JULY
Complacency on bullying: $2.8m awarded to bullied employee
In a significant judgement, the Federal Court has ordered a Victorian racing club to pay over $2.8m to an employee whose life was “destroyed” by the bullying conduct of their CEO. In the case of Leggett v Hawkesbury Race Club Limited (No 3) [2021] FCA 1658, Ms Leggett had been employed by Hawkesbury Race Club (the Club) for some 25 years prior to her employment ending, most recently in the position of Sponsorship and Marketing Manager, reporting directly to the CEO.
In May 2016, a new CEO commenced with the Club and within a week, proceeded to engage in bullying behaviour. Between May 2016 and October 2016, the CEO engaged in micromanaging Ms Leggett, questioning her actions, salary, spending, bonuses, and duties, repeatedly requiring her to explain her decisions/actions or ask permission to perform functions of her role, restructuring her position, withholding commission, and calling her “nothing”. Further, the CEO withheld bonus and leave payments. Ms Leggett complained to the CEO and directors, and in response, was called into a performance meeting, which triggered a psychiatric injury. Ms Leggett left the workplace and received compensation for her injury, and later asserted the Club’s withholding of her commissions repudiated her contract.
Ms Leggett brought a general protections claim against the Club, alleging her being called into the performance meeting following her making a complaint was the ‘last straw’ which led to her psychiatric injury, as well as a claim for underpayment of wages and entitlements (for leave and bonuses). The Federal Court agreed with Ms Leggett, awarding $2,816,906 in damages and costs, less payments Ms Leggett had received for her injury.
This case serves as a reminder for businesses to ensure proper training in policies and procedures is undertaken in respect of expectations of employees, but to ensure these are actively enforced across all staff, and that complaints are appropriately investigated and actioned.
Fair Work Ombudsman has fast food and hospitality in its sights for 2022-2023
Fast food outlets, cafes, and restaurants are on notice after the Office of the Fair Work Ombudsman (FWO) announced its strategic priorities for 2022-2023, focusing on wage theft across a number of industries.
The focus will be on the fast food and hospitality sector, with visa holders at particular risk of exploitation. Fair Work Ombudsman, Sandra Parker explained that there “continues to be high levels of non-compliance in the fast food, restaurant, and cafe sectors, with many requests for assistance coming from vulnerable workers…we will continue to undertake proactive investigations in metropolitan food precincts across the year.”
If you require specialist advice on wage compliance or want to learn more about our wage compliance auditing services, please contact us.
Restaurant owner on the grill after hefty underpayments
The Federal Court has recently held that Namitha Nakul Pty Ltd (Namitha) was in breach of the Fair Work Act 2009 (Cth) (the Act) for failing to properly pay two employees, engaged as cooks, over a two-year period.
Both employees, Indian and Pakistani citizens respectively, were on visas when they accepted the full-time cook roles advertised, offering a base remuneration of $55,000 for 40 hours per week.
While one cook should have been receiving $76,417 per annum in accordance with Level 4 of Restaurant Industry Award 2020 (the Award), Namitha required the employee to pay back more than $500 per week in cash, leaving his remaining $600 take-home income “less than the lowest weekly wage in an introductory level under the Award”. The other cook received just $29,980 between October 2016 and August 2018 and was asked by his employer to pay back $1,400 for costs associated with the employee’s visa.
The employees were considered “vulnerable”, given their visa status, and the Federal Court heard that Namitha would regularly threaten to dismiss them.
In addition to the underpayment of wages, it was found that Namitha had also failed to make superannuation contributions, pay annual leave loading, issue accurate PAYG statements and keep records. Justice Halley outlined that for these reasons, Namitha had committed serious contraventions of the Act through breaches of the Award and for underpaying the employees. It was held that the director also committed serious contraventions through his knowing involvement in the conduct by Namitha.
SafeWork SA cracks down on violence and aggression in retail
SafeWork South Australia (SafeWork) commenced a state-wide compliance campaign on 4 July 2022 that focuses on managing the risks associated with violence and aggression in the retail sector.
The campaign will see the use of inspectors deployed to retail outlets in both metropolitan and regional areas in SA. The inspectors will be tasked with auditing the business and determining whether or not appropriate policies and procedures are in place to address the risk of violence and aggression, whether workers are adequately trained in how to manage violence and aggression in the workplace and whether suitable control measures are in place to protect workers.
SafeWork’s bid to mitigate violence and aggression in the SA retail sector serves as a timely reminder for employers that a positive obligation exists, so far as is reasonably practicable, to provide and maintain a safe and healthy working environment. Given this, employers should be reminded to watch this space and stay up to date with workplace health and safety obligations, responsibilities, and how to appropriately manage risks. If your business needs support with the development of policies and procedures to assist in identifying and control risks arising from aggression in retail, please contact us.
FWC upholds dismissal of WHS specialist for failing to email work documents while on personal leave
The Fair Work Commission (Commission) has upheld the sacking of a work health and safety specialist while she was on paid personal leave.
The employer, TAFE NSW, terminated the employee in November 2021, claiming she had failed to comply with two lawful and reasonable directions. The worker had been on paid personal leave, due to a medical illness or injury, before submitting medical certificates stating she was fit to return to work.
In response, TAFE NSW directed the employee to attend an independent medical capacity assessment to obtain further information about her capacity to return to work. The worker refused this direction. TAFE NSW later directed that the employee email important documents relevant to an ongoing regulatory investigation contained within her work-assigned laptop. However, the employee claimed that work health and safety laws prohibited her from sending the documents to her employer in the absence of a return to work plan.
Commissioner McKenna agreed with TAFE NSW, ruling that the “directions issued by TAFE to the worker were lawful and reasonable”, and even going so far as describing the worker’s excuses for non-compliance as “entirely inadequate”, particularly given her role as a work health and safety specialist.
The Commission found the employee had not established that she had been unfairly dismissed, noting her failure to comply with the employer’s reasonable requests constituted “two valid, conduct related reasons for dismissal”. The Commission, therefore, found the dismissal was not unfair in the circumstances.
Karina Teuma v Technical and Further Education Commission T/A TAFE NSW [2022] FWC 1446
The Fair Work Commission (Commission) has upheld the sacking of a work health and safety specialist while she was on paid personal leave.
The employer, TAFE NSW, terminated the employee in November 2021, claiming she had failed to comply with two lawful and reasonable directions. The worker had been on paid personal leave, due to a medical illness or injury, before submitting medical certificates stating she was fit to return to work.
In response, TAFE NSW directed the employee to attend an independent medical capacity assessment to obtain further information about her capacity to return to work. The worker refused this direction. TAFE NSW later directed that the employee email important documents relevant to an ongoing regulatory investigation contained within her work-assigned laptop. However, the employee claimed that work health and safety laws prohibited her from sending the documents to her employer in the absence of a return to work plan.
Commissioner McKenna agreed with TAFE NSW, ruling that the “directions issued by TAFE to the worker were lawful and reasonable”, and even going so far as describing the worker’s excuses for non-compliance as “entirely inadequate”, particularly given her role as a work health and safety specialist.
The Commission found the employee had not established that she had been unfairly dismissed, noting her failure to comply with the employer’s reasonable requests constituted “two valid, conduct related reasons for dismissal”. The Commission, therefore, found the dismissal was not unfair in the circumstances.
Karina Teuma v Technical and Further Education Commission T/A TAFE NSW [2022] FWC 1446
Alleged workplace safety breaches linked to 45 COVID deaths
St Basil’s Home for The Aged (St Basil’s), was charged with multiple breaches of the Occupational Health and Safety Act 2004 (Vic), for failures resulting in the deaths of 45 residents due to COVID-19 or related complications.
WorkSafe Victoria has alleged that in July 2020, after St Basil’s was notified that a worker at its residential aged care facility in Fawkner had tested positive to COVID-19, the employer failed to:
- require workers to wear personal protective equipment (PPE);
- train workers how to safely ‘don and doff’ PPE;
- verify staff competency in wearing PPE;
- tell staff when PPE should be used;
- or supervise the use of PPE.
At or about this time, a COVID-19 outbreak occurred in the facility, resulting in 94 staff members and 94 residents testing positive for the virus. Forty-five of these residents subsequently died from COVID-related complications.
It is alleged that St Basil’s failed, so far as was reasonably practicable, to:
- provide and maintain a safe and healthy working environment for its employees;
- provide workers with necessary safety instructions and supervision;
- ensure persons other than its employees were not exposed to risks to their health or safety arising from its undertaking; or
- ensure its workplace and the means of entering and leaving it were safe and without risks to health.
Each alleged offence attracts a maximum penalty of 9,000 penalty units, equating to a maximum penalty of approximately $1.49 million per charge at the time of offence.
Enterprise agreement struck out due to deficiencies in NERR
The Fair Work Commission (Commission) has declined to approve a proposed enterprise agreement after finding the Notice of Employee Representational Rights (NERR) had omitted a sentence from the required text prescribed by the Fair Work Regulations 2009. This comes after the Turnbull Government passed legislation in 2017 allowing the Commission to overlook agreements containing minor ‘procedural or technical errors’.
In this case, the NERR omitted the following words:
"If you are a member of a union that is entitled to represent your industrial interests in relation to the work to be performed under the agreement, your union will be your bargaining representative for the agreement unless you appoint another person as your representative or you revoke the union’s status as your representative."
The employer argued that the omitted text may have been an error caused by the Commission’s NERR creation tool. Commissioner Platt rejected this argument stating that the ‘NERR creation tool is provided to assist parties and does not obviate compliance’ and instead accepted that the employer had made an unintentional error.
Commissioner Platt warned against inaccurate information on the NERR suggesting that "one of the risks of paraphrasing the NERR in additional communications to employees is that the meaning of the terms is distorted".
Further, Commissioner Platt held that omission did not constitute a minor ‘procedural or technical error he could overlook stating, ‘the NERR is a statement of the employees’ rights, and by removing the relevant provision (albeit unintentionally), it is difficult to see how the other largely inaccurate statements can be said to remedy that defect to an extent that it becomes a minor procedural or technical error such that employees are not likely to have been disadvantaged’.
Sushi restaurant penalised for ‘serious contraventions’ of workplace laws
In the recent decision of Fair Work Ombudsman v Delishesco Pty Ltd, the Federal Circuit and Family Court has handed a Brisbane restaurant over $355,000 in penalties for ‘serious contraventions’ of the Fair Work Act 2009 (Cth) (Fair Work Act).
This is among the highest overall amounts of penalties secured by the Fair Work Ombudsman (FWO) under the provisions introduced by the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Cth) (Vulnerable Workers Act).
Background
The respondents, Delishesco Pty Ltd (Delishesco) and its sole director, operated a sushi restaurant in Brisbane. Despite having been formally cautioned for similar conduct previously, the respondents deliberately underpaid 34 employees and knowingly provided false records to the FWO during its investigation.
The contraventions included failing to pay minimum hourly rates, casual loadings, allowances, overtime rates, and penalty rates under the Restaurant Industry Award 2010 and the Fair Work Act, as well as failing to provide employees with pay slips.
Most of the employees were foreign workers holding temporary visas and some were young workers aged between 19 and 21. Individual underpayments ranged from $92 to $9,588 and the respondents back paid the outstanding entitlements only after the FWO commenced legal action.
‘Serious contraventions’ of the Fair Work Act
The Vulnerable Workers Act came into effect in September 2017, increasing the penalties available under the Fair Work Act for ‘serious contraventions’ of workplace laws and breaches of record-keeping obligations, and strengthening the FWO’s investigative powers.
Under these provisions, a ‘serious contravention’ occurs when:
- an individual or business knowingly contravenes an obligation under a workplace law; and
- this contravention was part of a systematic pattern of conduct relating to one or more persons.
The maximum penalties for serious contraventions are currently $133,200 per contravention for an individual and $666,000 per contravention for a company, ten-times the maximum penalties that would normally apply for contraventions of workplace laws.
‘Deterrence looms large’
The Court found that eight of the contraventions were ‘serious contraventions’ as the respondents had knowingly underpaid the employees as part of a systematic pattern of conduct. The respondents disregard for the FWO’s previous warnings demonstrated the deliberate nature of the conduct.
Judge Vasta observed that the employees were ‘apt to being exploited because of their unfamiliarity with the English language and Australian industrial law’, and that ‘to provide false material’ to the FWO was ‘an extremely serious aspect of the conduct’.
The Court imposed penalties of $305,000 against Delishesco and $50,000 against the sole director, holding that ‘deterrence looms large’ in such a case since ‘the fact that the legislature has enacted such severe maximum penalties demonstrates the serious nature of these contraventions.
Compliance is key
The decision serves as a warning to businesses that operate in industries with a high proportion of junior or migrant employees to ensure they are compliant with all the requirements of the relevant modern award and the Fair Work Act, including record keeping obligations.
Employers should consider seeking support with proactive compliance activity and regulator engagement including:
Pro-active wage compliance audits
The value of proactive audits is tangible. Undertaking a compliance audit will provide insights into how effectively a business’s rostering, time attendance and payroll systems are functioning and highlight areas for improvement in these important compliance tools and safeguards.
Reviewing record keeping protocols
Employers are obliged to make and keep accurate and complete employee records including time attendance data and pay slips. These records must be kept for seven years, and it is best practice to keep these and all other relevant documents, such as employment contracts, in a secure file for each employee.
Seeking support when the regulator calls
If an employer receives any kind of notice from the FWO in relation to wage compliance, it is strongly recommended that they seek legal advice immediately.
Amendments to Queensland’s IR legislation before Parliament
The Industrial Relations and Other Legislation Amendment Bill 2022 (Bill) was introduced to the Legislative Assembly of Queensland in June. The Bill implements most of the recommendations from an independent five-yearly review of the Industrial Relations Act 2016 (Qld) (IR Act).
The proposed amendments will:
- Increase protections against sexual harassment or gender-based discrimination;
- Empower the Queensland Industrial Relations Commission (QIRC) to set pay and working conditions for independent couriers;
- Update the Queensland Employment Standards (QES) with respect to parental and adoption leave entitlements;
- Clarify the representational rights of employer and employee associations; and
- Further enshrine the equal remuneration principle in collective bargaining.
The definitions of ‘sexual harassment’, ‘discrimination’, and ‘gender-based harassment’ will be aligned with the Anti-Discrimination Act 1991 (Qld) and included within the meaning of ‘industrial matters’, giving complainants greater access to remedies through the QIRC.
The amendments will also clarify that unregistered employee and employer associations are not entitled to represent members before the QIRC as of right, with penalties imposed for organisations making misrepresentations about their rights under the IR Act.
Past Briefs
The Brief – Feb 2024
The Brief – July 2023
