Unfair Dismissal Rules and Small Businesses - Assignment Example

Employment Law Name Institution Course Lecturer Date Question 1 (a) Unfair dismissal rules and small businesses Introduction Unfair dismissal constitutes any dismissal that an employer can take without any valid reason. Critical considerations are taken when an employee was not given a warning for improvement or performance. There is Small Business Fair Dismissal Code that is applicable in this case to guide in knowing the legal action that can follow an employer if unfair dismissal is established as in s 3881. Through Fair Work Act we get a ground to establish fair dismissal for small business. A business with less than 15 employees with irregular casuals excluded is taken as small business. However, it is also expected to follow codes in dismissal. Two elements should be considered for a small business. An employer is expected to consider the duration or length of time an employee has worked if the two scenarios apply as in stated in s 382. In the first one, an employee that have worked for a business with less than 15 staff and for a period of 12 months is expected to raise a claim for unfair dismissal2. In the second case, an employee that has for 6 months in a business with 15 employees or more can legally claim as per s 383. An employer should just do a simple headcount for business’ staff in order to categorize the business. Secondly, the mode of working for an employee accounts for much; dismissal is considered on the ground of regular or irregular working modes. There is a simple Fair Dismissal Code that acts as checklist for employers in small businesses. Apparently, no small business is exempted from Fair Work Act rules3. For Just Loafin Around, it has 13 employees with; 4 apprentices, 6 bakers and other 3 part-time administrative staffs. Eventually, it falls under a business category with less than 15 staffs. Croissant is a typical small business employer which is regulated by Fair Dismissal Code. Conclusion Unfair dismissal rules are applicable as there are no exemptions existing for Croissant business. The criteria set forth for small business as seen above applies to it. (b) Liability after unfair dismissal, potential liability when Crusty’s application is successful. Introduction Through Fair Work Commission it is possible to determine if an employer strictly followed Fair Dismissal Code stipulations. Liability result due to harshness of dismissal and in considering whether some other factors were considered before dismissal. Some of these factors considered for unfair dismissal or harshness includes the three basic factors set in s387. A dismissal must be looked in terms of its validity where the employer is expected to reason by accounting for individual’s capacity. An employer should offer a reason to an employee. It is expected that, before dismissal, an employee need to be warned beforehand and then notified for the reason a dismissal is considered. The employer can do it verbally or preferably through writing4. The warning should be clear by identifying the risk for dismissal if at all an employee does not make any improvement5. Fair Work case also looks at whether an employee was given enough time to fix the problem. Reasonable time provided would also include employer’s necessary employer support with increased training and ensuring employee knowledge of role expectations. Before dismissal, an employee has to be offered an opportunity so as to respond to issues raised by employer about his/her conduct. In most cases, a notice period is required though it differ in different cases. The duration of an employee’s work in a business is a consideration. For those employed for shorter period, a notice period can also be shorter. However, instant dismissal can occur due to gross misconduct like cases of theft, fraud, intoxication, assault, or failure to take reasonable or lawful instruction. Still, Fair Work requires serious allegation reported to law enforcement officers with a reasonable ground when making such a report6. Whether a fair hearing was given for circumstances surrounding incidences is h required7. A small business should show evidence to follow Fair Dismissal Code. This should be demonstrated by a warning given; completed checklist of issues addressed and not addressed formal/written warning copies, employer termination statement and where applicable witness statements provided as evidence for dismissal8. Commonwealth Fair Work laws states the entitlements an employer should offer to an employee after dismissal. These entitlements are considered in part of wholly by the time employment relationship ends. First, the final pay with any outstanding wages that employer still owed should be given. An employer should submit any payment in lieu of termination notice that counts for 1-5 weeks pay when factors like duration of employment and age of employee are considered9. An employee should also receive any entitlements including accrued annual leave, severance pay as well as long service leave when settling on dismissal. An employee who fells that one or some of the following issues were not satisfied can raise a claim. Eventually, an employer can be required to pay a $51,000 penalty for each contravention established. Crusty was dismissed by Croissant together with his colleague Bob due to tension between them. The fact established by Croissant is unethical behavior of the two fighting over common interests of his daughter and thus they would not work in the same premises. One, Bob duration of work totaled to three years. In his case, Croissant dismissal can be taken as a harsh and unjust approach as with full of range, Bob was sacked instantly without a prior notice. Croissant would have provided Bob with a notice period and also give him an opportunity to respond to raised allegations. For Crusty, he had worked for only 8 months. His dismissal has some elements of unfairness since Croissant did not notify him or give him an opportunity for responding or improving on his behavior. Crusty will potentially claim for failure for Croissant to offer the entitlements pay in lieu of termination notice. Conclusion Croissant dismissal for the two employees is unfair as it did not follow Fair Dismissal Code as well as checklist that are supposed to be strictly followed for a dismissal to be deemed fair. Croissant liabilities arise from lack of considering Bob’s duration of work before determining dismissal. On the other hand, Crusty had less than 1 year and Croissant is only liable for failure to give a notice and opportunity to respond. If Crusty’s application will be successful, Croissant will have to pay $51,000 due to contravention of payment in lieu of notice entitlements. (c) Alternative for settling with Crusty Fair Work Act does not take leaving a job through harsh circumstances as an ideal. Morally, there are traumas which can affect employees treated harshly in dismissal. In most cases, a conciliation process should be prominent instead of pursuing a claim in the court of law as provided by s 369 (2). The process taken by Croissant was faulty due to lack of dedicated or professional Human Resource manager or specialist. Eventually, his procedure in effecting dismissal was wrong. Though Croissant is displeased as employees’ actions directly affect his affairs, due to his daughter, his values and traditions, a process of conciliation can be considered to settle for payment, particularly lieu of notice10. Croissant should consider submitting the money equals to the wage for a notice period as he stopped him immediately from working a remedy set in s 391 (3). Eventually, that eases harshness seen in previous dismissal. Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95 is a typical case where the business was to pay its workers a total amount of money not exceeding 5 weeks of each employee work11. (d) Issues to be worried about Bob might take a legal claim within a period of 21 days as provided in s 370 of Fair Work Act. Croissant liable will involve unlawful termination. The employee interests for the daughter might not stop even after dismissal. Question 2 Generally, an employee is defined by three principles and tests that determine a worker who is an employee. The first test included the common law that is applied by courts and internal revenue service. An employee is described to have employment relationship is employer posses the right of controlling work process. Secondly, an economic reality test describes employment relationship to exists where individual is economically dependent on a certain business for employment. Thirdly, a hybrid test describes employment relationship as evaluated under common law and through economic reality test factors. The focus is emphasized on the person who has a right of control and the manner of work performance12. Purcell v Tullett Prebon (Australia) Pty Limited [2010] cases are a good point to start and conceptualize how common law defines an employee in terms concept of control. The case pointed out that employment contract cannot be terminated by a breach by an employee. Contract of employment continues as it was highlighted by the court in determining the case. Even after repudiation by an employee, employment contract is not terminated and that can have significant ramification for an employee. Purcell was a successful fiancé broker with a contract with Tullett Prebon Pty Limited for a period of two years. After some months, after breach of employment contract, Purcell started to work for a competitor company. The first employer obtained injunction to restrain Purcell to work for the company placing him on a paid garden leave. The employer demonstrated that he employment contract continued with Mr. Purcell13. Shortly before the injunction expired, the employer had directed Purcell to return but failed to comply after when the employer sued Purcell on liquidated damages as per the clause of the contract. The court of appeal was determining whether the employment contract was still in force where the employer could direct Purcell to return. The court found out that, an employee was bound to obey reasonable directions of the employer and thus, the direction by the employer to return to work was reasonable and lawful as employment contract was still in force. There are major implications that follow such a case. The court decision reinforced that employment contract are similar to other forms of contract. The contract cannot be terminated simply through employee’s repudiation. Employees cannot rely on own repudiation so as to avoid the obligations set under the contract of employment. Simply, the concept of control is applied in determining who has given the right to carry out a certain work or a service. Common law assumes that there is an implied or express contract and employer is taken to be rightful controller of details of work or performance. The employee is hired to carry out a specific role or provider certain labor or expertise to an employee. In general, a person who performs services for an employer or a organization can be termed as an employee as long the organization control what to be done and how the work is done. The emphasis in common law determines the degree to which the employee or employer/organization controls the work14. The factor or the right to control posits that a worker is an employee if employer controls work details. However, a worker is independent contract as long as the worker controls details of work. Supervision aspects also determine or refine the status of an employee where an employer supervises a worker15. However, is the work is done without supervision; there are no indication of employment relationship. Employer control of work is determined by tools and materials. For a worker to be defined as an employee, employers must be the one who provides tools, instrumentalities and location of workplace16. The issue of control established by employment contract considers the factor of continuing relationship where a worker is employed for a continuous or extended period. The concept of control is established on various factors that are considered. Intent is one of such factors where an employer and a worker show the intention to create employer-employee relationship. Eventually, that gives the employer the right to control the employee as long as the law can establish that there was bringing together of the minds. In most cases, an employee who provides services to one employer only is rightly referred to as an employee. The worker who is integrated or is part of a business or employer’s regular business is also taken as an employee17. Common law also looks at the method of payment to determine a worker’s status. A worker paid by hour or through other computation that are based on the time a worker has worked to determine the pay actually fits as an employee. Workers who work in a type of business where they are not in any other occupation or business distinct from employer are employees18. There are opposing circumstances that are established on the same factors that common law uses to define independent contractor. Workers who controls the details of work or operates a business distinct from employer’s business cannot be termed as an employee. In most case, such workers are specialized, unique or with substantial training and provides the instruments or tools in a workplace working at a site other than that of an employer. In other cases, independent workers can be employed to accomplish a specific project for a limited time and be paid by a project19. Workers that are not part of a regular business of an employer and where the worker and an employer do not create or show intent to create employer-employee relationship cannot be taken as an employee. Similarly, where a worker provides services to two or more business, they hence fit as independent workers. All these distinctions are set to determine the rights, requirements as well as consequences that arise if a party cannot or fails to perform their obligations. These factors are followed to establish the contractual engagement and focuses on the circumstances and terms that give rise to termination and breach of an employee who terminates employment relationships. Breach is considered in terms of the process followed to exercise the right towards termination20. In turn, remedies are also considered when the employee-employer relationship is established. In Visscher v Giudice (2009) where contract services were likened to other contracts that cannot be terminated by employee leaving the innocent party or the employee at a grievous position21. Eventually, depending on the agreement set on employee contract, an employer can go further in suspending any further performance failing the employee to secure another job before the duration of contractual relation is concluded. Question 3 It is noted that GA did not provide all its employees with the right of representation prior to negotiation of a proposed enterprise agreement. Approval process must be considered as there are a number of steps that must be taken for an agreement to be valid. First, the provisions of pre-approval in subsections 180 (2), (3) (5) shows the steps that should be taken by an employer. These terms requires an employer to make sure that, the agreement terms and their effects are explained to employees. An explanation need to be provided in the right manner considering young employee and those from culturally diverse backgrounds22. Employee should be given a notice in order to vote and approve or endorse that agreement by voting as per s 169 Subdivision A. Subsection 181 92) requires that an employee to be requested to approve an enterprise agreement where the voting should be carried not until 21 days after giving a notice to employees and 7 days before voting, the employer must give a copy of the agreement to employees and any other material that might be incorporated therein as a reference23. An employer is also required to notify employees about the time, location and method of voting to be used. This is one element that is lacking and if at all GA enforces the agreement, it will be tantamount to abuse of employees’ or their representational rights. It is noted that the employee were not given any representational rights when the agreement is made. S 236 provides that, a vote is not successful if it does not involve a majority of employees in endorsing the agreement. Elizabeth should note that, legally, the agreement undermines employees’ rights and cannot be enforced at all cost. Generally, employees’ concerns are established through their realization of unlawful content. Section 186 of Fair Work Act opposes any approval where there lack genuine agreement. Where an agreement includes unlawful content such as objectionable term, it cannot be approved. The commission has to consider some aspects to approve an agreement by being satisfied that, an agreement exist with genuine agreement of the parties involved and that it passes the better of overall test s 194. An agreement that includes an unlawful term or designated outworker terms cannot be approved. It has also to be noted that a group of employees were fairly chosen who the agreement covered. The agreement must also specify a date for its nominal expiry a period not exceeding 4 years after the commission approves it. The agreement should also have a dispute settlement procedure clause and include flexibility and consultation clause24. There are a number of aspects that are not included in the agreement set by GA and that means that it can be challenged in the court of law. An employee has full rights to oppose or support an agreement and that should not be the basis for termination of work. The agreement goes through a voting process and that subjects it to individual opinion. In turn, the majority vote will determine the fate for other employees. Elizabeth should not be worried at all of any consequences such as loss of a job since in practice, lack to support cannot necessitate termination. Enterprise agreement directly related to wage and working conditions that are paramount issue that the union is concerned about. Any conditions that are negotiated at any level in an individual organization are legally binding and employees have to be careful in concluding such agreements. Enterprise Agreement involve a collective industrial agreement between an employer and a trade union that act on behalf of employees or directly between and employer and employee who act on themselves25. However, employees’ benefits and improved flexibility is established through a collective agreement. Any collective agreement is looked at on how it will benefit workers by providing higher pay, enhanced entitlements, additional leave and bonuses. Any employee represented by the union has a right to request an employer to involve the union. Fair Work Act provides a flexible, fair and simple framework to assist employer and employees bargain in good faith when making enterprise agreement. Union are in most cases the bargaining representatives and are supposed to be involved in the process before concluding an enterprise agreement. It is the requirement of the Act for an employee to notify the employees of the rights to be represented as per s 22826. However, in this case, GA is acting contrary to the requirement of the Act and that is tantamount to breach as it distracts the employees from contacting the union. In addition, they have failed to pick up any call from the union so as not to involve it to reach an objective point that is favorable for employees. Elizabeth should note that it is her right to be represented as unionized employees always have more effective bargaining powers due to representation by the union. The legal status for the union is to act as bargaining representatives and in most case, employees are represented by the union. An authorization is always required and should be formal in writing to see if employees want to bargain for themselves or would want to appoint a person apart from the union to act as a bargaining representative. A union member’s employee recognizes the union as a default bargaining representative as long as the union represents the industrial interests of the employee and what is to be performed under that agreement27. Elizabeth cannot be hindered from accessing her rights to have the union represent her to for the delivery of the most probable benefits. In fact, there are complex issues that an employee in the status of Elizabeth may not disambiguate and her capacity in handling such matters may make her feel tense to vote. The suspicion detected and demonstrated should be ascertained by the union’s critical re-look at the document to ensure that employees’ rights are well attended to before passing it to commissioning under the Fair Work Act. Under Fair Work Act 2009 and specifically, the Transitional and Consequential Amendments there are set interaction rules that act between Fair Work instruments and transitional instruments. Generally, individual agreements are protected at all cost and continue to override any collective agreement-based as well as enterprise agreements28. Enterprise agreements replaces collective agreement-based since are transitional instruments. The replacement occurs even when an instrument’s expiry date has passed or not. Modern awards also replace award-based transitional instruments. Modern awards do not apply to employees that are covered by individual agreement-based instrument that are transitional in nature. Where an enterprise agreement is concluded under Fair Work Act, modern awards can no longer apply to employees. Elizabeth should note that, where Fair Work Act approves the enterprise agreement set by GA and its employees, she will no longer enjoy the conditions of her modern award. At the same time, Elizabeth need to note that all enterprise agreements that are approved under Fair Work Act 2009 involves contracts of employment that supplement only but not in any way less beneficial to the terms and conditions of other agreements. Ultimately, Elizabeth should note the nature of the set enterprise agreement and particularly under Fair Work Act. That enterprise agreement made and approved following Part 2-4 of Fair Work Act are so different between those that are made under common laws29. These differences are seen in that; an agreement under Fair Work Act will bind all employees. Employees categorized under it involve those not employed during voting, the one covered by an agreement but did not vote at all as well as those that vote against its approval. Bibliography Bailey, Janis, and David Peetz. "Unions and collective bargaining in Australia in 2012." Journal of Industrial Relations 55, no. 3 (2013): 403-420. Carvan J, Understanding the Australian Legal System 6th edition 2010 Thomson Reuters. Cases Chapman, A. (2009). Protections in Relation to Dismissal: From the Workplace Relations Act to the Fair Work Act. UNSWLJ, 32, 746. Creighton, B and Stewart A, Labour Law 5th edition 2010 Federation Press. Farmakis-Gamboni, S., Rozenbes, D., & Yuen, K. (2012). Award-reliant small businesses. Fair Work Australia. Karcher, J. (2013). Stewart's guide to employment law [Book Review]. Ethos: Official Publication of the Law Society of the Australian Capital Territory, (228), 40. Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95 McCrystal, Shae. 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