The Norman Waterhouse Employment team has recently welcomed Jarrod Warren. Jarrod has considerable experience in workers' compensation and industrial matters. In addition, he has particular expertise in court work. Jarrod can be contacted on 8210 1278 or by e-mail: jwarren@normans.com.au
THE MILLENNIUM BUG
- INDUSTRIAL ISSUES
Readers are probably sick to death of hearing about the potential problems that can be caused by Y2K computer problems.
However, industrial issues which could arise as a result of the millennium bug have never been given much prominence in articles and discussions on the issue.
Employers should have contingency plans in place for their first day of operation in the Year 2000. It may be that computer problems will create operational difficulties for parts, if not all, of an employer's operations on that day. Some of these problems may well take days to resolve.
Consider this - are your workplace agreements, awards or other industrial instruments flexible enough to allow you to "stand down" employees who are unable to work due to machinery or equipment failures and difficulties caused by computer problems?
If they do not, then steps should be taken now to negotiate with the appropriate parties to provide for adequate flexibility.
SERIOUS & WILFUL MISCONDUCT
The Moving Goal Posts
Readers may be aware that there is a recent string of Australian Industrial Relations Commission decisions which throw some doubt upon the SA Industrial Relation Commission's findings in the case of Bi-Lo v Hooper.
In Hooper, the Full SA Commission set down a step-by-step approach to the investigation of an allegation of serious and wilful misconduct, and the basis upon which an employer could conclude that an employee had engaged in serious and wilful misconduct. Essentially, provided the procedure observed by an employer followed those steps, and provided the employer then had a reasonable basis to conclude that the employee had engaged in the conduct alleged, a finding of serious and wilful misconduct could be made out.
The Australian Commission has, in a number of recent decisions, suggested that the "bar" should be moved higher for an employer in this regard. In these cases, suggestions have been made that the employer needs to be "reasonably certain" that an allegation is made out, and whilst the Commission is not suggesting that allegations should be proven "beyond reasonable doubt" - ie the criminal burden of proof - there is a significant weakening of an employer's position which has come from these decisions.
Spare a thought, however, for employers in New Zealand. A recent decision by the Employment Court of New Zealand in the matter of Russell v Wanganui City College makes issues even more difficult for employees there.
In that case, Mr Russell, one of two Deputy Principals of the College, prepared a financial return on behalf of the school. The Minister of Education carried out an audit on the return and, following this, complained to the police alleging fraud against Mr Russell.
The College then attempted to carry out its own investigation to comply with the procedures required of it, to give Mr Russell the opportunity to respond to the allegations and then evaluate the evidence prior to making a decision as to whether or not he had engaged in serious and wilful misconduct.
Mr Russell applied to the Employment Court for an injunction restraining the employer from carrying out its disciplinary inquiry on the basis that he had the right to silence and, therefore, could not answer the employer's questions.
The Chief Judge of the Employment Court of New Zealand weighed up the right to silence against the right of an employer to require an employee to account for their actions. Although he commented that each case "must be judged on its merits", in the Russell case there was a real, and not merely a theoretical, danger of injustice in the criminal proceedings if the employer's investigation proceeded.
The Court did leave open the possibility of the disciplinary inquiry proceeding subject to appropriate safeguards. However, it is difficult to see how an employer can prevent the police from obtaining search warrants to seize evidence relevant to the disciplinary inquiry for use in a criminal investigation.
In New Zealand, therefore, and perhaps also in Australia, an employer should consider conducting its own disciplinary process prior to reporting a matter to the police. The practicality and probity of this approach must, however, be questioned.
Underage Drinking
A recent Commonwealth compensation case considered the issue of whether a RAAF worker aged 17 years who had been drinking at a club on the RAAF base, and then suffered an injury in the course of his employment, was disqualified from obtaining compensation due to his underage drinking constituting serious and wilful misconduct.
The employee was drinking alcohol at the club about a month before his 18th birthday. He had been described as being moderately intoxicated, but his behaviour was not disorderly. The consumption of alcohol by a person under 18 years of age was a breach of "standing orders". However, no real attempt was made to enforce this rule at the club and the worker had regularly consumed alcohol at the club (although he was not known as a problem drinker).
He went to bed at 10.00 pm that evening in his quarters on the base and at 2.00 am the following morning was seen by his room mate climbing through a window. His room mate asked what he was doing and he replied he was "going to the toilet - 10 milliamps".
Unfortunately, the room was on the third floor of the dormitory building and the worker fell, sustaining injuries.
The Administrative Appeals Tribunal found that the worker was guilty of misconduct by drinking alcohol, but did not consider the misconduct to be gross, or serious and wilful, and thus found that he was not disqualified from an entitlement to compensation. (MacPherson v Department of Defence).
Employee's Opportunity to Respond to Allegations
A recent decision of the Federal Court of Australia serves as a warning to employers to carry out proper investigations of alleged misconduct of employees which may lead to a ground for dismissal, even where the employer has a valid reason for terminating the employment.
In this case, the employee behaved in a disgraceful fashion at a conference at Lindeman Island. He drank heavily before, during and after the conference dinner and abused the disc jockey for a lengthy period, merely because he did not like the music he was playing. He and a fellow employee then went to another employee's room who was asleep and awoke him by lying on him. Next stop was the resort swimming pool where they arrived naked and were told to put some clothes on by a senior employee, as ladies were present. They ignored this and left the pool at 4.00 am and wandered around the resort naked and exposed themselves to a female receptionist and other guests.
At first instance, in the Federal Court, Justice Wilcox found the employer had a valid reason for terminating the employees' employment. On appeal to the Full Federal Court, the termination was found to be unlawful. When the employee returned to Sydney he was interviewed by senior employees and the various allegations were put to him and he admitted most of them. After this interview, they decided to terminate his employment and did so. The Full Federal Court held that this interview did not meet the requirements of a proper investigation as outlined in Sections 170DC and 170DE of the Industrial Relations Act 1988 (Cth), and his termination was held to be unlawful. The Court was mindful that when investigating an allegation of misconduct, or any act which might provide a ground for dismissal, the employer must give the employee the opportunity to defend him or herself against the allegations made. The employee must also be given the chance to be able to inform the employer of factors which might persuade the employer not to terminate the employment. In this case, the Full Federal Court was of the view that even if the employee had been afforded that opportunity, his employment would probably have been terminated shortly after due to the gravity of his misconduct. As a result of this, he was awarded, by way of compensation, one week's wages (the time required in this case to give him a real opportunity to respond to the allegations).
The case referred to is Shields v Carlton and United Breweries (NSW) Pty Ltd (1999) FCA 377.
WORKPLACE RELATIONS ACT AMENDMENTS
"Pattern Bargaining"
The Federal Workplace Relations Minister, Mr Peter Reith, has proposed amendments to the Workplace Relations Act which would be aimed at preventing unions engaging in "pattern bargaining". Pattern bargaining occurs where unions attempt to standardise pay and conditions across an industry by negotiating enterprise agreements with almost identical terms.
Examples of where unions have adopted this approach appear in the building and construction industry, the local government industry, and the metal trades industry.
Effectively, pattern bargaining defeats the purpose and spirit of the Workplace Relations Act, which is to promote bargaining based on the genuine requirements of a particular workplace. Pattern bargaining creates a defacto "award" situation within these industries.
Readers would be aware that the proposed amendments to the Workplace Relations Act will have difficulty passing the Senate, but the proposal to prevent unions imposing standard wages and conditions across an industry should be carefully considered by the minor parties.
Increase to Unfair Dismissal Salary Cap
As from 1 July 1999, the salary cap for unfair dismissal claims has increased from $68,000 to $69,200 per annum. All non-Award employees earning above this amount are excluded from being able to make a claim of unfair dismissal under the Workplace Relations Act 1996.
The maximum amount of compensation which may be awarded has also risen, from $34,000 to $34,600.
CONTRACTING OUT
Reasonable Restructuring
A decision in the last year by Coca Cola Amatil to restructure its field service operations was found to not be an unreasonable decision open to intervention by the Industrial Relations Commission (Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Coca Cola Amatil - AIRC - Commissioner Simmonds).
The Company's decision had been made pursuant to procedures set out in its certified agreement. A joint review by the Company and its employees had been undertaken, and the options provided to employees were:
The Union applied to the Commission to interfere with the Company's decision. It claimed that the Company's decision to restructure its operations in this way differed from the way that had been proposed by employee representatives involved in the review. It also alleged that the Company's decision to contract out was harsh, unsafe and unreasonable because of the terms of the contract.
The Commission, in considering these arguments, found that it could only look at the certified agreement, and whether the options and procedures to be adopted when the Company decided to restructure its operations had been followed. It found that the requirements of the relevant parts of the agreement dealing with these issues had been met, and that the decision to contract out the equipment maintenance functions, rather than accept the in-house options as required by the Union during the course of the review, was not an unreasonable decision. It was, therefore, not open to the Commission to intervene. As such, the Union's application was dismissed.
It would, therefore, appear that those employers who have entered into workplace agreements whereby change and restructuring of work functions occurs can make a decision which might not be favoured by the unions and the employees. Provided there is a reasonable basis for arriving at that decision following observation of the relevant requirements of the agreement for consultation with unions and employees, and the decision reached is not an unreasonable one, it will survive a challenge. Simply because it is not favoured by the unions and employees will not be enough.
Outsourcing Liabilities
The increase in outsourcing of certain areas of an employer's operations means that employers and contractors need to focus upon their individual responsibilities under occupational health and safety legislation.
An employer does not divest itself of any such responsibilities simply by engaging a contractor.
Section 4 of the Occupational Health, Safety and Welfare Act deems in certain circumstances that a contractor and its employees are employed by the principal. The principal's duties to the contractor and its employees become the same as to its own direct employees but only extends to those matters over which the principal has control, or would have had control but for some contrary agreement.
The effect of this provision is illustrated by a recent prosecution in Victoria.
A plumber employed by a roofing contractor suffered injury when he fell from a ladder. The principal employing the roofing contractor was prosecuted for breach of the Victorian Act. The principal was found not guilty in the Magistrates' Court. That finding was challenged on appeal.
The principal argued that it had no control over the roofing work - the work was a specialist activity and performance of it had been left to the subcontracted experts.
The evidence showed that the contract between principal and subcontractor permitted the principal to insist on compliance with the Occupational Health, Safety and Welfare Act and to direct the subcontractor to work safely. Employees of subcontractors testified that, if asked, they would have complied with the safety directions of the principal.
This evidence, in the eyes of the Court proved that the principal had control over the safety aspects of the subcontractor's work and the court held that the Magistrate erred in dismissing the charges.
The decision illustrates the importance of a principal employer having systems in place to ensure occupational health and safety compliance is fully complied with by its subcontractors and employees of subcontractors.
In South Australia, the principal could also be liable in damages to the injured employee of the subcontractor and also liable to action from WorkCover for recovery of any workers' compensation paid.
In South Australia, the employer would be liable to a maximum penalty of $50,000. However, there is presently a Bill before Parliament proposing an increase of that penalty to $100,000.
The Bill also proposes the imposition of a duty by an employer to take reasonable care to avoid adversely affecting the safety of any person who is not an employee of that employer through an act or omission at work. The proposed penalty is $100,000.