Australian Employment Law Update May 2016

Transcription

1 Employment Australian Employment Law Update May 2016 Contents Unfair dismissal recent appeal to the Full Federal Court Page 1 Extension of time for FWC unfair dismissal applications Page 2 Sham contracting misrepresentation of an employment relationship Page 4 About the authors Page 5 Unfair dismissal applications remain the most popular type of application and continue to be a significant risk exposure for employers of all industries and sizes. Recent Fair Work Commission Learnings Employment law continues to be a frequently litigated and ever changing area of law in Australia. For some years most employees have been governed by the federal system, with some notable exceptions in Western Australia and many state public sector employees who still operate under state legislative regimes. At the federal level, the majority of employment litigation takes place before Australia s national workplace relations tribunal, the Fair Work Commission (FWC). In the previous financial year there were 14,624 unfair dismissal applications to the FWC with the vast majority (79%) resolved at conciliations held in the Commission. General protections applications concerning dismissal were fewer in number with only 3,382 filed in the same financial year. Unfair dismissal applications remain the most popular type of application and continue to be a significant risk exposure for employers of all industries and sizes. In this update we look at key learnings from recent cases before the FWC including appealing a FWC Full Bench decision, requests for time extensions for unfair dismissal applications, and the misrepresentation of an employment with an independent contractor known as sham contracting.

2 1. Unfair dismissal recent appeal to the Full Federal Court Gregory v Qantas Airways Ltd [2016] FCAFC 7 Unfair dismissal proceedings were commenced before the Fair Work Commission in May 2014 by a Qantas pilot, Mr Gregory, following termination of his employment as a result of an incident which took place with fellow crew members on a layover in Chile. Mr Gregory, a 747 First Officer employed by Qantas for 20 years, flew into Santiago on 8 February 2014 and was due to fly out two days later. On the evening of arrival during social drinks with his work colleagues he left the group for 30 minutes or so. On his return the group noticed his conduct had become problematic and they decided to return him to the hotel. While travelling in a taxi Mr Gregory touched the breast of the female Second Officer who was visibly upset. This was observed by colleagues and reported to the Captain who informed Mr Gregory the next afternoon of his behaviour and that he would be stood down for the return trip and subject to a drug test. Mr Gregory apologised to the Second Officer and his apology was accepted. On 10 February 2014 Mr Gregory underwent a drug test which showed the presence of cannabinoids indicating he had ingested or smoked cannabis. He was dismissed by Qantas on 7 May 2014 on account of serious misconduct, namely sexual harassment of a female colleague. Fair Work Commission Mr Gregory then made an unfair dismissal application to the FWC. He argued that he had not taken cannabis but rather been the victim of drink spiking and as such there was no valid reason for termination of his employment rendering the termination unfair. Mr Gregory did not deny the sexual harassment but maintained he was not responsible for the conduct due to his drink being spiked. Qantas argued the evidence, namely the drug test results, did not support the argument that Mr Gregory s drink was spiked and rather indicated Mr Gregory had smoked cannabis while absent from his colleagues, returned affected by the drug and alcohol he had been drinking and then sexually harassed the Second Officer. At first instance Commissioner Cambridge concluded the evidence did not support any finding that drink spiking caused Mr Gregory to be affected by drugs, and that rather he had separated from colleagues as a deliberate act in pursuit of cannabis which he then imbibed. Commissioner Cambridge also held Mr Gregory was culpable for his sexual harassment of a female colleague, even though he did not consciously intend to sexually harass that colleague, on account of his decision to imbibe cannabis which presented a risk that his behaviour would be altered. The Commissioner also had regard to the confidence Qantas must have in its pilots which was eroded by Mr Gregory s conduct. Mr Gregory sought to appeal the decision. In dealing with leave to appeal the Full Bench of the FWC concluded there was no appealable error in Commissioner Cambridge s judgment. Federal Court of Australia Mr Gregory then appealed the Full Bench of the FWC s decision to the Full Court of the Federal Court of Australia (FCA). The Full Court of the FCA found the Full Bench of the FWC had not properly performed its task in dealing with the application for leave to appeal Commissioner Cambridge s decision. In particular the Full Bench had exceeded its jurisdiction by purporting to deal with the merits of the appeal without conducting a hearing enabling Mr Gregory to advance arguments. However, the Full Court of the FCA also dismissed the argument that there was any jurisdictional error in Commissioner Cambridge s decision and remitted the application for leave to appeal to the Full Bench of the FWC. Key learnings from this case Employees engaged in the taking of illicit drugs in social outings with work colleagues are responsible for their actions while affected by those drugs; The nature of the job and its responsibilities will be relevant when examining serious misconduct; and Think carefully about appealing a FWC Full Bench decision not allowing an appeal when the first instance decision of a single Commission member is a comprehensive and supportable one. Back to page 1 Australian Employment Law Update May

3 2. Extension of time for FWC unfair dismissal applications Applicant s often lodge unfair dismissal applications outside the timeframe for lodgement under s 394(2) or the Fair Work Act 2009 (Cth). Applications alleging unfair dismissal and seeking a remedy for the same must be made: within 21 days after the dismissal took effect; or within such further period as the FWC allows under s 394(3). It is very important to note that 21 days is counted from the day after termination of employment takes effect. When an application is lodged late it is up to a member of the FWC to determine whether they should apply their discretionary power in order to reduce the prejudicial value of a late lodgement. Under s 394(3) the FWC may grant an extension of time within which the application can be made if it is satisfied that there are exceptional circumstances, taking into account: (a) The reason for the delay; and (b) Whether the employee first became aware of the dismissal after it had taken effect; and (c) Any action taken by the person to dispute the dismissal; and (d) Prejudice to the employer (including prejudice caused by the delay); and (e) The merits of the application; and (f) Fairness as between the employee and other employees in a similar position. Some of the following recent cases before the FWC serve to highlight its approach when considering requests that a further period be allowed. It is worth noting the same considerations are taken into account when the FWC considers extension of time regarding general protections applications involving dismissal where the same 21 day timeframe applies. The decisions below concern unfair dismissal applications, however, the principles have application to extensions of time sought for general protections applications involving dismissal. Jones v Bunnings Warehouse [2016] FWC 1255 Following the termination of his employment by Bunnings Warehouse on 18 December 2015, Mr Jones lodged an unfair dismissal application with the FWC on 10 January Mr Jones had a reasonable explanation for the delay, namely his uncontested evidence concerning the impact of his depression following the termination of his employment combined with his need to leave Australia urgently to fly to the UK to deal with his father s terminal illness. The FWC was satisfied that the need for Mr Jones to urgently travel to the UK to tend to his father s terminal illness, coupled with his recognised mental health issues following termination of employment was a reasonable explanation for the delay. The reasonable explanation for the delay along with the lack of prejudice imposed on Bunnings meant there were exceptional circumstances. In light of this, an extension until 10 January 2016 was granted and the matter was then referred to conciliation. Meek v Baycorp Pty Ltd [2016] FWC 1291 Mr Meek s employment with Baycorp was terminated on 15 January Mr Meek lodged an unfair dismissal application on 9 February Mr Meek vigorously disputed the fairness of his dismissal at the time of the termination of his employment and argued there was no prejudice to Baycorp in the late lodgement of his application. Mr Meek presented no reasonable explanation for the delay in lodging the application and as such the FWC dismissed Mr Meek s application for an extension of time and his unfair dismissal application was therefore dismissed. Back to page 1 Australian Employment Law Update May

4 Gupta v The Trustee for Sogal Trust [2016] FWC 1290 Mrs Gupta lodged an unfair dismissal application following the termination of her employment with The Trustee for Sogal Trust t/a Core Physiotherapy and Pilates Studio Aberfoyle Park (Core Physiotherapy). Mrs Gupta asserted that her employment was terminated in or around August 2015 but failed to lodge her unfair dismissal application until 25 January However, it was questionable whether she had in fact been employed by Core Physiotherapy after May There was also no evidence that there was any termination of Ms Gupta s employment by Core Physiotherapy. The reason Mrs Gupta gave for delay in lodging her application was that her husband was a business partner with her employer in another franchise and they were severing their partnership. Thinking that lodging her unfair dismissal application may antagonise the Core Physiotherapy into not signing crucial documents to sever the business relationship with her husband, Mrs Gupta waited until 25 January 2016 to lodge her application. The FWC did not accept that this was an exceptional circumstance. As a result Ms Gupta s unfair dismissal application was dismissed. Key learnings The FWC registry checks the date of lodgement and the date of termination when receiving applications; Respondent employers would be wise to double check in case the FWC registry misses something; If the application is out of time seek advice as it may be possible to obtain dismissal of the application at an early stage; The FWC must take into account a number of factors when examining whether an extension of time should be granted. Back to page 1 Australian Employment Law Update May

5 3. Sham contracting misrepresentation of an employment relationship Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45 Ms Best and Ms Roden were employed as housekeepers by Quest South Perth Holdings Pty Ltd (Quest) in their business of providing serviced accommodation. Quest later entered into a labour hire agreement (the Agreement) with Contracting Solutions Pty Ltd (Contracting Solutions) that purported to employ Ms Best and Ms Roden as independent contractors. Following the Agreement both Ms Best and Ms Roden continued to perform precisely the same work in precisely the same manner as they had always done as housekeepers for Quest, however Quest represented to them that they were now independent contractors who were employed by Contracting Solutions. The Fair Work Ombudsman brought a proceeding in the Federal Court claiming, among other things, pecuniary penalty orders against Quest for contraventions of s 357(1) of the Fair Work Act 2009 (Cth). Section 357 seeks to prevent an employer from misrepresenting an employment relationship as a contract for services with an independent contractor (often referred to as sham contracting) Contravention of s 357 The previous, more constrained position, as applied by the Full Court of the Federal Court of Australia in this matter, was that to contravene s 357 an employer must mischaracterise the contract of employment that exists between the employer and the employee as a contract for services between the employee and the employer. This limited the application of the section to mischaracterisation of arrangements only between the employer and the employee. Here, the mischaracterisation occurred between Quest, as a purported third party business, and the employees, thus arguably falling outside the scope of s 357. The High Court of Australia (HCA) set aside the decision of the Full Court of the FCA and held that contravention of s 357 extends to cover connected entities and held that in this situation it operated to protect employees from sham contracting. The HCA also held that Ms Best and Ms Roden were note independent contractors and that they remained employees of Quest under implied contracts of employment. HCA remitted determination of penalties to the FCA. Key learnings from this decision Third parties assisting former employers in contracts for services with purported independent contractors are now at risk of contravening the Fair Work Act 2009 (Cth); Penalties can be imposed for breaches of the Fair Work Act 2009 (Cth). Penalties are currently AUD 54,000 for a body corporate and AUD10,800 for an individual per breach. Back to page 1 Australian Employment Law Update May

6 Meet the authors David Lee T: E: david.lee@clydeco.com Laura Sowden Senior Associate, Sydney T: E: laura.sowden@clydeco.com Elizabeth Newman Senior Associate, Sydney T: E: elizabeth.newman@clydeco.com Key senior employment contacts: Jenni Priestley T: E: jenni.priestley@clydeco.com Michael Tooma T: E: michael.tooma@clydeco.com David Amentas T: E: david.amentas@clydeco.com Alena Titterton T: E: alena.titterton@clydeco.com Back to page 1 Australian Employment Law Update May

7 Further advice should be taken before relying on the contents of this Newsletter. Clyde & Co accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary. No part of this summary may be used, reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, reading or otherwise without the prior permission of Clyde & Co. Clyde & Co Australia is a multi-disciplinary partnership registered with the Law Society of New South Wales. Clyde & Co 2016 Clyde & Co CC May 2016