The #MeToo Movement: When Employees Take Their Complaints to Social Media

As we are all aware, the news has been populated with stories concerning allegations of sexual harassment and misconduct, particularly in the entertainment and media industries as well as government institutions. These stories have contributed to the “#MeToo” movement, which originated on Twitter and other social media websites in late 2017 and has since become a widespread message on social media encouraging individuals to share their stories and speak out against sexual harassment and abuse. But while its purposes are laudable, the #MeToo movement is a touchy subject for employers, who ever-more-frequently find themselves accused of sexual harassment or other misconduct on social media and must grapple with the implications of publicly aired grievances.

In light of this possibility in today’s climate, employers should preemptively review their non-discrimination, harassment, and social media policies and procedures. The primary goal should be to encourage employees to confidentially submit their complaints through approved internal processes, as opposed to posting allegations of misconduct alongside the employer’s name and “#MeToo” on social media to the world at large. Employers should consider the following:

  • Review your sexual harassment and non-discrimination policies. Well-drafted policies should provide appropriate methods or venues to report complaints of sexual harassment so that employees do not feel the need to resort to publicly airing their grievances on social media. These policies are your first line of defense. Policies should designate who employees may report complaints to, and should provide for the confidentiality of all complaints of sexual harassment or abuse. Additionally, employers should provide an alternate method to report complaints anonymously, if possible. For example, many large employers have 24-hour hotlines in place that allow employees to report complaints of sexual harassment or abuse.
  • Provide regular training on your sexual harassment and non-discrimination policies and how to report instances of sexual harassment or abuse. Encourage employees to speak up! It is always better to know about an issue and address it than to be blindsided by it later.
  • In addition to a rigorous and enforced non-discrimination policy, review your social media policy. Well-drafted social media policies should prohibit employees from defaming the employer, as well as its employees, on social media. Social media policies may also direct employees to the appropriate internal method or forum to submit complaints, such as through human resources. Employers are also advised to discourage use of company affiliation on social media without permission, and if affiliation is permitted, to require the use of a disclaimer. Note, however, that employers may not prohibit employees from discussing or complaining about the terms or conditions of employment (such as compensation) on social media under the National Labor Relations Act (NLRA). If a social media complaint arises about your company, consider obtaining legal advice before taking action against an employee as the law in this area is evolving quickly.
  • Consider if your employees have signed any agreements with non-disparagement provisions that prevent them from making defamatory or disparaging remarks about the company or individual employees in connection with their employment. The non-disparagement provision may apply to remarks against the employer, other employees, or both. Employers concerned about employee complaints on social media may wish to consider incorporating these provisions into any employment agreement, including restrictive covenant agreements (such as confidentiality agreements).

Further, in the event that an employer does find itself (or its employees) publicly accused of harassment on social media, the employer must carefully consider how to respond to the allegations, as well as the alleged victim and harasser. First, the employer should investigate the complaint and determine if there is any veracity to it. Although the social media complaint will not have been reported through appropriate channels (as should be provided for in the employer’s policies), and the employer thus may or may not be legally obligated to investigate, the best advice is to conduct a thorough investigation notwithstanding the lack of complete information. The employer could likely experience additional backlash if it fails to take the allegations seriously and respond appropriately. Further, it looks bad—both to the public at large as well as to a court if litigation were to arise—if it appears that the employer ignored the allegations or did not take them seriously. As a preliminary matter, the employer should consider setting up a meeting with the non-anonymous employee to discuss the allegations and to obtain more information to determine if further investigation is required. Even anonymous allegations should be seriously considered and an investigation undertaken to the extent possible.

Second, and after investigating the allegations as appropriate, the employer must carefully consider how to respond to both the employee who posted on social and the accused harasser. If the allegations are determined to be true, the employer should take appropriate disciplinary action against the harasser in accordance with its policies. A more difficult question is how to deal with the complainant, who may have violated the employer’s social media, harassment, or non-discrimination policies (or possibly even a non-disparagement provision) by complaining on social media. While the employer may have grounds to take disciplinary or other action against the complainant, it may be unwise to do so, even if the employer’s investigation determines that the allegations are false. Punishing an employee after reporting sexual harassment is likely to be viewed poorly by the community and other employees—particularly in light of the current social and legal climate. And depending on the nature of the complaint, it might be impermissible under some statutes to take action against employees who seek to enlist others in support of a more general cause.

Employers should take allegations of harassment on social media seriously and not take disciplinary or other action against current employees who make #MeToo social media posts complaining of harassment unless extreme circumstances justify the action. Even then, the costs and benefits of the discipline must be carefully weighed against the possibility of negative publicity. Above all, employers must educate employees on their policies and how to properly report instances of harassment or discrimination; by doing so, employers can work to avoid being on the wrong end of the #MeToo movement.

The UK Government’s Good Work Plan and the Gig economy

Further to our post on the UK Government’s announcement (7 February 2018) of its Good Work plan following the Taylor review of Modern Working Practices published in July last year (the Review), the Government’s full response has now been published (the Response) together with the four consultation documents promised.

The key proposals detailed in the Response and the four consultation documents are set out below.

Employment status consultation 

  • Employment status for employment rights 

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. Employment status dictates the employment protection rights to which individuals are entitled. Employees enjoy the full range of employment rights including eligibility for statutory sick pay and protection from unfair dismissal, workers enjoy a more limited set of rights including the right to paid holidays and the National Minimum Wage, whereas the self-employed enjoy none of these rights.

Employment status is determined by a range of criteria established through case law. In light of modern employment practices and new ways of working such as in the so-called “gig economy”, the Review recommended that these criteria be clarified and set out in legislation, so that individuals are provided with more certainty as to their status and related rights.

The employment status consultation seeks views on the main problems with the current employment status system, and asks whether the Review’s recommendation for legislative change and codification of the main principles is the right approach.

If it is, it asks whether the current test for employment status (based on the irreducible minimum of: (i) mutuality of obligation (ii) personal service: and (iii) control) should be codified or should other factors be included?

Alternatively should an entirely different test be introduced, such as one which is based on the German social security model (where a range of criteria are used and if an individual fulfils three out of five conditions, such as dependence on one employer for a long time, he will be classed as an employee); or a simpler test such as the ABC test for contractors used in the States (where an individual is assumed to be an employee unless three main criteria apply: freedom from company control; the contractor performs work outside the usual course of the company’s business or place of business; and the contractor is engaged in an independently established business.)

  • Employment status for tax purposes 

Currently, for tax purposes, there are only two types of work status: employed or self-employed. This means that a worker for employment law purposes who is not an employee, is treated as self-employed for tax purposes.

Whilst tax was not part of the Review’s original terms of reference, it concluded that it was not possible to separate the two issues of employment status and tax entirely, and recommended that renewed effort should be made to align the employment status and the tax frameworks.

On the Review’s recommendations about tax, the Government notes that the current employee/self-employed tax regime has been in place for over two hundred years and moving away from the current test would be a fundamental change. However, they remain open minded and so seek views on whether the boundary between the two tax regimes should be based on something other than when an individual is an employee, and on whether the definitions of “employee” and “self-employed” for tax and employment rights purposes should be aligned.


Consultation on enforcement of employment rights recommendations 

This consultation considers the recommendations the Review made in relation to the enforcement of employment rights and seeks views on a number of proposals including: 

  • The introduction of a new naming and shaming scheme for employers who fail to pay tribunal awards within a reasonable time – it is suggested that this form an extension of the existing tribunal award penalty scheme.
  • Simplification of the enforcement process against employers who fail to pay tribunal awards.
  • Increasing the maximum financial penalty for employers for “aggravated” breach of employment rights from £5,000 to £20,000.


Consultation on measures to increase transparency in the UK labour market 

This consultation considers the Review recommendations in relation to increasing transparency between workers and employers, and seeks views on a number of proposals including: 

  • Extension of the right to a written statement of terms and conditions so that it applies not only to employees (as is now the case) but also to workers.
  • Raising awareness of holiday pay entitlements, for example through social media.
  • For those on non-guaranteed hours, such as zero hours workers, introducing a right to request a contract which guarantees the hours which they usually work.


Consultation on agency workers recommendations 

This consultation considers the Review recommendations in relation to the rights of agency workers and seeks views on a number of proposals including:

  • Introducing a right for agency workers to a clear statement of “key facts” including who pays them and any costs or charges deducted from their wages.
  • The possibility of repealing the existing legislation which allows agency workers to opt out of equal pay entitlements (the “Swedish Derogation”).


Other proposals 

  • Statutory sick pay (SSP) – in response to the Review’s recommendation to reform the statutory sick pay system so that it becomes a basic employment right for which all workers are eligible from day one, and which accrues with length of service, the Government confirms that as part of the reform of SSP currently being considered, a consultation on changes to SSP will be brought forward. 
  • In response to the Review’s recommendations, the Government agrees to ask the Low Pay Commission to consider the impact of higher minimum wage rates for non-guaranteed hours such as those worked by zero hours workers. 

Next steps 

The consultations close on various dates between 9 May and 1 June 2018. After that we can expect further information as to how what steps the Government decides to take on all these matters, and we will of course keep you informed of developments.



ICO updates its subject access Code of Practice

The Information Commissioner’s Office in the UK (ICO) has updated its Subject Access Code of Practice (the Code) which deals with requests from individuals for personal information. The amendments are mainly to reflect the Court of Appeal’s decisions in the recent cases of Dawson-Damer and others v Taylor Wessing LLP [2017] EWCA Civ 74 and Ittihadieh v 5-11 Cheyne Gardens RTM Company Ltd and Deer v University of Oxford [2017] EWCA Civ 121.

In the UK under the Data Protection Act 1998 (DPA 1998) a data subject, such as an employee, has a right, on making a subject access request (SAR) to the data controller (the employer), to be informed whether personal data of which he is the data subject is being processed. If so, the employee also has a right to certain information relating to that personal data and a copy of the data in permanent form must be provided. The Code is published to assist organisations in dealing with these requests.

Section 8(2) DPA 1998 provides an exemption to the requirement to provide a copy of the information in permanent form, where to do so would involve “disproportionate effort”. The updates to the recent version of the Code largely concern considerations of the “disproportionate effort” exception as a result of guidance in the recent cases referred to above. Whilst the Code makes it clear that “the DPA places a high expectation on you to provide information in response to a SAR” and that the disproportionate effort exception ” cannot be used to justify a blanket refusal” of a SAR, the ICO notes that the court has explained the scope for assessing whether, in the circumstances of a particular case, the disproportionate exception may apply. In relation to assessing disproportionate effort, the guidance notes that:

  • Data controllers may take into account difficulties which occur throughout the process of complying with a SAR, including any difficulties in finding the requested information.
  • Data controllers are expected to evaluate the particular circumstances of each request, balancing any difficulties involved in complying with the request against the benefits the information might bring to the data subject, whilst bearing in mind the fundamental nature of the right of subject access.
  • The burden of proof is on the data controller to demonstrate that all reasonable steps to comply with the SAR have been taken and that it would be disproportionate in all the circumstances to take further steps.
  • It is good practice to engage with the requester in open conversation about what information they require, which may avert unnecessary costs and effort in searching. If it receives a complaint about the handling of a SAR, the ICO may take into account a data controller’s readiness to engage with the requester.
  • Even if the employer can show that complying with a SAR would involve disproportionate effort, it must still comply with it in another way, if the requester agrees. For example, if supplying hard copies would involve disproportionate effort, the parties may agree that it is appropriate to allow the individual to view the original documents with specific requests for copies.

The Code also looks at the motive behind an individual’s request. It now expressly states that whether or not a requester has a “collateral” purpose (that is, other than seeking to check or correct their personal data) for making the SAR is not relevant. However, although the right is “purpose blind” , a court has a wide discretion in deciding whether or not to order compliance with a SAR under section 7(9) of the DPA. In addition the Code provides updated guidance on the various factors a court may wish to consider in exercising its discretion.

The General Data Protection Regulation (GDPR) will bring further changes to an employee’s rights on a data subject access request (see our previous blog The GDPR – what does it mean for HR? However, clarification on these points in the Code is to be welcomed.

Legal Update

Artificial Intelligence: The Fourth Industrial Revolution[1] and the need for improved employee representation

Traditional labour law is facing new challenges with the upcoming availability of flexible employment platforms (e.g. Uber/Takeaway/Deliveroo/Helpling). Society demands flexible working hours, flexible contracts and most employees are now – or in the near future – required to constantly review their skills to remain employed.

It follows from research performed by the World Economic Forum ( that the rise of artificial intelligence, robotics and other digital developments is displacing the primacy of human expertise in the economy.

The individuals who will succeed in the economy of the future will be those who can complement the work done by mechanical or algorithmic technologies, and ‘work with the machines.

Will you still have the same job in ten years? The answer is most likely ‘no’.

As a result of rapid technology changes, such as Artificial Intelligence, autonomous vehicles, 3D printing, robotic automation, blockchain, etc., almost all current business models are affected. New technology requires companies to consider investment, restructurings and potentially mass lay-offs. The positive angle is that this may not result in an overall reduction in the number of jobs, people will require a different skillset: we need technicians.

The key question for both employees and employers is how better to anticipate the changes to the labour market to prevent ‘sudden’, ‘unexpected’ and unnecessary redundancies in the future.

In the Netherlands the role of the works council (set out in the Dutch Works Councils Act) is especially relevant in relation to changes to the labour market. This includes:

  • Discussing the general operation of the enterprise at least twice a year in consultation meetings, including agreeing when and how the works council will be involved in the decision-making process;
  • Seeking prior advice from the works council in relation to any significant reduction, expansion or other change or any major investment by the enterprise;
  • Importantly in relation to the rise of Artificial Intelligence, seeking prior advice from the works council in relation to the introduction or alteration of an important technological provision;
  • Requiring prior advice from the works council in relation to the commissioning of an expert from outside the enterprise to advise on any of the matters referred to above. 

In addition to the requirement to consult with the works council, the Dutch Civil Code requires the employer to ensure that employees are trained to perform their tasks and responsibilities; or to continue the employment relationship in case of redundancy. There are also limitations on the ability of the employer to terminate the employment relationship based on performance if it turns out that they did not sufficiently provide the ability for improvement in the employee’s performance by training.

Dutch law therefore does seek to protect the workforce from the unavoidable market change, the question is whether these protections are sufficient.

We expect that trade union/works council consultation procedures in relation to restructuring scenario’s will, more than they do currently, focus on the mobility of employees and changes to their roles. For employees whose jobs are at risk of displacement by new technology, e.g. financial operations, accounting and auditing, health care, transport, production, etc. it will become important to be timely and well informed about any proposed future changes within the organisation and to be heard and consulted with. The following tools may be used to force the employer to consider alternatives now and to avoid unnecessary job cuts in the future:

  • demand continuous learning and reskilling;
  • unite and create groups of employees whose of positions are under risk of displacement to discuss displacement risks and potential solutions. This may require the prior consent of the works council;
  • request that trade unions and /works councils focus on the topic of labour market changes in consultation meetings;
  • claim a social and employee-related paragraph in relation to the board’s long-term vision/strategy as part of the annual report;
  • the Dutch Corporate Governance Code states that the management board of listed companies is responsible for creating a culture aimed at long-term value creation for the company and that it should formulate a strategy in line with this.

The fourth industrial revolution should be an agenda item in most company meetings. It is time for employees to claim more insight into the long-term strategy of the board.

AI Academy

In May 2018, the above topics shall be part of plenary discussions at our offices in Amsterdam as part of the AI Academy. Please feel free to contact Thomas Timmermans if you are interested in attending.


[1] Klaus Schwab, Founder and Executive Chairman of the World Economic  Forum.

What do #MeToo and #TIMESUP mean in an Australian workplace context?

In the wake of the Harvey Weinstein allegations surfacing in October 2017, the ‘MeToo’ movement has gained widespread traction after women and men around the world started sharing their experiences of workplace sexual harassment and sexual violence on twitter using the hashtag #MeToo.

In circumstances where one in five people surveyed by the Australian Human Rights Commission reported that they had been sexually harassed within the 5 years immediately prior to the survey3, it is time to ask what do #MeToo and #TIMESUP mean in an Australian workplace context and what should employers be doing?

If you would like to learn what to do about #MeToo have a read of our recent legal update or come to one of our upcoming free seminars.


Majoritarianism: binding minority unions to collective agreements remains constitutional

The extension of collective agreements to minority union members based on the principle of majoritarianism does not unreasonably limit the constitutional right to strike.

In Association of Mineworkers and Construction Union and others v Chamber of Mines of South Africa and others [2017] 7 BLLR 641 (CC).  The Chamber of Mines on behalf of various gold mining companies concluded a collective wage agreement with major trade unions (NUM, Solidarity and UASA) who together represented a majority of workers in the gold mining sector. The Association of Mineworkers and Construction Union (AMCU) refused to sign the agreement and gave notice that it would strike for higher wages than that agreed to in the collective wage agreement.

Was AMCU bound to the collective agreement?

AMCU did not consider itself bound to the agreement despite the agreement being extended to all employees in the sector in terms of section 23(1)(d) of the Labour Relations Act, 1995 (LRA). The section stipulates that a collective agreement binds employees who are not members of the unions which are party to the agreement provided that the trade union(s) who enter into the agreement have as their members the majority of the employees in the workplace of the employer.

AMCU argued that the collective agreement could not extend to the individual mines in which it enjoyed majority representation. The court considered whether each mine constituted a “workplace” as mentioned in section 23(1)(d) of the LRA or whether all the mines together constituted a single workplace because each mining house operated integrally as a single workplace and that each AMCU-majority mine was not an independent operation. AMCU did not enjoy majority representation and was bound to the collective agreement.

The reasonable and justifiable limitation on AMCU’s right to strike

Because section 65(1)(a) of the LRA prohibits a person from striking if that person is bound by a collective agreement in respect of the issue in dispute, AMCU was not allowed to strike as it was bound by the collective wage agreement.

Although AMCU challenged the constitutionality of section 23(1)(d) in limiting its right to strike, the court held that the infringement on the right to strike is reasonable and justifiable for three reasons:

  • It promotes the principle of majoritarianism which is required for effective collective bargaining;
  • The limitation on the right to strike is not indefinite. The collective agreement only applies for the duration of the agreement and the right to strike is only limited to the specific issue (wages) covered in the agreement. AMCU may strike on issues that are not covered in the agreement.
  • The extension of a collection agreement may be taken on review to the courts to ensure that there is no arbitrariness or irrationality.

The recognition of the principle of majoritarianism should encourage employees and trade unions not to engage in strikes if they are bound by a collective agreement that addresses the issue in dispute. Additionally, parties to collective agreements should also be certain that they enjoy majority representation in the workplace of the employer before assuming that the collective agreement extends to individuals who are not party to the agreement.

This article was written by Rukshana Parker, Candidate Attorney, Norton Rose Fulbright South Africa Inc

Will Artificial Intelligence Need Human Rights Training ?

The Financial Post interviews Norton Rose Fulbright Canada LLP’s patent and trademark lawyer Maya Medeiros on Artificial Intelligence’s discriminatory biases.

Despite all of the advances in the field of artificial intelligence (AI), experts reveal that these technologies are not immune from some of the less-than-admirable tendencies which afflict humans.

As recently reported by the Financial Post, experts have noted increasing biases that plague the decisions made by AI software. Specifically, AI outputs have been found to discriminate on the bases of race, ethnicity, gender and disability.

This phenomenon presents novel challenges to precisely the areas that have historically been susceptible to human lapses in judgment. One such area, as noted by Maya Medeiros, a patent and trademark lawyer at Norton Rose Fulbright Canada LLP, is employment and human resources management. Decisions with regard to hiring, promotion and firing, Ms. Medeiros states, are often being made or influenced by AI despite biases inherent in particular software, biases of which employers may not be aware. The discriminatory biases may manifest in various forms, from imparting negative scores in a cognitive emotional analysis of a video interview on the account of an individual’s disability, to discounting an individual’s work ethic on account of a period of unemployment due to pregnancy.

In order to prevent decades of progress in the area of human rights from being undermined by what is perceived to be objective analysis on the part of AI, it is imperative that those who build, as well as those who use, the technology take accountability for its shortcomings. In that regard, Ms. Medeiros states that “[e]mployers need to ensure that AI embeds proper values, that its values are transparent and that there is accountability, in the sense of identifying those responsible for harm caused by the system.” A way to do this, Ms. Medeiros suggests, is to take advantage of AI’s ability to learn and evolve by providing it with training data that reflects diverse values early on, and to continue to monitor the data throughout the machine learning process.

Employers would indeed be well advised to take an active role in counteracting any potentially improper decisions made or influenced by AI to ensure compliance with employment and human rights laws, as it is the employers themselves that are likely to be held ultimately responsible for any violation of such. Additionally, it may be advisable for employers and others relying on AI to obtain contractual indemnification from their respective developers  to avoid liability for aspects of AI technology beyond their control.

Written in collaboration with Alexandre Kokach, articling student.

Information collected via Facebook cannot – always – be used as evidence against an employee

Technology is ever-changing, and while in the past evidence of an employee’s misconduct was based mainly on “physical” witnesses and observations, employers might now be tempted to use data obtained through social media as evidence against their employees.

At the present time the French Supreme Court has not had many occasions to clarify the manner in which evidence obtained by French employers through the Facebook website (and more particularly on the “wall” of an individual) should be treated by the courts.

However, many cases have already been submitted for consideration by courts of appeal, most of which have up to the present decided to draw a line between what can be considered as public (and therefore legitimately available for use as evidence against an employee given that no expectation of privacy is permitted) and conversely what must be considered as private (and therefore not allowed as evidence).

In the present case, an employee had terminated her employment contract, claiming the equivalent of constructive dismissal. She lodged a claim before the employment tribunal, and then before the court of appeal.

The employer challenged the former employee’s claim, and to support its argument, the employer produced as evidence information which had been posted by the employee on her personal Facebook account.

The employer obtained access to such information using the business smartphone which had been provided to another employee of the company for the purpose of his duties. The employer instructed a bailiff to borrow the business smartphone and to transcribe the content of the information onto a report.

The employer claimed that it had legitimate access to the information because it was stored on a business smartphone allocated to an employee for the purpose of his duties, and therefore that such data should be deemed to be professional.  This was in line with a well-established principle under French law that documents stored on professional devices should be treated as professional and therefore may be produced as evidence, unless the employee has marked such document as private or personal.

However, the French Supreme Court denied the company’s argument, and held that even though the data obtained had not been identified as personal or private, such data could not be produced as evidence because it had been posted on the employee’s personal Facebook account, which she had rendered private. Only the employee’s “friends” on Facebook were entitled to access such data.

The French Supreme Court held that since the employer was not authorised to access the employee’s personal Facebook account, such access constituted a disproportionate and unfair infringement of the employee’s privacy).

Therefore, a distinction should be made when using information posted on Facebook in the context of relations with an employee:

  • employees’ accounts marked as “public” can be freely accessed and produced as evidence in certain situations (provided certain conditions are fulfilled);
  • however, employees’ accounts marked as private may not be accessed, even via a professional device.

Subventions du comité d’entreprise : du changement plus tôt que prévu

Le calcul des subventions qui doivent être allouées au comité d’entreprise (qu’il s’agisse de la subvention de fonctionnement, ou la contribution aux activités sociales et culturelles) est un casse-tête chinois pour les entreprises depuis plusieurs années déjà.

Ce casse-tête a été partiellement résolu par les ordonnances portant réforme du Code du travail qui ont prévu des dispositions spécifiques – et plus claires que les dispositions antérieures – sur les sommes à prendre en compte pour calculer les subventions allouées au comité d’entreprise.

Cependant, ces dispositions ne concernent que les sociétés déjà pourvues d’un comité social économique, à l’heure où l’écrasante majorité des entreprises françaises n’ont pas encore opéré la transition vers ce nouvel organe – qui, pour rappel, regroupera progressivement d’ici 2020 en une instance unique les délégués du personnel, le comité d’entreprise et le comité d’hygiène, de sécurité et des conditions de travail.

Dès lors, pour ces entreprises, le casse-tête restait encore entier, jusqu’à il y a quelques jours.

En effet, alors que les textes en vigueur faisaient pourtant référence à la « masse salariale brute » pour déterminer l’assiette des subventions dues par les entreprises à leur comité d’entreprise, la jurisprudence imposait aux sociétés, depuis un arrêt du 30 mars 2011, de calculer ces subventions sur la base des postes « rémunérations du personnel » définis par le compte 641 du plan comptable général.

Cet arrêt a soulevé de nombreuses difficultés pour les entreprises, qui utilisaient généralement comme base de calcul les sommes figurant dans la déclaration annuelle des données sociales (DADS), qui a maintenant disparu au profit de la déclaration sociale nominative (DSN). La difficulté venait du fait que la masse salariale brute telle qu’apparaissant dans la DADS ou dans la DSN exclut un certain nombre de sommes inscrites au compte 641.

Nombre de comités d’entreprise se sont emparés de l’arrêt du 30 mars 2011 et ont saisi la justice pour réclamer des rappels de dotation, souvent sur plusieurs années, s’estimant lésés par les calculs de dotation effectués par les entreprises.

Ces recours ont généré un contentieux important, et petit à petit, la jurisprudence de la Cour de cassation s’est affinée pour utiliser la référence à un compte 641 « retraité » de certaines sommes : rémunération des dirigeants sociaux, remboursements de frais, indemnités dues au titre de la rupture du contrat de travail autres que les indemnités légales et conventionnelles de licenciement et les indemnités de retraite, indemnités transactionnelles pour leur montant supérieur aux indemnités légales et conventionnelles.

Les entreprises étaient placées au milieu d’un tir croisé : d’une part, la Cour de cassation posant un principe (l’utilisation du compte 641) mais y apportant des exception à mesure que les contentieux lui parvenaient, et d’autre part, de nombreuses juridictions du fond résistant à la position de la Cour de cassation et continuant de valider la référence à la masse salariale brute telle qu’apparaissant dans la DADS.

L’insécurité juridique a enfin disparu, avec deux arrêts du 7 février 2018 qui, selon les termes même de la Cour de cassation, constituent un revirement de jurisprudence.

En effet, la Cour de cassation renonce définitivement à la référence comptable du compte 641 (même retraité), pour revenir à une définition sociale de la masse salariale brute. La Cour de cassation utilise ainsi la notion de “gains et rémunérations soumis à cotisations de sécurité sociale, en application de l’article L. 242-1 du code de la sécurité sociale”.

Dans ces deux espèces, la Cour de cassation précise que ne doivent être prises en compte au titre de la masse salariale brute :

  • Ni les sommes attribuées au titre d’un accord d’intéressement ou de participation, puisqu’il ne s’agit pas d’une rémunération ni de sommes soumises à cotisations de sécurité sociale (espèce n°1) ;
  • Ni les rémunérations versées aux salariés mis à disposition, dès lors que ces derniers ne sont pas rémunérés par l’entreprise d’accueil, et que les dépenses éventuellement engagées par le comité d’entreprise de l’entreprise utilisatrice en leur faveur doivent être remboursées par l’employeur (espèce n°2) .

Ces décisions ont été publiées sur le site internet de la Cour de cassation et ont fait l’objet d’une note explicative, preuve de la volonté de la Haute Cour de leur octroyer une large publicité. Elles mettront sans doute un terme aux contentieux sur ces thèmes.

“Casual” employee awarded 15 years of annual leave

The recent case of Apostolides v Mantina Earthmovers & Constructions Pty Ltd [2018] FCCA 279 serves as a useful reminder to ensure that your organisation’s award or agreement covered casual employees are “engaged and paid as such”.

In this case the Federal Circuit Court determined that an employee whom the employer purported was a casual employee, was in fact permanent and was owed a payment in lieu of notice and 15 years’ worth of annual leave payments.

The case very much turns on its facts, which are, in summary:-

  • There was no written contract of employment or written terms setting out the basis of the employee’s engagement;
  • The employee worked full time hours with substantial amounts of overtime for 15 years;
  • The employee had not been paid for public holidays over the course of his employment;
  • There was never any suggestion that he may not be required to work each day or that he had the option to decline to work;
  • The payslips contained no reference to the employee being a casual or a statement that there was a casual loading applied;
  • The employer gave evidence that a casual loading of around 20% had been applied in practice but there was no other evidence to support this;
  • A loading of 20% would have, in any event, been inadequate as the relevant pre-Modern Award, and the Australian Workplace Agreement (AWA) that was in place from 2007 (as an agreement-based transitional agreement) provided for a casual loading of 25%;
  • The employee gave evidence that he had not actually taken any annual leave over the 15 years (the judge found this to be questionable, querying why, if the employee genuinely considered himself to be a permanent employee, he would not have taken leave and questioned the non-payment of such leave); and
  • The employee was listed as ‘casual’ on the employer’s payroll system.

Although there was some evidence suggesting permanency and other evidence suggesting a casual employment relationship, the question of whether the employee was casual or permanent was, the judge found, to be determined by the construction of the terms of the pre-Modern Award (from 2000 to 2007) and the AWA (from 2007 to 2015). The pre-Modern Award (the Quarrying Industry Award) provided that “the contract of hiring of every employee will in the absence of a contract in writing to the contrary, be deemed to be a contract of hiring per week” and “a casual employee is one engaged and paid as such” [subject to some following conditions].

In this case, there was no contract in writing to the contrary (i.e. a contract stating that the employee was a casual). As such the Court found that from 2000 to 2007 the employee was a weekly hire employee and as such, permanent.

There was uncontested evidence given by the employee that, on signing the AWA, the employee was advised that “the Agreement wouldn’t change anything”.  The relevant terms of the AWA included the following:-

Full-time employment – this means that you are employed on a permanent basis and are required to work an average of 38 hours a week plus reasonable additional hours”; and

Casual Employment –  this means an employee who is engaged as a casual employee and whose hours and employment are subject to the employee’s availability to work and the Company’s needs for their services.”

Unsurprisingly, the parties had opposing views on the construction of the AWA. The judge found the subjective intentions of the parties to be of little assistance. The judge took account of the extrinsic evidence, applying it to determine whether the employment was ‘permanent’  or ‘casual’ for the purposes of the AWA. He noted that, although the word “permanent” had a degree of circularity about it, its ordinary meaning suggested long term or indefinite employment and would exclude temporary or short term employment. The judge also considered that the employee’s employment was also consistent with “38 hours a week plus reasonable additional hours”, in-keeping with the definition of full-time employment in the AWA. It was also found that the employee’s hours of work were not subject to the employee’s availability or the company’s need for his services, but rather he was expected to be available for work for 38 hours a week plus overtime. Those factors were inconsistent with casual employment as defined in the AWA. The employee was therefore found to have been a permanent employee for the duration of his employment.

Although the decision in this case turned on its facts and the construction of a pre-Modern Award and AWA, it highlights the importance of making the terms of an employee’s engagement clear at the outset and not acting inconsistently with that during the employment. Many Modern Awards provide that a casual employee is “one engaged and paid as such.” From a practical perspective it is therefore important that employers:-

  • Check the terms of, and have regard to, the definition of full-time and casual employment in the applicable Modern Award or enterprise agreement;
  • Ensure that there is written contractual documentation which explicitly includes:-
    • a statement that the employment is casual in nature,
    • that the specified casual loading is applied to compensate for the fact that as a casual, the employee has no entitlement to annual leave or personal leave;
    • that as a casual employee there is no entitlement to paid annual or personal leave;
    • a set off clause; and
    • notice provisions making it clear that the employment can be terminated on a limited notice period (the notice will depend on the terms of the applicable Modern Award or Enterprise Agreement but casual employment can commonly be terminated on no notice or 1 or 2 hours’ notice); and
  • Ensure that the payslips note that the employee is casual and separate out the applicable casual loading.

For casual employees who are not covered by an award or agreement, the issue will be determined in accordance with not just any contractual documentation but also by looking at the true nature of the relationship.

It is also worth noting that, separate from the question of casual employees’ entitlement to loadings and paid leave and the like, for the purposes of unfair dismissal, there is a statutory regime which specifically addresses when a casual employee will have access to the unfair dismissal regime (which is outside the scope of this article).

This case, however, is a timely reminder to review your casual employment contracts, pay documentation and any applicable Modern Award or Enterprise Agreement to ensure that your organisation is not exposed in this area. We are of course available to assist with any review and updating of contracts and/or an audit of your casual workforce.