Australia: Our "TOP 10" Employment, Workplace & Safety issues from 2014

1. IMPLIED TERM OF TRUST AND CONFIDENCE? HIGH COURT SAYS "NO" ...

After many years of uncertainty, the High Court finally clarified in September that there is no implied term of mutual trust and confidence in employment contracts under the common law in Australia.

The High Court's decision in Commonwealth Bank of Australia v Barker^[1] closes off the implied term as a potential cause of action for employees seeking redress against various forms of adverse or unreasonable treatment by employers.

However, the High Court left open the possibility of the implied term of good faith as a basis for such claims, and there is already some evidence that lawyers representing employees are exploring this option.^[2] Of course, employers also need to remain mindful of possible claims under the unfair dismissal, anti-bullying and general protections provisions of the FW Act, as well as health and safety and anti-discrimination legislation.

2. WORKPLACE BULLYING CLAIMS LOW

The expected avalanche of claims in the Fair Work Commission (FWC)'s new anti-bullying jurisdiction did not eventuate. In the nine months to 30 September, 532 applications for anti-bullying orders were lodged, with an order being made in just one of these cases (several other orders have since been made).

The general trend in the relatively small number of contested bullying cases has been to give a broad interpretation to the concept of "reasonable management action" which does not constitute bullying.^[3] Most of these decisions have arisen in the context of performance management, which has been perceived as bullying by the employees involved.^[4]

A test case decision handed down by a five-member Full Bench of the FWC on 19 December^[5] held that social media posts (outside work hours) can constitute "bullying at work" – but only if the worker to whom they are directed reads them while at work. More generally, the Full Bench considered that a worker could be considered "at work" (for purposes of the anti-bullying provisions) "at any time the worker performs work, regardless of his or her location or the time of day" (the concept "is not limited to the confines of a physical workplace").

Despite the lower than expected numbers of claims, and the decisions generally supporting the positions taken by managers, employers should remain alive to the possibility of bullying claims – and implement sound policies and training to create a positive workplace culture.

3. SEXUAL HARASSMENT DAMAGES ON THE UP

The Full Federal Court decision in Richardson v Oracle Corporation Australia Pty Ltd and Tucker ^[6] signalled an important shift in approach by Australian courts to the assessment of damages in sexual harassment cases. The Full Court awarded a former consulting manager employed by Oracle Australia damages of $130,000 for sexual harassment carried out by a male sales representative (for which Oracle was vicariously liable).

The Full Court took into account changes in the value placed by society on compensation for loss of enjoyment of life arising from harassment, finding that the award of $18,000 damages at first instance did not reflect "prevailing community standards".

The complainant's claim in Richardson v Oracle was brought under the Sex Discrimination Act 1984 (Cth) (SD Act). In Trolan v WD Gelle Insurance and Finance Brokers Pty Ltd,^[7] an employee obtained over $730,000 in damages for sexual harassment, intimidation and bullying by her boss, in an action founded in negligence (breach of duty of care).

Substantial damages for sexual harassment in breach of the SD Act were awarded in Vergara v Ewin.^[8] This Full Federal Court decision was also notable for the broad approach taken by the majority judges to the concept of a "workplace" in which alleged sexual harassment or discrimination may occur. It was found that unwelcome sexual conduct occurring at a nearby hotel occurred at the workplace for purposes of the SD Act.

These decisions show that in the event that employers "get it wrong" in relation to sexual harassment and discrimination issues, there are multiple heads of potential liability – which could result in large damages payouts to employees or former employees.

4. WHAT'S A "COMPLAINT ABOUT EMPLOYMENT"?

There were numerous decisions this year examining the nature of "complaints about employment" which may form the basis of an adverse action claim under Part 3-1 of the Fair Work Act 2009 (Cth) (FW Act).^[9]

Overall, a fairly broad approach has been taken by the courts to the types of complaints or issues raised by employees which can found an adverse action claim – e.g. where employees have raised matters going beyond their own employment conditions, such as probity issues or even the precise manner in which certain work is carried out within the employing organisation.^[10]

A narrower approach was taken by the Federal Court at first instance in Shea v TRUenergy Services Pty Ltd (No 6),^[11] suggesting that an employee's complaint could not be made in bad faith or for an ulterior purpose, and should have some basis in a contractual or statutory entitlement. However in the recent appeal decision in those proceedings, the Full Federal Court cautioned against constraining the ability of employees to make employment complaints by assessing the genuineness or bona fides of such a complaint.^[12]

While the law in this area is presently unsettled, employers should assume that a wide range of expressions of discontentment by employees could lead to an adverse action claim. This means that fair and transparent processes need to be in place to deal with employee grievances.

5. HIGH COURT "SCAB" DECISION AFFIRMS BARCLAY

In another adverse action case, the High Court applied its 2012 ruling in Board of Bendigo Regional Institute of TAFE v Barclay^[13] to find that an employer had not acted in breach of Part 3-1 when it dismissed a union activist who had held an anti-"scab" sign on a picket line during protected industrial action.

In Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd,^[14] the High Court (by a 3:2 majority) adopted the approach in Barclay to find that the manager's reason for dismissing the unionist was not his involvement in lawful industrial activity (including the holding of the sign). Rather, the manager's decision was based on a concern that the employee would not in future conform to the company's expected standards of conduct (based partly on his behaviour during the investigation into the picket line incident).

6. THE DOOR OPENS ON CUTS TO PENALTY RATES

Award penalty rates remain a contentious issue, particularly in the retail and hospitality sectors. As employer organisations stepped up their lobbying for penalty rate reductions, the FWC gave its first indication of a preparedness to modify these rates in Appeal by Restaurant and Catering Association of Victoria.^[15]

In a 3:2 decision, the majority of the FWC Full Bench accepted the long-held position supporting the need to provide additional rewards and incentives for those who are required to work on Sundays. At the same time, the majority considered that there should be a reduction from 75% to 50% in the Sunday penalty rate for casuals employed in cafes and restaurants.

This looms as a major issue in the FWC's four-yearly review of modern awards, with 100 hearing days set down until late next year for the FWC's consideration of employer applications to reduce penalty rates in the main retail and hospitality awards.^[16]

7. BARGAINING "HOT SPOTS"

There has been a great deal of threatened and actual protected industrial action in bargaining disputes in 2014, particularly in the resources sector, the offshore services which support resource exploration and exporting, and on the ports.

Employers including Mermaid Marine, Teekay Shipping, Tidewater Marine, Farstad, Bechtel Australia and (more recently) DP World have all experienced various forms of protected action. The threat posed to major resource companies, including BHP Billiton and Chevron, led the Abbott Government to implement a regulation enabling the WA Government and third parties to apply to the FWC to end protected action that might (for example) adversely affect exports.^[17]

Public sector bargaining was a major feature of the Victorian election campaign in November, with unions representing ambulance employees,^[18] firefighters and nurses campaigning hard for the ALP. New Premier Daniel Andrews pledged resolution of the long-running ambulance dispute as one of his top priorities on winning office. On 20 December, the Victorian Government announced that a deal had been concluded with the ambulance employees' union.^[19]

The progress of the Federal Government's Building and Construction Industry (Improving Productivity) Bill 2013, and the fate of the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014, are of keen interest to all in the construction industry as multiple agreements come up for renewal. The Advance Release Code has now been in place since April 2014 (with amendments on 28 November 2014) and its status is a matter of heated debate. To date the construction unions have indicated a firm position of resistance to agreeing deals that are "code compliant". This is likely to be one of the major stories of early 2015.

8. TRADE UNIONS ROYAL COMMISSION

Throughout the year, the hearings of the Royal Commission on Trade Union Governance and Corruption captured significant media attention. On 19 December, the Government released two volumes of Commissioner Heydon's Interim Report, which recommends prosecution of current and former officials of several unions including the CFMEU, AWU and HSU.

In addition to the Royal Commission's focus on financial malfeasance within these and other unions, the industrial tactics of the CFMEU have received particular scrutiny. The Interim Report recommends that proceedings alleging blackmail and cartel conduct be brought against officials in the union's Victorian branch, arising from a "black ban" imposed on Boral following the Myer Grocon dispute in 2012.

9. CFMEU GROCON CONTEMPT PROCEEDINGS

The CFMEU's unlawful blockade of the Grocon site also resulted in the imposition of $1.25 million in fines by the Victorian Supreme Court on 31 March,^[20] following findings of criminal contempt against the union in 2013.^[21] This decision was upheld by the Court of Appeal in October.^[22] The union's application for special leave to appeal will be considered by the High Court in February next year.

10. WORKPLACE HEALTH AND SAFETY – LEGISLATIVE DEVELOPMENTS AROUND AUSTRALIA

Changes to workplace health and safety (WHS) legislation have been implemented or proposed in a number of jurisdictions, including the following:

• Queensland passed the WHS Amendment Bill in April to require unions to give 24 hours' notice before entering workplaces, to prevent health and safety representatives (HSRs) from halting unsafe work, and to increase electrical safety fines by 650%.
• Western Australia tabled the draft mirror Work Health and Safety Bill 2014 in October 2014 for a three month comment period, which expires at the end of January 2015.^[23]
• The New South Wales Mining Sector introduced model WHS Regulations which will commence on 1 February 2015.
• South Australia commissioned a review of its model WHS Laws by Robin Stewart-Crompton.
• The new Labor Victorian Government has foreshadowed significant reform to the Victorian WorkCover Authority (VWA) regime, including reviewing the effectiveness of the current Victorian Occupational Health & Safety legislation and its enforcement by the VWA.

Look out for our "Top 10" Employment, Workplace & Safety Issues for 2015, in mid-January. This will include discussion of the recently-announced terms of reference for the Productivity Commission's Review of the FW Act and related legislation. The PC Review will be the major focus for the workplace reform debate in the year ahead, along with continued efforts by the Abbott Government to progress its legislative agenda.

Footnotes

^[1] [2014] HCA 32 (10 September 2014); see here.
^[2] "After Barker, lawyers turn to implied duty of good faith", Workplace Express, 11 December 2014.
^[3] See our earlier In Briefs here, here and here.
^[4] In the recent decision in Application by G.C. [2014] FWC 6988 (9 December 2014), the FWC found that some aspects of a manager's conduct were unreasonable (and therefore constituted bullying); however no order was made as the employee's fixed-term contract with the employer had ended.
^[5] Sharon Bowker; Annette Coombe; Stephen Zwarts v DP World Melbourne Limited T/A DP World; Maritime Union of Australia, The Victorian Branch and Others [2014] FWCFB 9227.
^[6] [2014] FCAFC 82 (15 July 2014); see here.
^[7] [2014] NSWDC 185 (4 November 2014).
^[8] [2014] FCAFC 100 (12 August 2014); see here.
^[9] See here; and here.
^[10] Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456 (9 May 2014); Evans v Trilab Pty Ltd [2014] FCCA 2464 (30 October 2014).
^[11] [2014] FCA 271 (25 March 2014).
^[12] Shea v EnergyAustralia Services Pty Ltd [2014] FCAFC 167 (8 December 2014).
^[13] [2012] HCA 32.
^[14] [2014] HCA 41 (16 October 2014); see here.
^[15] [2014] FWCFB 1996 (14 May 2014); this decision was upheld by the Full Federal Court in United Voice v Restaurant and Catering Association of Victoria and Fair Work Commission [2014] FCAFC 121.
^[16] "100 days of hearings for penalty rates case", Workplace Express, 18 December 2014.
^[17] Fair Work Amendment (Protected Industrial Action) Regulation 2014; in September this regulation survived a disallowance motion in the Senate, with the support of the Palmer United Party along with Senators Muir, Day and Leyonhjelm.
^[18] See here.
^[19] See here.
^[20] Grocon and Others v CFMEU (No 2) [2014] VSC 134.
^[21] Grocon Constructors (Victoria) Pty Ltd v CFMEU and Others [2013] VSC 275.
^[22] CFMEU v Grocon Constructors (Victoria) Pty Ltd and Others; CFMEU v Boral Resources (Vic) Pty Ltd and Others [2014] VSCA 261.
^[23] See here.

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