Model terms for annualised wages clause to be included in Modern Awards

As part of the Fair Work Commission’s (Commission) four-yearly review of Modern Awards[1], the Commission recently handed down a decision on 27 February 2019 (Decision)[2], to insert new model clauses for annual wages into Modern Awards.

The Decision applied to 17 Modern Awards that currently contain annualised wage entitlements, and 2 Modern Awards that previously did not contain annualised wage arrangements.

We set out below some background, the new obligations imposed on employers, and the impact of the model clauses for employers.

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Two jobs, one employer: Australia Post not liable for overtime pay

The recent Federal Court decision of Lacson v Australian Postal Corporation [2019] FCA 51 has reaffirmed the position than an employer is not liable for cumulative overtime and allowances where their employee performs different duties at two different locations and two different times. Justice Mortimer dismissed an appeal by an employee of Australia Post, who argued he was entitled to overtime, rest relief and meal allowances over a 4 year period while he worked two jobs for the same employer.

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Representations no longer required before precautionary suspension

On 19 February 2019, the Constitutional Court upheld the Labour Court’s finding that an employer need not afford an employee an opportunity to be heard before implementing a precautionary suspension. This important development arose from the following facts.

The employer, the South African Breweries (Pty) Ltd (SAB) employed a district manager for the Border region. The employee was responsible for the operations in that region, which included ensuring that SAB’s fleet of vehicles, met all legal requirements. In December 2012, SAB came to know of fraudulent activities in respect of the licensing of its vehicles, and that certain vehicles were being operated without licences and the requisite maintenance. In response, the employee instructed SAB’s fleet and depot managers to rectify the irregularities. It would appear, however, that this was not attended to because on 10 May 2013, one of SAB’s trailers, which was unlicensed and “in a state of disrepair” was involved in a collision which resulted in a fatality. As a result, on May 15, 2013, SAB informed the district manager that he was suspended, on full pay, pending an investigation into allegations of dereliction of duty and gross negligence. The suspension was precautionary not punitive.

Ultimately, SAB convened a disciplinary hearing. The employee was found guilty of various charges, including dereliction of duties, gross negligence and bringing the employer’s name into disrepute. He was found guilty of those charges and dismissed. He referred an unfair labour practice dispute to the CCMA pertaining to his suspension, and an unfair dismissal dispute to the CCMA. In respect of the unfair suspension dispute, the CCMA found that while there was a fair reason to suspend the employee, SAB had committed an unfair labour practice by failing to give him an opportunity to make representations as to why he should not be suspended. The unfair dismissal dispute culminated in a finding that the dismissal was substantively unfair but procedurally fair. SAB was ordered to reinstate the employee with retrospective effect. SAB applied to the Labour Court to review and set aside both arbitration awards.

Both review applications were successful. The Labour Court substituted the unfair dismissal award with an award that the dismissal was substantively fair. In respect of the unfair suspension award, the Court held

  • There is no requirement that an employee be given an opportunity to make representations before an employer institutes a precautionary suspension.
  • The precautionary suspension must be linked to a pending investigation and serve to protect the integrity of that investigation.
  • The prejudice to the employee is ameliorated by the employee being paid while suspended.

The Constitutional Court, in considering whether to grant leave to appeal considered the issue of a pre-suspension hearing. It found that the Labour Court’s findings could not be faulted. The Constitutional Court accepted that a precautionary suspension does not constitute disciplinary action, and as such the requirements for fair disciplinary action are not applicable, i.e. there is no right to be heard before a precautionary suspension is implemented.

Further, the Constitutional Court found that it was correct that in determining whether or not a precautionary suspension was permissible, the decision-maker must first determine whether there is a fair reason for suspension. If the reason for suspension is an investigation, it cannot be said to be unfair. The next consideration is whether there is any prejudice to the employee. Prejudice to the employee is cured by full pay for the duration of the suspension.

Therefore an employer, who wishes to suspend an employee pending an investigation into allegations against the employee, need not give the employee an opportunity to make submissions as to why he or she should not be suspended. If the suspension is a precautionary measure, and not a disciplinary action, full pay will usually address any prejudice to the employee. The employer must still be able to show that there is reason to remove the employee from the workplace during the investigation, e.g. that there is a reasonable apprehension that the employee’s presence or conduct may hinder the investigation in some way. The judgment is a welcome development in employment law, which may be seen to be overly laden with purely procedural requirements.

This article was written by Verushka Reddy, Director, Norton Rose Fulbright South Africa Inc

Marie Boland’s Review of the model Work Health and Safety laws – industrial manslaughter, enhancing the Category 1 offence, and what it might mean for statutory safety duty holders

Since the start of this year, two directors have been sentenced to custodial terms for safety offences in relation to separate fatal incidents. In February this year,  Marie Boland’s Review of the model Work Health and Safety laws – Final report (Report) was released  which recommends including a new offence of industrial manslaughter in the model Work Health and Safety (WHS) Act.

In this article, we examine two of the Report’s key recommendations which reflect the changing health and safety regulatory environment, and what it might mean for statutory safety duty holders, including individuals and persons who conduct a business or undertaking.

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BC Court of Appeal affirms BC approach to “family status” discrimination cases

The British Columbia Court of Appeal (the “BCCA”) recently issued an important decision about family status discrimination. In Envirocon Environmental Services, ULC v. Suen (“Envirocon”), a unanimous BCCA affirmed the existing legal test for adverse discrimination on the ground of family status under the BC Human Rights Code (the “Code”). For BC employers, this is a welcome decision.

In Envirocon, Mr. Suen was fired when, shortly after the birth of his daughter, he refused a work assignment that would have required him to work outside of BC for eight to ten weeks. Mr. Suen alleged discrimination on the basis of “family status”. After the BC Human Rights Tribunal (the “Tribunal”) refused to dismiss the claim, Envirocon appealed the decision to the Supreme Court of British Columbia, which refused Envirocon’s application for judicial review, and then to the BCCA.

To understand the impact of the Envirocon decision, one must first understand the 2004 BCCA decision of Health Sciences Assoc. of B.C. v. Campbell River and North Island Transition Society (“Campbell River”), where the BCCA established the test for adverse discrimination (on the basis of family status) as a change in employment “imposed by an employer” which “results in a serious interference with a substantial parental or other family duty” of the employee.

The Campbell River test has been the subject of scrutiny as it arguably imposes a different, less stringent standard in family status cases compared to other grounds of discrimination. As a result, courts and tribunals across Canada have declined to follow Campbell River in other jurisdictions. The central issue in Envirocon was whether the Campbell River test remained intact.

The Tribunal held that Mr. Suen’s “required absence from his wife and four‐month‐old infant for consecutive 24‐hour periods over a number of weeks could be found to constitute serious interference with a substantial parental or other family duty or obligation”. Despite applying the Campbell River test, the Tribunal questioned whether the Campbell River test remained “good law”.

At the BCCA, Mr. Suen argued that the Court should reconsider the Campbell River test and that it should only be “necessary for a complainant to show that a change in a term or condition of employment interferes with a parental or other family duty or obligation”. The BCCA declined to embark on any such analysis, stating simply that it was “bound by Campbell River”.

The BCCA then overturned the Tribunal’s decision that the company discriminated against Mr. Suen.  The BCCA held that the Tribunal had incorrectly applied the Campbell River test to the facts of the case:

While Mr. Suen’s desire to remain close to home to be with his child and to assist his wife in caring for the child outside of his normal weekday working hours and on weekends is understandable and commendable, he is no different than the vast majority of parents.  There are many parents who are required to be away from home for extended periods for work-related reasons who continue to meet their obligations to their children…

The effect of this decision, for now at least, is that BC employers have some certainty about what will constitute discrimination on the basis of family status in BC. By upholding the Campbell River test requiring “serious interference with a substantial parental or other family duty”, the BCCA unequivocally endorsed the high threshold set out in Campbell River. To demonstrate “serious interference” with a “substantial” family duty, an employee must show how his or her circumstances are somehow distinct from all other workers who balance the demands of their employment with their family lives.

We are monitoring whether Envirocon will be appealed to the Supreme Court of Canada, so stay tuned for further updates.

Ralentissement de travail : l’enfer est pavé de bonnes intentions

Perturbations du réseau d’autobus, vitrines vandalisées, courrier accumulé dans les centres de tri … Ces derniers mois, nous avons pu constater que les moyens de pression ne cessent de s’inviter sur la scène médiatique québécoise. À cet égard, le ralentissement de travail demeure un moyen de pression fréquent mais illégal utilisé par les salariés pour manifester leur désaccord. La bonne nouvelle? Lorsqu’un employeur craint un tel ralentissement, il peut rester calme pendant la tempête. Tout est question d’attitude et voici nos deux mots d’ordre : vigilance et justice.

  • Être vigilant

Tout n’est pas noir ou blanc. Les ralentissements de travail sont de véritables caméléons. Essentiellement, il s’agit d’une action concertée de la part des salariés, perpétrée dans le but de perturber les opérations. D’ailleurs, les salariés font parfois preuve d’une grande imagination, proche de l’expertise en matière de camouflage : en passant par des vérifications exagérément minutieuses, une mise en application trop stricte d’une politique ou d’un règlement interne d’entreprise, un refus d’effectuer du temps supplémentaire, en prenant le double de temps pour réaliser les tâches … Les exemples sont aussi variés que ce que l’imagination permet. Cependant, note à tous les employeurs : ne pas voir le mal partout. Le fait est que toute baisse d’activité n’est pas nécessairement synonyme de ralentissement d’activité illégal. Il faut apporter certaines nuances. Par exemple, une cadence de production au ralenti du fait d’un climat d’affaires en berne ne constitue pas un ralentissement de travail.

  • Être juste

Chaque ralentissement de travail, bien que prohibé en toutes circonstances, est unique en son genre : la prudence est de mise dans la sanction qui lui est appliquée. Pour le meilleur et pour le pire, il n’existe pas de règle absolue en la matière. Cependant, à l’image de toute sanction, celle imposée dans ces cas doit demeurer juste. Il n’est donc pas surprenant que de simples participants à un ralentissement de travail doivent être sanctionnés moins sévèrement que ceux ayant incité, voire provoqué un tel ralentissement. De la réprimande écrite à une suspension de longue durée, les exemples de sanctions sont innombrables puisqu’il s’agit essentiellement d’une question de faits. Un ralentissement de travail pourrait d’ailleurs justifier, dans certaines circonstances, l’émission d’une ordonnance de sauvegarde afin de forcer la prestation de travail sans ralentissement.

Morale de l’histoire : la fin ne justifie pas toujours les moyens. Des moyens de pression légaux sont offerts à vos salariés pour manifester leur mécontentement. Un ralentissement de travail illégal ne saurait donc, en aucun cas, être toléré.

What to expect in 2019

Following a Government-commissioned review of employment working practices in the UK which was published in 2017, a number of developments in employment law reform are expected over the coming months.

The Government published its latest proposals in December, covering a number of areas for change, some intended to improve the enforcement of employment rights, some to increase transparency and clarity of rights between employers and workers (including issues relating to employment status) and others to improve the rights of atypical workers. This post highlights some of the key areas for change.

Employment status

A key area for change is in relation to the employment status of individuals.

In the UK there is currently a three-tier approach to employment status for employment purposes. Individuals are either employees; workers; or self-employed contractors and their employment status determines the level of employment protection rights to which they are entitled.

Employees enjoy the full range of employment rights including protection from unfair dismissal and redundancy rights, workers enjoy a more limited set of rights which include the right to the national minimum wage and paid holiday, whilst self-employed contractors enjoy none of these rights.

Although there is no statutory definition of a self-employed contractor, definitions of “employees” and “workers” are set out in UK employment legislation. However, an individual’s employment status is determined by a range of criteria which has been established over the years through case law. The review recommended that these criteria be clarified and set out in legislation so that individuals would be provided with more certainty about their status and related rights.

The UK Government has now confirmed that it intends to legislate to clarify the test but has not yet given any detail as to how or when precisely this will be done. However, detailed proposals are promised and are likely to make significant changes to the current law.

Enforcement of rights

The UK Government accepts that the process for enforcement of workers’ rights should be more straightforward. Pending the outcome of the ongoing court and tribunal reform programme which is currently underway, they have introduced a scheme for the naming and shaming of employers who fail to pay tribunal awards which applies to all tribunal awards registered on or after 18 December last year.

In addition, with effect from 6 April this year the maximum financial penalty for employers’ aggravated breaches of employment rights will be increased from £5,000 to £20,000. This penalty is imposed in addition to any compensation awarded to the worker.

Transparency

In order to increase transparency and clarity of rights and obligations between workers and employers, the right to a written statement of key terms and conditions of employment, which is currently enjoyed by employees only, will be extended to all workers with effect from 6 April 2020.

In addition, it, must be provided from the first day of employment, rather than after two months as is currently the case, and must contain more information, such as details of all benefits in addition to pay, and all entitlements to paid leave.

Atypical workers

The Government proposes to make a number of changes to the law to improve the rights of atypical workers, such as agency workers and seasonal workers.

With effect from 6 April 2020, employment businesses must provide all agency workers with a “Key Information Document” setting out key information such as details of the type of contract they are engaged under, who is responsible for paying them and details of their pay and any fees or other deductions which will be made.

In addition the “Swedish derogation” (which currently allows agency workers to exchange their rights to be paid equally to their permanent counterparts for a contract which guarantees pay between assignments) is to be repealed from the same date.

In order to address the difficulties faced by some atypical workers (particularly those whose weekly earnings vary week to week or season to season), in receiving holiday pay which is a true reflection of their average weekly pay, the holiday reference period (which is currently the 12-week period before the holiday is taken) is to be increased to 52 weeks. This change also comes into effect on 6 April 2020.

Update on case involving whether employee can be compelled to give evidence in a coronial inquiry

The Full Court of the Federal Court of Australia (Full Court) handed down its decision on 15 February 2019 in Helicopter Resources Pty Ltd v Commonwealth of Australia [2019] FCAFC 25.  The case involves an appeal to the Full Court by Helicopter Resources Pty Ltd (Helicopter) arising from a decision of the Federal Court which we previously reported on in November 2018.

Briefly, the matter relates to a Coronial inquest commenced in September 2017 in relation to the death of Captain David Wood on 11 January 2016 (the Inquest).  On 20 December 2017, Captain Wood’s employer, Helicopter, was charged with offences under the Work Health and Safety Act 2011 (Cth) (WHS Act).  The Commonwealth of Australia (the Commonwealth) had engaged Helicopter to provide helicopter support services at the relevant time and was also charged with offences under the WHS Act.  The third charge brought against both Helicopter and the Commonwealth related to the events of 11 January 2016 (the criminal proceedings).

The Commonwealth had written to the Chief Coroner requesting Helicopter’s Chief Pilot, Captain David Lomas, be available for cross-examination at the Inquest.  The topics to be covered by the cross-examination would overlap with key aspects of the subject matter of the criminal proceedings.  Helicopter made submissions to the Coroner that the Inquest should be adjourned until the criminal proceedings were concluded.  The Coroner issued a subpoena to Captain Lomas and ruled on 12 April 2018 that he would be required to give evidence.  Helicopter sought judicial review of the decision not to adjourn the inquest until finalisation of the criminal proceedings.

Captain Lomas had not been charged, was not a party to the proceedings and there was no evidence as to the position he took in relation to being called to give evidence.  However, according to Helicopter, he was its ‘guiding mind’ and calling him to give evidence would constitute an interference with the due administration of justice.  Helicopter did not rely on a case of direct interference.  It sought to rely “…upon the adverse consequences to it, and the forensic advantages accruing to the prosecution or the Commonwealth, arising from any overriding of [Captain] Lomas’ rights.” (paragraph 115).  The Commonwealth submitted “…the hallmark of the accusatorial system was that the accused was not required to answer any questions of prosecuting authorities from the investigation phase through to the end of the trial” (para 124) and given Captain Lomas was not accused of anything the questioning of him “was not interfering with the same kind of rights as having the accused questioned” (paragraph 134).

The FCAFC considered provisions of the Evidence Act 2011 (ACT) and determined the evidence Captain Lomas could give at the Inquest would be capable of being tendered by the prosecution as an admission against Helicopter in the criminal proceedings.   “As a matter of practical reality, if Captain Lomas were required to give evidence to the Coroner before the completion of the criminal trial, that requirement would have a tendency to interfere with the due course of justice in that trial…”.  FCAFC went on to find the questioning of Captain Lomas would likely advantage the prosecution and co-accused by providing the opportunity to explore Mr Lomas’ evidence and would deny Helicopter the ability to rely on the “…fundamental principle of the accusatorial process …that  “it is for the prosecution to prove the guilt of an accused person”’ (paragraph 182) and if Captain Lomas were compelled to give evidence in the Inquest “…the appellant’s position as an accused corporation in the criminal proceedings would be altered fundamentally” (paragraph 189).

The appeal was allowed and the subpoena for Mr Lomas to give evidence at the inquest was stayed until finalisation of the criminal proceedings.

 

The author acknowledges the contribution of Nadeem Hekmat to this article.

Key developments expected for 2019

At the beginning of 2019, some important key changes to German labor law came into force. In particular, there were significant changes to the Part-Time and Fixed-Term Work Act, which are described in more detail in the following article.

On 1 January 2019, section 9a was newly inserted into the Part-Time Work and Fixed-Term Employment Contracts Act (TzBfG). This new provision entitles employees to a limited reduction in working hours for a period of between a minimum of one year and a maximum of five years, so-called “bridge part-time”. After this period of time has elapsed, the employee automatically returns to his original working hours. In comparison to other limited rights to part-time working, for example from the “Pflegezeitgesetz” or the “Bundeselterngeld- und Elternzeitgesetz”, the new section 9a TzBfG does not require any further prerequisites, only that the employee has been employed for at least six months and the employer must normally employ more than 45 employees. The employer can refuse the part-time request for urgent operational reasons only. In addition, employers who employ more than 45 but fewer than 201 employees can refuse a part-time request if a certain number of employees are already employed part-time. Starting from the threshold value of 45 employees, only one employee per 15 employees is entitled to a limited period of part-time working. Since the “first” 45 employees count fully, companies with up to 60 employees can only refer to the quota if 4 employees have already been granted temporary part-time work.

A further new provision in TzBfG is that in future employees must make their request to work part-time in writing and no longer merely informally. The requirements for a written rejection, on the other hand, remain unchanged.

The right of return to full-time work has also been changed. Irrespective of the new bridge part-time, it was already possible to return from part-time to full-time before. For this, however, the employer had to have a corresponding job vacancy and the employee had to prove this. In the future, the burden of proof lies with the employer to demonstrate that no corresponding job is available.

On 1 January 2019, stricter rules for work on call came into force. Work on call exists when the employee is obliged to perform his work according to the workload. Since these on call agreements often entail difficulties for employees, particularly with regard to wage levels, section 12 of the Part-Time Work and Fixed-Term Employment Contracts Act was amended in order to provide employees with greater certainty. Since the amendment, where no maximum weekly working hours have been agreed, the employer may require an employee to work an additional maximum of 25 per cent of his weekly working time on call. If, on the other hand, maximum weekly working hours have been agreed, the employer may only require the employee to work an additional maximum of 20 per cent of his weekly working time on call. These changes implement the case law of the Federal Labor Court. Previously, there were no statutory restrictions on the extent to which work must be carried out on demand. Until 2019, there was also a statutory presumption that ten weekly working hours would be deemed to have been agreed if the employee and employer had not specified a number of hours. This has now been increased to 20 hours per week. Consequently, in the case of work on call, if no specific number of hours has been agreed, a weekly working time of 20 hours is deemed to have been agreed. As part of these adjustments, a new reference period was also established for continued pay in the event of illness and on public holidays. According to the 2019 amendment, a reference period of three months applies to the calculation of continued remuneration.

Religious discrimination claim – whose religion?

The Employment Appeal Tribunal (EAT) has held that where an employer (or individuals on behalf of the employer) acts because of their own religion or belief, this may not lead to an employee bringing a successful claim for direct discrimination on grounds of religion or belief. The EAT upheld the employer’s appeal, overturning the Employment Tribunal decision.

The case involved a teacher at a nursery run in accordance with ultra-orthodox Jewish principles, who was dismissed after complaints made by parents who were aware that she was cohabiting with her partner. At a meeting, the headteacher and the nursery’s managing director expressed the view that cohabitation outside marriage was wrong, and suggested that a potential solution would be for the employee to state that she was no longer living with her boyfriend, so that they could tell parents that this was what she had informed them. However, she refused to do this and following disciplinary proceedings she was dismissed. The letter of dismissal included a number of grounds for dismissal: “acting in contravention of the nursery’s culture, ethos and religious beliefs”; damaging the nursery’s reputation; and financial detriment from parents threatening to withdraw their children. The employee brought claims of direct discrimination and harassment on the ground of sex, and direct and indirect discrimination claims on the ground of religion or belief.

The Employment Tribunal upheld all the claims and the nursery appealed. The EAT allowed the appeals against the findings of direct and indirect religion or belief discrimination, but upheld the Employment Tribunal decision that the claims of direct sex discrimination and harassment on the grounds of the claimants sex could stand.

The EAT found that the tribunal had erred by concluding that a direct discrimination claim could arise from the employer acting because of its own religion or belief. It referred to the case of Lee v Ashers Baking Co Limited [2018] in which a bakery had refused to supply a cake iced with the message “support gay marriage” because of its owners’ objections on religious grounds to gay marriage.  The purpose of discrimination law is the protection of a person who has a protected characteristic from less favourable treatment because of that characteristic, not the protection of persons without that protected characteristic from less favourable treatment because of a protected characteristic of the discriminator.  The EAT commented that it is an important principle of discrimination law that a discriminator’s motive for less favourable treatment is immaterial.  Any direct discrimination claim based on the discriminator’s own protected characteristic would be doomed to fail, as a discriminator acting because of their own belief would act in the same way regardless of who was affected.   The EAT also rejected the argument relating to associative discrimination.  It pointed out that no claim asserting associative discrimination rests on the premise that the discriminator is acting because of its own protected characteristic.  Finally in relation to the direct discrimination claim, although the EAT was not required to do so, it went on to consider whether the nursery had any religious occupational requirement. It held that the tribunal had been right to find that there was no genuine occupational requirement, either for the employee not to cohabit or that she should not communicate her views to parents.

An indirect discrimination arises where an employer imposes a provision, criterion or practice (PCP) which puts the claimant at a disadvantage. The tribunal had found that the nursery applied a PCP of requiring the employee to be prepared to make a dishonest statement about her private life in order to remain employed. The EAT held that the tribunal had erred in making this finding.  Whilst acknowledging that where an action arises from conduct (and not a formal statement of practice or policy), the line between a PCP and a simple response to events can be difficult to draw. In this case there was no direct evidence that this was anything other than an ad hoc measure and insufficient evidence to allow an inference that it was a PCP.  As no PCP could be identified, there could be no claim of indirect discrimination on grounds of religion or belief.  In any event even if the PCP did stand, the EAT held that any comparator group would have been disadvantaged in equal measure by being required to lie about their religion beliefs in order to retain their employment.

The remaining claims of direct discrimination and harassment on grounds of sex were remitted to the tribunal to consider remedy.

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