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Partner discussing Employment Law – 16 February 2016

Q & A on 2GB discussing Employment Law 16 February 2016

Tuesday, 16 February 2016 


CS–Chris Smith /DT – David Taylor /C1,2,3, etc – Callers 



CS       Turner Freeman and our Legal Matters segment and don’t forget to catch up with all your legal matters advice just by picking up your local newspaper they’ve got legal matters on all sorts of topics in your local newspaper and if you have a question today on employment law, simply go for your life on 131873. Maybe it’s something to do with workplace disputes, an unfair dismissal, a breach of contract and any other work related matter, I’ve got David Taylor from Turner Freeman Lawyers in the studio to take your calls and give you some free advice this afternoon. David. Thank you for coming in.

DT      Thank you for having me Chris.

CS       It’s good to see you here. Warm outside?

DT      It’s not too bad. Not as bad as it was yesterday.

CS       Yesterday was hot but not as bad as it is in Brisbane today. It’s a stinker. Okay. Have you ever been underpaid or overpaid by your boss? I want to ask you this question. If I get overpaid.

DT      Yep. 

CS       What obligation do I have to blow the whistle on myself?

DT      You don’t have an obligation to blow the whistle on yourself. The…. well you don’t have a strong obligation……..

CS       You don’t have a strong obligation?


DT      Arguably there’s some obligation in terms of a …..You’ve got an obligation for fidelity to your employer. So are you breaching an obligation of fidelity for not disclosing the fact that you have been overpaid? The bigger problem you’ve got is that you are going to have to pay it back and you know, you take it now… it’s just going to cause yourself a problem down the track.

CS       And it’s not good aura either to let the company know that you know you got overpaid and you didn’t say anything.

DS       No –it doesn’t do much for the relationship no.

CS       No….. I’m with you. It doesn’t do much for the relationship at all. 131873. I’ve got a few other questions I want to get to, but Shane has phoned through from Summer Hill in Sydney. A question for David, Shane go right ahead.

Caller 1           Shane 

Shane              Hi David. Hi Chris. How are you?

CS       Very well.

Shane              Just a question. I’m wondering if there is any standing for a larger company to put a clause in a contract of another company where they’ve got exclusive use of that company for their purposes?

DT      So essentially a sub-contracting relationship between two companies and the smaller company would be agreeing to only serve the bigger company’s interest? is that?

Shane              Yes.

DT      There’s nothing inherent that would prevent that. If the parties want to negotiate that, there’s no reason why they couldn’t. The smaller company one would think it would want to have significant warranties that they are going to be provided enough work to make it worthwhile.

Shane              Yeah, because basically what happened to me is that I was a sole trader and I was offered a contract where I had to become a company and was only able to do the work that was supplied to me by that other company and I’m just wondering if that was ………

DT      If it’s just about you as essentially a sub-contractor for an individual, it may be that depending on the balance of the terms, in fact what has been agreed between the parties is an employment relationship even though they are trying to characterise as a sub-contractor relationship. So you would have to have a look at all of the terms of the contract to work out whether or not it was truly a sub-contractor or was an employment relationship.

Shane              As a sub-contractor I have to pay all my own super, all my own holidays, sick days, and all the rest of it. Basically they are getting treated as an employee without any employee benefits because obviously it’s my own company and I can’t do the extra work. So if they go belly up and they don’t want to give me any work my company goes bust.

DT      Yeah. The flipside would be for you and this is why somebody would say they like that arrangements, there’s tax benefits for you being able to arrange your affairs as a company and in terms you operate yourself and your as a company to build up a business which you can potentially take somewhere else. So… but the law says generally, well the law treats it generally, there’s a bit of “swings and roundabouts” sort of arrangement. As long as, and this is the important proviso, that there is a problem if the amount you’re earning is less than what you would have learnt if you were being paid on award. So you can’t….. a company can’t use these sort of devices to undercut minimum award standards.

Shane              Alright. Not a problem. Thank you very much for your help.

CS       Alright good to get your call. Just back to overpaying, if someone is given a letter once the pay department works out they have overpaid you whether its $12 or whether it’s you know $1,200, you’ve got to pay it back right?

DT      Um…. No…. Sorry – if there’s an obligation in your contract to pay it back, then an employer can withhold the money. But absent an obligation in your contract or some other instrument, the employer can’t withhold the payment from you, but instead needs to seek an agreement as to the repayment and if they can’t reach an agreement with you as to the repayment, they need to sue you to recover the money. That….. when you’re starting ….. when you’ve got an employer suing an employee, that doesn’t do much for employment relationships either.

CS       Not at all. It gets back to the same kind of thing. Mitchell, you’ve got a question for David. Go ahead.

Caller 2           Mitchell

Mitchell          I do. Um, if you’re a casual employee and you’re being bullied in the workplace to the point where you can no longer work there, do you have redress?

DT      You’ve potentially got a couple of different avenues to redress, the Fair Work Act has provisions that allow a bullied employee, whether they are casual or any other sort of person, to approach the Fair Work Commission and seek orders that would prevent the bullying from continuing. So that would be one option. The second option would be to look at why the bullying was occurring. If the bullying was occurring because of an attribute, because you were a women or something like that, then that would be unlawful and that would actionable on that basis. The third would be that most companies would have anti-bullying procedures and you could make a complaint to the human resource department or to the employer and seek their assistance in resolving the issue.

Mitchell          I’ve done that.

DT      A fourth option …. well they’re the main ……… the fourth option would be if it’s caused you significant psychological damage, then potentially you could make a workers compensation application as well.

Mitchell          Yeah, yeah. I did tell management…..I did mention it to management and they’ve failed to act on it and it’s getting to the point where …… I’m still working there at the moment but it’s continuing and I’m feeling like I’d have to leave because it is affecting me emotionally. 

DT      Ultimately if you are in the position of luckily enough to transfer your skills, often the best thing to do is say well this employer doesn’t deserve to have me here because they are not going to do anything to protect my health and take your labour somewhere else.

Mitchell          Yeah, yeah. Alright, thank you very much.

CS       Good on you Mitchell. Thank you very much for the call. 7 Eleven, again accused of ripping off workers. I think the latest case and I had to comment on this on Channel 7 yesterday morning involved being paid 47 cents an hour or something stupid like that?

DT      It is remarkable isn’t it?

CS       Incredible.

DT      Yeah.

CS       So where does an employee stand because by the sound of it if you speak up, you can get your head knocked off.

DT      And a lot of those workers were also pretty vulnerable because they are on visas and they have limited capacity to work.

CS       Yes.

DT      So they’ve got to……..

CS       And they’ve got to rely on their employer to keep them in the country.

DS       Yeah. I’m not sure if that is much truth as 7 Eleven workers but it certainly true for a lot of migrant workers. One of the big problems with 7 Eleven and a lot of these big underpayment claims we are seeing this year is even though we see from the outside of them all as 7 Eleven employees, in fact they are employees of multiple smaller companies.

CS       Right.

DT      So 7 Eleven is as I understand it are……

CS       Franchisees.

DT      Are all franchisees and so each employee is employed by you know 7 Eleven Petersham or 7 Eleven Summer Hill or 7 Eleven Castle Hill or whatever.

CS       Yep

DT      And as such if you are bringing an underpayment claim you’ve got to be suing your employer rather than the company that is actually at the centre of…… and that can make it quite difficult because the employers are often quite small and there may be only one or two employees affected in relation to each one…..

CS       They’re in a tough situation some of these workers. Now, don’t forget we’ve got a $100 Westfield voucher to give away today courtesy of Turner Freeman Lawyers and our Legal Matters segment. A $100 Westfield Voucher and I’ll give it away to one of our callers between now and the top of the hour. Its thirteen minutes to news.

Turner Freeman Lawyers in the studio to take your calls. Free legal advice – you don’t get free legal advice in too many places. Don’t forget a little later this afternoon we have our rumour box. I can tell you that we have another winner in the rumour box. It’s gone berserk in 2016. Gone berserk and a chance for you to win $1,000 courtesy of Channel 9 and its program at 5:30 weekdays, Hot-seat. $1,000 but you’ve got to answer two questions today that have come from yesterday afternoon’s Hot Seat Program. Two of the questions asked there and if you were watching then, you’ll have a good insight into what the answers to these questions will be a little later in the program. Now back to David Taylor and our Legal Matters segment. Zoran, you’ve got a question for David – go right ahead.

Caller 3 – Zoran 

Zoran              Yeah I have. Hi guys.

CS       Hi.

DT      Hi Zoran

Zoran              Hi. I’ve got a couple of trucks. At the moment I’ve got people driving those vehicles as subcontractors. I’m not sure, I’ve been advised different things but do I….. am I obligated to pay superannuation and/or workers compensation for these people?

DT      Um, almost certainly depending on…. it depends on the circumstances of engagement whether they do other work. Are they all doing that exclusively? Is it like a full-time job?

Zoran              Pretty much. Pretty much they are working for me, but they are on a subcontracted basis.

DT      Truck drivers are really unique subcontractor…… are you in New South Wales?

Zoran              Yes I am.

DT      There is under the State system there are things called contact determinations which apply just to truck drivers and alike awards that apply as though they were employees. They’re akin to being employees but they’re subcontractors. It doesn’t exist anywhere else in the country. It’s a historical thing here but that governs a lot of the conditions around the engagement of truck drivers on a subcontractor basis.

Zoran              Right. I was advised that if they do more than 50% of the work directly with say me only exclusively, I am obligated to pay superannuation and workers compensation on their behalf.

DT      The superannuation, the Act has what are called deemed employees, and from …. well …. where…. well can I ask you this….. are they your trucks?

Zoran              They are. Everything is mine apart from their labour.

DT      Well where you’ve got somebody bringing their labour and doing nothing else, then generally they fit the definition of a deemed employee and the superannuation obligations would apply.

Zoran Okay that is workers compensation as well I suppose.

DT      Workers Compensation is slightly different but you’d think…. I’d think you’d probably need to look at your specific circumstances and get some advice on that but the likelihood is that you would need to do that.

CS       Good to get your questions Zoran. Thank you very much. Hopefully David’s been helpful in answering that. Just getting back to underpaying, you’ve got this Melbourne food wholesaler, Quality Food World. It’s been penalised at $85,000 for underpaying migrant and overseas workers. So in other case similar to 7 Eleven, how much trouble can companies get into for underpaying?

DT      Enormous trouble. Ah….

CS       Is that a big amount or a small amount?

DT      That’s the higher end of the penalties but the exposure companies have to penalties is far greater so the notional exposure would be $30,000 per breach and if you have multiple employees that could add up pretty quickly. There’s also exposure for individuals so if you’re a director or an owner and you do it and you’re the one the driving mind of an underpayment and you’re aware of it potentially, then there could be penalty imposed upon you as an individual and that can be up to $6,000 as well. So the amount that they then have to pay can add up to quite sizeable amounts of money.

CS       Okay – 6 minutes away from news. Colleen, go right ahead.

Caller 4 – Colleen

Colleen           Oh hi guys. Um I’m just wondering…. my daughter works in a retail area and she’s constantly being hassled about this productivity… that they need to keep up…. I’m just wondering if they don’t meet their productivity, can they be sacked over that?

DT      It depends on whether demand is being imposed by the employer reasonable. So an employer is entitled to say to make reasonable directions to the level of work to be performed by an employee and if they don’t meet those expectations, then subject to a decent process an employer is entitled to terminate someone. That doesn’t mean for example that you can impose targets that are unrealistic or that somebody can’t achieve albeit somebody’s control, you know for example where they require somebody else unrelated to the employee to do certain things…. So you would need to look at the individual circumstances to work out whether or not it’s about ensuring that a person performs to a required standard or whether it’s significantly more than that in which it is unreasonable and can’t be relied upon.

Colleen           Well normally there’s not so many girls on the floor and they’ve got to cover a large area of the floor and everybody’s under productivity not just her, everybody and nobody makes the productivity estimate and who decides you know when it goes quiet now is where they are getting jumped on you know to make the dollar…. I mean how do you know what they’ve been asked to sell her hour is a reasonable amount ……

DT      It’s hard to know and it only really comes up when the employer starts taking action so that’s when you look at it.

CS       And what about at the beginning now David. This should be part of the agreement when they start work.

DT      It should be……

CS       This is what you’ve got to achieve.

DT      These sort of things always work much better if it’s clearly articulated at the start and it’s applied fairly. The danger with those things is always that the employer will pick on one person and not others for the same thing.

CS       Yeah  Colleen, I’ve got you the $100 Westfield Voucher. That’d help your daughter.

Colleen           Thank you so much.

CS       Good on you. Stay right there the $100 Westfield Voucher courtesy of Turner Freeman Lawyers. David Taylor. Thank you for your time.

DS       Thank you very much for having me.


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