Monthly Update—Australian Labour & Employment | May 2018

MESSAGE FROM THE EDITOR

In this edition of the Update, we report on the annual increase to the minimum wage and the proposed 12-month Superannuation Guarantee Amnesty. We then comment upon a Memorandum of Understanding between Coles and the Transport Workers Union ("TWU") in relation to "on demand" workers. Finally, we discuss two decisions of the Fair Work Commission. In the first decision, the Commission warned against employers terminating employees' employment by email, text or phone. In the second decision, the Commission held that employees did not accrue leave under the Fair Work Act 2009 (Cth) during employer lockout periods.

IN THE PIPELINE—HIGHLIGHTING CHANGES OF INTEREST TO EMPLOYERS IN AUSTRALIA

Increase to the Minimum Wage

On 1 June 2018, the Fair Work Commission increased the minimum wage by 3.5 percent (or $24.30 per week). The new weekly minimum wage will be $719.20 per week or $18.93 per hour. The changes will come into effect on 1 July 2018.

Superannuation Guarantee Amnesty

On 24 May 2018, the Minister for Revenue and Financial Services introduced the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018. If enacted, the Bill will introduce a 12-month Superannuation Guarantee Amnesty. The Amnesty will give employers an opportunity to rectify unpaid Superannuation Guarantee ("SG") payments for any period from 1 July 1992 to 31 March 2018 without penalty.

Employers who voluntarily disclose shortfalls in superannuation payments will not be penalised or liable to an administration fee. The penalties to which employers would otherwise be exposed include penalties for not giving employees a choice of superfund and Director Penalty Notices for companies that fail to meet their SG obligations. Employers who fail to disclose unpaid superannuation may be liable to higher penalties once the Amnesty ends.

To avoid penalties or administration fees, employers must pay all that is owing to their employees and the high rate of nominal interest during the Amnesty.

Employers should also be aware that the minimum superannuation contribution cap will remain unchanged during 2018/19 at the rate of 9.5 percent.

Memorandum of Understanding Signed by Coles and the Transport Workers Union

On 23 May 2018, Coles and the TWU signed a Memorandum of Understanding ("MOU"), which focused on the "on demand" workforce. The five principles that underpinned the MOU for on-demand workers were:

• such workers should not be prohibited from accessing the same rights as other workers. On demand workers "should not have artificial labels applied to them that would limit their access to appropriate payments, leave entitlements, superannuation, safe working conditions and representation";
• all parties involved in the provision of goods and services have a role in ensuring safe and fair outcomes for workers in the industry;
• transport-related work should provide the opportunity for sustainable patterns of engagement and advancement, to ensure transport remains a feasible career option;
• on-demand workers must have the opportunity to contribute to a collective voice; and
• appropriate resources should be allocated to ensure worker and industry standards are maintained.

Under s 550 of the Fair Work Act 2009 (Cth) ("FW Act"), a person who is "involved in" a contravention of a civil penalty provision is taken to have also contravened that provision. This is known as "accessorial liability". The Fair Work Ombudsman ("FWO") is increasingly utilising the accessorial liability provisions in the FW Act to ensure that companies and individuals are held responsible for contraventions of that Act. It is possible that the MOU between Coles and the TWU was a response to the increasing focus of the FWO on such provisions.

HOT OFF THE BENCH—DECISIONS OF INTEREST FROM THE AUSTRALIAN COURTS

Commission Warns Against Firing Employees by Phone, Text and Email

Cachia v Scobel Pty Ltd ATF [2018] FWC 2648

Factual Background. In this case, the Commission considered an unfair dismissal application in relation to the applicant's dismissal from her employment with the respondent.

Decision. The Commission dismissed the application and concluded that the applicant had engaged in serious misconduct, including forcefully pushing, humiliating and belittling colleagues, and being dismissive of the authority of the manager of the respondent's business. The Commission concluded that the respondent had complied with the Small Business Fair Dismissal Code and had awarded the applicant procedural fairness prior to her dismissal.

However, in its decision, the Commission criticised the co-owner of the respondent's business for dismissing the applicant by email. The Commission stated: "I do not consider that informing an employee of their dismissal by phone, text or email, to be an appropriate means of conveying a decision which has serious ramifications for an employee". The Commission noted that dismissal by way of email, text or phone should not occur unless there is a "genuine apprehension of physical violence or geographical impediment".

Lessons for Employers. It is best to terminate an employee's employment in person. However, if this is not possible, termination should be effected by registered mail and email. Termination should only be effected by email alone where there is a genuine apprehension of physical violence or geographical impediment. Text messages should be used only in conjunction with other communication methods, for instance to notify the employee that a letter has been posted to him or her by registered mail.

Commission Confirms Employees Do Not Accrue Leave During Lockout

CEPU; CFMMEU v Carter Holt Harvey Woodproducts Australia Pty Limited [2018] FWCFB 2731

Factual Background. The Communications, Electrical and Plumbing Union of Australia ("CEPU") and the Construction, Forestry, Maritime, Mining and Energy Union ("CFMMEU") applied to the Commission to determine a dispute under the Carter Holt Harvey Wood Products Australia Pty Limited Myrtleford Enterprise Agreement 2013 ("Enterprise Agreement"). The dispute generally related to the accrual of employees' leave during a "lockout" period (where the employer refused to allow employees to work in response to protected industrial action taken by the employees and unions).

In February 2018, the Commission held that the lockout period was not "service" within the meaning of the FW Act, and therefore employees did not accrue annual leave during this period. The CEPU and the CFMMEU appealed to the Full Bench of the Commission against this decision.

Legal Background. Section 87 of FW Act provides that employees accrue annual leave "progressively during a year of service". Section 22 of the FW Act provides, among other things, that "any period of unpaid authorised absence" does not count as "service".

Decision. The Full Bench of the Commission concluded that a "period of unpaid authorised absence" included an employer lockout period. Accordingly, employees did not accrue annual leave or long service leave during the lockout period.

The Commission considered that this interpretation "accords more readily with s.416 of the FW Act, which provides employers with the discretion to refuse to pay their employees for periods of employer response action". The Commission stated: "A key principle reflected in the scheme established by Part 3-3 of the FW Act is that employees who take protected industrial action should be aware that not only will they not be paid for the period of their own industrial action, but also that they may not be paid for any period of employer response action that follows as a result of their own industrial action".

Lessons for Employers. This decision confirms the general position that employees will not accrue annual or long service leave during any strike or employer lockout period.

Lawyer Contact

For further information, please contact your principal Firm representative or the lawyer listed below. General email messages may be sent using our "Contact Us" form, which can be found at www.jonesday.com/contactus/.

Adam Salter
Sydney
+61.2.8272.0514
asalter@jonesday.com

We thank associate Katharine Booth and law clerk Jacqueline Smith for their assistance in the preparation of this Update.

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