10 May HR LAW NEWSLETTER – APRIL 2024

Welcome to the April 2024 HR Law Newsletter.  This month, we provide an overview of some recent developments in employment law including the findings of a report relating to workplace technology-facilitated sexual harassment, new leave entitlements for Queensland public sector employees and delayed consultation on portable leave entitlements.  We then discuss some potential developments relating to the use of restraint clauses.  Finally, we examine a recent case, which sheds light on an unforeseen consequence stemming from the incorporation of restraint clauses in an employee’s employment contract.

REPORT FINDS MYTH BELIEVERS HAVE HIGHER PROPENSITY TO HARASS

In the recent ‘workplace technology-facilitated sexual harassment: perpetration, responses and prevention’ report commissioned by Australia’s National Research Organisation for Women’s Safety (“Report”), it was found that employees who believe common sexual harassment myths are more likely to use digital technology to sexually harass their colleagues.

Notably, the Report found that, in the survey of more than 3000 workers, those who indicated that they strongly supported “sexual harassment myths” such as “most women secretly enjoy it when men ‘come on’ to them at work” and “sometimes a woman has a ‘fantasy’ relationship with her boss and then claims that he sexually harassed her” were almost 16 times more likely to report they had engaged in workplace technology-facilitated sexual harassment than those with “low endorsement” of such views.

HR Law recently wrote an article on employer’s obligations regarding sexual harassment in the workplace.  To access the article, click here.

NEW LEAVE ENTITLEMENTS FOR QUEENSLAND PUBLIC SECTOR EMPLOYEES

The Queensland Government will introduce 10 days paid reproductive health leave for public sector employees later this year.

The 10 days of non-cumulative leave per year will be available for use by public sector employees for fertility or IVF treatment, hysterectomies and vasectomies, and for absences related to chronic reproductive health conditions such as endometriosis, dysmenorrhea, adenomyosis, polycystic ovary syndrome, and menopause symptoms.  The leave is proposed to be available by no later than 30 September this year.

The Queensland Government have advocated for the Commonwealth Government to introduce a similar entitlement for private sector employees. 

HR Law will keep you updated.

PORTABLE LEAVE ENTITLEMENTS – CONSULTATION DELAYED

Tony Burke, Workplace Relations Minister has agreed to delay consultation on a portable leave entitlement scheme, after employer requests.  Prior to the 2022 Federal Election, the Labor Government proposed to deliver better pay to those in insecure work by developing portable leave entitlement schemes for annual leave, sick leave and long service leave.

What do portable leave entitlement schemes mean for employers?

If portable leave entitlement schemes are implemented, this will likely mean greater costs for employers that are captured by the scheme.

Portable leave entitlement schemes already operate in some sectors and jurisdictions across Australia.  For example, QLeave provides a portable long service leave scheme for workers in Queensland’s community services industry.  Under this scheme, applicable employers are required to register and pay a levy each quarter based on the ordinary wages of their employees as reported on their employer return.

HR Law will keep you updated.

RESTRAINT CLAUSES

What is a restraint clause?

Restraint clauses in employment contracts are conditions that restrict an employee from sharing information, moving to a competitor, or prohibiting a former employee from approaching clients or co-workers for a specified period post dismissal.  A restraint clause will only be enforceable where an employer has a legitimate protectable interest and the clause itself restrains no more than what is reasonable to protect that interest.  The onus is on the employer to show that any restraint is reasonable to protect their interests in the circumstances.

US Bans Restraint Clauses

The US Federal Trade Commission has published a final rule change that imposes a nationwide ban on non-compete clauses.  The US Chamber of Commerce has, however, initiated a challenge to the new rule.

Australian employers could also potentially see restrictions on the use of restraint clauses in the near future.  The Competition Review is currently seeking public submissions in relation to its Issue Paper, which covers emerging concerns relating to:

• non-competes and other restraint of trade agreements between businesses and workers; and

• no-poach and wage-fixing agreements between businesses.

To access the Issue Paper and relevant documentation, click here.

Case Brief – Unintended Consequence of Restraint Clause

In this month’s case brief, we aptly discuss the recent case of Andrew Goddard v Richtek Melbourne Pty Ltd [2024] FWC 979 (16 April 2024) which sheds light on an unforeseen consequence stemming from the incorporation of restraint clauses in an employee’s employment contract.

In this case, the Fair Work Commission refused to reduce compensation for an unfairly dismissed employee who chose not to apply for similar jobs after his termination, due to a non-compete clause in his employment contract.

In this case, the restraint clause prohibited the employee from engaging in a similar business to their former employer’s for a period of 12 months post-dismissal.  The employee gave evidence that he was wary of breaching this provision of his contract and therefore refrained from seeking opportunities in his field.  As a result, this significantly hindered his ability to secure new employment.

The Deputy President stated [27]:

“Ordinarily, one would expect a person to have applied for jobs in the sector of their expertise as a reasonable step in mitigating loss.  However the presence of a non-compete provision in his contract explains Mr Goddard’s decision not to do so.  Although the provision is most likely unenforceable on the basis that its scope is unreasonable, an ordinary worker cannot be expected to know this, and it is understandable that Mr Goddard would not want to risk embroiling himself in a legal controversy by acting contrary to an express provision in his contract.  I therefore make no deduction in respect of Mr Goddard’s decision not to apply for jobs that might have involved a prima facie contravention of the restraint of trade provision in his contract of employment.”

This case serves as a reminder to employers to reconsider the necessity and scope of restraint clauses in their employment contracts.  While restraint clauses may serve legitimate business interests, they should be drafted to strike the right balance between protecting the employer’s interests and respecting an employees’ rights to seek alternative employment.

To read the case, click here.

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The content of this newsletter is intended to provide a general guide to the subject matter.  Specialist advice should be sought about your specific circumstances.