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Legal Matters segment on 2GB – Workplace and Employment Law

Partner providing Q & A on the 2GB Chris Smith Afternoon Show discussing issues in relation to Workplace and Employment Law 11/04/13

Thursday, 11 April 2013


CS       Yes, Turner Freeman lawyers.  You can go to the website or call them on 8222 3333. They are sponsors of the programme and they have come into the studio again today to take your calls. Turner Freeman Lawyers, David Taylor joins me right now. David, good afternoon.

DT       Hi Chris, how are you?

CS       Good to get you in here. Today we’re talking about workplace law. Now, we’ll go into various aspects of workplace law in just a second but if you’ve got a question for David it doesn’t get much more freer than this. You can just call on 131873 and ask away. Both employees and employers by the way. Now is the time to get your questions answered. David Taylor will take your calls. But before we get into workplace law and there are probably questions that small business would like to ask in the industrial relations area because both parties have suggested changes to Fair Work Australia and, you know, the Government is suggesting there will be major changes into the Industrial Relations platform by an Abbott Government. Now, Tony Abbott is trying to play it down because he doesn’t want to get into this pre-election work choices argument which occurred in the last two elections. Tell me a little bit about…as we lead up to this September election, what are some of the possibles in terms of changes to industrial relations?

DT       The coalition have indicated I think a couple of weeks ago that in the next two or three weeks, they were going to make some announcements about where they’re going. I think people will be looking at issues such as unfair dismissal. One of the key differences from fair work choices was extending unfair dismissal rights to employers with less than 100 employees. You will recall that under work choices anybody who’s employed less than 100 had no unfair dismissal rights essentially.

A second issue would be what’s been known as adverse action which has been…

CS       So before you talk about adverse action, on dismissal laws…unfair dismissal laws, are we looking at something that may be put up by the coalition somewhere in between what we had with work choices and what we ended up with fair work?

DT       I think that’s…I don’t think they would go to the 100 again. The issue around 100 was, it just covered so many employers and there are quite sizeable employers that have less than 100 employees and under work choices, none of those people had any protection against being dismissed harshly, unjustly, unfairly. So, it would be unlikely I would have thought given the…how toxic the reaction to work choices was and how much it damaged the last coalition government that an Abbott government would try to go back to their…

CS       But having said that, when we got to the stage when you had to actually give an official warning to someone over the same misbehaviour on three different instances, it makes it very difficult for bosses to get rid of employees that misbehave.

DT       Yeah, it’s always been a really vexed area. Particularly around small business. Small businesses don’t have the same recourse to human resources departments, to expertise.

CS       Well it can’t absorb in a smaller population of workers…they can’t absorb the misbehaving work or can’t absorb a worker that should be even in the workforce.

DT       No, I think that’s absolutely right as well. They struggle to take up the slack in the same way that a larger employer can basically move on with that employee not performing at the same high level. The flip side of that is, if you’re an employee of a small business, it’s still your livelihood. You still need it to pay your mortgage, you still need it to feed your kids and to go on a holiday and so losing your job to that employee is as damaging as losing the job to an employee of a multi-national company and so trying to find that fair balance is the way they go. The Fair Work Act tried to do it a bit by having a code of conduct which was basically a ticker box thing for businesses with less than 15 employees. So if you followed a certain…if you ticked some boxes on a sheet, you were effectively protected against unfair dismissal.

CS       But don’t we refer to a small business as a business that has about 80 employees anyway?

DT       Eighty’s a fair business. I don’t know. Fifteen was the classic old definition. I think that 15-100 is the small middling business. They’re not large businesses by any stretch but they’re also not tiny businesses. They’re turning over millions of dollars usually.

CS       Ok, let’s talk about termination. While we’re on the subject, Trevor has a question for you. Trevor, go ahead, David is listening.

C1       G’day David

DT       Hi Trevor, how are you?

C1       Yeah, good thanks. I was terminated. I worked for a multi-national company for 12 years and I was terminated without notice. I was above the threshold for unfair dismissal from a salary point of view and I’ve been challenging that through the Fair Work Australia Commission and now into the Federal Magistrates Court but what I find difficult to understand is that there’s no protection against an employee for taking the cost associated. For me to take it through to court with barristers and everything else is well over $50,000 and obviously the ones with the deepest pockets tend to win.

CS       And that’s usually the employer.

C1       Absolutely. In this case, absolutely. They’ve employed a senior counsel in this case which I obviously can’t afford to challenge that with. Interestingly, in the Fair Work Commission, they said that under the privilege of the Fair Work Act or Fair Work Commission process, they said that they wanted to do the same to others and they didn’t want to set a precedent by letting me win.

DT       It’s a really interesting point you make Trevor. The trend over the last 10 years and this was both under the Howard government and under this government and indeed to a lesser extent before then, has been an employment law for the costs regime to be basically that you can’t recover your costs from the other side but you’ve got very limited risk of having to pay the other side’s costs. In law generally, the rule is, if you win, your costs are paid by the other side and if you lose, you pay the other side’s costs. The concern is, if you lose and the costs of $50,000, not only have you lost your job but you’re also out of pocket $50,000 and you’ve put your house at risk. The problem that you’ve identified goes the other way which is, for example, in unfair dismissal, the most you can recover other than reinstatement is about $60,000 if you’re right at the high end of the high income earners.

CS       But can you also have a ruling that pays your legal bills?

DT       Only if the other side has behaved unreasonably. So if you win but they didn’t behave unreasonably and unreasonable is quite a high test.

CS       You go through a nightmare just to pay your legal bills.

DT       Pretty much.  And the system is designed to drive to settlements at a very early stage which don’t cost a whole lot.

CS       Ok, that’s the problem for employees. That’s one area which we may see change in the new industrial relations landscape once the coalition announces a policy.  Where else?

DT       I think Greenfields agreements and Enterprise agreements generally. There’s been an opening up of the right of Unions and the capacity for unions to negotiate around Enterprise agreements and that’s probably something that may change.

CS       In what way? And how far?

DT       Well, under the old system, there were broadly two sorts of agreements. There were union agreements and non-union agreements. That distinction disappeared under fair work so you might see that distinction coming back where unions don’t have a guaranteed role under the agreement. But one of the issues that has been spoken about is around Greenfields agreements. Their agreements which are enterprise agreements for a new site so if you’re setting up a business and you’re going to employ people in the future and you want to have an enterprise agreement that covers those people, how do you negotiate that because it’s just you as the employer. At the moment, there’s some role for unions to play in that. The suggestion that I’ve seen that under an Abbott government, there would be no role or potentially no role for a union to play or a very limited role for unions to play in that sort of area.

CS       If there are such disagreements between employees and employers which result maybe in termination or just maybe in suspension or maybe simply a stand-off situation. Are there areas within the Fair Work Act that allow you services like arbitrators or negotiators that sit down in a table situation and work things out? Or is that expected to be handled by human resources within a business?

DT       It’s a combination of both. I think for businesses that don’t have much of a union involvement which is most businesses nowadays, it’s expected that human resources plays that role. Where there’s enterprise agreements and it remains a more unionised workforce which is still a significant number of workforces, there are dispute resolution procedures in those agreements which generally provide an escalation up into the Fair Work Commission as it’s now known and enable people to do it.

CS       And there’s nothing in between?

DT       There are dispute processes so you can go along and it doesn’t need to be a decision, you don’t need to get a decision out of Fair Work.

CS       It’s not a hearing?

DT       The first step is just a conciliation so you have an independent person.

CS       Right, so there is an avenue.

DT       Yeah, but it tends to only be used or available where there are enterprise agreements in place.

CS       Right 131873 is the telephone number. We’ve got David Taylor from Turner Freeman in the studio this afternoon. The sponsors of the programme and happy to take your calls each and every Thursday on aspects of the law. We’re sort of focusing today on industrial relations, possible changes Turner Freeman but I also want to talk about red tape and I’ll do that after a break and maybe we could get some feedback from small business owners/operators today, this afternoon…who want to cut down on red tape and maybe this is something that needs to change in any kind of review of the industrial relations landscape in this country. How do you get rid of red tape so you can actually move on and make money and be profitable and keep yourself afloat? And how much red tape do you face now which is just driving you mad? 131873 it’s 14 to 2.

Ok, straight to callers on 131873. We’ve got Turner Freeman, David Taylor in the studio this afternoon, the sponsors of the programme and we do this every Thursday and he’ll take your calls right away today, focusing primarily on industrial law. Chris, go right ahead.

C2       Hi guys…David/Chris. My son works as a maintenance refrigeration and air-conditioning mechanic at a particular firm and yesterday he got reprimanded for not taking one of his two designated breaks. The reason was that he was working on a break down and he thought he’d finish that job and then have a break which, inadvertently, he didn’t end up taking and he got a letter…a warning letter telling him he had to take two breaks.

CS       Why would that be so David?

DT       It seems remarkable doesn’t it. I think from the employer’s perspective, if the occupational health and safety laws require them to look at risk and to ensure they take steps to avoid injuries occurring both to your son and to anybody else and in this sort of situation one may imagine they’ve identified it as a reasonably risky task potentially where there’s danger and unless they enforce a strict system of risks, what they’re doing is creating a risk of an injury to either him or somebody else.

CS       Well that kind of makes sense. On a similar subject, Jason writes in an email:

Email   “What does the law say regarding giving employees smoke breaks during the day?”

DT       This is obviously a hard one because if you’re a smoker and you’re addicted, sitting there all day not going out and having a cigarette or sitting there for an extended period not going and having a cigarette can get you quite agitated and you won’t focus very well. That said, you’ve got no right to take a cigarette break. There’s no industrial agreement I have seen…

CS       None?

DT       Perhaps cigarette companies…will have a time to go out and have a smoking break.

CS       That makes sense.

DT       You do have under most awards an entitlement to a morning tea and lunch break and obviously employees can use that time to go and have a cigarette.

CS       Ok, Andrew, go ahead.

C3       Yes, hi Chris and David, thank you for taking my call.

CS       That’s ok.

C3       I’m an employer. I’ve got a small business with 12 staff and as with many businesses out there at the moment, we’ve been doing it pretty tough for the last couple of years and, in fact, losing money. My primary concern is to keep the jobs there for my staff but at the end of the day, I have to also preserve the longevity of the business. I just want to try and get some clarity around redundancy for small businesses for less than 15 staff, what are my obligations? What do I have to cover off on? You know, I don’t like to do it but it looks like I’m going to have to get rid of 1 maybe 2 staff members.

DT       There are three bits to this answer. The first is, if you’re covered by an award or an enterprise agreement, what I’m about to say may be different because that may change your obligations. The second bit is, under the Act, you’ve still got obligations to consult and to try to re-deploy to avoid the redundancies. You don’t…because you’re a business, you don’t get a free pass to take those reasonable steps of talking to somebody to try to working through the situation to see if there’s other work that they can do within your workplace, that means that you don’t need to retrench them. What you do get is you don’t have the same obligations to pay retrenchment pay that large businesses do have.

CS       Ok, that’s the good bit, especially in his circumstance. But there’s no provision for when as smaller business is doing it tough, there’s nothing that eases the pressure on them and allows them a little flexibility to get rid of an employee?

DT       Oh no, it is…retrenchment is a valid reason for termination so long as…it’s called a genuine redundancy in the Act, and it’s a genuine redundancy so long as you’ve taken the appropriate steps to consult and there’s no other position that that person could go into in your business or what’s called associated businesses.

CS       Ok, Andrew, does that clarify?

C3       Well, yeah, I mean it does but as I said it’s a small business, everybody’s already multi-skilling so it’s not like I could redeploy him into another area. We’ve already tried to skill up everybody as much as possible to keep everybody flexible for at the end of the day, if the business is still losing money, the last thing I want to do is have 12 people lose their job.  It’s difficult, I might just have to get rid of 1 or 2. And the other thing I wanted to ask was I’ve got some staff who are full time and some who are casual. If I have to make the tough decision to get rid of someone, does the law…is it any different if I get rid of a full time person…sorry not full time but a permanent full time as opposed to a casual?

CS       That’s a good question.

DT       That’s a really good question. It depends on the nature of the casual. If the casual is effectively a full time casual, then yes, I think it probably does because they don’t have the same ongoing expectation of work.  If the casual is somebody who you bring in to make…flatten out the ups and downs of demands then really what you need to get rid of is the carrying the full time employee in which case, I think you’d be within your rights likely if you were to retrench the full time employee.

CS       An email from Pierra in Victoria:

Email   “My husband has a verbally and emotionally abusive boss. I’ve suggested he brings in a phone recorder and record each meeting. Is this legal?”

DT       Short answer, no. Longer answer, if the boss agrees. But if the boss agrees, it’s unlikely he’s going to say what he would otherwise say.

CS       Exactly.  131873, Jason, hi.

C4       Hi, how ya going?

CS       Good.  We’ve got 60 seconds remaining, go for your life.

C4       Yes, look, I just recently was retrenched from work. I started work and within one day I was told to leave through personal circumstances and what it was is that I negotiated a payment of, say, three months because I was on three months probationary. Now, I was just wondering, did I do the right thing and it was basically…the grounds was anti-discrimination. I basically tried to put discrimination against him.

DT       It’s obviously pretty hard to work out exactly what happened. If you were employed for a day and you ended up being paid for three months, that seems like…it doesn’t seem like you missed out.

CS       That sounds like a generous parting offer.

DT       It does.

CS       Yeah, especially since the day has probably not been the full day.  It was probably close enough to half a day.

DT       If we could all do that every day, we’d be pretty rich.

CS       That would be fantastic. David, thank you once again for coming in and thank you for answering the calls.

DT       Thank you for having me.

CS       David Taylor, Turner Freeman lawyers, sponsors of this programme and we have our regular law segment on Thursdays. A new topic next Thursday with Turner Freeman.


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