It's been an absolute banger of a year – the Workpac casual controversy gathered steam, Cadbury's sick leave dilemma caused a meltdown and Israel Folau stuck the boot into Rugby Australia.
Below are just some of the significant events of 2019... which will continue to haunt employers into 2020 and beyond!
Casual hex
Late last year saw the Full Court of the Federal Court hand down the Workpac V Skene decision, now a famous case that sent shivers down the spines of every employer whose business model is dependent on casuals. 2019 saw Workpac send another case ‘up the shoot’ to see if they can get a different result, but more of that later.
If you don’t know the case, Mr Skene was employed over a period of nearly two years on the basis of a 7-on, 7-off roster. He was paid a casual loading and was not permitted to accrue leave, nor was he paid any leave. His contract specified one day for notice of termination. Sounds like a casual to us… right?
The difficulty in this case arose in connection with the divergence of the common law approach to casuals (if you’re regularly engaged and you have a reasonable expectation of work into the future, you’re not a casual) and the ‘industrial’ approach (enshrined in tribunal decisions and industrial instruments that specified as long as you were ‘engaged and paid as such’ you were a casual).
The court has effectively ‘killed off’ the industrial approach. For businesses that employ individuals where there is an advanced commitment to continuing and indefinite work, according to an agreed pattern of work, there’s a real risk these workers aren't casuals and instead should be engaged as full-time or part-time employees.
Workpac are so troubled by the decision it is running a second case, by way of a test case, to seek to revisit matters that were perhaps not ventilated or given the degree of consideration that Workpac considers they should have received.
Businesses use casuals for a range of reasons. Using casuals is not usually a way for an employer to save money given the cost of a full-time or part-time employee can sometimes cost you less than a casual when you do the sums. The difficulty for many businesses is the lack of flexibility with part-time employees as opposed to casuals.
Absent a statutory definition, there is no magic cure for the problem right now; businesses must have properly drafted contracts for casuals and consider strategies around casual conversion requirements in modern awards.
for updates on casuals.
Don’t take this personally, but you might owe your employees more paid leave
Another huge case that impacted businesses this year was the Mondelez v AMWU [2019] FCAFC 138 which involved a claim for a shortfall in accrued personal leave for shift workers in Cadbury’s factory in Hobart, Tasmania.
The employees worked 3 x 12 hour shifts weekly (36 hours). The employees were credited with an annual balance for paid personal/carers leave of 96 hours. They claimed they were entitled to accrue paid personal/carers leave at the rate of 10 x 12 hour days over a year of continuous service (equal to 120 hours of sick leave).
Most businesses consider a full-time employee working a 38-hour week will be entitled to 10 x 7.6 hour days over a year of continuous service (or 76 hours).
The Full Court of the Federal Court looked at the Fair Work Act and has considered that the Act is reasonably straightforward. It states that all employees (except for casuals) are entitled to 10 days' paid personal/carers leave. Full stop. No mention is made of the 10 days being for full-time employees nor is there a pro-rating arrangement for part-timers. The Act does talk about accruing ‘according to the employee’s ordinary hours of work’ but this is simply a way for an employer to enable an employee to accrue the entitlement over a year of continuous service.
At the end of the day, a day is a day… if your ordinary working day is a 10-hour day and you have an entitlement to paid personal/carers leave, then that’s 10 x 10 hour days per year of continuous service.
Understandably unhappy with the decision, Mondelez appealed to the High Court and has been given leave by the High Court to challenge the decision.
In the meantime, all businesses should ensure, at the very least, that they audit an employee’s personal/carer’s leave if they are part time and they have run out of paid leave.
The politics and religion of Israel
No, not the State of Israel, but more like the state of Israel’s rugby union career and the aftermath!
This year both mainstream and workplace media were peppered with stories about the fate of Israel Folau after he was dismissed by Rugby Australia (RA) for a homophobic social media post.
The legalities of Folau’s case were regularly misstated and incorrectly identified. While the case was largely pitched publicly as having freedom of speech and religion at its core, most who know what they’re talking about considered that part of the case a loser for Folau. We understand a breach of contract case raised by Folau was the better case and that largely came down to RA having poorly drafted contracts… can we suggest they take up a subscription of HR Advance?
The case has settled, allegedly costing RA more than $3m, but we've been lefting on the legal issues. Israel can use that money to defend the anti-discrimination claim that has been filed against him in the NSW Anti-Discrimination Board for homosexual vilification.
What the Folau case did do, was to spur on the government to introduce a religious discrimination bill that will, if passed, extend the limited protections against religious discrimination in the Fair Work Act to a broad based protection in relation to ‘religious beliefs or activities’. It will present challenges for some employers who will need to take a close look at whether they need to amend their policies and enhance their training.
Watch this space for updates in the new year on the Religious Discrimination Bill 2019.
On a lighter note (sort of)
Enterprise bargaining and agreement making in the Fair Work Commission has seen a smoother year.
The government's changes to permit the commission to rectify or ignore technical breaches during the bargaining process, together with the commission’s more efficient agreement approval process, has resulted in agreements being approved at a faster rate and with less hold-ups due to the undertakings progress.
This year also saw the Victorian Labour Hire Licencing Act 2018 take off, with the spread of State/Territory labour hire licensing regimes continuing to spread across the country. We now have regimes in Queensland, South Australia and Victoria. The government has promised a review at a national level on labour hire licensing and the Opposition in some states (such as NSW) have also indicated they would implement regimes if in power.
The relatively new Fair Work Act record-keeping laws also started to bite this year with the Federal Court penalising a Western Australian business (Ghimire v Karriview Management Pty Ltd (No 2) [2019] FCA 1627) to the tune of more than $40,000 due to underpayments in circumstances where the employer had failed to maintain adequate records.
2020 promises to bring a range of new and controversial decisions and law changes. Until then, let’s try and switch off over the break. Remember to ensure staff know how to behave at Christmas parties and staff events over this period –inevitably some will not.
See you all in 2020!