a medical certificate that does more than simply refer to the fact that an employee has an illness without identifying the nature of that illness (see, for instance, Australian and International Pilot’s Association v Qantas Airways Limited (2014) FCA32 (6 February 2014)).
Interaction between Absence due to Illness and Anti-Discrimination Laws
There is a tension in the Fair Work Act 2009 between circumstances in which an employer is entitled to terminate the employment of an employee who has been absent from employment for a period, in total, and in combination, which exceeds 90 days (see Section 352) on the one hand and, on the other hand, terminating the services of an employee because the employee is suffering from a disability, contrary to Section 351 of the Fair Work Act and, the Disability Discrimination Act 1992 more generally.
In broad terms, that tension should be addressed by conferring with an employee prior to any decision being made to terminate the employee’s employment with a view to ascertaining:
- the nature of the employee’s illness/disability;
- the likely duration of the employee’s absence from employment and whether that absence is such that it could be considered that the Contract of Employment has been frustrated as a result of the employee’s inability to perform the inherent requirements of their position; and
- whether it is possible for the employer to take reasonable steps to accommodate the employee’s return to work despite their illness or disability.
It is important to obtain specific advice in respect to individual circumstances that might arise when an employer is confronted by such a situation.
Author: Robert McClelland
A Moment of Levity
Our clients and friends may be interested to read the following office rules issued by a Sydney Law firm in 1852. Fortunately for all concerned, legal workplace have become slightly more informal in the intervening 162 years.
Rules for the Clerical Staff
- Godliness, Cleanliness and Punctuality are the necessities of a good business
- On the recommendation of the Governor of this Colony, this firm has reduced the hours of work, and the Clerical Staff will now have to be present between the hours of 7am and 6pm on week days. The Sabbath is for Worship, but should any Man-of-War or other vessel require victualling, the Clerical Staff will work on the Sabbath.
- Daily prayers will be held each morning in the Main Office. The Clerical Staff will be present.
- Clothing must be of a sober nature. The Clerical Staff will not disport themselves in raiments of bright colours, nor will they wear hose, unless in good repair.
- Overshoes and Top-coats may not be worn in the offices but Neck Scarves and Head-wear may be worn in inclement weather.
- A stove is provided for the benefit of the Clerical Staff. Coal and Wood must be kept in the locker. It is recommended that each member of the Clerical Staff bring four pounds of coal, each day, during the cold weather.
- No member of the Clerical Staff may leave the room without permission from Mr Ryder. The calls of nature are permitted, and the Clerical Staff may use the garden below the second gate. This area must be kept in good order.
The Owners hereby recognise the generosity of the new Labour laws, but will expect a great rise in output of work to compensate for these utopian conditions.