1. JobKeeper

On 25 January 2020, Australia confirmed its first cases of COVID-19. By mid-March cases in Australia were doubling every three days. As we know all too well, businesses and employment were significantly impacted by the actions and events that transpired as a result and in response the JobKeeper scheme was enacted via the Coronavirus Economic Response Package (JobKeeper Payments) Amendment Act 2020 (Cth).

On 9 April the Fair Work Act 2009 (Cth) (FW Act) was amended to insert temporary JobKeeper provisions to allow employers to temporarily change employees’ work conditions – including to reasonably stand them down, direct them to work different duties or at different locations, and to direct changes to their days of work – to help employers deal with the pandemic. That led to a spate of dispute resolution cases before the Fair Work Commission, including the high profile and well publicised Jones v Live Events Australia Pty Ltd [2020] FWC 3469, with the employee, Allan Jones, the ultimate winner in respect of his challenge to his employer’s reduction of his minimum hours of work by almost half. This spate of cases produced varying results for employers.

The JobKeeper scheme was initially intended to be operational until 28 September but was later extended and is currently earmarked to cease on 28 March 2021.

2. Award variations in response to COVID-19

In response to the pandemic, the Fair Work Commission (Commission) approved a range of temporary variations to modern awards aimed at providing increased flexibility for employers and employees. The changes included the provision of two weeks’ unpaid pandemic leave and an ability for employees to take twice as much annual leave at half their normal pay, subject to their employer’s agreement. These changes were slated to cease operating universally on 30 June, however the Commission has extended the application of these changes for many awards to 29 March 2021.

In addition to these collective changes to awards, the Commission made specific changes to a select few awards (namely, the Clerks Private Sector Award, the Real Estate Industry Award, the Vehicle Manufacturing, Repair, Services and Retail Award, and the Hospitality Industry (General) Award), upon application. Among the changes made to these specific awards:

• Employers were permitted to direct an employee to perform other duties, provided that such duties were within the employee’s skill and competency
• Employers were permitted to, after consultation with the employees concerned, reduce the weekly hours of permanent employees to no less than 22.8 hours per week (for full time employees) or no less than 60% of their usual hours (if part time), and
• After proper consideration of an employee’s personal circumstances, employers were permitted to give 24 hours’ notice to employees directing them to take annual leave.

These variations to modern awards were significant, not only due to the fact that they were unprecedented but also because the Commission acted so quickly in implementing them.

3. Casual leave entitlements and offsetting casual loadings (Workpac v Rossato)

In a decision estimated to cost employers a staggering $38.4 billion dollars, the Federal Court held that a casual employee with a ‘firm advance commitment of employment’ was entitled to permanent employee entitlements (such as annual leave) and, perhaps more importantly, that the 25% casual loading that was paid to the employee could not offset that liability.

It is commonly understood that the 25% casual loading is paid to casuals because they don’t have an entitlement to benefits such as personal or annual leave. However, in WorkPac Pty Ltd v Rossato [2020] FCAFC 84 (Rossato), the Court held that a casual loading paid in lieu does not satisfy an annual leave entitlement, because such entitlement is two-fold in that it is an entitlement to be absent from work and be paid during the period of absence – and therefore, a payment made in lieu of annual leave (without the absence) cannot properly satisfy the entitlement.

As a result of the decision in Rossato, some casual workers may be entitled to the 25% loading as well as the entitlements that permanent employees receive, such as personal and annual leave. The effect of this decision will be the creation of a massive back pay burden on companies that engage casuals. This, in the current economic climate, is less than ideal for employers to say the least.

Affected employers now anxiously await the outcome of a High Court appeal of the Rossato decision which will be heard in 2021.

4. The proper calculation of personal/carer’s leave entitlements (the Mondelez decision)

Employers breathed a sigh of relief when the High Court of Australia handed down its decision in Mondelez Australia Pty Ltd v AMWU & Ors [2020] HCA 29, which essentially confirmed that the way in which most employers had for a long time been calculating the personal/carers leave entitlements of employees, was in fact the right way.

The High Court determined that an employee’s personal/carer’s leave entitlement under the National Employment Standards is, because patterns of work do not always follow two-week cycles, properly calculated using the formula: 1/26 of an employee’s ordinary hours of work in a year.

5. Industrial manslaughter

Victoria

On 1 July 2020 the Workplace Safety Legislation Amendment (Workplace Manslaughter and Other Matters) Act 2019 (Vic) amended the Occupational Health and Safety Act 2004 (Vic) (OHS Act) to introduce the offence of workplace manslaughter in Victoria.

The offence is punishable by penalties which include a maximum of 25 years’ imprisonment for an individual and a maximum of $16.5 million for a body corporate. It applies where:

• An employer or officer (not an employee or volunteer) owes a specified duty under the OHS Act to ensure the health and safety of another person
• The employer or officer (if a natural person, acting consciously and voluntarily) engages in conduct in relation to the business which causes the death of another person, and
• The conduct is negligent (which will be considered to be the case where there is a significant falling short of the standard of care that a reasonable person would have taken in the circumstances; and a high risk of death, serious injury or serious illness).

Queensland

Following the deaths of eight miners at Queensland coal mines in just the last couple of years, the Queensland Government passed the Mineral and Energy Resources and Other Legislation Amendment Act 2020 (Qld) (Energy Act) on 20 May 2020. The Energy Act (which amends a number of acts and is to commence operation on a date as yet to be fixed) introduces the offence of industrial manslaughter at all mines (including coal mines).

The offence is punishable by penalties which include a maximum of 20 years’ imprisonment for an individual and a maximum of $13.3 million for a body corporate. It applies where negligence of the resources company, its senior executives or senior officers causes the death of a worker.

The Energy Act brings the resources sector into alignment with the industrial manslaughter laws that have applied to all other industries in Queensland since October 2017. Under those existing laws, Australia’s first industrial manslaughter conviction was made on 11 June 2020 in R v Brisbane Auto Recycling Pty Ltd & Ors [2020] QDC 113. The conviction was made against the defendant company and a fine of $3 million was imposed. The two directors of the defendant company were convicted of reckless conduct and each received a sentence of 10 months’ imprisonment suspended for 20 months.

6. Underpayments and FWO activity

There has been a lot of action in the underpayments space with the Fair Work Ombudsman (FWO) taking a hard stance on wage theft. According to the FWO’s 2019-20 Annual Report, almost $123.5 million was recovered on behalf of more than 25,000 workers, $90 million of which was self-reported by employers.

The FWO has established a dedicated taskforce to investigate the prevalence and scale of big corporations underpaying their workers.

Yet another class action was launched against a major supermarket chain. This time it’s South Australian chain Drakes Supermarkets in the firing line with allegations that workers were paid annualised salaries that did not properly compensate them for overtime or penalty rates and that unlawful deductions were made from their pay to cover the cost of their work uniforms. The class action involves 81 workers and it is estimated that Drakes could owe up to $20 million.

The 7-Eleven and Chemist Warehouse franchises, both which entered into compliance deeds with the Fair Work Ombudsman in 2016 following significant underpayment and/or noncompliance issues, rolled out internal training, improved their compliance processes and engaged external auditors in further steps taken to strengthen their compliance partnerships with the FWO.

With the Wage Theft Act 2020 (Vic) expected to take effect in Victoria from 1 July 2021, this activity is likely to increase in that State particularly.

7. Workplace harassment: Respect@Work

Following an 18 month long inquiry, the Australian Human Rights Commission’s report on sexual harassment in workplaces, Respect@Work, was released in March. The report detailed the prevalence of sexual harassment in workplaces and criticised the nature of the existing legal and regulatory system which, according to the report, does not sufficiently place a burden on employers to prevent harassment from occurring in the workplace. The report made 55 recommendations including:

• Introducing an enforceable “positive duty” in the Sex Discrimination Act 1984 (Cth) (SDA) requiring employers to, as far as is possible, take reasonable and proportionate measures to eliminate sexual harassment, sex discrimination and victimisation
• Amending the Australian Human Rights Commission Act 1986 (Cth) such that costs may only be ordered against a party if the court is satisfied that the proceedings were instituted vexatiously or without reasonable cause, or if a party’s unreasonable act or omission caused the other party to incur costs
• Amending the current State based human rights and anti-discrimination laws to make them more consistent with the SDA
• Adding a ‘Stop Sexual Harassment Work Order’ in the FW Act which would operate similarly to the existing Stop Bullying Orders, and
• Amending the unfair dismissal provisions of the FW Act to make it clear that engaging in sexual harassment constitutes a valid reason for dismissal.

The Federal Government is now considering the report with a view to adopting some of the report’s recommendations.

8. That $5.2m adverse action case

In Roohizadegan v TechnologyOne Limited [2020], the Court ordered the employer to pay more than $5.2 million in compensation, penalties and damages to its former State Manager.

In his general protections claim, the State Manager alleged that he was dismissed because he had made seven bullying complaints as, shortly after he raised these complaints with HR and complained that he hadn’t been paid incentives due to him under his employment contract, the Executive Chairman summarily dismissed him. The State Manager further alleged that as a result of the dismissal, he had suffered a mental breakdown and depressive disorders and that he was incapable of ever working again.

The Executive Chairman alleged that the State Manager was dismissed because of poor performance and because he had received multiple complaints regarding the State Manager’s workplace conduct. However, the State Manager was able to produce evidence to demonstrate that his performance had been more than satisfactory and further, that no investigation had been conducted to ascertain the veracity of the complaints made against him.

Ultimately, the Court found that the employer had taken adverse action against the State Manager because of a proscribed reason (namely, the complaints that he had made). The Court also found that the employer had breached the State Manager’s employment contract by failing to pay incentives due to him.

The Court ordered that the employer pay to the State Manager:

• $2.825 million for his economic loss (representing over four years’ pay)
• $1.59 million in damages for breach of contract
• $756,410 to compensate him for his forgone share options
• $10,000 in general damages, and
• $47,000 in penalties.

The Court also found the Executive Chairman was accessorily (personally) liable and ordered that he pay penalties of $7,000.

It’s important to note that the high compensation in this case is reflective of the State Manager’s remuneration which was upwards of $845,000 per annum. That being said, this decision is an important reminder for employers that dismissing an employee without a legitimate reason and without following a procedurally fair process, can be costly.

9. Employee or contractor?

In the latest gig economy case, a Full Bench of the Fair Work Commission held earlier this year that drivers who deliver food through UberEats are independent contractors, not employees. The decision related to whether the Fair Work Commission had jurisdiction to deal with an unfair dismissal claim filed by a driver who was terminated by UberEats (the Fair Work Commission generally will not have jurisdiction to deal with unfair dismissal claims that are not made by employees). Ultimately, as the driver was deemed to be an independent contractor, and not an employee, his unfair dismissal claim was dismissed. The employee will also be unable to pursue any employee entitlements such as minimum wages and accrued leave.

The Full Bench found the following factors determinative when considering the employee v contractor issue:

• The driver was able to take on other work (including work for rival food delivery services)
• The driver controlled when, and for how long, he logged into the app and he was able to elect whether to accept or decline a service request
• The driver was not obliged to identify himself as a delivery driver for UberEats, nor was he required to represent the company.

The Fair Work Ombudsman made a similar ruling in 2019 when it determined that Uber drivers did not have any employment relationship established with Uber Australia.

10. The likelihood of significant changes to the Fair Work Act

The Morrison Government’s IR omnibus legislation (the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill (Bill)) introduced into Parliament on Wednesday 9 December 2020, flags significant changes to the Fair Work Act 2009. The changes are specified in the Bill to involve:

• Providing certainty to businesses and employees about casual employment
• Giving regular casual employees a statutory pathway to ongoing employment by including a casual conversion entitlement in the National Employment Standards (NES) of the Fair Work Act
• Extending two temporary JobKeeper flexibilities to businesses, in identified industries significantly impacted by the pandemic
• Giving employers confidence to offer part-time employment and additional hours to employees, promoting flexibility and efficiency
• Streamlining and improving the enterprise agreement making and approval process to encourage participation in collective bargaining
• Ensuring industrial instruments do not transfer where an employee transfers between associated entities at the employee’s initiative
• Providing greater certainty for investors, employers and employees by allowing the nominal life of greenfields agreements made in relation to the construction of a major project to be extended
• Strengthening the Fair Work Act compliance and enforcement framework to address wage underpayments, ensure businesses have the confidence to hire and ensure employees receive their correct entitlements, and
• Introducing measures to support more efficient Fair Work Commission processes.

You can read our earlier recent article about these changes here.

The Bill is expected to be referred to a Senate inquiry and will almost certainly be a ‘watch this space’ issue for 2021.

And that’s a wrap

Well, 2020, that’s a wrap – and 2021 is certainly shaping up to be an interesting one in the workplace space. We at Moray & Agnew will continue to provide relevant legal updates, so subscribe or follow us to keep up to date. In the meantime, Moray & Agnew wishes you all the best for the festive season and new year.