Australian Work Place Relations - Case Study Example

Memorandum of Advice Heidi Law Graduate Clerk September 23, RE: Advice for Mal Campbell, Human Resources Manager, ABC Pty Ltd, in Respect of Recent Termination of its Employee Jones. Issue Whether the termination of Jones constitutes, unfair dismissal, under the employment legislation of Australia. Whether Jones’ resignation amounts to constructive dismissal. Whether ABC Pty Ltd, has any defence against the claim of Jones. Rule of Law Employees discriminated on the grounds of gender, race, disability, age or union membership, can initiate legal action against the employer. Such employees can claim compensation for unlawful dismissal under section 659 of the Workplace Relations Act 1996. Employers are required by this Act to establish the reasons for dismissal of an employee, and there is no limit on the compensation to be awarded to an unfairly dismissed employee (Stewart, 2008, p. 296). The dismissal of an employee in the middle of the employment term, or in the absence of a proper notice gives rise to an action for wrongful dismissal. The employer can defend himslef by proving the existence of valid grounds for the dismissal (Stewart, 2008, p. 297). Each and every employee is not eligible to claim unfair dismissal. To make a claim for unfair dismissal; first, the employee must have completed at least six months in the organisation. Second, there should be fifteen or more employees in the organisation. Third, if the number of employees is less than fifteen, then the claiming employee must have completed twelve months of service with that employer. The number of employees is the number of full-time employees, and casual workers are not considered for this purpose (Termination of employment, 2005). Under section 661 of the Workplace Relations Act 1996, the employer must serve a notice of termination within reasonable time to the employee. If the employee’s service with that employer is between three to five years, then the notice period should be at least three weeks. For employees, who are 45 years or above in age, and have served continuously for at least 2 years, an additional week’s notice is to be provided. No employee should be dismissed without a valid reason; otherwise it will constitute unfair dismissal (Riley, 2007). An employee should be allowed to respond to the dismissal notice, otherwise it constitutes unfair dismissal. In such cases, the courts are empowered to reinstate the employee, and award compensation for the period of dismissal, under section 170 of the Work Relations Act 1996. If reinstatement is impossible the courts can award six months’ salary as compensation. In addition, a fine up to $10,000 can be imposed upon the employer (Riley, 2007). An employee, who is dismissed from work in his absence, can claim unlawful termination of employment, under the Fair Work Act 2009 (Cth). Protection under state and federal laws protect employees from employer discrimination. Employer liability is determined by the circumstances leading to dismissal. The courts assess the reasons behind the employee’s absence, and ascertain whether the employee had submitted valid evidence for the absence (Calderone, 2010). The Australian modern awards specify a single set of minimum conditions for employers and employees, in the same industry (Modern awards). Application Employers are entitled to make the usual decisions relating to their business. However, employers have to act fairly and consider all the relevant circumstances prior to dismissing an employee. Dismissal without valid reason is termed unfair dismissal. In constructive dismissal, the employer creates a workplace environment that is inconsistent with the employment contract, thereby compelling the employee to voluntarily leave employment (Unfair Dismissal). The courts and employment tribunals would decide in such cases that there was a constructive dismissal even though the employee had resigned from the employment. In such cases, the employee can claim compensation on the grounds of unfair dismissal. In order to invoke the doctrine of constructive dismissal, the employer must act in a manner that is in breach of the terms and conditions of the contract of employment (Unfair Dismissal). Discrimination can be either direct or indirect, and can be perpetrated on various grounds, such as gender, religion, nationality, ethnicity, and age. No employer should practice discrimination against employees, on these grounds; as discrimination is unlawful (Editors, 2009, p.533). The case law discussed below discloses the courts’ attitude towards unfair dismissal claims, under different circumstances. In Visscher v The Honourable President, the High Court of Australia ruled that if a party to a contract of employment unlawfully terminates it, then the other party has two choices. First, rejection of the termination of the contract, with a view to continue with it; and second, to accept the repudiation, with a view to end the employment relationship. Under the latter circumstances, the contract is deemed to be in force (Visscher v The Honourable President Justice Giudice, 2009). The court held that the defendant Teekay Shipping (Australia) Pty Limited’s attempt to repudiate the contract; by serving a notice did not automatically rescind the contract of employment. It was deemed to be essential for Visscher to accept the repudiation, for the contract to be terminated (Harben, 2009). In Northern Tablelands Insurance Brokers Pty Ltd v Howell, the court refused to grant an injunction order that would have prevented an erstwhile employee from violating the post-employment restraints. This ruling was given as the employer had repudiated the contract of employment (Northern Tablelands Insurance Brokers Pty Ltd v Howell, 2009). In Western Excavating (ECC) Ltd. v Sharp, the High Court of Justice clarified that the doctrine of constructive dismissal came into play, whenever the employer’s conduct rendered it impossible to continue with the contract of employment. Constructive dismissal transpires, if the employer indicates expressly or by conduct that it does not intend to continue with the contract. Employer behaviour that is tantamount to constructive dismissal includes reduction in pay, demotion, and workplace harassment. The Federal Legislation has also incorporated the doctrine of constructive dismissal (Western Excavating (ECC) Ltd. v Sharp, 1978). At the time of termination, Jones’ salary was $ 105, 000 per annum. This is less than the salary cap of $ 113, 800 per annum. Hence, Jones is eligible for claiming relief for unfair dismissal. Since, Jones had worked for more than 3 years, and was above 45 years of age; he is to be provided with at least four weeks’ notice. Jones had enjoyed the reputation of being a very good salesman. His sales figures had diminished during the past six months, on account of increased competition. Therefore, Martin’s contention that Jones was negligent or lacked commitment is baseless. Jones contends that that he was discriminated against by Martin, due to his being an Irishman. Jones had also described Martin’s discriminatory treatment of employees, on previous occasions. This supports Jones’ contention that Martin had behaved in a prejudiced manner. Moreover, Martin failed to consult even the HRM manager, while terminating Jones’ employment. Furthermore, he did not give Jones any notice in writing, such as a warning letter regarding his alleged misbehaviour in the office. As such he did not provide him with an opportunity to defend his position. All these things indicate unfair dismissal. As per the case law discussed and according to the provisions of the employment legislation, the resignation submitted by Jones, at the behest of Martin’s instructions, constitutes constructive dismissal. In addition, there are several lapses in the notice procedure adopted, indicating unlawful termination of employment. In view of the above facts, Jones is more likely to succeed in his claim. In order to defend itself from Jones’ claim, the ABC Pty Ltd should establish that Jones was not dismissed unfairly, and that it had a valid reason for doing so. Jones’ demeanour was unsatisfactory, since the previous half – year, and he had failed to achieve his sales targets. Moreover, Jones had been actively engaged as a fire-fighter, which was seen to affect his sales performance. Conclusion Although, the ABC Pty Ltd contends that Jones was not taking interest in his work due to his fire – fighting duties, the case law mentioned above, makes it clear that temporary absence cannot invite summary dismissal. Hence, the ABC Pty Ltd cannot claim that it had lawfully terminated the employment of Jones. Consequently, it will be liable for the unfair dismissal claim filed by Jones. The procedure adopted by the Fair Work Australia (FWA), in the context of the unfair dismissal application submitted by Jones are, first the validity and completeness of his application will be verified. Second, the ACB Pty Ltd will be intimated about Jones’ application. Third, the FWA will attempt reconciliation between Jones and the ABC Pty Ltd. Finally, if the issue remains unresolved, the FWA will determine it by resorting to a hearing or conference (Guide Unfair dismissal, 2010). On satisfying itself that Jones was dismissed unfairly, it may order his reinstatement, continuity of service and payment of lost remuneration. Alternatively, it may award compensation if it is convinced that reinstatement would be unsuitable. List of References Western Excavating (ECC) Ltd. v Sharp, ICR 221 (1978). Termination of employment. (2005). Retrieved October 11, 2010, from NSW Business Chamber: http://www.nswbusinesschamber.com.au/?content=/channels/Workplace_relations/_IR_changes/Fair_Work_FAQs/faq-fair_work_system.xml#whatare Northern Tablelands Insurance Brokers Pty Ltd v Howell, NSWSC 426 (May 22, 2009). Visscher v The Honourable President Justice Giudice, HCA 34 (2009). Guide Unfair dismissal. (2010, July 1). Retrieved October 12, 2010, from Fair Work Australia: http://www.fwa.gov.au/documents/dismissals/guide_dismissal.pdf Calderone, F. (2010). Legal: Absent from work under Fair Work . Retrieved October 12, 2010, from Human Capital Magazine: http://www.hcamag.com/news/legal-absent-from-work-under-fair-work/38416 Editors, C. (2009). Australian Master Work place Relations Guide. CCH Australia Limited. Fair Work Act 2009 (Cth). (n.d.). Harben, S. (2009, November 5). Employment contract: High Court rules on contracts, collective agreements and ending the contract. Retrieved October 11, 2010, from http://www.claytonutz.com/publications/newsletters/workplace_relations_insights/20091105/employment_contract_high_court_rules_on_contracts_collective_agreements_and_ending_the_contract.page Modern awards. (n.d.). Retrieved October 11, 2010, from http://www.fairworkaust.com/fairworkfaq.php Riley, J. (2007, June 11). Australia. Retrieved October 11, 2010, from International Labour Organization: http://www.ilo.org/public/english/dialogue/ifpdial/info/termination/countries/australia.htm Stewart, A. (2008). Stewart’s guide to employment law. Federation Press. Unfair Dismissal. (n.d.). Retrieved October 11, 2010, from http://www.lawhandbook.sa.gov.au/ch16s07.php Workplace Relations Act 1996 (Cth). (n.d.). Read More