30 Nov HR LAW NEWSLETTER

Welcome to the November 2021 Newsletter

November was a busy month for employers.  We saw Modern Award wages increase in a number of Modern Awards, changes made to legislation relating to sexual harassment and the introduction of superannuation stapling.

As we move into December, some businesses will be operating at their busiest, while others will be winding down and preparing for the annual Christmas and New Year shutdown.

We have outlined below some important matters for employers to consider at this time of year.

Business Shut/Close Down

A business “shuts down” or “closes down” when it temporarily closes its operations during certain times of the year, for example, over the Christmas and the New Year period.  

Most Modern Awards contain provisions which allow employers to direct employees to take annual leave over periods of shut down provided certain obligations, such as notice requirements, are met. If an enterprise agreement applies, it may also contain provisions regarding shutdowns. 

If you would like advice regarding whether you can direct your employees to take annual leave over a shutdown period, please contact the team at HR Law.

Public Holidays

There are a number of public holidays coming up over the Christmas and New Year period.

Employers must remember that Modern Awards and enterprise agreements can provide entitlements for working public holidays, including:

• extra pay (such as penalty rates);
• agreeing to substitute a public holiday for another day;
• an extra day off or extra annual leave; and
• working minimum shift lengths on public holidays.

Even though a public holiday may fall on a day when the employee would normally work, an employee does not have to work.

However, an employer can ask an employee to work on a public holiday, if the request is reasonable. An employee may refuse to work on reasonable grounds.

Section 114 of the Fair Work Act 2009 (Cth) (“FW Act”) outlines what needs to be taken into account when deciding if a request to work is reasonable:

• the employee’s personal circumstances (for example family responsibilities);
• the needs of the workplace;
• whether the employee will get more pay (for example penalty rates);
• the type of work;
• whether the employee’s salary includes working on a public holiday;
• whether the employee is full-time, part-time, casual or a shiftworker;
• how much notice was given to the employee about working; and
• the amount of notice the employee gives that they refuse to work.

Employers are reminded to check any applicable Modern Award and/or enterprise agreement for specific provisions regarding public holidays. Getting it right the first time is the best way to avoid any costly claims being made, e.g. for an underpayment.

Mandatory vaccinations

We are seeing more and more businesses mandating COVID-19 vaccinations, whether there is a Government directive that their employees be vaccinated or not. 

Recent cases (such as Harding v Sutton [2021] VSC 741 and Larter v Hazzard (No 2) [2021] NSWSC 1451) have found employees unsuccessful in challenging Government mandated vaccination directives.

As more businesses are mandating vaccinations, we anticipate further challenges before the courts.

Before implementing any mandatory vaccination policy, we strongly recommend you contact HR Law for advice on matters such as what should be included in the policy and how it should be implemented.  

Stop Sexual Harassment at Work

Applications can now be made for orders to stop sexual harassment at work.

From 11 November 2021, the Fair Work Commission (“Commission”) can receive applications for orders to stop sexual harassment at work. This means that the Commission can now receive applications for orders to stop bullying, to stop sexual harassment, or to stop both bullying and sexual harassment at work. 

In order to make a stop sexual harassment order, the alleged harassing behavior must occur whilst the worker is at work.  As the phrase “at work” is not defined in the legislation, the term at work can encompass a range of circumstances and will depend upon the context, including custom and practice and the nature of the worker’s contract.  Being at work is not limited to the physical workplace or when a worker is performing work for the employer.  “At work” includes:

• the performance of work at any time or location;
• when the worker is engaged in some other activity authorised or permitted by the employer;
• when the employer has authorised the worker to be on special paid leave; and
• on an authorised meal break, at a work event or even on a coffee break.

(See for example, Petar Ankucic v Drake Personnel Limited, t/as Drake [1997] NSWIRComm 157; Inspector Campbell v James Gordon Hitchcock [2004] NSWIRComm 87;Bowker and Others v DP World Melbourne Limited T/A DP World and Others [2014]FWCFB 9227).

Schedule X – Modern Awards

On April 2020, the Fair Work Commission made determinations to vary 99 Modern Awards by adding unpaid pandemic leave and annual leave flexibility provisions. The determinations inserted a temporary new Schedule X into those Modern Awards, providing for example, two weeks of unpaid pandemic leave and the ability to take twice as much annual leave at half the employee’s normal pay if the employer agreed. Schedule X provisions stopped applying for some Modern Awards on 30 June 2020 and 29 March 2021, however Schedule X provisions still remain in place until 31 December 2021 for some Modern Awards (unless extended upon application).  The remaining Schedule X Modern Awards include:

• Aboriginal and Torres Strait Islander Health Workers and Practitioners and Aboriginal Community Controlled Health Services Award 2020
• Aged Care Award 2010
• Banking, Finance and Insurance Award 2020
• Fast Food Award 2010
• Hair and Beauty Industry Award 2010
• Manufacturing and Associated Industries and Occupations Award 2020

Case Brief

High income employees – are they always protected from unfair dismissal?

The question of whether a high income employee was exempt from protection from an unfair dismissal remedy was recently examined in the case of Lingli Zheng v Poten & Partners (Australia) Pty Ltd [2021] FWC 1023 and then on appeal in Lingli Zheng v Poten & Partners (Australia) Pty Ltd [2021] FWCFB 604.

Section 382 of the FW Act states that “a person is protected from unfair dismissal at a time if, at that time:

• the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
• one or more of the following apply:
  •  a modern award covers the person;
  • an enterprise agreement applies to the person in relation to the employment;
  • the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”

In Lingli Zheng v Poten & Partners (Australis) Pty Ltd [2021] FWC 1023, Ms Lingli Zheng (“Ms Zheng”) applied for an unfair dismissal remedy arguing she was covered by the Professional Employees Award 2020 (‘the Award”) and was employed under a classification level of the Award, (namely a “Level 3- Professional” classification) and therefore protected from unfair dismissal.

It was not contested that Ms Zheng’s annual earnings were above the high income threshold and an enterprise agreement did not apply to her employment. Therefore, the key question the Court had to consider was whether the Award covered Ms Zheng. If the Award did not apply, then she would not be protected from unfair dismissal and her application would have to be dismissed.

Ms Zheng relied on the “principal purpose test”, i.e. distinguishing between the substantive role of the position versus examining the actual time that an employee has been occupied performing the tasks of that role, Ms Zheng made submissions based on:

• the nature of the day to day technical work, namely, chemical engineering;
• the circumstances in which she was employed to do the work almost exclusively required the use of her qualifications;
• the reason that she was hired, i.e., she was hired for her technical abilities; and
• the job advertisement  which made it clear that chemical engineering skills were mandatory.

Poten & Partners (Australia) Pty Ltd (“Poten”) argued that Ms Zheng was not protected from unfair dismissal as Ms Zheng was not covered by the Award.   Poten argued:

• her remuneration was clearly above a Level 3- Professional;
• 80% of Ms Zheng’s time was not spent doing a technical role – instead Ms Zhengs’ time was spent as follows:
  • one third on primarily technical assignments; technical tasks;
  • one third of her time spent on assignments focused on markets, shipping, organisational capability; and
  • the remainder of her time was focused on business development and administration;
• Ms Zheng was not carrying out professional engineering duties and did not perform ground up engineering of infrastructure; and
• Ms Zheng was not required to perform duties such as preparing specifications for chemical process systems, the construction and operation of commercial-scale chemical plants or the fabrication of projects undergoing physical or chemical changes.

These factors they argued went against her being covered by the Award, that is, in respect of a Level 3- Professional Engineer, there was no evidence that Ms Zheng was carrying out “professional engineering duties”.

Deputy President Beaumont at [38] stated that “assessment of award coverage requires first, a legal question concerning the proper construction of the coverage clause (and any other relevant provisions of the award) and, second, a factual question as to whether the employer and employee fall within the scope of the coverage clause properly construed”.

Deputy President Beaumont found that, although Ms Zheng held the professional qualifications of a Level 3- Professional that in itself was not enough. Deputy President Beaumont said it must be shown that Ms Zheng was carrying out professional duties. Deputy President Beaumont stated at [69] that “often it will be a narrow line that distinguishes whether an employee is, or is not, covered by award” and “this is one such case”.

To establish if Ms Zheng was covered by the Award, Deputy President Beaumont applied the principal purpose test and examined the duties that Ms Zheng was required to perform in her role as an “LNG Technical Consultant” and examined the technical duties and qualifications needed to perform this role.  Deputy President Beaumont at [70] stated that “turning to the test of principal purpose, an applicant who seeks to establish that they are protected from unfair dismissal by virtue of being covered by a modern award need to establish not only they are within the coverage clause of that modern award, but also that they are employed in a classification in the award”. 

Deputy President Beaumont found that the Award did not cover Ms Zheng, an enterprise agreement did not apply to her in relation to her employment and her earnings exceeded the high income threshold and Ms Zheng was not a person protected from an unfair dismissal claim.  Therefore, the Fair Work Commission had no jurisdiction to order an unfair dismissal remedy under section 390 of the FW Act.

The Appeal

On appeal, the Full Bench of the Fair Work Commission found that the Deputy President erred in the application of the “principal purpose” test in determining whether Ms Zheng was covered by an Award classification.  Their Honours determined Ms Zheng was covered by the Award at the time of her dismissal and was therefore a person protected from unfair dismissal within the meaning of section 382 of the FW Act.

In reaching this decision, their Honours undertook the principal purpose test which included consideration of the job advertisement, the contract of employment and the classification structure in Schedule A of the Award. With respect to the job advertisement, their Honours considered the job title of ‘LNG Consultant’, which required responsibility for the technical support of consulting studies as well as project technical due diligence, and the reference of an ideal candidate holding a graduate or post-graduate degree in chemical engineering.  The contract of employment placed less emphasis on technical roles of the position, however, Ms Zheng was still required to prepare technical analysis and consulting reports in the development of LNG export and import.  Turning to the classification levels of Schedule A of the Award, their Honours at [21] were “comfortably satisfied that Ms Zheng’s role as a LNG and natural gas industry consultant required her to utilise the technical knowledge, expertise and analysis derived from her chemical engineering qualifications and experience would at least fall within Level 2 as an “Experienced engineer”.”

Practical Implications for Employers

Simply because an employee is a high income employee as defined by section 329 of the FW Act, does not automatically exclude an employee from unfair dismissal protection.    Employers who engage employees paid above the high income threshold (currently FY2021/2022 $158,500.00) must ensure that the employee is genuinely not covered by a Modern Award  or enterprise agreement in order to rely on section 382 of the FW Act.

If you require advice on a high income employee arrangement, please contact the team at HR Law. 

HR LAW ANNOUNCEMENTS

HR Law is pleased to announce that it has been appointed on the Local Buy panel for not only Legal Services (BUS261) but also Human Resources and Employee Services (BUS278).   

HR Law will form part of a register of pre-qualified suppliers who will:  

• provide legal services in employment and industrial relations to Queensland Councils and approved purchasers; and
• provide a diverse range of Human Resources and Employee Services to purchasers in Queensland and Tasmania including workplace investigations and training.

HR Law looks forward to continuing to work with employers in Queensland and Tasmania through these panel appointments.