Partner discussing Employment Law on 2GB – 27 June 2013

27 June 20193

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SP – Steve Price / DT – David Taylor /C1,2,3, etc – Callers

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Listen to the Podcast

Read the transcript below:

SP       Right now, we are talking legal matters with our good sponsors Turner Freeman. Today it’s workplace law, and David Taylor has returned to the studio this afternoon from Turner Freeman Lawyers. You can speak with David, ask a question about any aspect of employment law. There are a couple of aspects of employment law that we’ll raise in just a second. 131 873 is our telephone number. Firstly, David, welcome to the studio again.

DT       Thanks Chris

SP       Because we’re fast approaching the end of the financial year, along with lodging your tax return, this could also mean things like pay rises, promotions, bonuses, maybe even redundancies. They tend to sort of reach a fork in the road, many businesses, at this time of the year, planning for the next financial year. David Taylor is Turner Freeman’s employment law specialist, he joins me in the studio, we’re talking pay rises to start.  If my boss says to me at one stage, now I’m going to give you a bonus, we’ll do that in a year’s time, should I be demanding he puts it in writing and upsetting the apple cart, or should I be making a note of it and going back to him in a year’s time to say, hey listen, 12 months ago you said that.

DT       It’s always difficult.  You’ve got to try to work out the best way to maintain the cordial relationship, maintain a positive working environment but protect yourself.  I think often a good way to do it is just, particularly for offices who’ve got email, to send a short email just confirming what was said so not making a note of it, but sending an email to the boss saying …

SP       A lot more passively…

DT       Yea…confirm that we had a conversation about you providing me a bonus and that we’ll talk about it in 12 months.

SP       And then getting your diary and going 12 months in advance and writing it down.

DT       Yea, and making sure you’re there in 12 months.

SP       Yea, so you can ask the right questions at the right time.

DT       With a copy of your email.

SP       Yea. So promotions. What about when you’re promised, we’re going to get you up to that next category at this particular time, it may not mean any more pay for you, but it will qualify you in that sector a lot more.

DT       Promotions are a really big part for most people. People still have careers that they’ve tried to work on over years and years and even if you don’t get a pay rise with the promotion, it means that if you’re looking for another job, you’re coming at it from a different level and you can say well, this is the experience I’ve had, this is what I can do, and your capacity will actually demand a better pay or a better job somewhere else.  It proves you become more marketable. A lot of this is really about recognising that as an employee, it’s a market relationship. You can get what your worth and you can demand what you’re worth and ultimately your employer will pay what they need to pay to keep you.

SP       When an employer comes to you and says David Taylor can you represent me, I want to go to court, I’m taking my employer to court because they promised me a promotion, they had 2 pay rises pencilled in for me, I’ve got none of those, I want you to take them on. Do most of those sort of cases end up with an agreement outside of court and a parting of the ways? Because I doubt whether an employer wants to continue employing an employee that wants to take him or her to court.

DT       It’s often, although not always, but often fatal to the employment relationship to get a lawyer involved. A lot of people will come, and this is very common, and say, this is my issue, this is my concern, and our response would be here’s what you’re going to do, we’re going to draft some letters for you but you’re going to send them. The role of the lawyer is behind the scenes and the employer doesn’t necessarily know that there is legal advice going on.

SP       And maybe just some constructive advice can get you over the line.

DT       Absolutely. It’s the advice to say well make sure when you do that, you confirm what was said in writing, confirm you sent the email back saying this is what happened, so you can protect yourself down the track.

SP       OK, let’s start taking some calls. 131 873 this is free advice courtesy of Turner Freeman Lawyers, our sponsor of the legal matters segment, and David Taylor can answer your calls. Tim go right ahead, David’s listening.

C1       Hi David, how are you?

DT       Hi Tim, how are you?

C1       Good thanks. I’ve started working in an office for about a month and the owner of the business has asked me to sign a restraint of post-employment activities. He should have done that when we started, but he’s only got to it now. In essence, he wants me to sign that I will have a restraint period of 9 months for an area of 7.5km radius from the office if my employment is terminated for any reason at all.

DT       Do you work in sales or something like that where you’ve got direct client contact?

C1       Yep.

DT       Restraints like that are very common in sales jobs. Employers are generally reasonable and upholdable, so they are generally legal, if the parties have agreed, and they do not more than protect the legitimate interest of the employer. So if it’s just about protecting their interest in the area where you work, it’s potentially a reasonable restraint and would be legal. You’re absolutely right, the conversation should always be before you start and they’ve got no capacity to require you to sign it now. The contract should have been discussed and there should have been the restraint put there. The difficulty you’ve got is the human difficulty, in that you’ve got to maintain the working relationship with this person, and if you tell him that you’re not going to sign it, then you’ve got a real risk that you’ll damage the relationship and you won’t be able to continue the employment.

C1       That’s right. Don’t they have to offer some sort of inducement, sort of a counter balance in stopping you working somewhere else?

DT       There’s consideration for it for the legal team, but there is consideration in your contract because you’re being paid for the work that you do. There’s no necessary obligation to offer you new consideration for the new restraint.

SP       OK Tim, we’ve got to move on. Jason’s on the line, Jason go ahead, David’s listening.

C2       How you going bud?

DT       Hi Jason, how are you?

C2       Good mate. Just a quick question, as being a contractor and someone is offering you X amount of rate per hour for doing a job, what happens when they offer you your rate and then six weeks later they turn around and take it back off you, can they do that?

SP       Good question.

DT       The short answer is no, you’ve got a contract at law. It doesn’t matter that its not in writing. If you’ve agreed on a rate and you’ve said this is the work that I’m going to do and you’re going to pay me, you know, $20, $30, $40 an hour to do that work, then you’ve got a contract and you’ve got a right to pursue them for payment. The difficulty for you obviously is going to court costs money, and you can often spend more money than you’re trying to recover and it’s just not worthwhile. The good answer is to always get paid as frequently as you possibly can and make sure that the invoices go out often and that you get paid every week or every couple of weeks so that you’re exposure to that sort of thing happening is reduced.

C2       Right, but they pay monthly and they don’t even pay on those dates either, you know what I’m saying, they always drag it out for an extra couple of days, you know, can that do that either by law?

DT       Well no, there’s a contract and they’ve got to pay in accordance with the contract. The problem is, what do you do when they don’t do it, and trying to pursue them. You’ve got two options ultimately, one is to sue them for the money and sue them for the breach of the contract, and the second is to say well, I’m not going to continue to work for you because the terms that you offer and the way that you behave are unsatisfactory.

C3       OK.

SP       Good on you, thank you for your call Jason. 131 873. Yearly bonuses. What happens if you’ve received a bonus every year but then your employer decides to cut that. Can they cut your wages like that? Or cut your bonuses like that.

DT       People who receive bonuses generally have a guaranteed salary, so they’ll have an amount that they are guaranteed and that can’t be cut without agreement, and then they’ll have a secondary thing, which is a bonus. Some people’s bonuses are discretionary and the employer can determine whether or not they want to pay any or all of the bonus at their discretion, and there’s really not much that can be done. Others commonly are related to metrics that are set in the contract or agreed, so if you achieve the following targets, then you will get a bonus at certain levels. And then others are based on team performance, so if the company achieves profitability of whatever, then you get the bonus. Now in the latter two, they are contractual obligations to pay the bonus and the employer can’t just sort of say, we don’t want to pay you this year. Often, the employer might have the entitlement to change it in the future, so they might say, well, it’s going to cost us more this year than we wanted it to cost, so, they still can’t get out of that payment but they can say well next year, instead of paying you a 20% bonus, we’re going to pay you a 10% bonus.

SP       But David, with things not going quite so good for small to medium sized businesses in Australia, how often can an employer legitimately use the excuse that things have been pretty crook the last six months and not pay you things that you have received in previous quarters.

DT       If the bonus is a discretionary bonus and the business doesn’t do as well as it has before, the employer is completely entitled to say sorry mate, we can’t pay it this year.

SP       OK, Paul go ahead, David’s listening.

C4       G’day David, thanks for taking my call.

DT       Hey David, how are you?

C4       What I’ve just discovered is I’ve got 7 bakeries and I’ve got 3 of my bakers on a Sunday that normally work through the night, so unsupervised, just the 3 of them. They’ve been going an alternate roster and giving each other a day off each week and I am falsifying the actual roster.  I want to know how I can recoup that money, because I look at it as fraud, and I’ve been to the police, and they said no it’s a civil matter, and I don’t know how I can recoup that money.

DT       You’ve potentially got a cause of action against them for breach of their contract in that they’ve failed to, as you’ve put it, they’ve indicated that they’ve done work which they want to be paid for, but in fact they haven’t done, and therefore they have no entitlement under their contract for you to pay them. The concern for you would be that the cost of trying to recover that money and the expense and the distraction of that is going to overwhelm the amount you actually get back and the value of doing it. And really, what might be a more prudent course, is to say well, I need to move on, these bakers aren’t the bakers that I want to have working for me, I can’t trust them anymore, and certainly on what you’ve said you’ve got pretty good grounds to terminate them and they’ve got really no way to come back at you, so you can do that and move on.

C4       I have terminated them. So what about me withholding pay?

DT       Withholding what money you owe them?

C4       Yea

DT       So for example, you own them a period of annual leave on termination and saying can you withhold that. The Fair Work Act and previous legislation have all been quite clear that absent a specific agreement, so something in the contract that would let you do that, that’s unlawful.  That isn’t to say that there isn’t a process by which you can exert some pressure on them to resolve the claims that you might have against them, at the same time as you pay them the amount. So you’ve got to pay them what they’re owed, but you do certainly have a capacity to say to them, well, I’m going to commence proceedings against you to recover that money and to see how all of that plays out.

SP       OK Paul, I’ve got to leave it there, but I think David has gone a long way to answer that question. 131 873 is the telephone number. I want to talk about how to terminate people if you are a small business person and whether you can get other firms to terminate your own staff, because that seems something that does go on in the workplace at the moment. We’ll get back to David Taylor, legal matters with our sponsors Turner Freeman Lawyers.

SP       A little bit more time to take your calls with David Taylor from Turner Freeman Lawyers, he is the employment law specialist at Turner Freeman Lawyers, sponsors of the segment. Gary go right ahead, David is listening.

C5       Yea, my information is about audio and visual cameras inside a vehicle. A work for a company that has these things installed. He gave us a notification six months ago, we all signed it saying yes, we don’t mind them coming into the vehicles, now he’s asking us to sign off saying that they are in the truck but there is also video and audio. I reject signing the contract because I wish to have my privacy and I said I won’t be able to turn the audio off and on when I make personal calls. And he said well that’s got to be done because it’s for insurance. Is that correct.

DT       I have no idea of his insurance policy. The general principle around audio and video surveillance is it can only be done, there are some areas where it can’t be done ever, you know, toilets and changerooms and places like that, and where it can be done, it can only be done where there’s been written notification of it. You’re indicating that that’s what’s occurred. Often people put it in contracts. I’d have to say, in circumstances where there’s a notice that it’s happened, and you’re saying well you think that’s an unreasonable interference with your personal space, in circumstances where you spend your day in the truck, which seems pretty reasonable. I’d have to say, I’m not completely sure of the capacity for you to be able to challenge that and where you’d challenge it. I think the relevant legislation does give you some rights to challenge it, but it probably means you’ve got to go to court and get an order saying that its unreasonable.

SP       Yes, that certainly makes sense. 131 873. What about firms that aren’t really sure of their rights when they have to sack or terminate someone, and they use some of these floating human resources contractors that come into your business and do it for you. Is that such a clever thing to do?

DT       Um, it can be fought with danger but it can also be a lot better than the alternative, which is not having anybody there.

SP       Or stuffing it up!

DT       Yea and stuffing it up. There’s been, and you sort of see this in the work choices acted in the Fair Work Act, the real difficulty about how much expertise you expect companies that have less than say 100 employers to have in HR and employment matters, and one of the ways that some of the companies have tried to deal with this is by getting those people in from external contractors. The trick is always in the briefing.  People are only as good as the information they’re provided, and if they’re provided information that isn’t right, then they’ll give advice that isn’t right. That said, often having somebody being able to assist and talk through things and make sure the process has been followed can work out cheaper, more effective….

SP       Because you’re plugging the holes….

DT       Yes, that may later become far bigger dramas.

SP       Michael, very quickly go right ahead.

C6       Yea G’day. I’m working for…. well I’m not working for them now, I’ve been told I can’t work for them no longer until I pass a medical, but they haven’t paid me for the last three weeks.

DT       Ah, you should ring up the Fair Work Ombudsman and they should be able to help you to get paid.

SP       Yea, that is always the best way to go about it. The Fair Work Ombudsman, are they approachable?

DT       They are approachable, and matters like that, they’re the ones to go to.

SP       Yea good stuff. That may apply to so many other people as well, thank you very much for all that David, I appreciate your time this afternoon.

DT       Thank you for having me.

SP        From Turner Freeman Lawyers, our employment law specialist, and we’ll have David in no doubt down the track when we get stuck into that subject once again. Our legal matters segment brought to you by the people at Turner Freeman Lawyers.