EMPLOYMENT LAW BASICS Dealing with employment disputes arising from termination and resignation Michael Turnell Associate 29 August 2017

UNFAIR DISMISSAL: 1 JAN 2017 – 31 MARCH 2017 Information Number Number of applications for orders granting a remedy made under s.394 3478 Applications finalised prior to conciliation 640 Applications settled at conciliation 1985 Applications not settled at conciliation 531 Applications finalised after conciliation and before a formal proceeding before a Fair Work Commission member 538 Applications withdrawn after conference/hearing and before decision 10 Applications finalised by a decision 264 7.5% of cases determined WWW.CAPPELLOROWE.COM.AU

THIS PRESENTATION WILL COVER PRIOR TO TERMINATION - Reasons to terminate an employee and when is it lawful? TERMINATION – Notice periods and final payments POST TERMINATION DISPUTES – What kind of action can an employee bring and what to do (other than call Cappello Rowe!) RESIGNATION WWW.CAPPELLOROWE.COM.AU

WHY DO WE TERMINATE? Poor performance “Serious misconduct” Putting another worker in danger Refusing to follow instructions, or Redundancy. WWW.CAPPELLOROWE.COM.AU

SERIOUS MISCONDUCT Serious misconduct as per Reg 1.07 the Fair Work Regulations 2010 (Cth): conduct that is serious misconduct includes both of the following: Wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment; Conduct that causes serious or imminent risk to: - the health or safety of a person; or - the reputation, viability or profitability of the employer’s business. WWW.CAPPELLOROWE.COM.AU

SERIOUS MISCONDUCT - theft; or Conduct that is serious misconduct includes each of the following: The employee, in the course of the employee’s employment, engaging in: - theft; or - fraud; or - assault; The employee being intoxicated at work; The employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment WWW.CAPPELLOROWE.COM.AU

LAWFUL TERMINATION It is lawful for an employer to terminate an employee if: There is a genuine need for redundancy The termination is not an ‘unfair dismissal’ The termination does not contravene the general protections provisions of the Fair Work Act 2009 The termination does not give rise to unlawful discrimination, and There is a breach of the employee’s employment contract. WWW.CAPPELLOROWE.COM.AU

POOR PERFORMANCE Clear position description; Clear goals and achievement timeframes; Performance should be regularly reviewed; If expectations not met, the employer may implement a performance plan; Develop a more detailed plan for the employee and advise that if their employment does not improve to the expected benchmarks within a certain reasonable period of time, their employment may be terminated; If still no improvement, consider termination with appropriate notice. WWW.CAPPELLOROWE.COM.AU

MISCONDUCT – A GOOD INVESTIGATION Clear policies about acceptable behaviour; Act promptly on a matter that may amount to misconduct; Investigate the allegation to determine whether there is any basis to the allegation; It may be appropriate to suspend the employee whilst the investigation takes place depending on the seriousness of the allegations; The investigation should be carried out by someone who is not connected with the subject matter of the investigation; All relevant witnesses should be interviewed and relevant documents gathered; The employee should be allowed to have reasonably representation, if requested; The allegations should be put to the employee in detail and the employee allowed to respond; Detailed written records need to be kept. WWW.CAPPELLOROWE.COM.AU

MISCONDUCT – COMMON MISTAKES Resorting to investigation when conciliation/mediation is appropriate; Taking too long to initiate an investigation; Taking too long to advise the respondent; Failing to put all or specific allegations to the respondent; Failing to allow adequate representation; Not taking a specific complaint from the complainant; Failing to interview the complainant; Not allowing the respondent time to consider the allegations and rebut; Not allowing information given in confidence to be rebutted by the respondent; and Failure to act consistently in comparison to previous occurrences of the conduct. WWW.CAPPELLOROWE.COM.AU

CONSIDERATIONS FOR EMPLOYERS Was the employee aware of the performance standards or the policy? Was the grievance or performance issue raised as soon as it arose? Was the employee given an opportunity to respond to the allegation of misconduct or poor performance? Was the employee’s response considered before any disciplinary action was taken? Was the employee given an appropriate opportunity to improve performance prior to disciplinary action being taken? Was the suspension of the employee on pay necessary to properly investigate the performance or conduct issue in the absence of the employee? WWW.CAPPELLOROWE.COM.AU

CONSIDERATIONS FOR EMPLOYERS Was the employee given sufficient information to enable the employee to respond to the performance issue or allegation? Was the employee given sufficient time to prepare a response? Have all relevant witnesses been interviewed? Have any issues raised by the employee in the employee’s defence been properly explored? Is there any valid response for termination or disciplinary action of the employee which is supported by evidence? Has the employee had the opportunity to respond to both the reasons for the termination or disciplinary action, and to the decision of the employer as to the action to be taken? WWW.CAPPELLOROWE.COM.AU

NOTICE NOT REQUIRED Casuals Employees employed for a specified period of time, task or season (eg. a fixed term contract or a seasonal fruit picker) Serious misconduct Having a training arrangement and are employed for a set period of time or for the length of the training arrangement (other than an apprentice) Daily hire working in the building and construction industry or meat industry Daily hire employee working in the meat industry in connection with the slaughter of livestock Weekly hire employee in connection with the meat industry and whose termination depends on seasonal factors. WWW.CAPPELLOROWE.COM.AU

NOTICE REQUIRED ALL OTHER SITUATIONS NB – increase the period by 1 week if the employee is over 45 years old and has completed at least 2 years of continuous service. Period Employee’s period of continuous service with the employer at the end of the day the notice is given Period 1 Not more than 1 year 1 week 2 More than 1 year but not more than 3 years 2 weeks 3 More than 3 years but not more than 5 years 3 weeks 4 More than 5 years 4 weeks WWW.CAPPELLOROWE.COM.AU

DISPUTES UNFAIR DISMISSAL ‘HARSH, UNJUST OR UNREASONABLE’

ELIGIBILITY FOR UNFAIR DISMISSAL An employee may be eligible to make an unfair dismissal application if: Their employment is covered by a Modern Award; Their employment is covered by an Enterprise Agreement; or The employee’s ‘annual rate of earning’ is less than the ‘high income household’ ($142,000 from 1 July 2017) WWW.CAPPELLOROWE.COM.AU

THE HIGH INCOME THRESHOLD Exclusions Compulsory employer superannuation contributions Contingent payments (e.g. commissions, bonuses or overtime) Reimbursement of expenses Award based allowances Wage / Salary Money paid on behalf of the employee $142,000 (from 1 July 2017) Non-monetary benefits WWW.CAPPELLOROWE.COM.AU

EXCLUSION: ‘MINIMUM EMPLOYMENT PERIOD’ 6 months; or 12 months if the employer employs less than 15 employees (small business) Includes: Continuous service with same employer; or Transfer of business situations (i.e. sale of business). But does not include: Periods of unauthorised leave; Unpaid leave, other than community service leave, periods of stand-down authorised by the Act Any other periods of leave prescribed by regulations. NB – period of absence on paid worker’s compensation is included: WorkPac Pty Ltd WWW.CAPPELLOROWE.COM.AU

EXCLUSION: FIXED PERIOD (ETC.) OR CASUAL Fixed period/fixed task/seasonal employees where employment ended at the end of the period, task or season Employee employed under a training arrangement, and the training arrangement ends Employee demoted where demotion does not involve a significant reduction in remuneration or duties and employee remains with the employer Casual employees unless they: Have been employed for over 12 months on regular and systematic basis; and Had reasonable expectation of ongoing work WWW.CAPPELLOROWE.COM.AU

EXCLUSION: GENUINE REDUNDANCY Section 389 A dismissal will be a case of genuine redundancy if: The employer no longer requires the employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and The employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy. However, a redundancy will not be genuine if it would have been reasonable in all the circumstances to redeploy the employee in the enterprise, or in a related enterprise (which can include interstate). WWW.CAPPELLOROWE.COM.AU

EXCLUSION: GENUINE REDUNDANCY However, a redundancy will not be genuine if it would have been reasonable in all the circumstances to redeploy the employee in the enterprise, or in a related enterprise (which can include interstate). WWW.CAPPELLOROWE.COM.AU

EXCLUSION: SMALL BUSINESS EMPLOYER Section 388 It will not be unfair for a Small Business (an employer with fewer than 15 employees) to dismiss an employee provided the dismissal was consistent with the Small Business Fair Dismissal Code. WWW.CAPPELLOROWE.COM.AU

SMALL BUSINESS FAIR DISMISSAL CODE © 2014-2017 Effective Workplace Solutions Completing the checklist does not automatically make the dismissal fair, however the employer can use it to show that they followed a fair procedure in dismissing the employee. WWW.CAPPELLOROWE.COM.AU

DOES AN EXCLUSION APPLY? Has the worker been employed for less than 6 months (or less than 12 months of a small business)? Is the employee as a casual, fixed term employee or under a training contract? Was the employee demoted? Was the employee made redundant? Were they consulted? Were they offered redeployment opportunities? WWW.CAPPELLOROWE.COM.AU

THE MEANING OF ‘UNFAIR’ ‘Harsh, Unjust or Unreasonable’ If there’s a valid reason for the dismissal If the employee was notified about the reason and allowed to respond If there was any unreasonable refusal to allow the employee a support person to assist in any discussions relating to dismissal If the dismissal was for unsatisfactory performance, whether the employee was warned about their performance before the dismissal The size and human resources capacity or the organisation, and Any other matters that it considers relevant, which might include any factors such as the harshness of the dismissal in the employee's particular circumstances. Section 387, Fair Work Act 2009 WWW.CAPPELLOROWE.COM.AU

WAS DISMISSAL WAS HARSH, UNJUST OR UNREASONABLE? What was the reason given by your employer for your dismissal? (Obtain a copy of the termination letter and any other correspondence) Were you notified of that reason? When? Were you given an opportunity to respond? How much time were you given? Did you afford the employee the option of a support person during meeting? Did you warn the employee of unsatisfactory performance (if dismissed for poor performance)? If so, what standards were these based upon? Has the employee previously been subject to disciplinary action? What was their length of service? Have you complied with your policies and procedures? WWW.CAPPELLOROWE.COM.AU

HARSH, UNJUST OR UNREASONABLE ‘It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.’ Justices McHugh and Gummow Byrne v Australian Airlines Ltd [1995] HCA 24 WWW.CAPPELLOROWE.COM.AU

REMEDIES - REINSTATEMENT Section 390 - 391 Primary remedy is reinstatement to same position, or to a similar position on terms and conditions no less favourable. The Commission may also order continuity of service despite termination and restore lost pay. When will reinstatement be appropriate? Reinstatement occurs less than 1% of the time. Relationship of trust and confidence still exists. Length of employee’s service More likely for large scale business. WWW.CAPPELLOROWE.COM.AU

REMEDIES - COMPENSATION Section 392 - 393 However, if the Commission considers reinstatement is inappropriate it may award compensation instead. Compensation is capped at 6 months’ pay or $71,000, whichever is lower (indexed annually). Practical note – 6 months’ is rarely awarded. Employee misconduct may reduce the compensation amount. Compensation may be made in instalments and may be taxed at a different rate dependent upon the age of the employee. Best to speak to your accountant about this. WWW.CAPPELLOROWE.COM.AU

DISPUTES - GENERAL PROTECTIONS ‘ADVERSE ACTION’ FOR A PROHIBITED REASON’

GENERAL PROTECTIONS OVERVIEW CONDUCT REASON REMEDY Workplace Right Discrimination* WWW.CAPPELLOROWE.COM.AU

WORKPLACE RIGHTS – s 341 Entitlement to a benefit under a workplace law or industrial instrument A role or responsibility under a workplace law or industrial instrument Entitlement to initiate or participate in a process under a workplace law or industrial instrument Entitlement to make a complaint or injuiry under a workplace law or industrial instrument or in relation to his/her employment WWW.CAPPELLOROWE.COM.AU

WHAT IS ‘ADVERSE ACTION’? Heraud v Roy Morgan Research Ltd: the worker had exercised a workplace right to take maternity leave, the employer had taken adverse action (by injuring or prejudicing her in her employment) by not returning the employee to her substantive role, or a restructured role, at the end of her maternity leave Morris v Allied Express Transport Pty Ltd (2016): the Federal Circuit Court confirmed that, if evidence is required by the employer, there is no automatic right to two days’ compassionate leave. Barclay v BRIT: Issuing show cause letter and withdrawing computer access ALAEA v Qantas Airways: Abusive language and intimidation. WWW.CAPPELLOROWE.COM.AU

WHAT IS A ‘PROHIBITED REASON’? Family responsibilities – maternity leave Age and physical condition Asserting a right to a pay rise or other award-based entitlements Advancing the views of the union Status as a bargaining representative Participation in industrial action Complaints about bullying WWW.CAPPELLOROWE.COM.AU

CONSIDERATIONS Employee Show adverse action for a prohibited reason Employer Must prove (on the balance of probabilities) that adverse action was not taken for a prohibited reason (s.361) Court Did adverse action take place? (generally straightforward) Was it for a prohibited reason? What were the reason for the dismissal? WWW.CAPPELLOROWE.COM.AU

HAS AN EMPLOYEE BEEN TERMINATED FOR A PROHIBITED REASON? Did the employee make a complaint regarding their employment prior to being terminated? (i.e. workers compensation, complaint about the employment conditions) Was the employee dismissed because of their views? (i.e. political) Has the employee been treated differently when compared to other employees? Did you misrepresent workplace rights/obligation to engage in industrial activity? Was the employee coerced into participating in/not participating in any industrial activity or exercise of any workplace right? WWW.CAPPELLOROWE.COM.AU

SUMMARY OF UNFAIR DISMISSAL AND ADVERSE ACTION REMEDIES Comparison Unfair Dismissal General Protections Grounds Termination was harsh, unjust or unreasonable ‘Adverse action’ taken for a ‘prohibited reason’ Time limit for application 21 days from the date the dismissal takes effect Dismissal = 21 days from the date the dismissal takes effect No dismissal = 6 years from the date of the adverse action Remedy Reinstatement or compensation (up to 6 months pay of $71,500) Reinstatement, payment of compensation, payment for lost remuneration, maintenance of the continuity of employment, maintenance of the period of continuous service. WWW.CAPPELLOROWE.COM.AU

RESIGNATION When a worker resigns from their employment they may be able to claim unfair dismissal under the Fair Work Act 2009 (Cth) if they can show they were forced to resign because of the conduct, including a course of conduct, engaged in by the employer. Constructive Dismissal = “had the employer not taken the action it did, the employee would have remained in the employment relationship.” : Mohazab v Dick Smith Electronics Pty Ltd WWW.CAPPELLOROWE.COM.AU

HAS THERE BEEN A RESIGNATION? An employee need not provide written notice of resignation. However, it is a good idea to obtain written confirmation from the employee as soon as possible. This is to avoid any confusion at a later stage. WWW.CAPPELLOROWE.COM.AU

STEPS TO CONSIDER Provide written acknowledgement of an employee's resignation Honour the employee's notice requirements, or come to an agreement Work out the employee's final pay Exit Procedures Record keeping WWW.CAPPELLOROWE.COM.AU

ANY QUESTIONS? WWW.CAPPELLOROWE.COM.AU