By now your business or organisation should have Year 2000 compliance work well under way, or nearing completion. If not, then you should immediately:

• identify the extent to which your internal systems are exposed to such risks;
• identify which affected processes are crucial to you;
• identify the extent to which your key suppliers and clients are affected and what they are doing to resolve any problems;
• plan corrective action and make contingency plans;
• implement and test your plans.

There are a number of useful websites on the year 2000 problem, including: www.y2k.gov.au and www.y2kregister.com.au. However, you may well need expert assistance.

The Federal Government has recently passed the Year 2000 Information Disclosure Act 1999. This was intended to encourage disclosure of information about Year 2000 readiness and provides some limited protection to written statements about such readiness. However, the Act is subject to many exceptions, including (but not limited to) the following:

• it does not protect false or misleading statements;
• it does not protect statements made to induce people to buy goods or services;
• the Act does not protect against liability for defective goods or services.

The statement must also reference the Act, in the following way:

You should still be careful when commenting about your readiness for Year 2000 that you do not make false or misleading statements, as this may lead to legal liability if people rely on those statements.

For further information and advice on this article, please contact Robert Chalmers, Senior Associate on (08) 8210 1229 or via email: rchalmers@normans.com.au

The Workplace Relations Act allows the Australian Industrial Relations Commission (AAIRC) to certify enterprise agreements, even though they fail the "no disadvantage test", provided that they are in the public interest. In an appeal against the certification of the Chubb Security - Darling Harbour Ranges Enterprise Agreement 1998, a Union argued that the scope of what is in the public interest is limited by an example given in the relevant section (Section 170LT(4)). This argument was rejected by the Full Bench of the AIRC which found that the expression "in the public interest" requires a discretionary value judgment on the part of the AIRC based upon the objects of the Act.

Employers should, accordingly, remember that failing the "no disadvantage test" will not always mean that their agreement won't pass the AIRC.

This firm recently represented an employer in the South Australian Industrial Relations Court in a claim by an employee that the redundancy payment he received was inadequate. The employee argued that he was a clerk covered by the relevant Award and, accordingly, was entitled to 4 weeks pay per year of service capped at 52 weeks. The employer successfully maintained that the employee was a non-Award employee entitled to 3 weeks pay per year of service capped at 52 weeks. The employee was employed as a manager and the Court noted that while some of his duties were clerical in nature, the position involved responsibilities, such as hiring and firing staff and writing off bad debts which were not clerical tasks. The claim for underpayment was dismissed.

Claims such as this can be avoided by ensuring that an employee's terms and conditions of employment are carefully documented and updated to reflect promotions.

Deputy President Hampton recently determined that Section 84(4) of the Industrial and Employee Relations Act 1994 (SA) provides that the South Australian Industrial Relations Commission (ASAIRC) must rescind an expired agreement on the application of either the employer or the majority of employees. In Re: Adelaide University Union Agreement (No. 3), the employer applied to rescind an enterprise agreement following its expiry. The application was opposed by the Unions on the ground that if the rescission occurred without making a new agreement, the employees would be subject to reduced salaries and wages in view of the status of the relevant Award. The Deputy President determined that this was merely an issue relevant to the question of the timing of the rescission order. He further found that the SAIRC has power to conduct preliminary proceedings to encourage the parties to enter into a further agreement and to list and deal with the application for rescission, including determination as to when an order to rescind an agreement should come into effect.

Applications to rescind can, therefore, be used in situations where negotiations in respect of new agreements have stalled.

Recently the SAIRC, in Badenoch v David Jones Limited, dealt with the demotion of a David Jones sales manager to the position of a supervisor. The employee argued that he had been constructively dismissed by the demotion and sought a determination that the dismissal was harsh, unjust or unreasonable because he had not been afforded procedural or substantive fairness in the handling of the demotion. The SAIRC accepted that this was the case in that the employee had not been provided with any formal warning as to the possible outcome of the employer's criticism of his performance and had not consulted with the employee in relation to the proposed demotion. In reaching this conclusion, the SAIRC applied the same principles of substantive and procedural fairness to a consideration of the demotion as it would if the employee had actually been dismissed. The employee was ordered to be reinstated to the position of sales manager.

In our February 1998 Briefly we reported upon the case of Telstra Corporation Limited v Worthing & Another in which the New South Wales (ANSW) Compensation Court and NSW Court of Appeal determined that Commonwealth employees were able to pursue workers' compensation claims under State legislation. On 24 March 1999, the High Court of Australia allowed Telstra's appeal. The High Court determined that, during the period Mr Worthing was employed by Telstra Corporation Limited, a company incorporated in the Australian Capital Territory, he was covered by the Safety, Rehabilitation and Compensation Act 1988 (ASRC Act) which was a workers' compensation scheme intended by the Commonwealth to cover the field and which was inconsistent with the operation of the State legislation. In other words, Mr Worthing's entitlements to compensation were determined under the Federal scheme and he was not entitled to benefits under the State scheme.

Following the decisions of the NSW Compensation Court and the NSW Court of Appeal, several workers commenced proceedings in both the Federal Administrative Appeals Tribunal (AAAT) and State workers' compensation jurisdictions. The AAT has followed a procedure of putting these matters on hold until the High Court decision in Worthing. In view of this decision, it is anticipated that the various State matters will now be dismissed and the AAT matters will proceed to be determined under the Commonwealth legislation.

Commonwealth employers and authorities licensed under the SRC Act will no doubt be relieved by this decision which avoids the necessity for them to insure under both State and Federal schemes.

In our May 1998 Briefly we reported on the Full Federal Court decision in Australian Postal Corporation v Burch. The arguable effect of this decision is to dispose of the concept of mutual exclusivity of injury and disease under the SRC Act. There are few, if any, diseases that are likely to cause incapacity for work which do not, at some point, involve a sudden physiological change. If that change occurs at work, even without contribution by work, then the Federal Court decision suggests that it is compensable as an injury.

In view of the significant implications for the federal scheme, an application for special leave to appeal was made to the High Court. In a recent decision this application was dismissed. However, we understand that the High Court indicated that it was interested to hear argument on this issue, but did not consider that the findings of fact made in Burch rendered it a suitable vehicle for the determination of the issue. Accordingly, the distinction between an injury and a disease remains a live issue which will, no doubt, be the subject of further litigation. In the meantime, we refer to our previous Briefly advice that it is most important that determining authorities pay very careful attention to obtaining medical evidence on the critical issues prior to making any determinations on such claims.

It is reasonably common that employees who have suffered a compensable disability return to alternative duties. What if the usual pay rate for the alternative duties is higher than for the injured worker's normal duties? In a recent Industrial Relations Court decision (Day v State of South Australia (DECS), 5 February 1999), the question was whether a teacher was entitled to be paid as an employee under the Award applicable to a Schools Service Officer (ASSO). The teacher had been carrying out the duties of an SSO as part of a rehabilitation program and the relevant Award rate was higher than the weekly payments of income maintenance she was receiving. It was argued for the teacher that because she was performing work which fell squarely within the ambit of the relevant Award, she was entitled to be paid in accordance with that Award. The Court found that there had been no variation to the existing contract of employment of the applicant as a teacher and that as part of her rehabilitation program, the teacher had been offered certain duties designed to gradually ease her back into her old job. Her remuneration was by way of weekly payments based upon her notional weekly earnings as a teacher and the rate of weekly payments could only be changed in accordance with the provisions of the Workers' Rehabilitation and Compensation Act 1986. The Court noted that the amount of weekly payments received was not dependent upon the duties performed or the nature or existence of any rehabilitation program.

If there had not been a rehabilitation program in place throughout the duration of the alternative duties, or if it had not been made clear to the worker she was continuing to receive weekly payments of compensation rather than wages, the outcome may well have been different.

When issuing a notice to discontinue weekly payments on the basis of a return to work or of capacity to carry out suitable employment duties, the possibility of exposure to liability for an increased rate of wages needs to be considered.

The decision is subject to appeal. We will let you know the outcome.

A recent decision of the President of the AAT, Justice Mathews, has found that a redemption lump sum paid to an employee pursuant to the SRC Act is not taxable income. The case, Coward v Commissioner of Taxation, involved a employee who had turned 65 years of age when he received his redemption. Her Honour relied upon the employee's age in determining that the redemption was not taxable income.

The situation for those redemptions made to employees under the age of 65 is still not clear. The Australian Taxation Office (AATO) has recently advised that it interprets the Coward decision to mean that those employees under the age of 65 years, and in receipt of weekly income payments which are subsequently redeemed, will be required to pay tax on the redemption sum. That is, the redeemed amount is income and, therefore, taxable.

Clearly the decision of Coward and the ATO's attitude towards the redemptions will have a significant impact on those employees covered by the South Australian Workers' Rehabilitation and Compensation Act 1986 and the SRC Act. The ATO expects to issue a Public Ruling regarding the taxation of redemption sums in the near future. Until that time, if employees request a Private Ruling, it will continue to accept that redemption sums are not taxable income.

We suggest that if employers receive a notice from the ATO for payment of tax on a redemption sum, in all cases the notice be complied with, leaving the employee to pursue his/her rights against the ATO.

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