Employment

Tax agent deregistered after overlooking personal affairs

In the recent matter of Madz and Tax Practitioners Board [2019] AATA 4773, the Administrative Appeals Tribunal upheld a decision of the Board after it cancelled a tax agent’s registration for overlooking his personal affairs.

Mr Stephen Madz was a tax practitioner, who in May 2019 had his registration terminated by the Tax Practitioners Board for breaching the Code of Professional Conduct pursuant to section 30-30 of the Tax Services Act 2009. Mr Madz was also prevented from applying for registration for a period of 18 months pursuant to section 40-25(1) TASA. Mr Madz subsequently applied to the AAT seeking that he be reinstated.

In doing so, Mr Madz contended that his failure to lodge two income tax returns was the result of a ‘perfect storm’ of events, which ensued after he moved house in November 2015. Namely, upon his move, Mr Madz had no telecommunications facilities for 57 days and thereafter, continued to suffer poor connectivity until early November 2019. Further, there was a period in which Mr Madz did not receive mail from the ATO, as it was being sent to his former address. Mr Madz emphasized that he continued to lodge his clients returns during this period.

The Tribunal accepted that Mr Madz had serious telecommunications difficulties which affected his ability to conduct his business after his move. In doing so, it acknowledged that this resulted in him reasonably prioritising meeting the needs of his clients and the requirement of the ATO in relation to those clients.

However the Tribunal relied on Su v Tax Agent’s Board of South Australia (1982) 13 AR 192, noting that this could not excuse his failure to appropriately conduct his own affairs. In Su, the court noted that:

“If a doctor is convicted of a serious offence relating to drugs, his name may be struck from the register because the offence is inconsistent with the task which medical practitioners perform. If a tax agent is convicted of an offence of tax evasion, his name may be taken from the register, for tax evasion is inconsistent with the role which tax agents are called upon to perform.”
As such, the Tribunal held that the Board was justified in cancelling Mr Madz’s registration, noting that his non compliance was exacerbated by his failure to comply with an Outstanding Lodgement Order issued by the ATO pursued to s 30-20 of the code and that the outstanding returns and BAS’s had still not been lodged by the date of the hearing.

Despite this, the Tribunal reduced the period for which Mr Madz was prohibited from reapplying for registration from 18 months to 12 months.

by James Conomos Lawyers

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.

by James Conomos Lawyers

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.

by James Conomos Lawyers

Foodora rider awarded $15k for unfair dismissal

The Fairwork Commission has handed down a highly important decision in the matter of Joshua Klooger v Foodora Australia Pty Ltd [2018] FWC 6836. Mr Klooger was a delivery rider for Foodora in Melbourne who had his employment terminated after he spoke out against pay rates and conditions in the Foodora structure and gig economy generally.

Mr Klooger commenced working as a 'Corporate Rider' (delivery rider) with Foodora in March 2016. Until his dismissal he held various titles/positions such as 'Rider Captain' and 'Driver Manager'. When Mr Klooger first began working as a rider in 2016, workers would select shift times in certain geographical locations through Foodora’s app or website. Access to shift selection was not restricted or preferenced except for users designated as 'Captains'. In October 2017, Foodora introduced a new system of shift selection. This system would use certain performance metrics, such as number of orders delivered per hour, to rank users into a series of ‘batches’ that would determine when a user was able to select upcoming shifts. Additionally, Foodora had been progressively reducing payments for new riders/drivers since about July 2016 to the point where an hourly rate was eliminated and replaced by a flat rate of $8.00 per delivery in February 2018.

Shortly after the payment rate had reached $8.00 per delivery, Mr Klooger made a complaint about pay rates and conditions at a public rally and on an interview with the television show 'The Project'.  Following these appearances, Foodora management requested Mr Klooger hand sole control of a mobile messaging app chat group to Foodora. When Mr Klooger failed to comply with these requests, Foodora advised they had decided to no longer contract his services, effective immediately. In response Mr Klooger filed an application for an unfair dismissal remedy pursuant to s 394 of the Fair Work Act 2009.

Foodora raised two lines of argument, first that Mr Klooger was an independent contractor and not entitled to unfair dismissal protections, and second even if he were an employee he was dismissed for a valid reason. In establishing Mr Klooger’s status as an independent contractor counsel for Foodora pointed to the agreement between the parties which was a standard form contract titled “INDEPENDENT CONTRACTOR AGREEMENT” expressly stipulating Mr Klooger was engaged as an independent contractor and not an employee. Other indicators of contractor status included: the level of control Mr Klooger reserved over the amount of shifts he did or did not take in a week, that the service agreement was not exclusive, and the ability to have someone else discharge the obligations. (Foodora drivers/riders could have someone other than themselves perform deliveries with permission).

In terms of the validity of the reason for dismissal, Foodora pointed to its request for Mr Klooger to handover administrative control of the chat group and Mr Klooger's failure to do so as a valid reason for his dismissal under s 387(a).

Counsel for Mr Klooger disputed both assertions arguing that Mr Klooger worked directly for Foodora and not as part of a distinct, independent trade or company of his own. Secondly the reason for dismissal was not valid as it was unclear what the actual reason was, was not based in fact, and failed to give Mr Klooger any real opportunity to respond.

Commissioner Cambridge weighed a number of factors such as the nature of work and manner in which it was performed, the terms and terminology of the contract, ability to delegate work, level of control over working conditions, expenses/capital investment on the part of Mr Klooger and the extent of remuneration received. On these factors the Commissioner found that the proper characterisation of that relationship was that of employee-employer, in the Commissioners own words: “the applicant was not carrying on a trade or business of his own, or on his own behalf, instead the applicant was working in the respondent’s business as part of that business. The work of the applicant was integrated into the respondent’s business and not an independent operation.”

On the issue of the dismissal, the Commissioner rejected the arguments of Foodora that the dismissal was based on a valid reason. Referring to an email chain between Foodora managers on 28 February and 1 March 2018, the Commissioner determined that the substantive and operative reason for Mr Klooger’s dismissal was his conduct involving public agitation and complaint about the terms and conditions that Foodora imposed on its delivery riders/drivers.

As Foodora is currently in voluntary administration, Mr Klooger was unable to seek reinstatement, rather he sought damages. The Commissioner agreed with this remedy and determined, based on an average weekly remuneration, that Mr Klooger be awarded the sum of $15,559.00 as compensation.

by James Conomos Lawyers

Employee Reassignment Sufficient to Reduce Bullying

In Mr Andrew Hamer [2018] FWC 6037, the Fair Work Commission (“the Commission”) found that the reassignment of an employee alleging work place bullying was an acceptable means of reducing the risk of the employee experiencing further bullying.

Mr Hamer was employed by the Australian Taxation Office (“ATO”) in Perth. After making allegations of bullying against three other employees of the Perth office, Mr Hamer made an application under section 789FC of the Fair Work Act 2009 for an order to stop the bullying.

At a conference conducted by the Commission, representatives of the ATO advised that Mr Hamer had been moved to a temporary position where he was not required to report to, or engage with, the three people against whom bullying was alleged. The ATO also agreed to attempt to find a permanent position for Mr Hamer (at the same level) where he would continue to be separated from the three. After successfully finding a position for Mr Hamer, the ATO wrote to the Commission advising that Mr Hamer was to be transferred and that the s 789FC application could therefore be withdrawn. However, Mr Hamer sought determination of the application.

In submissions, Mr Hamer expanded upon the type of bullying experienced, claiming it was done for the purpose of having him charged and convicted of a breach of the ATO’s Code of Conduct. Further, he alleged that the ATO had failed to properly investigate his claims, asserting that they did not comply with policy and apparently sided with the three parties against whom bullying was alleged.

Despite recognising Mr Hamer's concerns, the Commission was not satisfied there was a risk he would continue to be bullied by the persons named in the Application. In doing so, the Commission noted that a number of measures taken by the ATO significantly reduced the risk of further bullying.  These measures included:

• Mr Hamer now working in a different business line that had no crossover with the named person’s business lines;
• Mr Hamer working on a different floor in the office; and
• a provision that teams in other states would interact with Mr Hamer or the named persons if there was any need for the two lines to cross.

Ultimately, although the Commission deemed the ATO's actions to be acceptable in reducing the risk of future bullying, employers should be careful to ensure that the measures taken in such situations are not perceived as an act of reprisal or victimisation. The reassignment of an employee who has filed a complaint may be viewed as such.

by James Conomos Lawyers

Full Federal Court: 'Casual' Employee Entitled to Annual Leave Payments

A recent decision in the Full Federal Court determined that a labour hire employee was entitled to annual leave payments. Typically, casual employees are not entitled to the same entitlements as a permanent employee and are instead paid casual loading. However, following this decision in WorkPac Pty Ltd v Skene [2010] FCAFC 131, simply paying casual loading and stating an employee is a casual may not be sufficient for an employee to be considered casual under the National Employment Standards (NES).

Case Facts

Mr Skene was employed by WorkPac (a labour hire company) as a dump-truck operator on mining operations in Central Queensland. Mr Skene was first employed from 17 April 2010 to 17 July 2010 in a “drive in, drive out” (DIDO) position, and then again from 20 July 2010 to 17 April 2012 in a “fly in, fly out” (FIFO) position working 12 hour shifts on seven days on, seven days off roster arrangements with little flexibility. During Mr Skene’s second stint his roster was at times provided 12 months in advance.

Upon his termination in 2012, Mr Skene was not paid money in lieu of unused annual leave which he challenged arguing that he was in fact a permanent employee under the NES and therefore entitled to such a payout. WorkPac argued that because Mr Skene had executed a document entitled “Casual or Fixed-Term Employee Terms and Conditions of Employment” and his employment contract provided he was employed on a casual basis, Mr Skeen should be deemed a casual employee.

Mr Skene was successful at first instance before the Federal Circuit Court and WorkPac were ordered to pay compensation and interest for the unused leave on a full loaded pay rate. WorkPac subsequently appealed this decision to the Full Federal Court.

Full Court Findings

The basis of the case was whether Mr Skene’s employment fell within the concept of casual employment. As there is no definition for “casual employee” in the Fair Work Act 2009 (Cth) the Court looked to the common law, modern awards and enterprise agreements to determine if there was a uniform understanding. The Court deemed that no such understanding existed in the context of awards of agreements instead relying on the common law to provide a definition. In doing so the Court established several “indicia” of employment:

• Irregular work patterns;
• Uncertainty as to the period over which employment is offered;
• Discontinuity; and
• Intermittency of work and unpredictability.

On this basis the Court held that an assessment of “the real substance, practical reality and true nature of the relationship” must be undertaken rather than simply adopting the description the parties have given to the relationship.

The Court observed that a ‘casual employee’ describes a type of employment that in part takes meaning from other recognised types of employment. Noting that the point of distinction between full-time and part-time employment is the ongoing nature of those employments, the Court stated that ongoing employment:

“…is characterised by a commitment by the employer, subject to rights of termination, to provide the employee with continuous and indefinite employment according to an agreed pattern of ordinary time (as distinct from overtime) work.  A corresponding commitment to provide service is given by the employee.”

In contrast a casual employee was described as having:

“… no firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work. Nor does a casual employee provide a reciprocal commitment to the employer …”

In assessing the relationship, the Court noted the following:

• Mr Skeens employment was predictable with rosters at times set up to 12 months in advance;
• The employment was regular and continuous (save one period of approved unpaid leave);
• The FIFO nature of the employment was inconsistent with the notion Mr Skeen had the ability to elect not to work on a particular day or refuse a shift;
• It was unclear if Mr Skeens was actually paid any casual loading (however the Court held that the payment of a casual loading amount does not necessarily confirm casual status);
• There was a strong suggestion that the work was not subject to significant fluctuation.

The Court subsequently dismissed the appeal being unable to find any error in the primary judge’s assessment of the relationship factors.

Considerations for employers

The case provides that simply describing your employee as a casual may not be sufficient for them to be classed as a casual under the NES as courts will look beyond the agreement or contract to determine the true nature of the relationship. Employers should be mindful of their working arrangements and review their workplace to ensure that a casual employee will actually be characterised as a casual.

by James Conomos Lawyers

Naming Wrong Employer Invalidates Fair Work Claim

The recent case of Lili Sinden v HDR Inc. T/A HDR [2018] FWC 5643 provides a reminder that when bringing a claim against employers, any would be applicant must ensure they name the correct entity in their application.

The applicant in this case, Ms Lili Sinden a HR manager, attempted to file a general protections claim under s 365 of the Fair Work Act 2009 against her former employer. Unfortunately for Ms Sinden, she named the US parent company, HDR Inc, as the respondent in her application and not her actual employer HDR Pty Limited. In response the employer raised a jurisdictional objection to Ms Sinden’s claim. Ms Sinden then sought to have the application amended under s 586 of the Act.

Ms Sinden asserted that the Commission could be satisfied that naming HDR Inc was a genuine error as her application correctly identified the trading name, ABN and address of her employer HDR Pty Limited. Ms Sinden further submitted that a number of documents surrounding her employment and termination simply referred to her employer as “HDR” as well as her email signature listing her as an employee of “HDR” and making several references to HDR Inc.

The respondent opposed claiming that this mis-naming was not a simple error, instead contending it was a conscious decision to elicit a strategic benefit in the application. In arguing this point the employer noted several factors including: the applicant’s position as the most senior HR manager for HDR Pty Limited, over 17 years of experience in human resources, frequent contact with the HR Manager for the US, and her regular work included drafting and distributing documents specifying the name HDR Pty Limited.

Having canvassed the evidence, Deputy President Kovacic was not prepared to amend the application to name the correct entity, concluding that it was implausible for Ms Sinden to have made such an error.

by James Conomos Lawyers