Workplace and Employment Law - Significant Events & Predictions

Developments and Significant Events in 2014:

• Commonwealth Bank of Australia v Barker [2014] HCA 32 – The High Court unanimously found that employment contracts in Australia do not contain an implied term of mutual trust and confidence. Courts will only imply terms into contracts to ensure the business efficacy of the contract. An implied term of mutual trust and confidence in employment contracts is not necessary, particularly considering the statutory protections against unfair dismissal. This is an important decision for employers as such a term would significantly widen causes of action available to employees against their employers. It should be noted that despite this decision, such a term could still be implied in different factual circumstances so employers should be crystal clear as to whether or not benefits are discretionary or contractual.
• Fair Work Amendment (Bargaining Processes) Bill 2014 (Cth) – the Coalition’s Bill aims to make two key changes to our Fair Work regime. First, the Bill seeks to tighten the circumstances in which protected industrial action can be taken by unions and workers. This would restore the legislation’s intended purpose for strikes to be used as a last resort. Second, the Bill seeks to ensure the Fair Work Commission is satisfied that improvements to productivity in the workplace are discussed during the bargaining process. Employers will welcome both these proposed developments. The Bill has been referred to the Senate Education and Employment Legislation Committee, with a report due 25 March 2015.
• Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41: The High Court found an employee was lawfully dismissed for abusive conduct during a lawful protest. The employee engaged in protected industrial action by protesting onsite, holding a sign that included the word ‘scabs’. The employer terminated the worker’s contract for breaching the company’s Code of Conduct, as ‘scabs’ was an offensive term which intimidated other workers.
  The majority of the High Court held the dismissal was not adverse action due to the employee taking industrial action. Instead, they accepted the employer’s evidence that the reason for dismissal was because the employee’s actions breached the Code of Conduct.
• Last year, the Fair Work Commission began dealing with matters under its new anti-bullying jurisdiction. The Application by Ms SB [2014] FWC 2104 shed some light on how the Commission will interpret the legislation. Overall, the interpretation was good news for employers who were concerned that allegations would be made against them when supervisors or managers are simply trying to supervise, manage, control, counsel or discipline staff. As long as management’s actions are reasonable and carried out in a reasonable manner, no bullying complaint should be made out. Additionally, the Commission has adopted a pragmatic approach by considering a course of action in its entirety, rather than segregating each individual step of a course of action.
• The Fair Work Commission also began arbitrating general protection dismissal disputes. We will keep you informed of significant decisions.
• The Superannuation Guarantee increased from 9.25% to 9.5% on 1 July 2014. This will increase to 10% in 2021.
• On 1 July 2014 the following thresholds relating to industrial relations were indexed:
  • The unfair dismissal income threshold has increased from $129,300 to $133,000.
  • The compensation cap for unfair dismissal claims has increased from $64,650 to $66,500.
  • The minimum wage has increased $0.50 per hour from $16.37 to $16.87.
  • Employees that fall under a modern award had their pay indexed 3%.
• The Commission of Audit suggested the Fair Work Ombudsman and Commonwealth Ombudsman merge roles. However, the Government did not act on this recommendation.
• The Coalition have introduced a $10,000 incentive for employers that employ people over 50 years of age who have been on social welfare for 6 months. The Restart Program has failed to meet its objectives with only 500 people benefiting from the scheme compared to its projected target of 32,000 per year.
• As of 1 October 2014, organisations with more than 500 employees have been required to implement one or more policies regarding gender equality, such as equal pay between men and women.

Predictions for 2015:

• The Royal Commission into Trade Union Governance and Corruption tabled its interim report on 19 December 2014 which found a number of serious flaws in the current system. The Minister for Employment has expressed his plans to create a Registered Organisations Commission to combat criminality in trade unions and ensure there is a clean trade union movement. Further hearings will be conducted this year before the release of the final report.
• The Government is transforming its controversial paid parental leave scheme into a ‘holistic families package’. The final product is still unclear, however it is anticipated the planned full replacement salary of 6 months (limited to $50,000) will be decreased. The Bill has received significant opposition due to tight economic conditions. Nevertheless, parental leave requirements may become more onerous for employers if the Bill is successful.
• Building and Construction Industry (Improving Productivity) Bill 2014 (Cth): The most significant change is the proposal to bring back the Australian Building and Construction Commission (ABCC). The Bill also aims to limit industrial action and unlawful picketing, while increasing penalties as a deterrent.
• The major changes to employment law in 2015 surround builders, as the Government has also proposed a new Building Code. The code will outline the standard of workplace relations conduct required of contractors to be eligible to work on Federal Government funded projects. The code has a retrospective application to enterprise agreements made on or after 24 April 2014.
• Employers with more than 100 employees will incur additional gender reporting requirements on 1 April 2015. The report must include a number of Gender Equality Indicators to help identify and abolish discrimination. Contact us for further information on your reporting requirements.
• The Productivity Commission’s review of the Fair Work Act 2009 (Cth) is expected to be completed by November 2015. Interested parties can make submissions as to what has and hasn’t worked under the current legislation. The Commission will then make recommendations on how to improve the current system based on the findings. It is expected that very little will change in industrial relations over 2015. However, the government is setting itself up for more significant changes if elected for another term.
• A draft of the Commission’s first issues paper has recently been leaked. The paper states that five extensive documents will be published, including:
  1. an overview of the system including its objectives and faults;
  2. issues relating to pay and conditions, with consideration to minimum wages, the award system and the NES;
  3. the bargaining framework and industrial disputes;
  4. employee protections; and
  5. other workplace relations matters (including an analysis of the institutions under the system, attached compliance costs and arrangements for public sector employees).
• The due date for submissions was 13 March 2015, by email to workplace.relations@pc.gov.au
• The recent four year review of modern awards by the Fair Work Commission found a number of inconsistencies between modern award provisions and the National Employment Standards. The Commission is currently drafting amended clauses to cure these inconsistencies. These clauses will be made available throughout the following months with an opportunity for comment before the Commission holds further hearings. Further information about the four year review and the amendment process can be found on the Fair Work Commission’s website.