Insights & News

March 2, 2020

There’s a week to go on a probationary period and concerns get raised for the first time that someone might not be right for the role…. Sound familiar? The NSW Industrial Relations Commission (IRC) has sounded a warning for the NSW public sector to assess the conduct and performance of new employees during the probationary period, and ensure they confirm the appointment of those employees, or dismiss them, prior to the probationary period ending.

What happened?

The practical implementation of probationary periods has to be considered by NSW public service employers in the wake of the IRC decision in Wilson v Industrial Relations Secretary (Wilson). The key takeaway from Wilson is that public service employers concerned about the conduct or performance of a probationary employee must either act to dismiss before the probationary period ends, or extend the period. What happens if neither of these occur? Well, the IRC says that it will be assumed the employee has successfully completed the probationary period. Of course, this means that the employee could then pursue claims such as unfair dismissals and disciplinary appeals if they are dismissed or disciplined at some later date.

The facts

Mr Brock Wilson brought a disciplinary appeal in the IRC against a decision by a NSW public sector employer to terminate his employment.

The IRC was asked to consider whether it had jurisdiction to determine the appeal because, although Mr Wilson had served his six-month probationary period, his employment had not been confirmed under rule 5 of the GSE Rules. The employer argued that, without express confirmation of Mr Wilson’s employment, he remained on probation and was unable to bring a disciplinary appeal to challenge the termination of his employment.

Mr Wilson argued that, at the end of his six-month probationary period, his employment was not terminated, and the probationary period wasn’t extended either, so it should be inferred or assumed that he had completed his probation and his employment was confirmed under the GSE Rules. In other words, the fact he remained employed and continued to be paid meant it was fair to assume he had completed his probation.

The Decision

The IRC looked back at the history of the law relating to probationary periods for NSW public servants, going as far back as 1895. A key observation of the IRC was a change in the wording of the probation provisions in the GSE Rules compared with the PSEM Act. Under the PSEM Act, employment could be confirmed “after” the period of probation expired. Now, the GSE Rules state that the decision must be made “at the end of” the probationary period.

The IRC did not accept that probationary periods could be automatically extended indefinitely until the employer actively ‘confirmed’ the employment. Extending a probationary period requires employers to take a positive step, including notifying the employee of the extension. No such steps were taken in this case.

As Mr Wilson’s employment was not terminated, and the probationary period was not extended at the end of six months, the IRC said that it must be inferred that he had satisfied the requirements of the position, and that his employment had been confirmed. The consequence was that the IRC could then hear his disciplinary appeal.

What do we learn from this?

While this may seem like a niche point, it is something that comes up time and time again, as administrative processes for dealing with impending end dates of probationary periods fail, or are delayed until after it is too late.

In case there was any doubt, Wilson confirms that NSW public sector employers cannot continue to rely on the historical approach of employees just remaining on probation indefinitely until the employer ‘confirms’ or ‘annuls’ their employment, even if that doesn’t happen until long after the probationary period should have ended.

The GSE Rules now provide that the employer may, at any time during or “at the end of” the probationary period, confirm or terminate the employment. Unless the probation period is clearly extended before it ends, and the employee is told that it’s being extended, then when the period ends, that’s it. Probation completed. No second chances.

So how is this addressed from a practical perspective? All employers should diarise key dates during employees’ probationary periods to allow time for conduct and performance to be assessed. For NSW public sector employers, there also needs to be enough time factored in for the relevant decision-maker to decide whether to extend the probationary period, terminate the employee or confirm employment, and communicate those decisions to the employee, well before the probationary period expires. This requires systems and education for those responsible for managing new employees.

The specialist agencies in the government sector are not immune from this decision. The same wording that is used in rule 5 of the GSE Rules is found in the equivalent provisions that deal with probationary periods for:

• NSW Health Service senior executives;
• Administrative employees of the NSW Police Force (both executives and non-executives); and
• Transport Service senior executives.

However, differently worded provisions are used for people employed in the Teaching Service, police officers appointed to the NSW Police Force, and some members of the Transport Service. Accordingly, the decision in Wilson may not apply to them.

The lesson here is relevant for all employers in all industries. The six month ‘qualifying period’ for unfair dismissal claims, which usually corresponds with a probationary period, cannot be extended just because an employee’s performance is still under review. The same systems and education for persons managing new employees should be implemented.

Martin Watts
Partner
+61 2 9169 8408
[email protected]

Kathleen Weston
Lawyer
+61 2 9169 8415
[email protected]

February 11, 2020

By Christa Lenard, partner, Les Maroun, associate & Natasha Elster, paralegal

The New Year is behind us and business is back in full swing. Our difficult and heart wrenching summer saw many businesses and employees impacted and with new threats to the economy and restrictions on travel, it’s hard not to feel burdened by the state of play.

The employment space, like many others in business, comes wrapped in layers of red tape. Right now, compliance is the key word. Whether it be a supermarket giant (and the law firm advising it) or the family business which has through its success outgrown its systems in place to manage compliance, the issue of wage compliance is front and centre.

Sitting in the small claims division of the Federal Circuit Court in Victoria last week, Judge McNab observed that Australia has the most complex industrial system in the world, with Modern Awards being over complicated and frightfully hard to navigate. The Judge’s musings are consistent with what we have long known.

So as we hit the ground running in 2020, the year ahead promises to be another big year of significant decisions and new legislation – more red tape you may say? Most certainly. But with the right lens, Human Resource practitioners should be sharply focused on ensuring the left hand is talking to the right hand and that you keep up to speed with developments in this space.

Let’s take a brief look at what lies ahead.

Wage theft

Following significant media attention and mounting public frustration of the underpayment of employees in Australia, particularly by high-profile employers, the Commonwealth Government has revealed it is working on legislation to criminalise wage theft. In consultation on the issue, the Government last year sought submissions on possible reforms such as introducing maximum 10-year jail terms or $25m fines for wage theft offences.

Moreover, on 13 November 2019, the Senate referred an inquiry into the “unlawful underpayment of employees’ remuneration”. The inquiry’s terms of reference include reasons for wage theft, the costs of such theft to the economy and effective recovery and deterrence mechanisms. The Committee is accepting submissions until 14 February 2020 and is required to provide its report by 25 June 2020.

Focus point: be proactive and audit rostering and payroll practices against enterprise agreement or Award requirements. Be sure to do this under privilege!

Annualised salaries

From 1 March 2020, new model clauses on annualised salaries will commence operation in 22 modern awards. The new clauses impose greater obligations on employers who rely on award-based annualised salaries to satisfy award entitlements, including record-keeping, auditing and employee consent. More information, including steps you should take now to ensure you are compliant, can be found in our article on the topic.

Blink and you’ll miss it: If you haven’t already, seek advice before 1 March about the impact of the annualised salary clauses as they affect your business.    

Personal leave

This year, the High Court is expected to hear appeals filed against the decision in Mondelez v AMWU, which concerned employees’ entitlement to 10 days’ paid personal leave under the Fair Work Act.

In that decision, the Full Federal Court found that all employees (except casuals), regardless of their weekly hours of work, are entitled to the 10 days per year, with a “day” being the portion of a calendar day that would be allotted to working. This finding is contrary to the understanding that had been adopted by most employers, who considered a “day” to be an employee’s ordinary weekly hours divided by a notional working week of 5 days. To demonstrate the disparity in views:

• the decision (which is currently law unless overturned by the High Court) in effect provides that an employee who works 12-hour days (whether once, twice or three times a week) is entitled to 10 lots of 12 hours of personal leave per year (in effect 120 hours)
• under the commonly adopted approach prior to the decision, an employee who works 3 x 12-hour days per week is entitled to 10 lots of 7.2 hours of personal leave per year (in effect 72 hours), whereas an employee who works 2 x 12-hour days per week is entitled to 10 lots of 4.8 hours of personal leave per year (in effect 48 hours).

Mondelez and the Federal Minister for Jobs & Industrial Relations (who intervened in the Federal Court proceedings), have both appealed against the decision to the High Court. Their final written submissions are due by 20 March 2020 before the matter goes to hearing.

Our insight: At the moment, many employers are in strict non-compliance with personal leave requirements, particularly in respect of part-timers who have historically accrued personal leave on a pro-rata basis. The High Court decision will provide employers with the certainty needed on this issue. Watch this space as we think there is further change on the horizon.      

Religious discrimination

After releasing two drafts last year which generated heated public debate, the Commonwealth Government is expected to introduce its Religious Discrimination Bill 2019 to Parliament this year. As currently drafted, the Bill seeks to:

• prohibit discrimination on the grounds of religious belief or activity in certain areas of public life, including work, education, goods and services, accommodation and sport
• protect statements of religious belief from the operation of other anti-discrimination laws (subject to statements being made in good faith and other caveats)
• prohibit large businesses from imposing conditions of dress standards, appearance and behaviour that restrict employees’ religious expression in their private capacity (unless the conditions are necessary for avoiding unjustifiable financial hardship), and
• allow health practitioners to conscientiously object to providing health services on the basis of their faith (provided the objection is to a treatment and not a person).

The Bill also contains certain exemptions for religious entities, including schools, charities, hospitals, aged care facilities, accommodation providers, camps and conference centres.

Ripe for revision: The Government period for accepting submissions on the Bill’s current draft closed on 31 January 2020. More than 6000 submissions were received. At the time of publication, these submissions had not been made publicly available. There will be more changes on the way, so stay tuned.

Modern slavery

Last year saw the commencement of the Commonwealth’s Modern Slavery Act 2018, requiring entities with an annual revenue of over $100m to annually report on actions taken to assess and address modern slavery risks in their operations and supply chains. Reporting entities with a July to June financial year will need to provide their first reports – known as ‘modern slavery statements’ – by December 2020. The Government will then make the statements publicly available through an online central register.

NSW’s Modern Slavery Act 2018, which similarly requires entities to report on modern slavery risks, is still not in force despite being passed in June 2018 to become the first modern slavery legislation in Australia. The NSW Act goes further than the Commonwealth’s with a lower reporting threshold of $50m and penalties of up to $1.1m for non-compliance. However, defects in the Act have led to its indefinite deferral by Parliament and referral to the Standing Committee on Social Issues for inquiry. The Committee’s recommendations are due on 14 February 2020.

2020 Vision: Have you determined whether the new modern slavery laws apply to your workplace? If so, have you started assessing your supply chains and operations for any modern slavery risks for the first reporting period?

Industrial manslaughter

New industrial manslaughter laws are expected to commence in Victoria and the NT later this year after being passed in November 2019.

These jurisdictions will be joining the ACT and Queensland who have had industrial manslaughter laws in place since 2004 and 2017 respectively.

Although not yet law, the WA Government has introduced industrial manslaughter offences in its Work Health and Safety Bill 2019, which was tabled last year and also seeks to bring WA’s work health and safety laws in line with the national harmonised model legislation.

If passed into law, this would leave the Commonwealth, NSW, SA and Tasmania as the only jurisdictions without industrial manslaughter laws. Although NSW does not intend to introduce such laws, it has introduced amending legislation to clarify that the death of a person at work can, in circumstances, constitute manslaughter under the NSW Crimes Act 1900.

Look and learn: Your WHS practices are critical to reducing risk.  

Labour hire licensing

To address the exploitation of workers in the labour hire industry, more jurisdictions are expected to introduce licensing schemes to prohibit labour hire providers from operating without a licence that imposes ongoing operating and reporting conditions.

With Victoria, Queensland and SA already having schemes in place, the Commonwealth, the ACT and WA have proposed introducing schemes of their own. The Commonwealth’s proposed registration scheme is expected to focus on four high-risk industries: horticulture, meat processing, cleaning and security. The ACT and WA are yet to provide details on their respective proposals. SA has also introduced amending legislation to narrow the scope of it scheme to identified high-risk industries.

NSW, Tasmania and the NT have not announced any plans to introduce such schemes.

What needs doing?

Employers should be thinking about whether any of these developments will affect their workplace and what needs to be done before any new laws come into effect.

Follow us to receive updates on each of these topics and many others throughout the year as more developments unfold.

Christa Lenard
Partner
+61 2 9169 8404
[email protected]

Les Maroun
Associate
+61 2 9169 8414
[email protected]

January 23, 2020

By Lucy Shanahan, partner

From 1 March 2020, changed annualised salary provisions in 22 modern awards will apply.  The new provisions impose greater obligations on employers who rely on award based annualised salaries to satisfy award entitlements including record keeping, auditing and employee consent. It is important that you take steps now to ensure you are compliant with the provisions that will apply from 1 March 2020.

Who do the new provisions apply to?

The new provisions will apply to any employer covered by the modern awards listed below. The new provisions only apply to full time employees, and only apply to employers who rely on an annualised salary arrangement under the terms of an award to satisfy award conditions.  The model clauses are not intended to invalidate or regulate terms of common law contracts which ‘buy out’ or otherwise compensate for award entitlements.

The Full Bench of the Fair Work Commission has introduced four different model clauses which apply to different modern awards. Model Clauses 1 and 3 apply most broadly as set out below.

Model Clause 2 applies to the Hospitality Industry (General) Award 2010 in respect of employees classified as managerial staff and Model Clause 4 will apply to the Restaurant Industry Award 2010, Marine Towage Award 2010 and Hospitality Industry (General) Award 2010 in respect of non-managerial staff.  In this Insight we focus on Model Clauses 1 and 3.

What are the new provisions?

Model Clauses 1 and 3 require an employer to keep specific records and to undertake an audit either every 12 months or on termination of an employee’s employment.

The audit requires employers to calculate the amount of remuneration that would have been paid to the employee under the modern award and compare that amount to the annualised salary paid.  Any deficiency must be addressed within 14 days.

Under Model Clause 1, an employee must be advised of the information set out below in writing. A record of the information must also be kept.

For those employers who are covered by Model Clause 3, the information set out below must be contained in a written agreement between the employer and the employee. A copy of the written agreement must be retained as a time and wages record.

Any hours worked in excess of the outer limits are not covered by the annualised salary and are paid for in accordance with the award.

In addition, under Model Clause 3, an annualised salary arrangement can be terminated by:

• a mutual written agreement between the parties at any time, or
• either party providing written notice to the other 12 months before the agreement ceases to operate.

What do you need to do?

1 March 2020 is fast approaching. You need to identify whether you are required to comply with the terms of any of the Model Clauses, and then take steps to ensure that you are compliant.  This will involve preparing relevant communication to employees and may involve making changes to your record keeping and payroll procedures.

Remember that you need to work out first whether or not you need to make any changes. Don’t panic! We can assist you to ascertain if the changes apply to you and help you to prepare for these changes.

Lucy Shanahan
Partner
+61 2 9169 8405
[email protected]

November 28, 2019

By Duncan Fletcher, partner and Oliver Marshall, lawyer

Western Australian Work Health and Safety Bill 2019

In a snapshot

• The long awaited Work Health and Safety Bill 2019 (WA) was tabled in the Western Australian Parliament on 27 November 2019 and is based on the harmonised model Work Health and Safety Act.
• The WA Bill introduces two separate industrial manslaughter offences and has an expanded application to potentially all risks to health (broadly defined).
• Insurance policies with indemnities will need to be reviewed or risk being void.

A little more detail

On 27 November 2019, the Work Health and Safety Bill 2019 (WA) (WA Bill) was tabled in the Western Australian Parliament. The WA Bill applies generally to all workplaces in Western Australia and makes provision for specific industries in separate sets of proposed regulations. Currently, there are three sets of proposed regulations, one covering general workplaces in WA, one set will cover the mining industry and another set will cover the petroleum and geothermal energy industries. The regulations however remain subject to the outcomes of the public consultation period which closed on 26 November 2019.

The most notable feature of the WA Bill is the introduction into WA of the criminal offence of industrial manslaughter, under which corporations and individuals, including directors or other corporate officers may be convicted. The WA Bill introduces two separate industrial manslaughter offences. The first being Industrial manslaughter – crime offence, carrying the maximum penalties of imprisonment for 20 years for an individual and a fine of $10 million for a body corporate. This offence includes the element that the accused person engaged in conduct knowing it was likely to cause the relevant death and the person engages in that conduct in disregard of the likelihood of death.

The second offence is the Industrial manslaughter – simple offence and is punishable by the maximum penalties of imprisonment of up to 10 years for an individual and a fine of $5 million for a body corporate. The simple offence contains only 3 elements, centring on the causation of death by the PCBU.

However in in order for an officer of the Person Conducting a Business or Undertaking (PCBU) to be convicted of either industrial manslaughter offences under the WA Bill, it must also be proven that the PCBU’s conduct was attributable to any neglect on behalf of the officer, or that it was engaged in with the officer’s consent or connivance.

The WA Bill also expands the scope of application by defining “health” in its broadest sense to cover both physical and psychological health. This means that the WA Bill potentially covers psychological risks to health such as stress, fatigue and bullying.

Another notable feature of the WA Bill is that it deems certain parts of insurance policies of no effect if they indemnify a person for liability under the WA Bill. This means that only those parts of insurance policies addressing liability for penalties under the WA Bill will be deemed void, rather than being “illegal” as announced by the WA Industrial Relations Minister Bill Johnston in this press release and reported in some commentary.

The text of the WA Bill is available on the WA Parliament Website together with a comprehensive explanatory memorandum.

Victorian and Northern Territory Offences

The Victorian parliament today passed the Workplace Safety Legislation (Workplace Manslaughter and Other Matters) Act 2019 (Victorian Amendment Act).

The primary objective of the Victorian Amendment Act is to introduce the offence of industrial manslaughter in Victoria, which was an election commitment by the Andrews Labor Government. The Victorian Act does so whilst also providing the highest monetary penalty under a work health and safety law in Australia at $16.5 million.

The Victorian Amendment Act creates a single offence of Workplace Manslaughter applicable to both PCBUs and officers of PCBUs. The offence is structured so that negligent conduct is the central element, supported by safety duty and causation elements. That is, an accused person will be guilty if they engage in negligent conduct, that breaches an applicable safety duty owed to a person and the conduct causes the death of that person.

However, unlike the WA Bill, the Victorian Amendment Act does not require an additional element of neglect, consent or connivance to be proven for an officer to be convicted of the offence. Rather, the Victorian Amendment Act simply recreates the elements of the offence applicable to PCBUs and applies them to “a person who is an officer of an applicable entity”, being corporations, unincorporated associations and partnerships.

Meanwhile, the Northern Territory parliament also introduced an industrial manslaughter offence in the Work Health and Safety (National Uniform Legislation) Amendment Act 2019 (NT Act). The NT Act passed into law on 27 November 2019 and will commence on a date fixed by Gazette notice.

The offence under the NT Act is structured similarly to the Victorian Amendment Act, however it includes an additional requirement to prove recklessness or negligence about the relevant conduct causing the death. Pursuant to the NT Act, the industrial manslaughter offence is punishable by imprisonment for life for an individual or $10.2 million for corporations.

Victoria and the Northern Territory now join Queensland and the Australian Capital Territory as the Australian jurisdictions with industrial manslaughter offences in force.