Adviser Nov 09

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The New South Wales Government passed a Bill referring its

industrial relations powers to the Commonwealth on 1 December. While we support the move to a national system, under this referral it’s clear the states can walk away from the table at any time.

IN THIS ISSUE

� NSW refers industrial relations powers to the Commonwealth

� Will you be derailed by the new legislation?

� Payroll update—personal, carer’s and compassionate leave from 2010

� Help from the hotline—Shutting down over christmas

� Exemption rate removed from clerks modern award

� Union right of entry—industrial

NSW refers industrial relations powers to the Commonwealth

AdviserEmployers

November 2009 Published by AFEI - Level 2, 97-99 Bathurst Street, SYDNEY NSW 2000

The referral will bring the remaining employees in the state’s private sector, estimated to be less than one fifth of the NSW workforce, under federal law. Once the referral is formalised, the only employees not covered by the Fair Work Act 2009 in NSW will be state public servants and local government employees.

Background

The states and territories formally committed to creating a national workplace relations system in late 2009 in an inter-governmental agreement. Since then each state, except for Western Australia, has agreed to refer their powers.

The referrals overcome a constitutional problem that existed under the old workplace law, which relied on the corporations power. The state Labor governments refused to move to a unitary system with a federal Coalition government.

WorkChoices couldn’t apply to entities that weren’t constitutional corporations and individuals employed under these entities were covered by the state industrial system.

This generally included:

� unincorporated organisations

� some community sector organisations

� partnerships

� sole traders

� state public sector agencies.

We’re here so long as we like it

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Published by AFEI - Level 2, 97-99 Bathurst Street, SYDNEY NSW 2000 November 2009

What is a referral?

A referral is when a state gives the Commonwealth the power to make laws in an area that is normally a state matter. The only other way a federal law can be created on a state matter is by referendum or an agreement to introduce identical laws in each state. Neither of these ways are as convenient for the Commonwealth as a referral.

continued from page 1

Employee type System

Private sector Federal

Community sector Federal

Incorporated sector Federal

State owned corporations State

Public sector State

Local Government State

News2 News headlines

Features 1 NSW to refer industrial relations powers

to the Commonwealth

4 Will you be derailed by the new legislation?

7 Payroll update—personal, carer’s and compassionate leave from 2010

9 Help from the Hotline—Shutting down over Christmas

10 Union right of entry—industrial

11 Unfair dismissal—trends since the start of Fair Work

13 Magical and other poor decision making

14 Exemption rate removed from clerks modern award

Cases & the law15 Race discrimination—employee told not to

speak his native language

Training & events 16 December & February training dates

Modern award information sessions

NEWS Commonwealth passes referral Bill

The Federal Government passed its refer-ral Bill on 2 December enabling the states to transfer their workplace relations powers covering the private sector to the Common-wealth. NSW refers powers

New South Wales is set to join the national workplace relations system from next year after passing a Bill on 1 December referring its powers to the Commonwealth. New South Wales was the last state to commit to the referral, with the exception of Western Aus-tralia, which had declared from the start that it wouldn’t refer it powers.

Modern awards process complete

The Australian Industrial Relations Commis-sion (AIRC) delivered it final modern awards decision on 4 December. This decision on the stage four modern awards marks the end of the modernisation process—with modern awards set to start in 2010.

Govt announces super clearing house

The Federal Government has announced it will create a superannuation clearing house for small business from the middle of 2010. Small businesses—less than 20 employees—will pay their super contributions to a single location and the clearing house will forward the payments to the employee’s fund of choice.

For the stories behind these headlines visit the

Adviser online at:www.afei.org.au/files/AdviserArticles/1109/

index.html

What is the effect of the referral?

The Commonwealth has also passed a Bill to enable the states to transfer their powers. The Commonwealth Bill amends the Fair Work Act so that from 2010 the Industrial Relations Act 1996 won’t apply to private sector employees in NSW.

Which system will cover employees after the referral in NSW?

CONTENTS

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Excluded subject matter

There is still a lengthy list of subjects that are excluded from the referral and the state laws that deal with the following workplace issues continue to apply:

� anti-discrimination and equal opportunity

� superannuation

� workers compensation

� occupational health and safety

� matters relating to outworkers

� child labour

� training arrangements

� long service leave

� leave for victims of crime

� attendance for service on a jury, or for emergency service duties

� declaring and substituting public holidays

� workplace surveillance

� business trading hours.

When will the referral take effect?

The referral takes effect from the 1 January 2010, as this will also coincide with the start of the rest of the Fair Work Act and modern

awards. The Federal opposition passed the Bill in spite of concerns about provisions giving the states and territories the right to reject amendments to the Fair Work Act and to revert to state laws if they object to changes in the federal workplace relations laws. As it stands the federal Bill gives no certainty to employers who would be subject to state Labor governments reverting to state laws when it suits them to do so.

Industrial Relations (Commonwealth Powers) Bill

Will you be derailed by the new legislation?New awards and minimum employments standards

Make sure you’re on track with the workplace relations changes that are set to start in 2010. In just over a month employers will be expected to begin operating under the modern award system. This exercise has seen thousands of awards reduced to 122 national awards for specific industries or occupations. It’s been an enormous undertaking with the devilish detail of applying the award provisions now to be worked through.

Also in January 2010 the last part of the Fair Work Act 2009 starts—the national employment standards. These are new core standards that underpin the terms of any modern award and enterprise agreement. They are a set of extensive employee

rights that include the new right to request a change in working conditions for employees returning

from a period of parental leave and redundancy payments for all national system employees.

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Helping you stay on track

AFEI has been heavily involved in the 18 month long award modernisation process, representing members interests. We have also submitted our objections to those NES standards that impose new obligations on employers without any evidence of the need for increased regulation, such as the expansion of redundancy and the parental leave entitlements.

Key features of the NES and modern awards

There is a great deal of detailed attention needed to correctly apply the NES and modern awards in your workplace, which is why we are encouraging members to discuss this detail with us as soon as possible, and attend our ‘Know your Award Sessions’.

Here are some key features to be alert to:

The National Employment StandardsThese are minimum non wage entitlements applying to all employees which cannot be modified to an employee’s detriment:

Hours

38 hour week, employees can be required to work ‘reasonable overtime’ but may refuse to work additional hours if they are ‘unreasonable’.

Right to request flexible work

Employees responsible for the care of a child may request flexible working arrangments until their child reaches school age. The employer may refuse on ‘reasonable business grounds’, but this is not defined in the Act.

Parental Leave

Each parent has a separate entitlement to 12 months’ unpaid parental leave or one parent can request up to 12 months additional leave. Casual employees who have worked with the one employer on a regular and systematic basis over a 12 month period also have this entitlement. Where a pregnant employee needs to be transferred to a safe job for OHS reasons, and no safe job is available, she is entitled to paid leave for the risk period.

Annual leave

The four week entitlement (five for certain shift workers) to annual leave will accrue progressively for all periods of employment other than periods of unpaid leave, unpaid absence (other than community service leave) and unauthorised leave. Progressive accrual means that leave accrues continually, rather than by a defined period of time (e.g. annual service, or monthly service) so employees do not have to wait for a certain period of service before they are entitled to take leave. An employer cannot ‘unreasonably’ refuse a leave request. Annual leave is to be paid at the employee’s base rate of pay (excluding overtime and penalty rates, bonuses and similar payments).

Personal carers/compassionate leave

The 10 day paid personal/carers leave entitlement will be accrued progressively, as with annual leave, and accumulates from year to year. There is no cap on the amount of leave which can be accumulated. Employees are entitled to an additional two days paid compassionate leave per occasion and two days of unpaid carer’s leave per occasion if their carer’s leave has been exhausted. For more information on the evidence

and notice requirements see the separate article in this issue of the Adviser on personal, carer’s and compassionate leave.Casual employees are entitled to compassionate leave of two days unpaid leave per occasion.

Community service leave

An employee who engages in an eligible community service activity (as defined in the legislation) is entitled to an unpaid (except for jury duty) absence from work if the absence is reasonable in all the circumstances. There are notice and evidence requirements to be met.

Employers are required to pay the first 10 days absence for jury duty. Payment is the difference between what the employee was paid for jury duty and the employee’s base rate of pay.

Long service leave

While part of the NES, long service leave remains, for the time being, covered by current state and territory legislation and where relevant, award or agreement provisions. The federal government intends to introduce a new national long service leave standard.

Public holidays

The NES provide the following public holidays:

� Christmas Day, Boxing Day, New Year’s Day, Australia Day, Anzac Day, Queen’s Birthday, Good Friday and Easter Monday

� a substitute public holiday under a state or territory law where, for example, a public holiday falls on a weekend

� any other public holiday under a state or territory law, including a regional public holiday in the place where the employee works.

An employer can ask an employee

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to work on a public holiday if the request is ‘reasonable’.

Notice of Termination and Redundancy

The NES prescribes the periods of notice which must be given or payment in lieu made.

It also prescribes the scale of payments to be made where

� the employee’s employment is terminated at the initiative of the employer because the employer no longer requires their job to be done by anyone

� the employer is insolvent or bankrupt.

Small business (less than 15 employees) is exempt from redundancy payments; and the notice and redundancy payments requirements do not apply to certain categories of employees, including casuals, employees on probation, fixed term or seasonal employment.

Awards and agreements may provide more generous redundancy payments.

The Fair Work Information Statement

From 1 January 2010 employers must give new employees a Fair Work Information Statement. This fact sheet sets out employee rights and entitlements at work, including the NES, modern awards, agreement making, the right to join a union and the role of Fair Work Australia (FWA). You should have received a copy of this statement in a recent AFEI circular on the national employment standards.

Modern awardsModern awards will replace existing awards (except those

applying to a single enterprise) and NAPSAs from 1 January 2010.

Modern awards will cover all employees who fall within the scope of the modern award except:

� high income employees,

� currently $108 300 (the high income threshold is prescribed and varied from time to time)

� employees covered by enterprise agreements (except to the extent that the modern award is referred to in assessing an enterprise agreement for compliance with the better off overall test and in determining minimum base rates of pay).

Transitional provisions in modern awards mean that rates of pay and certain other pay related entitlements will not come into force until 1 July 2010 and are to be phased in over five years. Award matters affected by transitional provisions include:

� minimum wages

� casual and part time loadings

� Saturday, Sunday and public holiday penalty rates

� evening and other penalty rates

� shift allowances.

During the period between 1 January 2010 and 1 July 2010, the pre- modern award pay-related entitlements remain in effect. That means entitlements contained within a pre-modern award (e.g. a federal award, or NAPSA) for these matters continue to operate.

From 1 July 2010, where there is an increase or decrease in wages or other pay related entitlement, the transitional provisions allow for the incremental phasing-in of changes over a five-year period.

However, all other entitlements under modern awards will apply from 1 January 2010.

Modern awards contain provisions covering:

� minimum wages

� types of employment (e.g. full-time, part-time, casual)

� overtime and penalty rates

� work arrangements (e.g. variations to working hours)

� allowances

� leave, leave loading and taking leave

� superannuation

� procedures for consultation, representation and dispute settlement.

The fourth and final stage of the award modernisation process was completed on 4 December 2009 when the final Stage 4 awards were released.

Modern award—AFEI member information

To help you prepare for the impact of modern awards in your workplace, AFEI is providing members with the following as a part of membership:

� help determining your awards

� specialised information sessions on a number of awards

� online access of final awards

� AFEI Hotline award information and help.

Help determining your award

AFEI has represented the interests of members before the Australian Industrial Relations Commission (AIRC) over the entire award modernisation process. We’re currently contacting members by telephone to conduct specialised and tailored modern award determinations. This process is provided to you as part of our members’ only award service.

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Know your modern award information sessions

Over December 2009 we’re running a series of ‘know your modern award’ information sessions for modern awards across a number of industries. For a list of award sessions that we are running please see page 16. These sessions will include:

� a brief overview of the award modernisation process

� briefing on specific terms and conditions of the modern award and a discussion of the major changes between the modern award and existing NSW NAPSA or award in that industry

� transitional arrangements and what these mean for preparing

� payroll

� a discussion of the other modern awards that might also impact

� on your business

� the opportunity to ask our workplace relations consultants specific questions about the award.

These 90 minute sessions are designed for any employee who will implement the new award wages and conditions in your workplace, this could include general management and human resources or payroll employees, depending on your business. If you’re not sure which session you should attend, please contact the AFEI Hotline on: 02 9264 2000.

Our website

During December and January members will start to get access to their modern awards in our members only area of the AFEI website. The website will also contain circulars, wage rate

schedules and practical information and guidance on the Fair Work laws. All of this information will be updated regularly.

If you have any questions about how to access the website please contact Member Services on: 02 9264 2000.

The Hotline

The AFEI Hotline is our telephone advisory service specifically for employers. You can ask our team of industrial and employment law advisers any questions about modern awards, including what they cover and how they will affect your business. The AFEI Hotline is open every business day of the year, from 8.30 am to 5.00 pm on: 02 9264 2000.

The AFEI legal practice

To better service members we’ve registered an incorporated legal practice—AFEI Legal Pty Ltd.

This new legal practice will focus on industrial, employment, discrimination, occupational health and safety and workplace relations law, but our lawyers are qualified to practice in all areas of law.

Because we only work for employers we can provide members with a specialised legal service at a reasonable cost. Our expertise in this area also gives us a distinct advantage over other lawyers who are attempting to specialise in this area.

Please speak to a lawyer today about AFEI Legal on: 02 8088 4999.

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Payroll update—personal, carer’s and compassionate leave from 2010

Leave under the NES and modern awards

The Fair Work Act 2009 creates core standards that set the minimum terms and conditions for all national system employees. Complying with the leave provisions of these national employment standards (NES) will be complex for payroll officers as there are a number of categories of leave and unpaid leave. Here we look at the three different types of leave entitlement and your obligations from January 2010.

Paid personal/carer’s leave Definition

An employee can take paid personal/carer’s leave because they aren’t fit to work as a result of sickness or injury or to care for an immediate family member, or member of their household, who needs care or support because of sickness or injury. Leave is also permitted for an employee who must care for an immediate family member or household member because of an emergency.

Notice and evidence

An employee’s entitlement to this leave is contingent on them

meeting notice and evidence requirements of both the Fair Work Act and their modern award or enterprise agreement. Under the Act employees must tell their employer as soon as practicable that they are taking leave and must define the leave period, or if that’s not possible estimate the period of leave.

If you require employees to give you evidence that they have taken leave for one of the reasons defined in the Act, that evidence must satisfy a ‘reasonable person’. Because this term isn’t defined in the Act we suggest you contact us to discuss how it has been interpreted in the past. Typically, a reasonable person would be satisfied by a medical certificate from a doctor or other health professional.

You are entitled to question medical certificates and request more information about the nature of the sickness or injury, remember its not enough for the employee to be sick, but they must also be unfit to work. However, the best approach is to establish and communicate workplace policies that describe what evidence you require. Then it would be prudent to warn any employee who fails to

meet these standards as soon as an issue arises.

Amount of leave

Permanent employees are entitled to ten days of paid personal/carer’s leave for each year of service.

Accrual of leave

The entitlement accrues progressively during each year of service according to the employee’s ordinary hours of work. Paid personal/carer’s leave accumulates from year to year and there is no cap on the amount that an employee can accumulate.

Rate of pay

You pay the employee at their base rate of pay for their ordinary hours of work for that period.

Cashing out

It’s possible for employees to cash out their paid personal/carer’s leave if they have accrued large amounts of leave and their modern award or enterprise agreement provides for it. However, the Fair Work Act puts conditions on cashing out terms. Under the Act a separate written agreement must be made for each act of cashing out and it can only be done if after their leave is cashed out, the

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injury, the employee may take the compassionate leave for that occasion at any time while the illness or injury persists.

Amount of leave

An employee is entitled to two days of compassionate leave for each occasion.

Rate of pay

You must pay the employee at their base rate of pay for their ordinary hours of work for that period.

Conclusion

Payroll officers need to be aware of the paid and unpaid personal, carer’s and compassionate leave entitlements created by the NES from 2010. The NES provide an outline of the minimum standards that apply to all national system employees. Awards and agreements may contain more beneficial provisions, so they also need to be checked.

If you need any more information call the AFEI Hotline on: 02 9264 2000.

employee will still have at least 15 days of accrued paid leave left.

Unpaid carer’s leave

The Act provides for unpaid carer’s leave for times when an employee has used their paid carer’s leave, but an immediate family member or household member needs care or support because of sickness or injury or in a family emergency.

Period of unpaid carer’s leave

The length of unpaid leave can be up to two days or another period that the employee and employer agree to. The entitlement is for leave each time a family or household member needs care. This means that, provided the occasion is genuine and the notice and evidence requirements are met, there is potential for employers to access significant amounts of leave of this type.

Compassionate leave

The final type of leave under the NES that we will examine in this article is compassionate leave.

Definition

A permanent employee is entitled

to paid compassionate leave if a member of their immediate family or household:

� has a life threatening illness

� has a life threatening injury

� dies.

Casual employees are entitled to unpaid compassionate leave.

Notice and evidence

The employee must provide the same notice and evidence as for paid personal/carer’s leave.

Period of compassionate leave

Employees that are entitled to compassionate leave can take the leave on each occasion as:

� a single continuous two day period

� two separate periods of one day each

� any separate periods to which the employee and his or her employer agree.

Further, if the permissible occasion is the contraction or development of a personal illness, or the sustaining of a personal

Help from the Hotline—Shutting down over ChristmasAFEI runs a Workplace Hotline that gives members information and advice on managing their workplace issues. The information we provide on the Hotline is tailored to the individual needs of each business, but we often receive questions that are relevant for all employers. Here we publish

our answers to these frequently asked questions.

What issues should I consider if I’m planning to shutdown over Christmas? Many organisations shutdown

over Christmas for a set period of time that ranges from one week to one month. This Christmas, as employers in the Federal industrial relations system transition to the Fair Work Act 2009 and the (NES), a unique situation is created with different requirements applying before and after 1 January 2010.

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What is the current federal law?

The Australian Fair Pay and Conditions Standard (AFPCS) continues to apply in relation to annual leave until 31 December 2009. Under the AFPCS, an employer can shutdown their organisation, or part of the organisation, without giving notice to employees and there is no limit on the number of shutdowns in a year. An employer can direct employees to take annual leave, but only if they have enough leave to cover the entire period of the shutdown. This can be problematic for employers. If employees don’t have enough annual leave to cover the period of the shutdown, you may be able to come to an agreement with them to take annual leave in advance. It can be difficult, however, to recover leave granted in advance if the employee leaves before earning the days back.

Generally there is no ability to direct employees to take leave without pay under the AFPCS if they don’t have enough leave to cover a period of shutdown. The industrial instrument that applies to your employees, such as an award, notional agreement

preserving state award, workplace or enterprise agreement or contract of employment, could also determine whether you can direct employees to take leave without pay and define the amount of notice you will need to give.

What happens from 1 January 2010?

The NES and modern awards take affect from 1 January 2010 and will change the shutdown and annual leave requirements. The NES doesn’t refer to any specific shutdown period or notice requirements. Award and agreement free employees may be required to take a period of annual leave where the request is reasonable. Employers can also make general agreements with these employees about how and when leave will be taken and this could include shutdown periods and notice requirements.

Most modern awards make specific provisions for shutdowns and give employers the ability to direct employees to take annual leave with four weeks, or one month’s notice. Many of the awards also allow for employees to be directed to take leave without pay during a shutdown if they don’t have enough leave to cover the entire period.

What about the current NSW laws?

Employers in the NSW industrial relations system can specify a shutdown period for a particular department or whole organisation and require employees to take annual leave or leave without pay. Each employee must be given one month’s notice of the shutdown dates. New employees starting within the month before the shutdown must be advised of the shutdown dates when they start work.

How will this affect shutdowns this Christmas?

Employers must still comply with the AFPCS and current industrial instruments for shutdown periods until the end of the year. However, from the start of next year the NES and modern awards take effect and employers will need to meet different requirements for shutdowns. This includes requirements for directing employees to take annual leave or leave without pay.

If you are planning to shutdown over the Christmas and New Year period, call the AFEI Hotline: 02 9264 2000 and speak with one of our advisers.

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Union right of entry—industrialThe Fair Work Act 2009 has expanded the ability of unions to enter the workplace. Under the previous laws, unions could only enter the workplace if:

� work carried on in the premises was covered by an award or collective agreement that was binding on the union

� there was an employee in the work premises who was a member of the union or eligible to become a member of the union.

What happens now?

Unions can enter premises if the union is entitled to represent the industrial interest of one or more employees in the workplace. Simply put, unions can enter workplaces to hold discussions with employees on the basis that their own registered rules provide they are able to represent the employees.

However union officials don’t have an automatic right to enter workplaces. A union official who wishes to enter work premises must hold a federal right of entry permit and comply with the right of entry provisions in the Fair Work Act before they can exercise the right to enter a workplace.

The permit allows the union official to:

� meet and hold discussions with employees

� investigate suspected breaches of the Fair Work Act or other instruments

� exercise rights under occupational health and safety laws.

Below is a set of quick guidelines to help you decide whether a union official can enter your workplace.

Guidelines for the new laws

1. Is the union representative who is seeking to enter the workplace a permit holder*?

NO—refuse entry.

YES—proceed to point 2.

*Employers can check the validity

of a union representative’s entry

permit on the Fair Work Australia

website.

2. Have you been provided with an entry notice at least 24 hours before but not more than 14 days before the time of entry?

NO—proceed to point 3.

YES—grant entry. Refer to point 4 for methods that you may reasonably direct the permit holder to comply with.

3. A permit holder doesn’t have the right to enter the workplace to hold discussions if they haven’t issued an entry notice before the proposed date of entry. The only exception is if they enter to investigate a suspected contravention and Fair Work Australia has issued them with an exemption certificate. You can require the permit holder to produce their exemption certificate on entry.

4. Employers can direct the permit holder, provided the direction is reasonable to:

� conduct interviews or hold discussions in a particular room or area of the premises

� take a particular route to reach a particular room or area of the premises.

Permit holders don’t have the right to inspect any

work process or to access documentations when the stated purpose of entry in the entry notice is for holding discussions. Discussions can only take place during meal breaks and employers are under no obligation to allow employees to grant extended breaks to attend the discussion.

5. When the purpose of entry is to investigate on a suspected breach, the permit holder may do the following:

� inspect any work, process or object relevant to the suspected breach

� interview any union member or consenting person about the suspected breach

� inspect or make copies of union members documentation that is directly relevant to the suspected breach and kept on the premises or accessible from a computer on the premises

� inspect or make copies of non-union members documentation that is directly relevant to the suspected breach and kept on the premises or accessible from a computer on the premises only if a written consent has been obtained.

6. The permit holder can request access to a document, with written notice, if they identify a document that they want to inspect, but the employer can’t produce it on the day because it is held off site, or is inaccessable for some other reason.

For information on union entry on OHS grounds see our article in the September issue of the Adviser.

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Exemption rate removed from clerks modern awardMinister asks for exemption rate to be removed

When modern clerical and banking awards were made earlier this year, AFEI successfully argued for the retention of their exemption clauses. The exemptions clauses are a long-standing feature of the NSW clerical awards and other federal and state awards. The clauses provide flexibility for employers by allowing for an over award payment mechanism which provides greater flexibility, and employees enjoy, in the aggregate, a higher salary for all purposes, including while on annual leave.

AFEI was able to demonstrate this provision in clerical and banking awards had an undeniably long history, including several arbitrated decisions upholding their purpose and retention, and that they covered the bulk of clerical employees.

This was recognised by the AIRC in

its decision to include the clause in the awards:

We considered that adopting a provision which reflected the terms of the instrument applying widely in the largest state, where similar provisions of one sort or another apply in four of the six states and one of the two territories, was consistent with our approach in award modernisation of generally adopting appropriate minimum provisions applying to the critical mass of relevant employees.

However, unions objected to this outcome and complained to the Federal Minister who amended her Award Modernisation Request to require the AIRC to remove the clauses.

These awards will now stipulate that employers are to pay all allowances, overtime and penalty

rates and annual leave loading. Salaries may be annualised, but only if the employee receives no less than they would have been paid for overtime, allowances, penalty rates worked over the year, and must be reviewed annually.

To use the annualised salary provisions, employers covered by these awards need to apply the entitlements under the new awards to the employee’s usual working pattern over the year to ensure they have met the minimum award requirements.

There is a further issue for employers covered by the Clerks—Private Sector Award 2010 arising from this decision. Under the NSW Clerks NAPSA, employees above the exemption rate could be paid on a monthly basis. The modern award provides only for fortnightly pay periods, unless there is majority agreement.

�Agreements

�Awards

�Discrimination

�Dismissal

�Disputes

�Harassment & bullying

�Hiring & recruitment

�Leave entitlements

Did you know that we offer a wide range of workplace consulting services in the following areas:

� Legal services

� OHS

� Paying wages

� Redundancy

� Training

� Unions

� Workers compensation

� Workplace policies

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Unfair dismissal—trends since the start of Fair Work

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Claims rise under new laws

There has been a marked increase in unfair dismissal claims lodged by employees in the first months of the new Fair Work Act 2009, compared to the same period last year. This increase confirms our report in the Adviser at the start of the year that the laws would substantially alter the unfair dismissal regime by widening eligibility criteria for employees.

Who’s eligible to make a claim?

The Fair Work Act 2009 (Cth) removed the unfair dismissal exemption created by WorkChoices for small to medium sized business—100 or fewer employees—significantly increasing the exposure of businesses to claims since July this year.

Table 1–comparison between the new and old law

*Although a longer qualifying period does apply for small

business employees.

Now to make a claim employees need only have completed a minimum employment period and meet one or more of the following conditions:

� they are covered by a modern award

� they are covered by an enterprise agreement

� they earn less than $108 300**.

**$108 300 is the threshold for the 2009–2010 financial year,

but it’s updated each year on 1 July. This threshold is worked

out using a process described in the Fair Work Act.

What about casual employees?

Casual employees are generally not entitled to make a claim for unfair dismissal. The only exception is for people who are employed on a ‘regular and systematic basis’ and could reasonably expect to continue to be employed on that basis.

What’s the minimum employment period?

The qualifying period is determined by the size of the employer. To be eligible an employee in a small business must have worked for the employer for one year and an employee not in a small business must have worked for the employer for six months.

Table 2–minimum period of employment

What’s the meaning of ‘small business employer’?

A small business employer is defined in the Fair Work Act as a national system employer with fewer than 15 employees.

How is it calculated?

Currently the method for counting employees is based on the number of full time equivalent employees in your business. However this method is temporary and will be replaced at the start of 2011 by a straight headcount method.

The current full time equivalent method is considered a better definition for employers and we argued that it should be the final definition.

Table 3–small business employer calculation method

Law Date Exemption

WorkChoices up to 30 June 09 100 employees or fewer

Fair Work from 1 July 09 none*

Employer type Period

Small One year

Not small Six months

Start date Calculation method

now-end 2010 full time equvalent

2011 headcount

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year. The right to request could include the right to ask for part time work.

If your employee numbers are around 15 we suggest you consider your arrangements in time for the start of the new definition in 2011. The shorter eligibility period for employees not in small business can have a direct financial cost for employers.

What about the code?

If you are defined as a small business employer you are subject to the ‘Small Business Fair Dismissal Code’ (the code). The Federal Government introduced it after promising to create special arrangements for small businesses to recognise the increased impact unfair dismissal claims have on small business.

However, the rules in the code are effectively the same as those required of every employer under the Fair Work Act. In our view, there aren’t different criteria for small business and they are subject to the same test of harshness in an unfair dismissal matter as any other employer. The only real difference between small and other businesses is the minimum employment period, which is why it’s important to consider the phased in definition of small business.

Table 4–steps for calculating the number of full-time equivalent employees

Step 1

Work out the number of ordinary hours—including parts of hours*—for each person who was an employee at any time during the four weeks before the dismissal.

*ordinary hours have a legal definition and you should

work out the hours for each employee by referring to

this definition. We can help with this.

Step 2

Work out the number of hours leave for each employee during this period, whether paid or unpaid that was connected to the birth or adoption of a child and was at least four weeks long.

Step 3

Add together the ordinary hours worked out under step 1 and subtract the hours of leave worked out under step 2.

Step 4

Divide the number worked out in step 3 by 152* to get the number of full time equivalent employees.

*The number 152 is based on the maximum number

of hours that a full time employee would work in four

weeks (38 hours per week).

How will I calculate my employee numbers under the headcount method?

From 2011 this definition will change to the less forgiving headcount method where each employee is counted, irrespective of the hours they work.

It’s an approach that disproportionately affects small businesses with part time employees. It also intrudes on employer decision making by ‘promoting’ full time status over part time and is onerous considering the new right to request flexible working arrangements, which will come into effect for parents from next

November 2009

14

Published by AFEI - Level 2, 97-99 Bathurst Street, SYDNEY NSW 2000

What happened?

In late 2007 the employee said he was walking past his manager and another employee, when the manager said angrily ‘I hate Vietnamese’. The manager later said he was joking and refused to apologise for his comment. The employee said the manager then told all of the employees ‘Anyone who speaks Vietnamese get out!’ and then slammed the table.

The employee and other Vietnamese workers at the bakery approached the manager to tell him they were proud of Vietnam and asked him not to joke about it. The manager told them they ‘should be fighting for Australia, because they are Australian citizens and Australia has given them everything they have earned’. He then said:

and when we are working around the table nobody to speak Vietnamese anymore. We all speak English so we understand each other.

They approached the director of the business to complain about what had happened but he denied seeing or hearing the incident and did not say anything other than ‘I don’t know’.

One of the employees quit and two others, including the applicant, left the bakery. The applicant returned to see if he still had a job but the

CASES & THE LAW

director reduced the employee’s annual leave by four hours and forced him to take annual leave for a period of about five or six weeks. He was also paid $25 less per week after he told the employer he had made a complaint and refused to withdraw it.

What did the tribunal find?

The tribunal awarded the employee $28 406 in damages for economic loss and an additional $12 000 in general damages for racial discrimination.

The tribunal found the employer did discriminate against the employee on the ground of his race by prohibiting him from speaking Vietnamese at work, which was a condition that only related to people of Vietnamese race. The employer also subjected him to the detriment of not knowing whether he still had a job and requiring him to take his annual leave.

The tribunal found the director of the company implicitly authorised the manager’s actions through his own inaction. This included not responding to the comment by the manager that the employee’s shouldn’t speak Vietnamese to each other at work and not intervening to reassure his workers that they could return to the bakery. A reasonable boss would have asked what was said

at the time and decided whether the direction was appropriate. The director should also have explored whether the conflict could have been resolved because some of the employees didn’t speak English very well and might have only have been able to speak Vietnamese. There was no evidence that speaking English was a requirement of the role.

What does this mean for employers?

Employers shouldn’t delay investigating behaviour in the workplace that is potentially discriminatory. An employer is taken to ‘authorise’ the discriminatory act of an agent or employee—in this example a manager—if they don’t show that they reject or disapprove of the employee’s actions. The director of the company might have avoided the prosecution if he asked the employees for their version of events and then clearly disagreeing with the manager’s request that they not speak Vietnamese. Only an employer can be held liable for race discrimination in employment and no order can be made against the manager. Therefore it’s the employer that’s exposed and needs to protect against the discriminatory actions of employees, including managers, against other employees.

Vuong v Casabake Pty Ltd [2009] NSWADT 279

Race discrimination—employee told not to speak Vietnamese

A bakery employee who was told not to speak Vietnamese at work has been awarded $28 406 for economic loss and damages for distress and humiliation.

15

Published by AFEI - Level 2, 97-99 Bathurst, SYDNEY NSW 2000 November 2009

TRAINING AND EVENTS

FEB COURSE TITLE

1 Advanced Excel (2 days)

2OHS Consultation for Workplace Committee Members and OHS Representatives (4 days)

8 Running Effective Meetings (1 day)

9 Introduction to Workplace Relations (1 day)

10Introduction to OHS and Workers Compensation (1/2 day)

10Preventing Discrimination and Harassment in the Workplace (1/2 day)

11 OHS Risk Management (2 days)

15Effective Supervision and Team Leadership 1 (2 days)

15 Advanced Word for Windows (2 days)

17 Effective Communication Skills (1 day)

17Writing Safe Work Method Statements (1/2 day)

18 Time Management (1 day)

22Develop and Manage Work Priorities and Development (1 day)

23 Managing Staff in the Community Sector (1 day)

23Telephone Techniques and Positive First Time Impressions (1 day)

24Performance Management and Improving Staff in the Community Sector (1 day)

25Implement Industrial Relations Procedures (2 days)

Next year......

www.afei.org.au/training

DEC COURSE TITLE

2 Essential Selling Skills (2 days)

4 Manual Handling Employee Awareness (1/2 day)

7 Manage People Performance (2 days)

9 Principles of OHS Risk Management (2 days)

14 Introduction to Word for Windows (2 days)

14OHS Workplace Committee Chairpersons Course (1 day)

AFEI modern award sessionsAmusement, Events and Recreation Award 2010

Banking, Finance and Insurance Award 2010

Book Industry Award 2010 and Journalists Published Media Award 2010

Building and Construction General On-site Award 2010

Children’s Services Award 2010

Clerks - Private Sector Award 2010

Fitness Industry Award 2010

Gardening & Landscaping Services Award 2010

General Retail Industry Award 2010

Health Professionals and Support Services Award 2010

Manufacturing and Associated Industries and Occupations Award 2010

Nurses Award 2010 and Medical Practitioners Award 2010

Quarrying Award 2010

Restaurant Industry Award 2010

Road Transport and Distribution Award 2010

Social, Community, Home Care & Disability Services Industry Award 2010

Storage Services and Wholesale Award 2010

16

© Australian Federation of Employers & Industries (AFEI) 2009

ABN 68 337 541 246

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Please address enquiries to Copyright at [email protected]

For further information about the Adviser or AFEI please visit: www.afei.org.auYou can also write to:

AFEI AdviserPO Box A233

SYDNEY SOUTH NSW 1235

Street Level 2, 97-99 Bathurst Street, SYDNEY NSW 2000Postal PO Box A233, SYDNEY SOUTH NSW 1235

Phone 02 9264 2000Fax 02 9264 5699

Email [email protected]

www.afei.org.au

Adviser Nov 09

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