BSS Business Legal Services:

EMPLOYMENT LAW

This section includes information on workplace relations issues, such as discrimination, harassment, bullying, termination of employment, and occupational health and safety, and what to do if you have an employment problem. Depending upon the structure used to run a business, the business can be subject to both State and Federal laws. Workplace relations can be quite confusing for employers and employees alike. Usually a happy workplace equals a profitable workplace for everyone, so here are a few things you should think about.

Anti-Discrimination, Harassment and Bullying

What is it?

Harassment is considered to be any form of behaviour an employee does not want, including behaviour that:

• offends, humiliates or intimidates that employee;

• targets the employee because of his/her gender, pregnancy, race, marital status, disability, age, sexual preference or transgender status.

Behaviour that can be harassment includes offensive jokes, sexual or physical contact such slapping or kissing, sexual or physical conduct, sexual advances or invitations, unwelcome practical jokes, offensive jokes, material that is sexually explicit, whether it is displayed in the workplace, put in someone’s work space or belongings, displayed on a computer or fax machine or from the internet.

Workplace bullying is the persistent, continuous ill-treatment of an individual worker by one or more staff members, which can reasonably be regarded as undermining that individual worker’s right to dignity at work. Bullying takes many forms and can be dispute related or predatory. Workplace bullying is the misuse of power in the workplace. This power can derive from status and authority over others in the workplace, such as in the case of a manager or supervisor. It can also occur where power and authority is derived from more subtle sources, such as being part of a dominant group or culture. Behaviour which constitutes bullying includes verbal abuse and threatening gestures, whether committed privately or in front of other staff, clients or members of the public.

Is Harassment, Discrimination and Bullying a Serious Management Issue?

The simple answer is yes, if any form is occurring in a workplace, it can lead to a decrease in profitability, an increase in stress for staff, an increase in absenteeism, create low morale, decrease productivity, cause the loss of a reputation or image, lead to high staff turnover, increase worker’s compensation claims and create occupational health and safety issues.

Employers need to remember that the employer is liable for any harassment it commits, as well as any harassment committed by an employee. To avoid liability, the employer has to be able to show that it took reasonable steps to prevent the harassment from happening. Reasonable steps can include developing a policy on harassment, but more importantly, implementing and applying it to everyone in the workplace from the Managing Director down.

What happens if there is a claim?

If there is a claim made, the business must deal with it as effectively as possible. There is financial compensation available of up to $100,000.00 from the various legal remedies available to the victim. The internal cost for the company can include legal fees, time away from the business and loss of profitability, together with staff turnover. Appropriate action must always be taken against the harasser, and there is also the possibility that the behaviour has breached the occupational health and safety laws.

Recruiting, Retaining and Terminating an Employee

If a business is operated through a corporation, then you need to come up to the speed with the fairness agenda of the current Federal Government. The changes to the federal industrial relations laws include the establishment of a one-stop shop for all industrial relations matters – Fair Work Australia (“FWA”). FWA is an amalgamation of the Australian Industrial Relations Commission, the Workplace Ombudsman, the Australian Fair Pay Commission and the Workplace Authority. It has begun operation and will be fully operational by 1 January 2010.

National Employment Standards

From 1 January 2010 there will be 10 minimum requirements which will apply to all employees, regardless of their remuneration package. These are known as the National Employment Standards (“NES”). The NES are:

• Maximum weekly hours of 38 hours for full time employees;

• Flexible working arrangements for parents of a child under the school age and/or a disabled child under the age of 18, or having responsibility for the care of such a child;

• Parental leave;

• Annual leave;

• Personal carers, carers and compassionate leave;

• Community service leave;

• Long service leave;

• Public holiday;

• Redundancy and notice of termination entitlements for all employees except employees of small businesses with less than 15 employees (head count) with severance pay;

• A fair work statement which must be given to all new employees.

Modern Awards

From 1 January 2010 the new modern awards will come into operation. These modern awards have been designed to be based upon industry groups and will apply to employees, unless the employee earns over $100,000.00 per annum by way of remuneration (indexed annually each July). Modern awards reintroduce holiday loading, overtime, penalty rates and other entitlements which the previous industrial relations system had removed in many instances.

Right of Entry

From 1 July 2009 a union official can enter a workplace to investigate a contravention of the federal industrial relations laws, where employees are union members. A union official can also enter premises where the union is eligible to represent employees located there. However, union officials can only inspect records or other documents which are directly relevant to a suspected breach of the federal industrial relations laws. Any information obtained under the right of entry can only be used for the purposes related to that particular investigation.

Unfair Dismissal

From 1 July 2009 employees who have been employed for less than 6 months (or 12 months for small businesses) are excluded from bringing unfair dismissal claims. To qualify as a small business, you must have less than 15 full time equivalent employees. This exemption will change to a head count of 15 employees from 1 January 2011. Also, if you are a small business and you follow the Fair Dismissal Code, you should be able to successfully defend any unfair dismissal claim made by a former employee.

Remember, employees who are not covered by awards, enterprise agreements or earn in excess of $100,000.00 (adjusted annually each July 2009) are excluded from making unfair dismissal claims. Any claim for unfair dismissal must be made within 14 days of the date of termination. It is intended that a flexible approach is to be taken when dealing with each unfair dismissal claim.

Unlawful Termination

The federal industrial relations laws also protect employees from unlawful termination, which is identified as a termination of someone’s employment on the basis of race, colour, gender, sexual preference, age, physical and/or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin; temporary absence from work because of illness or injury; trade union membership or participation in trade union activities outside working hours or with the employer’s consent within working hours, non-membership of a trade union, seeking offers or acting as a representative of employees; being absent from work during maternity or other parental leave; temporary absence from work to participate in voluntary, emergency, management activity, filing a complaint or participating in proceedings against the employer.

Record Keeping

It is essential for all employers to keep written records of their employee for a minimum of 7 years, including time and wages. These records must be easy to access and written in English.

It is also important to ensure that all payslips contain the right information each time an employee is paid. Employees are entitled to receive a payslip within 1 working day of their payday. The information on an employee’s payslip must include the name of the employer, the employer’s ABN, the employee’s name, the date of payment, the period of payment, both the gross and the net amount of pay for that period, any loadings, monetary allowances, bonuses, incentive-based payments, penalty rates or other entitlements paid, the ordinary hourly rate if the employee is paid by an hourly rate and the number of hours worked at that rate and the amount of pay at that rate, if the employee is paid an annual rate or salary, the rate applicable on the last day in the pay period, any deductions made from the employee’s pay including the amount and details of each deduction including superannuation, and you must identify the name and the number of the fund or account the deductions are paid into.
FWA inspectors can issue employers with infringement notices for failing to meet these payslip and record keeping requirements. Alternatively employers can be taken to court.

Employee Records

Employee records must include the following information: the name of the employer, its ABN and the name of the employee, the employee’s start date, whether the employee is full-time, part-time or casual, whether the employee is permanent or temporary, the employee’s pay rate, including gross and net amounts paid and any deduction, any loadings, monetary allowances, bonuses or incentive payments, penalty rates or other entitlements paid that can be singled out, the hours worked, a copy of the written employment agreement, and ff an employee is terminated, a copy of that termination.

Businesses must remember that it is not okay to take unpaid work trials, delaying payment, not paying employees for training, meetings or time that they spent opening or closing the business, or offering goods or services including food instead of payment.

New South Wales Industrial Relations Laws

If you run (or work for) a business as a sole-trader or a partnership in New South Wales, you are still covered by the Industrial Relations Act 1996 (NSW). The business must ensure that its employment contracts and work practices comply with this Act and the State awards where applicable. There are similar responsibilities with regard to payslips and employment records. The business must display any award which applies to your workplace.

There are some slight differences when it comes to unfair dismissal. An unfair dismissal claim must be made within 21 days of the date of termination of the employee’s employment. It can be made by a public sector employee, an employee covered by a NSW State Award or registered agreement, or an employee who is award-free with an annual remuneration less than $108,300.00 (adjusted annually). It can include casual employees, employees who have been forced to resign and employees who have been dismissed whilst on Worker’s Compensation. The exemptions from an unfair dismissal claim include apprentices or trainees, independent contractors, employees on a 3-month probation period if determined in advance, some casual employees, employees on contracts of employment for a specified period of less than 6 months, and employees who are engaged under a contract of employment for a specified task.

Occupational Health and Safety

There are both State and Federal laws covering any workplace safety obligations for both employers and employees. The current Federal Government has identified that Occupational Health and Safety (“OH&S”) is a priority area for reform. There is a move toward harmonisation of state-based OH&S laws, so that we can have in the future one set of OH&S laws. Currently each state and territory is responsible for making and enforcing their own of OH&S laws. In addition, there is the federal system of OH&S laws, which essentially deals with federal government agencies and departments. There is currently a set of model OH&S laws for the national system, and there is a move to have all states and territories adopt them by no later than December 2011.

The OH&S laws are designed to ensure a safe workplace, minimise injury and workplace deaths. The current New South Wales OH&S laws set extremely high standards for employers. Any accident at work is considered a breach of the OH&S laws. Anecdotal evidence suggests that recent OH&S prosecutions are now focusing not only on the companies involved, but also the directors and any individuals involved in the management of the company or business, who are considered to be responsible for ensuring OH&S compliance. Under the New South Wales OH&S laws, fines can be imposed on the employer, its directors and those individuals.

In February 2009, a grain mill company and its director were prosecuted for an incident which occurred in June 2006, where an employee suffered serious crush injuries to his right hand, which then had to be amputated. Even though both defendants pleaded guilty to the charges for failing to ensure employees were not exposed to risks to their health and safety, the company was fined $220,000.00 and its director $16,500.00 personally. Also in February 2009, another company was prosecuted and fined $110,000.00 plus costs for the accidental electrocution of its maintenance manager in October 2004. In December 2008, the principal contractor and sub-contractor of a road construction site were fined a total of $343,500.00 for an accident which occurred in March 2003 when a worker was severely injured after falling 14 metres from the fourth floor of the building site.

It must be remembered that under the New South Wales OH&S laws, there is strict liability and very little room for a successful defence to be launched to a prosecution.

What can you do?

As a business, you should implement and apply a comprehensive OH&S program that suits your particular business. Your OH&S program should:

• involve representatives from all staff levels in the OH&S Committee;

• review your workplace;

• develop OH&S procedures and an OH&S policy to suit your workplace;

• regularly review your workplace and OH&S policy and procedures.

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