29 November 2015

Employment Law News and Tips

Release of draft Productivity Commission report

As reported in the media, the Productivity Commission recently released its draft report into the workplace relations framework.

The report summarised the current workplace relations system as “not dysfunctional” and in need of “repair not replacement”.  It also reported: “Toxic relationships between employers and employees can sometimes surface due to poor relationship management rather than flaws in the WR framework”.

One of the most innovative proposals is a new form of agreement – the “enterprise contract”.  This would fill the gap between enterprise agreements and individual arrangements and offer many of the advantages of enterprise agreements, without the complexities, making them particularly suitable for smaller businesses.  Any risks to employees would be assuaged through a comprehensive set of protections, including the right to revert to the award.

The Commission is now receiving further submissions and holding public hearings before releasing its final report in November 2015. 

When a conference or hearing is mandatory for unfair dismissal cases

I recently appeared before the Full Bench of the Fair Work Commission sitting in Sydney in relation to an appeal against a jurisdictional decision.

Prior to making the original decision, the Commissioner wrote to the employee advising that unless he requested a hearing in person, a decision would be made on the basis of the written material filed only (ie. ‘on the papers’).  The employee (unrepresented at the time) did not seek a hearing, was unsuccessful and appealed.

The Full Bench held that whenever there are “facts in dispute”, as was the case here, the Commission must conduct a conference or hold a hearing in person regardless of the wishes of the parties.  As a hearing on the papers is not sufficient, the matter was remitted back for rehearing.

Tip:      Unless it is clear there are no disputed facts in unfair dismissal matters, parties should, if given a choice, elect a conference or hearing in person to avoid the prospects of an appeal.  This issue often arises when an employer raises a jurisdictional objection that may be dealt with prior to conciliation.

How to calculate compensation for unfair dismissal cases:  the cap is the last consideration 

The compensation cap for unfair dismissal matters is the lesser of $68,350.00 or the total amount of remuneration received by the employee (or entitled to receive) 26 weeks prior to the dismissal.

Sometimes, there is a mistaken view that the legislative cap on compensation operates as a maximum to be awarded in only the most serious or grievous cases.  However, the cap is simply an arbitrary one and is the last consideration to take into account.

In allowing an appeal and awarding an employee full compensation, the Full Bench of the Fair Work Commission recently held that the following steps are to be followed:

  1. estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated;
  2. deduct monies earned since termination;
  3. deductions for contingencies;
  4. calculate any impact of taxation;
  5. deductions for any misconduct; and
  6. apply the legislative cap.

Tip:        Employers should beware the long-standing employee.  Absent any evidence suggesting the employment relationship might have come to an end (eg. resignation or lawful termination) the Commission will more readily accept a submission that the employee expected to work for 12 months or more.  This often outweighs other discounting factors resulting in an award of compensation equal to the legislative cap.    

For more information about this issue and all employment and industrial relations matters, please contact Elaine Jesurasingham, Partner on 07 4036 9700.

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