Rouse Lawyers

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Why Businesses Can’t Be Too Casual About Their Casual Employees

There has been quite a bit happening with regards to casual employees of late that businesses should take stock and review all casual employment arrangements they currently have in place.

Whilst casual employees are not entitled to annual leave under the National Employment Standards (NES) in the Fair Work Act 2009 (Cth) (FW Act), the recent Full Federal Court decision of WorkPac Pty Ltd v Skene [2018] FCAFC 131 (the Skene decision) has looked closely at when an employee is really a casual for the purposes of the NES and therefore entitled to annual leave. We recommend that all businesses now take stock and do the same, considering whether their casual employees really are casual employees. ...

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Don’t get Grill’d over your traineeship agreements

Don't get Grill'd over your traineeship agreements
Grill’d, the popular fast food burger chain was recently in the media over allegations by the Young Worker’s Centre (YWC) of Victoria that Grill’d is prolonging it’s traineeships as a way to reduce their employees’ hourly wage.
YWC made the allegation on behalf of a current Grill’d employee.
Following the allegations, the founder of Grill’d, Simon Crowe, released a statement (that can be found on their website) standing behind the company’s practices.
What is a traineeship?
A traineeship is a program provided by an employer to employees to learn on-the-job skills related to the industry the employee is employed in.  At the completion of a traineeship, the employee will earn a certificate in the relevant area.
The time to complete a traineeship varies depending on the classification of the employee.
Part-time Grill’d employees, according to Crowe, generally complete the traineeship within 12 to 18 months and upon completion, the employee earns a Certificate III in Hospitality.
Did Grill’d pay their employees less?
When employed as a trainee, an employee will be paid the trainee rate as provided for in the relevant award or enterprise agreement.  Each award or enterprise agreement sets out how to calculate the rate of pay for the different classes of employees.  For example, a casual employee’s rate of pay is calculated differently than a full-time employee.

Once an employee completes a traineeship, the employee’s rate of pay is adjusted in accordance with their level of training (e.g. completion of a certification III) and type of employment (e.g. casual or full-time).

In the case of Grill’d, the concern relating to the rate of pay is that Grill’d, in the opinion of the employee, ...

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Social Media Policy For Employees- Why You May Still Be Vulnerable

Social Media Policy For Employees-  Why You May Still Be Vulnerable
Social media is embedded in our society as a means of engaging and interacting with others in a professional and personal capacity. There are many social media sites with large numbers of users (including Facebook, Instagram, Twitter, Snapchat, LinkedIn, Youtube, Google+, Whatsapp, Tumblr and Pinterest – to name a few) and the list is growing.

All business’ should consider implementing a social media policy as part of the business’ human resource policies.

Social media policies serve two purposes:

  1. To provide guidance to employees on how to use social media
  2. To provide employers recourse to disciplinary action if the employee breaches the policy

Employees’ use of social media outside the workplace can have a significant impact on their employer. Therefore, it is prudent for social media policies to include social media use outside working hours, in addition, to use while the employee is at work.
Clauses to include in your social media policy
A social media policy should cover the following:

  1. Who the policy applies to
  2. What is acceptable and unacceptable use of social media
  3. Use of the employer’s internet connection and devices to access social media
  4. Whether any use of social media during work hours is permitted
  5. Consequences of breaching the social media policy such as disciplinary procedures

What sort of behaviour can I address in the social media policy?
Your social media policy needs to be lawful and reasonable, and should support employees who choose to use social media. Any restrictions that you place on employee behaviour need to be in place to protect your business. This can include your business’ reputation, confidentiality and security. Examples of behavior more commonly prohibited by social media policies include:

  1. Posting or ‘sharing’ offensive, obscene, ...

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What Employers Need To Know About Unfair Dismissal

Employer Tips: How To Minimise Or Prevent Unfair Dismissal Claims
In 2015, the Fair Work Commission reported close to 15,000 applications were lodged for unfair dismissal.
There are a number of simple steps we find are often overlooked by employers that can minimise or prevent unfair dismissal claims.
1. Clear pre-employment communication
From the outset, employers need to be clear about what is expected from their employees. Coherent and unambiguous employment agreements are vital. In conjunction with an employment agreement, any relevant policies and procedures regarding workplace issues should also be given to the employee. By providing a clear guide of the expected behaviours, and what constitutes a breach of these expectations, employers reduce their risk of claims.
2. Maintain written records
Employers should keep written records of all dealings with employees. This is particularly important when issuing warnings. Previous warnings issued to employees are a relevant consideration in these matters. The maintenance of written records will not only satisfy employers’ legislative requirements, but will also assist in terms of evidence should the employer face an unfair dismissal claim.
3. Exercise procedural and substantive fairness
According to employment law in Australia, dismissal is unfair if the dismissal was harsh, unjust or unreasonable. In responding to an application for unfair dismissal, an employer must demonstrate that there was a valid reason for dismissing an employee. Additionally, employers should also establish that the following occurred prior to termination:
1. the employee was notified clearly of the reason for dismissal

2. the employee was provided an opportunity to respond

3. during discussions surrounding the potential dismissal, employers allowed the employee to have a support person present.
4. Obtain advice before dismissal
In some circumstances (theft, fraud, violence and serious breaches of Workplace Health & Safety ...

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Restraint of Trade – Employment Contracts

Restraint of trade clauses in employment contracts are critical to protecting legitimate business interests of an employer after an employee is terminated.

For many businesses, the enforceability of a restraint of trade clause in an employment contract is extremely significant, particularly where an employee moves to a competitor or starts their own business. Restraint of trade clauses are enforceable to the extent that the restraint is reasonably necessary to protect the legitimate business interests of the employer, and this is assessed on a case by case basis.
Valid Employment Contract
In order to enforce a restraint of trade clause, the employment contract itself must be valid and enforceable. It is not unusual for the scope of an employee’s role to change throughout the course of their employment with an employer. A failure to ensure that the employment contract accurately reflects the relationship between the employer and the employee at the time of termination can result in repudiation of the contract, as seen in Fishlock v The Campaign Palace Pty Ltd [2013] NSWSC 531 (the Fishlock case).
The Fishlock Case
In the Fishlock case, the NSW Supreme Court found that an advertising agency was unable to enforce an otherwise valid restraint of trade clause against a former employee, Mr Fishlock.

During Mr Fishlock’s employment at The Campaign Palace, the employer unilaterally changed Mr Fishlock’s duties and responsibilities. The Court held that as a result of the change in duties and responsibilities, The Campaign Palace had repudiated Mr Fishlock’s employment contract (and consequently the restraint of trade clause). Accordingly, The Campaign Palace was unable to enforce the employment contract, including the restraint of trade clause.

Employers must regularly review the employment contracts of their employees, and ensure that where there is any substantial change in an employee’s duties and responsibilities that these ...

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7-Eleven Saga: Underpayment of Employees

Recently, a number of 7-Eleven operators have come under fire in light of allegations they have underpaid employees. As a result, the founders of 7-Eleven Australia could face a Senate inquiry over allegations head office was complicit in wage fraud against workers at 7-Eleven stores.

Whilst it appears there may be many more cases of underpayment taken up by the Fair Work Ombudsman, we have considered the facts surrounding two such cases published by the Fair Work Ombudsman.

7-Eleven Blacktown, Sydney
The Fair Work Ombudsman has commenced legal proceedings against 7-Eleven Blacktown owner/operator, Harmandeep Singh Sarkaria, both in his personal capacity and against his company, Amritsaria Four Pty Ltd.

Mr Sarkaria and his company allegedly underpaid two console operators a total of $49,426. Those employees were entitled to receive normal hourly rates of more than $22, and up to $29.27 an hour for some weekend, public holiday and overtime shifts.

In essence, it is alleged that the company made entries representing that the employees had only worked a minimal number of hours, and had been paid award rates, when in reality the shifts were significantly longer and the rates paid to the employees was equivalent to $10 per hour.

Mr Sarkaria faces maximum penalties of between $5,100 and $10,200 per breach, and his company faces penalties of $25,500 to $10,200 per breach.

7-Eleven Edward Street, Brisbane
The Federal Circuit Court has imposed a $6,970 penalty against the former operator of 7-Eleven Edward Street, Mubin Ul Haider for underpaying an overseas worker more than $21,000 and refusing to co-operate with the Fair Work Ombudsman.

Mr Ul Haider admitted his business underpaid the young visa-holder the minimum wage, casual loading and penalty rates he was entitled to.

The Court ordered that the fine be paid to the former employee. ...

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Battle of the Beard: Unfair Dismissal Claim

In Felton v BHP Billiton Pty Ltd [2015] FWC 1838, Mr Felton (the applicant) was dismissed by BHP Billiton (his employer of 6 years) when he repeatedly refused to comply with BHP’s clean shaven policy.

Due to occupational health and safety concerns, Mr Felton was directed by BHP to shave his facial hair so he could safely wear a respirator mask in the underground mine. The mask was required to be worn in order to prevent exposure to diesel particulate matter, dust and other gasses and chemicals.

The clean shaven policy had been in existence at BHP for some years, but BHP sought to comprehensively apply it to its underground operations in 2014, following advice confirming diesel particulate matter was a human carcinogen.

Mr Felton had previously worn a different brand of respirator which covered his goatee, and he argued he ought to be able to use the brand which catered for his facial hair, at his own cost (instead of the BHP sanctioned respirator). BHP denied this request and said that Mr Felton’s respirator was not appropriate for the risks associated with the underground mine he worked in.

BHP issued a number of warnings to Mr Felton to comply with the direction to shave. Mr Felton did not comply with the directions, and as a result BHP terminated his employment.

Mr Felton alleged his termination amounted to unfair dismissal because BHP had conducted inappropriate consultation about the clean shaven policy. He also argued his offer to supply another brand of respirator mitigated BHP’s alleged workplace health and safety risk. Mr Felton was unsuccessful.

Commissioner Hampton found Mr Felton’s dismissal was not unfair in light of his refusal to comply with BHP’s policy and said: “Mr Felton made a deliberate and well informed decision not to comply with the policy... It was his right to maintain his appearance however this was in conflict with a reasonable and lawful ...

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Asset Protection for Employees

A common misimpression is that an employee cannot be liable for work performed on behalf of his or her employer. It is certainly true that an employer does not have any claim against an employee for defects in the employee's work, however, what about claims made by third parties for defects in work performed by an employee?
Case Study
The best way to answer this question is by way of an example encountered in our practice.

An employee worked as a quantity surveyor for a medium size surveying firm.  A couple of years previously, the employee had performed some work in relation to a proposed high-rise building. Notwithstanding the integrity of the employee, there were some defects in the work that caused damage to the building owner in an amount exceeding $7 million.

The building owner commenced action for the damage suffered. The employer was covered by insurance for these kinds of claims and therefore referred the claim to the insurer.

It is not uncommon when large claims are made for insurers to look for a basis of avoiding the claim. Claims may not be covered on a number of bases including:

  • The claim is caught by a policy exclusion;
  • Lack of full and true disclosure (insurance is an area where there is obvious motivation for an insured to hide the truth. Insurance contracts are therefore different to ordinary contracts and are governed by a principle of utmost good faith which requires the insured to disclose all material facts relating to the matter to be insured prior to entering into the policy. Failure by the insured to provide full disclosure gives a basis for the insurer to avoid a claim);
  • The insurer lacks the capacity to pay (recall the HIH saga).

In this case, the insurer claimed the employer failed to make full and true disclosure and therefore avoided the claim.

The employer was unable to meet the claim for $7 million and the building owner then made a claim against the employee.  The employee ...

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High Court Overrules Finding of Duty of “Trust and Confidence” in Employment Contracts

The High Court has overruled a decision of the Full Court of the Federal Court in relation to whether a mutual duty of trust and confidence is implied in employment contracts.

In 2012, the Federal Court in Barker v Commonwealth Bank of Australia (CBA), awarded damages to an employee in relation to a breach by the employer of an implied term of “mutual trust and confidence” arising from an employment contract.

In overruling the Federal Court’s decision, the High Court found that, under Australian common law, employment contracts do not contain an implied term of mutual trust and confidence.
IMPLIED TERMS
Implied terms are found in most, if not all, contracts. Parties to a contract do not, and cannot, expressly provide for all events that may arise in their course of dealings with each other. There are gaps which courts may be asked to fill, by implying a term in favour of one of the parties.

There are number of types of implied terms, the most common being those implied by law, and those implied in fact (or, to give business efficacy to the agreement).
THE FEDERAL COURT DECISION
Our article on the background of this case and the Federal Court’s decision can be accessed by following this link.

In summary, in a two-to-one majority, the Full Court of the Federal Court implied the following term into Mr Barker’s contract with CBA:

‘...the employer will not, without reasonable cause, conduct itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.”

The majority went on to find that CBA had breached the duty arising from this implied term.

The dissenting judge disagreed that Australian law required the implication of such a term into employment contracts.
OVERRULED BY THE HIGH COURT
In its appeal to the High Court, CBA argued that the term implied by the ...

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Restraint of Trade – Cascading Clauses

A clause which provides for different ‘levels’ of restraint in an employment contract is commonly referred to as a ‘cascading restraint clause’. Cascading restraint clauses can operate by providing for multiple options in relation to distance/geography, time periods and the nature and type of conduct to be restricted. Each variable is treated as an individual clause, and is severable and independently binding. This means that where one level of restraint may be deemed too harsh, the employer can look to enforce a lower level restraint without the entire clause being invalidated.

The operation of cascading restraint clauses was tested in OAMPS Insurance Brokers Ltd v Hanna [2010] NSWCA 781, and the decision by the New South Wales Court of Appeal confirms that these clauses are valid and enforceable.
OAMPS Insurance Brokers Ltd v Hanna
Mr Hanna commenced employment as an experienced insurance broker with OAMPS in 1990, resigned from OAMPS in 2010 and commenced a position at another insurance broking firm.

During his employment with OAMPS, Mr Hanna’s employment was subject to a written employment agreement. A schedule to the employment agreement contained a post-employment restraint deed.

After Mr Hanna left OAMPS, a dispute arose regarding the enforceability of the restraint clause in the deed. The restraint clause itself was a cascading clause with 9 restraints, which ranged from 15 months across Australia, down to 12 months across metropolitan Sydney.
Outcome
OAMPS sought an injunction to prevent Mr Hanna from providing services to a number of its clients. The injunction was ultimately granted, and Mr Hanna was restrained from dealing with 17 clients for a period of 12 months.

Mr Hanna advanced a number of grounds of appeal, including that the cascading restraint clause was void for uncertainty, and went beyond what was reasonably necessary to protect OAMPS’ interests.

The Court of Appeal held that the restraint clause was not void for ...

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