Employment Law - Robert Croissant - Assignment Example

Student Name: Tutor: Title: Employment Law Course: Question 1 Issue/Facts Robert Croissant has a chain of bakeries known as ‘Just Loafin’ Around’ in Melbourne Vitoria. The business has employed 6 bakers, 4 apprentices and 3 part-time administrative staff. The business also employs a pool of five casual employees who step in when the other workers are sick or in the course of busy periods. Croissant has employed his teenage daughter in the Melbourne pay office. Two of the apprentices, Crusty Bun in his third year of service and Bob Scone, in his eight months of service are feuding over Croissant’s teenager daughter. Croissant is outraged when gets wind of this. He pays their entitlements and immediately dismisses them. Do unfair dismissal rules apply to Croissant Business? Is Croissant liable for unfair dismissal and what would be his potential liability? What approach should Croissant take if he wants to settle with Crusty? Is there anything else that Croissant should be worried about? Rule/Law Unfair dismissal happens whereby an employee is dismissed in an unjust, harsh or unreasonable manner. Fair Work Act 2009 as well as Fair Work Regulations 2009 are the major legislation that govern employee-employer relationship in Australian jurisdiction. The legislations offer a series of minimum entitlements, they enable working environment where there is fairness and ensures that there is no discrimination against the employees1. Fair Work Act 2009 is charged with regulating all the workplace relations matters across Australia except the provisions of long service leave. Long service leave provisions are regulated under the Industrial Relations Act 1999 (Qld) whereby territory and state governments work towards an arrangement that is nationally consistent2. The Fair Work Act laid down a workplace relations system founded on a double safety net of minimum employment conditions. These comprise of modern awards and National Employment Standards. It is upon the employees to provide all new employees with a copy of Fair Work Information Statement. This statement has to be provided prior to commencement of employment or as soon as possible. A small business is a business which has employees that are fewer than 153. In order to find out if a business is a small business one has to count employees employed during the time of dismissal including any employee being dismissed, regular and systematic casual employees at the time of the dismissal but not all casual employees. The Small Business Fair Dismissal Code was ratified under the Fair Work Act on July 1st, 2009. The code provides the procedure to be followed by small business employer during dismissal of an employee. If the employment termination is consistent with the stipulated code, Fair Work Australia cannot find the individual to be dismissed unfairly4. A person may make unfair dismissal claim if they have completed the minimum employment term and are covered by modern award or enterprise agreement. If the two conditions are not met, an individual will only be able to file for unfair dismissal claim when the sum of their yearly rate of earnings and any other amounts worked in accordance with the established regulations is below the high income threshold which is $138,900 from 1st July 2013. The minimum employment periods are 1 year for employs within a small business and six months if the employer is not considered a small business. A small business employs less then fifteen employees. If Fair Work Commission finds that a worker has been unfairly dismissed, the basic remedy is reinstating the employee either to a different position or same position as long as the terms and conditions are not less favourable5. In the case of Anderson v Thiess Ltd [2014] FWC 6468, Mr. Anderson employment contract was terminated summarily because he sent an email that was very offense to Muslims. Although the email was a clear breach of policies at Thiess and the impact of causing reputational damage to the company, Mr. Anderson was awarded $28,000 by the Fair Work Commission in compensation for the reason that the dismissal was unreasonable and harsh. The Commission established that the termination was harsh since the victim was 65 year of age and would not be easy for him when he tries to find a new job. It found out that the dismissal was also unreasonable since Thiess relied too heavily on a previous verbal warning communicated to Mr. Anderson for getting involved in similar conduct. Furthermore, the company did not give Mr. Anderson enough time to acknowledge that the contents of his emails were inappropriate for the work environment and apologize to show that he regretted. It is obvious that Mr. Anderson was being charged from his previous conduct and not specifically the current case6. Any company has to consider the repercussions of unduly terminating the contract of worker without following proper procedure. One when he is dismissed from the place of work, proper procedure has to be followed to avoid him or her seeking recourse the Commission despite there being a strong reason for dismissing the person. In the Case of Dent v Halliburton Australia Pty Ltd7, an employee of Halliburton Australia Pty Ltd, Mr. Dent, was dismissed for going against the driving safety policy of the company because he was speeding a company’s vehicle while talking on the phone. Two employees of the company gave evidence that they saw Dent using his phone while exceeding the speed limit of 5 km/h when getting into the parking yard of the company. During this time the victim has been given the first as well as final warning for driving while using his phone. When the issue was brought up to the Fair Work Commission, it was determined that there the evidence was insufficient to arrive at the decision that Dent was using his phone, but agreed that speeding had happened8. Despite establishing that the speeding had happened, the Commission argued that the dismissal was unfair since Dent was not given adequate notice prior to the disciplinary meeting hence was denied a very important chance to respond to the claims made against him. Dent was given eleven weeks of wages by the Commission. It is very crucial for proper procedure to be followed before reaching a decision to terminate anyone. One has to consider if the business is small or not and follow all the procedures stipulated by law before dismissing any employee. Failure to follow the regulations will lead to the employees seeking redress from the Fair Work Commission and they be awarded hefty compensations if it is established that the employer did not follow laid procedures9. Application A business to be considered a small business, it must have fewer than 15 employees. Robert Croissant’s business cannot be considered as a small business. The business employs 6 bakes, 3 part-time administrative staff and 4 apprentices. Croissant is also an employee since he is the general manager of the company. Regular and systematic casual employees are also considered in the head count of employees during the time of dismissal. The business has a pool of five casual employees who come in to assist regularly during busy periods or when other employees are sick. In total they are 19 employees including Croissant and his daughter. This is not a small business anymore. Employees must have been employed at least six months before applying for unfair dismissal. Those workers working for a business considered as small must be employed at least 12 months prior to applying. Croissant dismisses Crusty and Bob because they are both seeing his daughter. This reason is not work related and moreover, there is no sexual harassment policy at the business. Crusty has been employed for eight months while Bob is doing his third year. Yes, Croissant may be proud and traditional but he has no right to dismiss employees on the account that they are seeing his daughter. If the daughter is working at the company then he must be of age and an adult who can make her own decisions about whom to associate with. If the business was a small business, Crusty would not have been entitled to anything but unfair dismissal since he has been at the business for less than twelve months. However, the business cannot be considered small and Crusty and Bob are both entitled to everything stipulated under Fair Work Act 200910. Croissant did not follow proper procedure when dismissing the duo. He did not give them a chance to answer to the claims leveled against them. Furthermore, the allegations are not work-related if they did not interfere with the performance of the apprentices. Conclusion a) Yes, unfair dismissal rules apply to Croissant’s business since he employs more than 15 employees. Even if the business was a small business, the unfair dismissal rules apply but differently. For instance, Crusty should have been working for at least 12 months before they apply. b) Croissant is liable for unfair dismissal c) If Croissant wants to settle with Crusty, he can apologize to him and reinstate him before he files his claim for unfair dismissal. He can negotiate with the daughter to find work somewhere else to avoid confrontations with the apprentices. d) Yes, Croissant has to be worried about Bob Scone who has worked for the company for more two years. Bob can also bring his claims to the Fair Work Commission and file for unfair dismissal. Employees have to apply to the Commission within twenty-one days of the dismissal happening. Before the 21 days elapses, Croissant has to be worried about another claim being filed. Question 2 Introduction For many years, legislators, courts, and government agencies have tried to distinguish independent contractors from employees, and the challenge has remained controversial to attorneys. Having anchorage in common law and statutory law, the distinction is ever evolving following different circumstances and incidents in the labour market. The type of Worker-employer relationship is used to gauge whether one is an employee or not. The aspect of control plays a big role in common law in arriving at the decision. It is a fact that in determining who is an employee in common law a lot of focus has been placed on the concept of control as it will be demonstration by the analysis of this paper. Discussion The issue whether a worker is an independent contractor or an employee is the most fundamental issue within employment law. The foundation of federal as well as state employment legislation has been to protect employees from the uncertainties encountered in the job market and the perception of ‘at-will employment’ that leads to exploitation11. Every worker under the common law rules that are applicable in determination of the employer-employee relationship carries the status of an employee. Establishing whether a relationship exists or not, calls for examining every worker individually and arriving at a decision basing on the facts of that particular person. The common law control test is the fundamental test applying common law rules for determination of whether a there is existence of a relationship between the worker or the person or the firm that they are working for. The common law control test emanates from the original notion of master and servant from pre-industrial English law. According to the common-law test any employee has the right of telling the employee what he has to do, how to do it, when to do it and where to do it. In this case there are elements or factors which point to control on the details of an individual’s work12. A worker can be regarded as an employee if his or her relationship with the employer meets the threshold of the common-law test. Where the employee does not provide orders to the employee on what to be done, the worker only needs the right to do so in order to be considered as an employee. In most circumstances if the test does not show the existence of a relationship then they are self-employed or a contractor. Working under the presumption that employment law is anchored in a contract made apparently between equal partners, Australian tests for telling apart an independent contractor from an employee have emphasized on the contract’s obligations. In deciding whether a party that is hired is an employee under the common law of agency, one has to consider the right to control of the hiring party and the means and manner by which the task is achieved13. Although other factors are considered, the aspect of control takes a large portion of the common law test. In case where the basic term of a contract employment was paying wages in exchange of work performance at the direction of the master; the freedom from the direction of the principal or the right to direct became very significant in determining a contract independent of the principal’s control. In the case of Stevens v Brodribb Sawmilling Co Pty Ltd14, the Court held that the presence of control, while important, is not the only the determinant to decide where a relationship can be termed as employment. The judge said other matters to be considered included, but not confined to, the remuneration mode, maintenance and provision of equipment, the hours of work, provision for holidays, the obligation to work, income tax deduction as well as the work delegation by employee who is putative. The judgment was accepted in deciding whether a worker is an independent contractor or an employee. The case concerned a workplace negligence issue. Stevens had been injured do to workplace negligence of another worker called Gray. The concern by the sawmilling company was that if the guys were independent contractors then the company could not be in anyway liable for negligent acts by Gray or personally liable to Steven as being an employee15. The Court held that the two men were not employees but independent contractors. Brodribb had not breached any duty of care to be liable for Stevens’s incident. The court focused on the nature of the work relationship or the contractual terms. However, the terms are not always the exclusive or inclusive indicators of the kind of work relationship. The basic consideration when using the common law test to access who has the right to control two fundamental elements: what has to be done and how it will be done. This calls for the application of judgments of circumstances as well as facts. Industrial legislation is usually inclined to define an ‘employ’ with reference to the common law as well as Workplace Relations Act 1996 is no exception. In s 4 (1) of the Act, an employee is defined to encompass any individual who usual occupation is that of employee16. A worker is regarded as an employee if the existing relationship with his employer meets the requirement of the common-law test. If the test does not reflect any existence of the relationship then, the persons are most likely to be self-employed or are contractors. The test of common-law control is applied in determination of whether a worker can be regarded as an employee. This test involves a huge level of subjectivity, and even if all the facts are considered, it may still be challenging to tell whether the rendered services were carried out by an employee17. Establishing that a worker is an employee is determining that the individual was subject to control regarding when, where, and how the task was performed. This finding does not reflect that control is exercised in real terms; the employer has the right to exercise it. Conclusion It is evident that common law in establishing who is an employee still places a lot of emphasis on the concept of control. This concept of control can be literally exercised by the employer or assumed by the worker that the employer ought to give directions on what to be done, how it should be done and when it should be done. In many circumstances control takes the center stage in determining if the worker can be considered as an employee. In common law focus is placed on control when a decision has to be reached if a worker is an independent contractor or an employee. Regardless of the fact that the circumstances and other factors are considered, control has remained a big emphasis when determining who is an employee. Question 3 Issue Elizabeth and her colleagues are employees of Ginninderra Apples Pty Ltd. The employees are under a modern award. In 2016 the company proposes an enterprise agreement. The company does not offer all the employees with a prior notice of employee’s representation rights before starting of the negotiation in the proposed agreement. The agreement proposes increase in salary but also increase in weekly working hours from 38 to 41 among other propositions. Does Elizabeth have genuine concerns and what can the Union do with regard to the situation? Rule It is agreed that employers can negotiate with their employees to take pay cuts in the course of challenging economic times as being an option to redundancies. The employer’s capacity of imposing pay cuts will only depend upon employment contract existence. Ideally any employer cannot reduce the pay that is specified within a contract of employment since this can amount to breach of contract18. It is important for the employer to consult each employee and seek his consent prior to an imposition of a pay cut. In many circumstances an employee will unlikely agree to this without a valid reason, but they can accept the pay cut willingly if they understand that their jobs are on the line. Employers usually explain to their employees that there is a choice between making other people redundant or sharing the cost or pain across the workforce through taking a pay cut. Most likely some employees will opt for a pay cut than losing their jobs altogether. Employers have an option of implementing a hiring freeze or withdraw any offers of employment that are not yet accepted19. This can be done to alleviate any financial strain that happens in the course of recruiting new employees. In the case of Adam Piggott v Wellpark Holdings Pty Ltd20 Mr. Piggott was terminated in 2016 was refusing to take a pay cut. The Fair Work Commission held that refusing to agree to a reduction in pay is not a valid reason with regard to Piggott’s conduct or capacity under s. 387 (a). The employer conceded that he had the capacity to perform his duties. There was no absolutely no reason for termination. The opportunity to respond had to be related to conduct or capacity of an individual under s.387 (c)21. In this case there was not claim that the employer denied a support person to be present hence this is not anyway relevant. The employers have to take into consideration if the employees are covered by a modern award prior to instituting a pay cut. Modern awards offer safety for minimum rates of pay as well as working conditions. Those employers who have employees who are covered by modern award cannot reduce their pay below the minimum rate stipulated by the award. Any worker who is not covered by a modern award or are not under employment cannot have their earnings reduced below the stipulated the national adult minimum wage which is present set at $672.7 per week22. When considering pay cuts, employers have to give an opportunity to employees to respond with their concerns and thoughts on the issue. It is not proper for any action to be undertaken without the consent on an employee. Maintaining motivation and morale is crucial in getting the employees on board with the proposed idea of the pay cuts. In the case of Garside and Laycock v Booth, the firm had been going through financial difficulties and requested all employees to take a pay cut of 5%23. Mr. Booth and another employee refused to take the pay cut and were dismissed by the firm. Booth took his claim to the tribunal claiming that he had been dismissed unfairly. The role of the Tribunal was to establish first if there was a fair reason warranting the dismissal. Following the turbulent times that the company was going through, it was decided the firm had a good and substantial reason of dismissing24. This was due to the difficult economic circumstances that pushed the company to suggest stringent austerity measures like taking the pay cut to sustain its operations. Nevertheless, it was not reasonable for the firm to expect an employee to take a pay cut. Consequently the dismissal was deemed unfair. The company had not consulted widely with the employees. The decision was overturned at the appeal tribunal25. The Appeal tribunal found out that the company was not at fault. The Appeal Tribunal gave guidance on how the matter should have been resolved. Application In many circumstances Employees do not automatically proceed to lodge the ‘unfair dismissal’ claims as soon as they are dismissed. This can be attributed to lack of knowledge regarding the system and somehow due to the feeling of powerlessness as compared to the employer26. Elizabeth has to know her rights and what she is entitled to before panicking about dismissal or being disadvantaged. It is an advantage for Elizabeth and fellow employees since they are covered by the Modern Awards the minimum rates stipulated cannot be altered27. The working hours per week cannot be increased since there are rates which are allowed under modern awards. Elizabeth has no course to worry since the company overlooked many things while implementing the agreement. An opportunity to be represented by a legal mind is very important since all the employees have to understand the terms and conditions of the new agreement. If the agreement is in breach of the initial contract of employment then it becomes null and void28. Denying the employees to have a support person during the negotiation is a violation of the employees’ rights. The company is misleading Elizabeth when they say that he cannot ask the Union to be involved in the negotiation. The company did not provide the employees with the notice concerning employee’s representation rights before starting negotiations. Elizabeth has a right to be represented by a competent body or person who is familiar with employment relations like the Union. The company has denied the labour union audience to talk about the happenings in the company. This is unfair on the behalf of the company since it does not want the employees to understand their rights under the employment law29. Conclusion Elizabeth should not worry since he is covered by a modern award hence her payment cannot be reduced beyond the stipulated minimum. The company did inform the workers about the employee’s right to representation hence did not have a labour relation lawyer or a union to represent their interests in the negotiations. If the changes will lead to a pay cut, then they are not applicable to Elizabeth since she is covered by a modern award. The Union can file for renegotiation of the terms of the agreement of the employees since the employees were not represented the first time. Before the changes are institutionalized, the company has to seek proper consent from all the employees. The company did not follow the proper procedure while implementing these changes. References Adam Piggott v Wellpark Holdings Pty Ltd T/A ERGT Australia (U2016/482) Anderson, G., Gahan, P., Mitchell, R. and Stewart, A., 2011. The evolution of labor law in New Zealand: A comparative study of New Zealand, Australia, and five other countries. Comp. Lab. L. & Pol'y J., 33, p.137. Banker, R.D., Byzalov, D. and Chen, L.T., 2013. Employment protection legislation, adjustment costs and cross-country differences in cost behavior. Journal of Accounting and Economics, 55(1), pp.111-127. Brown, A.J., 2013. Whistle blowing in the Australian public sector: Enhancing the theory and practice of internal witness management in public sector organizations (p. 333). ANU Press. Creighton, B. and Stewart, A., 2010. Labour law. Federation Press. Dent v Halliburton Australia Pty Ltd [2014] FWC 5692 Fair Work Act 2009 Hardy, T. and Howe, J., 2010. Partners in enforcement? The new balance between government and trade union enforcement of employment standards in Australia. MacDermott, T. and Riley, J., 2011. Alternative dispute resolution and individual workplace rights: The evolving role of Fair Work Australia. Journal of industrial relations, 53(5), pp.718-732. Mitchell, R., Gahan, P., Stewart, A., Cooney, S. and Marshall, S., 2010. The evolution of labour law in Australia: Measuring the change. Australian Journal of Labour Law, 23(2), pp.61-93. Poole, M., 2013. Industrial relations: origins and patterns of national diversity (Vol. 4). Routledge. Skinner, N. and Pocock, B., 2011. Flexibility and work-life interference in Australia. Journal of Industrial Relations, 53(1), pp.65-82. Stewart, A. 2013, Steward’s guide to employment law/Andrew Stewart, The Federation Press, Annandale, N.S.W. Stewart, A., 2010. Good faith: A necessary element in Australian Employment Law. Comp. Lab. L. & Pol'y J., 32, p.521. Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16. Twomey, D., 2012. Labor and Employment Law: Text & Cases. Cengage Learning. Read More