Employment Law

Contributor: DLA Phillips Fox

Currency of information: January 2011

NOTE: This chapter reflects the Fair Work provisions which commenced on 1 July 2009.

The Australian Workplace Relations System

The Australian workplace relations system is a complex mix of Commonwealth and State legislation and the common law. As a result, the rights and entitlements of workers derive from a wide range of sources, including statute, awards, collective agreements, individual agreements and the common law.

The Fair Work Act 2009

The Fair Work Act 2009 (Cth) (the Fair Work Act) was passed in March 2009 after consultation with unions and employer groups. The Fair Work Act commenced on 1 July 2009 and is the principal legislation controlling workplace relations in Australia.

The Fair Work system replaced the previous workplace relations system under the Workplace Relations Act 1996.

Other legislation, such as the Sex Discrimination Act 1994 (Cth), the Racial Discrimination Act 1975 (Cth), and the Disability Discrimination Act 1992 (Cth), as well as the Disability Discrimination Act 1991 (ACT) and the various state based Occupational Health and Safety legislation, also affect working conditions and are not discussed in this chapter.

Federal Workplace Relations Institutions

Fair Work Australia

Fair Work Australia is the national workplace tribunal (www.fwa.gov.au) that began operation on 1 July 2009 following the enactment of the Fair Work Act and associated transitional legislation. Fair Work Australia assumes the functions of the Australian Industrial Relations Commission, the Australian Industrial Registry, the Australian Fair Pay Commission and some of the functions of the Workplace Authority. The Australian Industrial Relations Commission (AIRC) and the Australian Industrial Registry ceased operation on 31 December 2009.

The Fair Work Act covers all employment by constitutional corporations and in:

Victoria, ACT & NT: all other employment; and

NSW, Qld & SA: all other private sector employment (as of 1 January 2010).

Tasmania: all other private sector and local government employment (as of 1 January 2010).

Fair Work Australia is an independent body with power to carry out a range of functions including:

• providing a safety net of minimum conditions, including minimum wages, in awards;
• facilitating good faith bargaining and the making of enterprise agreements;
• granting remedies for unfair dismissal;
• regulating the taking of industrial action;
• resolving a range of collective and individual workplace disputes through conciliation, mediation, compulsory conferences and in some cases arbitration (where the parties agree it can arbitrate); and
• functions in connection with workplace determinations, equal remuneration, transfer of business, general workplace protections, right of entry and stand down.

Fair Work Australia has the power to inform itself of the circumstances of a particular matter and make recommendations. The types of disputes which Fair Work Australia may concern itself with include:

• bargaining disputes;
• general protections disputes;
• right of entry disputes;
• stand down disputes; and
• disputes that arise under dispute-settlement procedures in a modern award, enterprise agreement, workplace determination or contract of employment.

Fair Work Ombudsman

The Fair Work Ombudsman is an independent statutory office created by the Fair Work Act. Replacing the Workplace Ombudsman and Workplace Authority, the Fair Work Ombudsman's functions include promoting harmonious, productive and cooperative workplace relations and ensuring compliance with Commonwealth workplace laws. In exercising these functions, the Ombudsman:

• offers people a single point of contact for them to get accurate and timely advice and information about Australia's workplace relations system;
• educates people working in Australia about their workplace rights and obligations;
• investigates complaints or suspected contraventions of workplace laws, awards and agreements;
• litigates to enforce workplace laws and deter people from doing wrong in the community;
• performs auditing in workplaces to ensure compliance with the Fair Work Act;
• appoints Fair Work Inspectors to monitor and investigate compliance with workplace laws;
• publishes information on things such as the NES, modern awards, agreement making, the right to freedom of association and termination of employment; and
• produces best practice guides on workplace relations or workplace practices.

Fair Work Divisions of the Court

Specialist Fair Work Divisions have been created in the Federal Court and Federal Magistrates' Court to hear workplace law matters arising from the Fair Work Act. The Fair Work Division of the Federal Court and Federal Magistrates' Court exercise jurisdiction in relation to:

• any civil matter arising under the Fair Work Act;
• any civil matter arising under the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth);
• any matter arising under the Workplace Relations Act that is pending before the Court as at 1 July 2009; and
• any civil matter arising under the Workplace Relations Act as it continues to apply because of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 - these will include any matters relating to conduct that took place prior to 1 July 2009.

In addition to the above, Section 548 of the Fair Work Act makes provision for certain proceedings to be dealt with as small claims proceedings.

EMPLOYEE OR INDEPENDENT CONTRACTOR?

A primary question in determining the rights and duties of a worker is whether the individual is an employee or an independent contractor. This is because only employees are covered by awards, certified agreements, collective agreements and individual agreements. The Fair Work Act defines "employee" by reference to the employer. Section 13 states that:

A national system employee is an individual so far as he or she is employed...by a national system employer, except on vocational placement.

A national system employer includes:

• a constitutional corporation;
• the Commonwealth or Commonwealth authority;
• a person in connection with constitutional trade or commerce who usually employs an individual as;
• a flight crew officer,
• maritime employee, or
• a waterside worker
• a body corporate incorporated in a Territory; or
• a person who carries on an activity, in a Territory of Australia.

An employment relationship is formed when an employer and an employee enter into a contract called a 'contract of service' - an employment contract. By contrast, the contract under which an independent contractor performs work is called a 'contract for services'. An employment contract creates a legally binding promise on the employer and the employee to do (or not do) certain things. The terms of the employment contract can be determined in various ways.

Independent contracting arrangements are widely used in the transport and building industries. The differences between the rights of employees and independent contractors vary greatly and Part 3-1, Division 6 of the Fair Work Act (section 357-359) imposes penalties on an employer who misrepresents an employment relationship as an independent contracting relationship.

For example, independent contractors are not provided with the same legislative protection as employees. The rights, entitlements, obligations and liabilities of independent contractors are generally governed by the contract itself and the common law, as well as the Independent Contractors Act 2006 (Cth) (the Independent Contractors Act). The Independent Contractors Act provides some protection to independent contractors by allowing a court to review a contract on the grounds that it is unfair or harsh. If the court is satisfied that the contract is harsh or unfair then it has the power to vary or set aside that contract.

Contract of Employment or Independent Contractor?

The courts have developed a series of tests for distinguishing between employees and independent contractors. The touchstone is the nature and degree of detailed control which the employer exercises over an individual's work. Other factors are also considered, such as:

Payment - employees are usually paid an hourly rate or an annual salary. Independent contractors are more often paid when work is completed or a result has been achieved and often that payment is not based on a time measurement. In addition, independent contractors often have the benefit of an ABN and operate as a small business;

Work injury - independent contractors are responsible for providing their own insurance and employees are usually insured by the employer (although in many cases workers compensation legislation has very broad definitions of 'employee' which can often include people who other wise might be treated as independent contractors);

Mutuality of obligation - employees may generally be required to work for a particular period and to work for that period. By contrast, independent contractors are generally free to accept or reject work;

Financial risk - employees do not generally share in any profit or become liable for any loss whereas an independent contractor will usually carry some financial risk;

Sub-contracting - an employee usually cannot pass on duties by sub-contracting them to a third party. Independent Contractors are often able to sub-contract all or part of the work they are required to perform;

Tools and equipment - In an employment relationship tools and equipment are usually provided by the employer. Independent contractors often must provide their own;

Income tax and superannuation - employers are required under legislation to pay income tax and superannuation on behalf of employees whereas an independent contractor is required to make their own arrangements; and

Leave Entitlements - an employee is entitled to various forms of leave provided by the Fair Work Act. Independent contractors will not receive any form of paid leave.

Courts are clear that they will uphold the true nature of an employment relationship, considering in detail the facts of the case, despite the label put on the relationship by the parties to it. As the New South Wales Court of Appeal stated in Wesfarmers Federation Insurance Ltd v Stephen Wells Trading as Wells Plumbing (2008) NSWCA 186 (at para 70), where a:

...relationship depends on various indicia, there is always a danger in extracting one (factor) and giving it decisive weight because of the way it has been used in a different context, rather than weighing each matter in the balance.

The court will therefore look at the relationship as a whole to determine its true nature. In the case of Hollis v Vabu Pty Ltd (2001), the High Court determined that the relationship between a courier company (Vabu Pty Ltd) and its couriers was that of employer and employee. The Court considered as important the fact that the couriers were not providing skilled labour, had little control over the manner of performing their work where Vabu had considerable scope to exercise control, wore the uniforms of Vabu Pty Ltd, and were provided with pay summaries.

Employees are afforded protection by ss 357-359 of the Fair Work Act, which impose penalties on an employer who misrepresents an employment relationship as an independent contracting relationship or forces people to enter into independent contracting arrangements.

THE FAIR WORK SAFETY NET

There are five primary sources for terms and conditions of employment:

• the NES,
• the provisions of a modern award,
• an enterprise agreement,
• contracts of employment; and,
• workplace determinations.

The Safety Net - the National Employment Standards

(Chapter 2 Part 2.2 of the Fair Work Act) and Modern Awards (Chapter 2, Part 2.3 of the Fair Work Act)

The Fair Work Act established the 10 NES which apply to all national system employees, regardless of industry, occupation or income. The safety net also comprises of modern awards which are tailored to particular industries or occupations and complement the NES. Both the NES and modern awards took effect on 1 January 2010.

The 10 NES cannot be excluded by either a modern award or an enterprise agreement, and are as follows:

Maximum weekly hours (s 62)

38 hours plus 'reasonable' additional hours. Factors going toward 'reasonableness' include health and safety risks, personal circumstances including family responsibilities, the needs of the organisation, level of compensation, notice given, usual patterns of work, and other relevant matters.

Flexible work arrangements (s 65)

Employees who are responsible for school age children or people under the age of 18 with a disability may request flexible work arrangements. The Fair Work Act is silent on any aged-care equivalent.

Employees will not be entitled to make such a request unless they have been employed continuously for more than 12 months (in the case of an ordinary employee) or, in the case of a casual employee, the employee is a 'long-term casual employee of the employer' and has a 'reasonable expectation of continuing employment' (see s 65(2)).

Fair Work Australia cannot hear a dispute arising under this section if an employer refuses an employee's request on 'reasonable business grounds' (see ss 65(5), 739(2)).

Parental leave and related entitlements (ss 67 - 85)

The Fair Work Act provides 12 months unpaid leave for employees with 12 months service (s 70). Employees may request a further 12 month extension (s 76). Like a request for flexible working arrangements, there is no avenue of appeal outside an express term in an agreement.

In addition, there is provision for 'unpaid special maternity leave,' available if a female employee is 'not fit for work' because of her pregnancy (s 80(1)). In order for this maternity leave to be taken, the employee must give her employer evidence that would 'satisfy a reasonable person' that she was 'not fit for work' (s 80(4)). Any 'unpaid special maternity leave' takes away from the employee's entitlement to unpaid leave under s 70.

Annual leave (ss 86 - 94)

Employees are entitled to 4 weeks annual leave, with the exception of shift workers, who are entitled to 5 weeks of annual leave. A shift worker is defined as an employee who is employed in an enterprise where shifts are continuously rostered 24 hours a day for 7 days a week. The employee must be 'regularly rostered' to work these shifts and must regularly work on Sundays or public holidays. Alternatively, an employee is a shift worker if so prescribed by the regulations for the purposes of the NES (section 87(3)).

There is now the facility for award/agreement-free employees to 'cash out' paid annual leave subject to a minimum accrual of 4 weeks remaining intact (section 94).

Personal leave and compassionate leave (ss 95 - 107)

An employee is entitled to 10 days personal/carer's paid leave per year of service. There is no 'cashing out' permitted unless it is permitted in an award or enterprise agreement (s 100). An employee is entitled to 2 days compassionate leave for each permissible occasion - serious illness, injury or death affecting the immediate family (s 104). The employee must give notice to their employer of the expected duration of the leave (s 107).

Community service leave (ss 108 - 112)

Community service leave is an open-ended entitlement, subject to a test of 'reasonableness'. To be absent for jury service or recognised emergency services commitments is always reasonable (s 108). If an employee, other than a casual employee, undertakes jury service, they are entitled to be paid at a base rate for a period of 10 days (s 111).

Long service leave (s 113)

Section 113 maintains any long service leave provisions already in awards and agreements, with State laws still operative otherwise. Any existing provisions under an AWA continue to apply with respect to long service leave entitlements (s 113(2)(a)).

Public holidays (ss 114 - 116)

Employees are entitled to be absent on listed national public holidays, plus any gazetted on a State basis. However, an employer may request an employee to work, but only if that request is reasonable. A determination of what is reasonable in the circumstances depends upon an assessment of the same factors applying to a determination of 'reasonableness' in relation to maximum working hours. (ss 114 & 115).

Notice of termination and redundancy pay (ss 117 - 123)

The Fair Work Act provides that an employer must not terminate an employee's employment unless the employee has been given the required period of notice or payment in lieu. The Act sets out a sliding scale of entitlements according to years worked with the employer.

Employers are excluded from the requirement to pay redundancy entitlements in certain circumstances (s 121).

Fair Work Information Statement (s 124)

A Fair Work Information Statement (as prepared by the Fair Work Ombudsman - and available on its website) setting out the rights of employees, including the NES. This document must be given to all new employees by their employer, preferably before the employee begins their employment, or otherwise as soon as is practicable.

Modern Awards

(Chapter 2, Part 2.3 of the Fair Work Act)

Modern awards came into effect on 1 January 2010 with specified award provisions including minimum wage, leave loading and penalties applying from 1 July 2010. Award modernisation streamlines thousands of state and federal awards into 122 national awards ('modern awards.') The Fair Work Act sets out tough penalties for non compliance with modern awards. Compliance is regulated by the Fair Work Ombudsman.

A modern award applies to all employees and occupations in the industry described by the award.

There is an important distinction between modern award coverage as opposed to modern award application. For example, an employer may be covered by the award, in terms of the industry it is part of, but the award may not apply to its workforce if they are party to an enterprise agreement.

Section 139 of the Fair Work Act sets out the terms that may be allowed in a modern award:

• minimum wages;
• types of employment;
• hours, rosters, break periods;
• overtime rates;
• penalty rates;
• annualised wage arrangements;
• allowances;
• leave and leave loadings;
• superannuation;
• procedures for consultation, representation and dispute settlement.

The Fair Work Act also sets out terms which must be included in a modern award:

• coverage (a term which sets out the employers, employees, organisations and outworker entities that are covered by an award (s 143));
• flexibility terms (s 144);
• terms for dispute resolution (s 146);
• ordinary hours of work (s 147);
• base and full pay rates for piece workers (s 148); and
• automatic variation of allowances (s 149).

Conversely, there are certain terms which must not be included in a modern award (objectionable terms) include:

• terms that provide for unreasonable payments/deductions for the benefit of the employer (s 151). What will constitute an unreasonable payment is defined in s326, which provides that such a term has no effect to the extent that it is 'unreasonable.'
• right of entry terms that require/authorise an official of an organisation to either hold discussions with, or interview, an employee, and to inspect any work, process or object (s 152);
• discriminatory terms. It should be noted that religious organisations are allowed to discriminate on the basis of religious faith, providing the discrimination is done in 'good faith.' In addition, discrimination on the basis of the inherent requirements of a position is permitted (s 153);
• terms containing state-based differences (There is a 5 year grace period) (s 154); and
• terms dealing with long service leave (s 155).

Modern awards do not apply to 'high income employees' (defined in the regulations to the Act, and is currently set at $113,800.00, indexed annually on 1 July) who have a written guarantee of earnings (ss 329 - 333).

Modern awards and the NES provide a new safety net against which future enterprise agreements will be tested.

Agreements and Agreement Making

Individual Transitional Employment Agreement (ITEA)

ITEAs replaced Australian Workplace Agreements (AWAs; a statutory written agreement between an employer and an employee about the employee's terms and conditions of employment) on 1 January 2010. AWAs or individual statutory agreements of any kind can no longer be lodged with the Workplace Authority.

Individual flexibility agreement (s 144)

A 'flexibility term' enables an employer and employee to enter into an 'individual flexibility arrangement' which varies the effect of the award 'to meet the genuine needs of the employer and employee'. Although there is no room for individual workplace agreements under the Fair Work regime, these individual flexibility arrangements will provide a useful means by which employees and employers can tailor some modern award provisions to better suit their needs.

Enterprise Agreement (Chapter 2 Part 2.4)

An Enterprise Agreements (EA) is an agreement made at an enterprise level between employers and employees about terms and conditions of employment. An EA can be made in two forms:

• single enterprise; or
• multiple enterprise agreements.

Employee organisations (unions) cannot be a party to such agreements unless they are a bargaining representative and apply to Fair Work Australia to be covered by the agreement. Once covered, the union can enforce the agreement.

Fair Work Australia can assist in the process of making such agreements. It can also deal with disputes arising under the terms of agreements and assess and approve agreements.

The Fair Work Act sets out to provide a simple, flexible and fair framework that enables collective bargaining, in good faith, at the enterprise level. An EA can be made between one or more employers and:

• employees; and
• (in the case of a greenfields agreement) one or more relevant employee organisations.

Content of Enterprise Agreements

While modern awards cover a whole industry or occupation and provide a safety net of minimum pay rates and employment conditions, an EA can be tailored to meet the needs of particular enterprises. EAs can include a broad range of matters including:

• rates of pay;
• employment conditions, eg, hours of work, meal breaks, overtime;
• consultative mechanisms;
• dispute resolution procedures; and,
• leave arrangements.

An EA cannot, however, include unlawful content such as:

• discriminatory or objectionable terms;
• terms that purport to give an unfair dismissal remedy or exclude statutory unfair dismissal provisions; and
• terms that are inconsistent with statutory industrial action or right of entry provisions.

An EA must have:

• a nominal expiry date, which may be up to four years from approval (s 186(5));
• dispute resolution procedures (s 186(6));
• flexibility terms (s 202); and
• consultation terms (s 205).

EAs only commence operation after being lodged and approved by Fair Work Australia. The agreement must pass the 'Better Off Overall Test' (BOOT) in comparison to the relevant modern award. The BOOT has been used from 1 January 2010 to decide whether an enterprise agreement has better terms and conditions than a modern award. Except in limited circumstances, an enterprise agreement will not be approved by Fair Work Australia unless it passes the BOOT.

Types of enterprise agreements

Approval processes for enterprise agreements vary depending on the type of agreement. There are three types:

Single-enterprise agreements—involving a single employer or one or more employers (such as in a joint venture) co-operating in what is essentially a single enterprise (such employers are known as single interest employers);

Multi-enterprise agreements—involving two or more employers that are not all single interest employers; and

Greenfields agreements—involving a genuinely new enterprise that one or more employers are establishing or propose to establish and who have not yet employed persons necessary for the normal conduct of the enterprise. Such agreements may be either a single-enterprise agreement or a multi-enterprise agreement.

Paid Parental Leave Act 2010

Under the Paid Parental Leave Act 2010 (PPL), working parents whose child was born after 1 January 2011 are entitled to be paid up to 18 weeks pay at the national minimum wage rate. To be eligible to receive paid parental leave, a parent must satisfy all of the following:

Work Test - the primary care giver must have been engaged in work for a period of at least 10 of the 13 months prior to the expected birth/adoption, with a break of no longer than 8 weeks and have undertaken at least 330 hours during that period;

Income Test - the primary care giver's adjusted taxable income for the full financial year previous to the year in which the claim is lodged must not be more than $150,000. This income limit will be indexed from 1 July 2012;

Be the primary care giver of the child - this can alternate between parents during the 18 weeks PPL period. 18 weeks is the maximum amount of PPL entitlement per birth/adaption and is not an individual entitlement for each parent;

Have not returned to work - if a person returns to work before receiving their entitlement, and they are eligible to receive the PPL, they will become ineligible. A person can ‘keep in touch' with their employer without losing their entitlement to paid leave, but cannot do so within 14 days after the birth/adoption. If a person returns to work after receiving some PPL entitlement, but before receiving their total PPL entitlement, and their partner becomes the primary care giver as a result, the partner will then be entitled to receive the remainder of the entitlement as long as they are the primary care giver (and satisfy the other eligibility requirements); and

Australian Residency Test - the primary care giver must be an Australian resident or satisfy the requirements relating to visas and temporary absences from Australia.

BARGAINING

Bargaining is the process by which one or more employers and employees negotiate the terms and conditions which make an agreement. Either side may be represented in the process by a bargaining representative.

Bargaining on a proposed EA generally begins when the employer agrees to bargaining or initiates bargaining. This is known as the notification time (s 173).

Section 173(3) obliges the employer to notify each employee of the right to be represented as soon as practicable, by issuing a 'Notice of Employee Representational Rights' to all employees, and no later than 14 days after the notification time. This does not apply to a Greenfields agreement as those employees to be covered by the agreement have not yet been employed.

In relation to Greenfield agreements Fair Work Australia must be satisfied that:

• the relevant union/s to be covered by the agreement is/are entitled to represent a majority of the employees who will be covered by the agreement; and
• it is in the public interest to approve the agreement.

Bargaining Representatives

Section 176 sets out the persons who are bargaining representatives for a proposed EA, these include (excluding greenfields agreements):

• an employer who would be covered by the agreement;
• any union who has a member that would be covered by the agreement (unless the member has specified in writing that he or she does not wish to be represented by the union);
• any union that has applied for a low paid authorisation that relates to the agreement; and
• any person specified in writing as their bargaining representative by either an employer or employee who would be covered by the agreement.

Bargaining representatives have broad powers ranging from:

• bargaining for an EA;
• applying for bargaining orders;
• enforcing breaches of bargaining orders;
• applying for serious breach declarations;
• obtaining majority support determinations (in other words to force bargaining); and
• obtaining scope orders.

Good faith bargaining

Section 228 of the Fair Work Act introduced a statutory obligation to bargain in good faith. Good faith bargaining requires that bargaining representatives must:

• attend, and participate in, meetings at reasonable times;
• disclose relevant information (other than confidential or commercially sensitive information) in a timely manner;
• respond to proposals made by other bargaining representatives for the agreement in a timely manner;
• give genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative's responses to those proposals;
• refrain from capricious or unfair conduct that undermines freedom of association or collective bargaining; or
• recognise and bargain with the other bargaining representatives for the agreement.

However, s 228(2) does not require a bargaining representative to:

• make concessions during bargaining for the agreement; or
• reach an agreement on the terms that are to be included in the agreement.

Bargaining disputes

If the good faith bargaining requirements are not met, a bargaining representative may apply to Fair Work Australia for assistance in resolving a dispute in relation to the proposed agreement (see s 229).

Fair Work Australia will issue bargaining orders where there is a concern that the good faith aspect is not being honoured, bringing the parties into line (s 230). It may also make a 'majority support determination' confirming that a majority of employees in a workplace want to secure a collective agreement. This will require an employer to engage, even if it's contrary to its own preferences (s 236).

If a bargaining representative contravenes one or more bargaining orders, Fair Work Australia can make a serious breach declaration(s 234). The contraventions must be serious and sustained and have significantly undermined bargaining for the agreement. If a serious breach declaration is made Fair Work Australia may resolve the dispute by making a bargaining related workplace determination.

UNFAIR DISMISSAL (FAIR WORK ACT PART 3.2)

Under the Fair Work Act, all employees have access to the unfair dismissal regime, provided they:

• earn less than the 'high income' threshold ($113,800.00 ( as at 1 July 2010) for full-time employees. This income threshold is indexed annually on 1 July; or
• are covered by a modern award if their income is greater than $113,800.00; or
• are covered by an EA; and
• have worked for their employer for more than 12 months; or
• have worked for six months for employers with 15 or more employees

Section 385 of the Fair Work Act provides that an employee has been unfairly dismissed if Fair Work Australia is satisfied that all of the following occurred:

• the person has been dismissed;
• the dismissal was harsh, unjust or unreasonable;
• if the employer is a small business, the dismissal was not consistent with the Small Business Fair Dismissal Code; and
• the dismissal was not a case of genuine redundancy.

In considering whether a dismissal was harsh, unjust or unreasonable, Fair Work Australia must take into account all of the following factors (section 387):

• whether there was a valid reason for the dismissal related to the employee's capacity or conduct;
• whether the employee was notified of that reason and given an opportunity to respond;
• any unreasonable refusal by the employer to allow the employee to have a support person present to assist at any discussions relating to dismissal;
• if the dismissal related to unsatisfactory performance by the employee, whether they had been warned about that unsatisfactory performance before the dismissal;
• the degree to which the size of the employer's enterprise and the degree to which the absence of dedicated human resource management specialists or expertise would be likely to impact on the procedures followed in effecting the dismissal; and
• any other matters that Fair Work Australia considers relevant.

Fair Work Australia may order reinstatement or compensation as the remedies for an unfair dismissal (s 390).

A person who believes they have been unfairly dismissed has a 14 day period in which to lodge their application.

An application fee (currently $61.60) is payable to Fair Work Australia to lodge a claim for unfair dismissal. The fee may be waived if it is deemed to cause hardship to the Applicant.

An application for an extension of time may be granted, however such an extension is unlikely to be granted unless the applicant can demonstrate hardship or illness.

A conciliation conference will be listed between the parties. 90% of conciliation conferences are held by telephone conference. 80% of conciliated matters are settled by agreement. The terms of agreement are usually signed by the applicant and respondent in a deed of settlement. It is important to note that the conciliator cannot make an award, that is, the resolution must be by the agreement of the parties. .

Small Business Fair Dismissal Code

The Small Business Fair Dismissal Code (the Code) was introduced for businesses with fewer than 15 employees. The Code specifies the steps a small business employer must take to ensure a dismissal is fair. If an employee of a small business makes an unfair dismissal claim, Fair Work Australia will first determine whether the employer has complied with the Code. If so, the claim cannot succeed.

The Code provides the following:

• Summary Dismissals;
• Other Dismissals;
• Procedural matters.

Summary Dismissals

It is fair for a small business employer to dismiss an employee without notice or warning when the employer has reasonable grounds to believe that the employee was guilty of serious misconduct. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures.

Other Dismissals

In other dismissals, a small business employer must give the employee a valid reason based on their capacity or conduct to do the job if they are at risk of being dismissed. The employee must be warned verbally or (preferably) in writing, that they risk being dismissed if there is no improvement. Further, the employer must provide the employee with an opportunity to respond to the warning and give them a reasonable chance to rectify the problem, having regard to the employee's response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.

Procedural matters

Employees can have another person present to assist them in discussions in circumstances where dismissal is possible. However, the other person cannot be a lawyer acting in a professional capacity.

If the employee makes an unfair dismissal claim to Fair Work Australia the small business employer will be required to provide evidence of compliance with the Code. This evidence may include that a warning has been given (except in cases of summary dismissal), a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.

Transfer of Business (Fair Work Act Part 2.8)

The transfer of business provisions under the Fair Work Act deal with situations where a business is transferred (after 1 July 2009) from one national system employer (eg, a company) to another. The end result may be that an award, agreement, or another type of 'transferable instrument' follows the transfer and becomes binding on the new employer.

Therefore, when an employer buys or sells a business, the sale may affect the employment and entitlements of the employees already working for the business.

General Protections

Part 3.1 of the Fair Work Act sets out a range of general protections that deal with workplace and industrial rights, including freedom of association, protections against discrimination, unlawful termination and sham arrangements.

Broadly, persons, including employers, employees, independent contractors and industrial associations must not take 'adverse action' against a person because that person has a workplace right, has or has not exercised a workplace right, or proposes or proposes not to exercise a workplace right,

The meaning of a 'workplace right' under the Act is very broad (s 341). Generally it relates to all aspects of employee entitlements under law, agreements and awards and the freedom to exercise and enforce those entitlements, as well as the ability to engage in industrial activity, including freedom to be or not to be members or officers of an industrial association. Examples include an entitlement to paid sick leave, a right to join a union, a right to breaks under an enterprise agreement, a right to a payslip and a right not to have a request for annual leave unreasonably refused.

Adverse action can be taken by employers (including prospective employers) and employees as well as independent contractors and industrial associations (s 342 includes a table of what constitutes adverse action). Types of conduct which will equate to adverse action include dismissal, injuring someone in the course of their employment, altering a person's position to that person's prejudice and discriminating between a person and other similar persons (s 342). A threat to take adverse action against a person because of that person's workplace right is also prohibited by the Fair Work Act. There are also express prohibitions on coercion, undue influence or pressure and misrepresentations (ss 343, 344 & 345).

What is important to establish in a claim of adverse action under the general protections provisions of the Fair Work Act is that the alleged 'adverse action' taken or threatened against a person was taken or threatened because of a person's 'workplace right'. It does not matter that there might be other reasons for taking action against a person. If one of the reasons was because that person had a workplace right, then the person taking the adverse action will be in breach of the general protections provisions.

Once a person claims that adverse action has occurred, the person alleged of undertaking or threatening the adverse action must prove that the reason for taking the adverse action was not because the person had a workplace right.

Contacts, Links and Resources

Contacts

Australian Human Rights Commission www.hreoc.gov.au

Federal Magistrates Court of Ausralia www.fmc.gov.au

National Research Centre for OHS Regulation regnet.anu.edu.au/nrcohsr

Welfare Rights and Legal Centre www.welfarerightsact.org

WorkCover (ACT) www.worksafe.act.gov.au/health_safety

WorkCover (New South Wales) www.workcover.nsw.gov.au

Fair Work Ombudsman www.fairwork.gov.au

Resources

ATOlaw: the ATO Legal Data Base law.ato.gov.au/atolaw

Fair Work Australia www.fwa.gov.au

Licence Recognition www.licencerecognition.gov.au