Redundancy and the redistribution of duties

Under the Fair Work Act 2009 (Cth) (the Act), a business cannot simply make an employee redundant without cause. The redundancy must be genuine and the employer must comply with their obligations under the Act and any employment agreement. In assessing whether a redundancy is genuine regard is to be had to section 389 under which there are three general criteria:

  1. The employer must no longer require the employee’s job to be performed by anyone because of changes in operational requirements;
  2. The employer must comply with any consultation obligations it has under a modern award or enterprise agreement; and
  3. Redeployment within the employer’s business or an associated entity must not be reasonable in the circumstances.

An example of the assessment of redundancy procedures by the Fair Work Commission (FWC) is the case of Broudou v Eurolinx Pty Ltd [2019] FWC 4469. In this case a Technical Service Manager challenged his redundancy alleging that it was an unfair dismissal on the basis that the redundancy was not genuine. The employee claimed that given duties of his role still existed within the business, as demonstrated by the redistribution of tasks to other employees, there could be no redundancy.

The employer responded that the redundancy was a result of a downturn in business, a 15% reduction in sales and a 15.7% reduction in service activity, which necessitated a reorganisation of the business. As a result, the employee’s duties were distributed amongst four other employees rendering the technical service manager role redundant. The basis for this decision was nothing more than ensuring the sustainability of the business in face of the commercial challenges.

Deputy President Boyce held that section 389 is not concerned with whether duties survive, rather it is concerned with whether the job performed by the employee exists. Whilst a job is “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employers’ organisation, to a particular employee”, where a redistribution results in no continuing need for someone to perform a job, that job will not be required by the employer.

The Deputy President stated:

“The law more-or-less permits an employer to structure their business as they see fit. In this instance, the Fair Work Commission can take no recourse against what is clearly within the bounds of managerial discretion.”

On this basis, and in the absence of evidence that the employer did not comply with any obligations regarding redundancy or that there were reasonable redeployment or retrenchment options, the Deputy President concluded that the redundancy was genuine.

Court rejects bankrupt’s international travel request

A recent decision of the Federal Circuit Court has refused a bankrupt’s application to travel overseas after the bankrupt demonstrated total disregard for the obligations arising under his bankruptcy status.

On 28 November 2019, Sher Khan made an application under section 27 of the Bankruptcy Act seeking review of a decision by the trustee which prohibited him from travelling overseas. In doing so, Mr Khan gave evidence that he wished to travel abroad and that he had done so previously.

The trustee submitted that Mr Khan’s application was refused because his conduct had been inconsistent with his obligations as a bankrupt. In this respect, Mr Khan had failed to disclose information pertaining to proceedings that were underway in New Zealand in respect of his assets and in which he had claimed $3 million.  Further, Mr Khan had treated a charity as if it were his own funds.

In deciding the case, the court was particularly concerned by the fact that in the New Zealand proceedings, Mr Khan had supplied an affidavit in which he claimed that he was not bankrupt. Accordingly, Judge Street concluded that Mr Khan’s false affidavit demonstrated that he had no understanding of his obligations as a bankrupt.

Ultimately, his Honour held that it was not appropriate to permit a grant of leave to the applicant to travel overseas. This was on account of the concerns expressed by the trustee and Mr Khan’s apparent lack of understanding surrounding his bankruptcy status and his subsequent obligations.

Mind Your Language

In the recent case of Boris v Metcash Trading Limited T/A Metcash [2019] FWC 3993, the Fair Work Commission assessed an unfair dismissal claim by an employee who claimed that his swearing in a formal meeting was “conversational swearing”, effectively that when he did swear in conversations it was not directed at anyone and that the workplace was one where “people use intemperate language and tensions.”

The employee was a part-time store person for Metcash working 20 hours and was dismissed for serious misconduct; namely his conduct at a meeting regarding a confrontation he had with a supervisor several days earlier.

The employee had failed to comply with a supervisor’s instruction to attend a debrief meeting later that day. The employee recorded this instruction despite the supervisor’s instruction not to, claiming that the recording was done to demonstrate requests for advanced notice and time to arrange a representative to attend. Evidence from other Metcash staff provided that there was historical antagonism between the employee and this supervisor.

In accordance with the wishes of the employee the performance review was held several days later. In arranging this meeting, the supervisor texted the employee and called him three times on his day off without leaving a message.

Metcash claimed the employee was aggressive, intimidating and his discourse was laden with expletives, at one point saying to his supervisor: Under no circumstances are you to contact me out of work hours for any reason whatsoever. If you ever harass me out of work hours again, I will tell you exactly what I think of you and your mother.This conduct in conjunction with the prior confrontation and poor behaviour were used as the basis for termination.

At the hearing the employee admitted to the swearing and making the reference to the supervisor’s mother. The employee however submitted that the swearing was not directed at anyone and that the workplace was one that permitted swearing. The employee further submitted that the reference to the supervisor’s mother was borne of frustration with the supervisor’s conduct toward him. The employee admitted that while his language and comments warranted censure and discipline, this did not constitute a sound reason for dismissal in light of all the case facts.

Deputy President Beaumont noted that:

“Apparently, ‘conversational swearing’ appears to be dialogue punctuated by the occasional or perhaps often cited profanity … I assume that the reference to ‘conversational’ is because the offensive words are buffered by a tone and voice volume that would otherwise be considered ‘conversational’. Hence, to speculate, such profanities become accepted part of the meeting vernacular because they are couched in such a way.”

However, this argument was rejected:

“I do not accept that ‘conversational swearing’ … is acceptable conduct in a meeting where conduct issues are being discussed, or allegations are being traversed, or a person has been asked to show cause. Whether that person is the employee against whom allegations are made, or the person facilitating or running the meeting, makes no difference.”

On this basis, the employee’s conduct was held to be in breach of the Metcash Code of Conduct which constituted a valid reason for dismissal.

In the contrasting case of Matthews v San Remo Fisherman’s Co Operative [2019] FWC 4877, the FWC did not find that swearing by an employee during a confrontation with a general manager was aggressive, abusive, or enough to constitute a valid dismissal.

In that case the employee, a pelican feeder, had been approached by the Co-Op general manager on several occasions to request details about revenue raised from badge sales by a separate entity known as the Pelican Research Group, of which the employee was a member. The employee denied these requests each time until he was asked a similar question by a visitor. The employee subsequently confronted the general manager concerned that this was a set up.

During the confrontation the employee said to the general manager “what you did was very f***ing disrespectful”, to which the general manager replied that it was “effing offensive that you would make such an accusation”. The employee was subsequently dismissed by email due to his refusal to disclose information about the badge sale, his offensive accusation toward the general manager and his conduct in swearing at the general manager.

Commissioner Gregory was not satisfied any of the above reasons constituted a valid reason for dismissal. On the point of the employee’s swearing, the Commissioner found that the employee’s language was used in frustration and not directed with any aggression or threat, and it was in the context of a robust discussion between employees who otherwise had a good relationship. In addition, Commissioner Gregory held that there was little distinction between the terms “f***ing” and “effing” and that it was simply an exercise in hair splitting to suggest that the general manager’s language was somehow more restrained or differing in intent.

From these cases we can see that the general workplace culture, as well as the relationship between employees and/or employers and the context of any conversation, will determine what is and isn’t acceptable conduct. Notwithstanding this, it is very apparent that abusive or threatening language is wholly unacceptable and will not be accepted in any circumstances.

Whilst swearing may be an aspect of certain workplace cultures, it does not excuse inappropriate or abusive swearing directed at others and is a valid reason for dismissal as concluded by the Fair Work Commission (FWC) in Pridham and Rose v Viterra Operations Pty Ltd T/A Viterra [2019] FWC 1018.

10 tips for effective settlement agreements

When parties to a dispute reach a compromise, it is important that the terms of the compromise are recorded in writing and that the settlement agreement is binding.

A settlement agreement recognises that the parties to a dispute have formulated a resolution and signals the end of the dispute. The agreement may be entered into at any time before a proceeding commences, and if proceedings have commenced, at any time before judgment is handed down.

Important Considerations

In drafting a settlement agreement, it is important to have regard to some key considerations:

    1. The agreement should clearly state the terms of settlement;
    2. The agreement should clearly state and identify the parties to the agreement, to ensure the person executing the agreement has authority to execute. This is particularly so where a party is a company or a Trustee of a trust;
    3. Any conditions to the settlement that are required to be met prior to either payment of the settlement sum or the proceedings being discontinued;
    4. The timing of the payment of a settlement sum and also the consequences of non-payment;
    5. Where a settlement sum is being paid, tax implications may arise and need to be considered;
    6. Generally settlement agreements include a unilateral release of claims from both parties and it should state the extent of the releases given;
    7. If proceedings are on foot, the settlement agreement should include clear terms on the discontinuance of the proceedings including whether there will be any order as to costs;
    8. The agreement should be clear on which party is bearing the cost of preparing the agreement. Generally, each party bears their own costs;
    9. Commonly, settlement agreements include an obligation that the parties must keep the terms of the agreement confidential, except for limited disclosure purposes;
    10. The settlement agreement should contain a term with respect to the governing law of the agreement should a dispute/breach arise.

Effective Settlement Negotiations

Here at JCL, we strive to understand our client’s needs and provide the best overall solution. We encourage mediation and compromise. If the parties to a dispute can reach a compromise and avoid the costs, time, and stress of having to go to court, this is always the best result. All parties should feel comfortable with the outcome however, compromise is based on give and take.

Settlement negotiations can be daunting and overwhelming. Here are some practical tips for effective settlement negotiations.

Before entering into settlement negotiations:

  1. Have an understanding of the outcome you or your client are hoping to accomplish. What is the most optimistic result that realistically could be achieved? Also importantly, what is your “bottom line”. Identifying these two positions will give you a direction and focus and will enable you to negotiate towards a specific goal;
  2. Be prepared. Know your case;
  3. Take into consideration the interests and goals of the other party and what outcome they are trying to achieve. This will assist in negotiating a resolution.

During settlement negotiations:

  1. Do not get personal. Focus on resolving the problem;
  2. Ask questions and understand the other party’s position. There may be valid reasons limiting the other side’s ability to reach an agreement. There may be other issues hindering a resolution which once known, can be discussed and resolved;
  3. Explore alternatives to a monetary only resolution;
  4. Do not leave the room until the agreement is recorded in writing. You will likely not have enough time to prepare a settlement agreement, but have the parties sign a document that sets out the general terms that have been agreed.

Are Queensland roads safer as from 1 February 2020? Probably not!

Under stricter penalties introduced from 1 February 2020, Queensland drivers caught illegally using a mobile phone while driving will receive a $1000 fine and 4 demerit points.  Keeping in mind that drivers on an open licence receive a sanction after accumulating 12 demerit points within a 3-year period and all other licence types after accumulating just 4 demerit points, the penalties are significant. But will the changes work to make our roads safer or will they simply raise more revenue?

Relevantly, section 300 of the Transport Operations (Road Use Management – Road Rules) Regulation Queensland provides:

‘Holding’, although not defined in the Act, is ordinarily defined as gripping or grasping.  Presumably wearing a watch with phone capabilities will not be ‘holding’ but tapping the watch might be.

Accordingly, the way in which the legislation is drafted suggests that conduct will not be illegal unless the driver has physically picked up, and is holding the phone in their hand.

It could be argued that placing a phone in a dash mount, and tapping the screen to accept calls or change music, would not be in breach of the law but it could be.  Similarly, despite subsection 2(b), placing a phone on the passenger seat or in the driver’s lap, and reading a text message would not appear to constitute a breach unless the driver picked up the phone to read it.

On the contrary, if you enter a drive through and use your iPhone to pay for your meal with Apple Pay, you would appear to have broken these laws upon picking up your phone.

It is submitted that the law, as it is currently drafted, is therefore ineffective in achieving its objective of ensuring safer roads.  There is no doubt that a person taking their eyes off the road to read a text message, even with both hands on the wheel, is far more dangerous than one who has pulled up at a drive through and opted to tap their phone, rather than credit card, on the eftpos machine.  But what of a person who takes their eyes off the road to change the radio or even adjust their air-conditioning? That is not an offence but might have the same effect.

Drivers do get distracted whilst driving but laws cannot be enacted which will prevent all distractions.  It is clearly appropriate to introduce a law to punish inappropriate use of mobile devices, as we all too often see people texting while driving.  However, the penalties seem too harsh, particularly when there are similar distractions that cannot be avoided.  Before introducing these laws, the government ought to have first considered drafting the legislation to redact the requirement that the driver must be holding the device. The provision is unnecessarily restrictive and provides limited further protection to Queensland’s drivers.  Instead, in implementing more carefully considered legislation, regard ought to be had to the practical consequences of the law.