HR LAW NEWSLETTER – MAY 2023

HR LAW NEWSLETTER – MAY 2023

Welcome to the May 2023 HR Law Newsletter.  This month, we discuss some upcoming legislative changes. We then turn to focus on the key provisions of accessorial liability under the Fair Work  Act 2009 (Cth) (“FW Act”) and discuss a recent case, in which a HR Manager was ordered by the Court to personally pay significant pecuniary penalties for a mismanaged termination.

REMINDER OF UPCOMING LEGISLATIVE CHANGES

Over the next two months, some important legislative changes will come into effect.  If you would like assistance or advice regarding your obligations, or further information regarding these changes, contact HR Law.

Flexibility Requests

More employees will be able to access flexible work arrangements from 6 June 2023.

From this date, the right to request flexible working arrangements will also apply to:

  • employees, or a member of their immediate family or household, experiencing family and domestic violence; and
  • employees who are pregnant.

Unpaid Parental Leave

From 6 June 2023, there will be changes to how employers must handle requests for an extension of unpaid parental leave. These changes, implemented through the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, reflect the Albanese Government’s commitment to enhancing job security and prioritising gender equality in the workplace.

Currently, the FW Act provides limited guidance on how employers should respond to requests for an extension of unpaid parental leave.  The new requirements are as follows:

  • When an employee requests an extension of unpaid parental leave, the employer can either agree to the request or engage in discussions with the employee to reach a different extension period.
  • The employer must provide a written response to the employee within 21 days of the request. If the employer decides to refuse the request for an extension, they must also respond in writing within 21 days.
  • Employers can only refuse an extension request if they have genuinely attempted to reach an agreement with the employee but were unsuccessful, they have considered the implications of denying the extension, and they have legitimate business grounds for refusal.
  • The written response to the employee’s request must include detailed explanations for the refusal, outlining the employer’s specific business grounds and how they relate to the request. It should also propose an alternative extension period that the employer is willing to agree to, or state that they cannot agree to any extension.

Additionally, the new provisions introduce dispute resolution mechanisms that the Fair Work Commission (“FWC”) will oversee.

Wage Increases

Each financial year, the FWC reviews and sets minimum wages.

The FWC’s minimum wage Bench is set to hand down its 2023-24 national minimum wage decision at 10.00am on Friday, 2 June 2023.

In light of increasing cost of living pressures (CPI currently 7% a year), unions have been pushing for an inflation-matching increase.

A 7% increase would lift the minimum hourly rate from $21.38 to $22.88 and the minimum annual full-time rate by $2,966.00, raising it to $45,337.28.

The FWC will livestream the ruling via a link that will appear on its home page.

To view the Notice of Listing, click on the link.

Superannuation Increase

A reminder that the Superannuation Guarantee will be increasing from 10.5% to 11% on 1 July 2023.  Employers should ensure that their payroll systems are updated in preparation for this change.

ACCESSORIAL LIABILITY

As the legislative framework around employment law rapidly changes, it is important that those involved in employee management stay aware of their employer obligations, particularly those obligations enshrined in the FW Act.  But what happens if they do not and there is a subsequent breach of the FW Act?

Section 550 of the FW Act deals with what is commonly termed “accessorial liability”. Section 550(1) provides that a person who is involved in a contravention of a civil remedy provision of the FW Act is taken to have contravened that provision. Section 550(2) provides that a person is involved in a contravention of a civil remedy provision if, and only if, the person:

  • has aided, abetted, counselled or procured the contravention; or
  • has induced the contravention, whether by threats or promises or otherwise; or
  • has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
  • has conspired with others to effect the contravention.

A person or company can include:

  • a company director;
  • a human resources manager or other manager;
  • a payroll officer;
  • an accountant;
  • a business involved in the company’s supply chain.

The applications for orders in relation to contraventions of civil remedy provisions are found in section 539 of the FW Act.  Some of the matters under the FW Act to which civil remedy provisions may apply include, but are not limited to:

  • Part 2‑4—Enterprise agreements;
  • Part 2‑5—Workplace determinations;
  • Part 2‑6—Minimum wages;
  • Part 2‑7—Equal remuneration;
  • Part 3‑1—General protections;
  • Part 3‑2—Unfair dismissal;
  • Part 3‑3—Industrial action;
  • Part 3‑4—Right of entry;
  • Part 3‑5A—Prohibiting sexual harassment in connection with work.

A person found to have been involved in a contravention of a civil remedy provision can be held personally liable under section 550 of the FW Act and ordered to pay pecuniary penalties.  To potentially limit the risk of being held personally liable, those involved in employment management decisions should ensure they:

  • are aware of obligations arising under the FW Act, including under relevant modern awards and/or enterprise agreements;
  • where there are potential issues, make inquiries to confirm compliance with the FW Act; and
  • do not turn a blind eye to possible breaches of the FW Act, as a Court may be able to infer actual knowledge from wilful blindness.

CASE BRIEF

In this month’s case brief, we focus on United Workers’ Union v Bervar Pty Ltd (No 2) [2023] FedCFamC2G 251 (4 April 2023) (“Compensation Case”), which concerned a HR manager being ordered to personally pay significant pecuniary penalties as a result of a mismanaged termination. 

Background

Ms Talwinder Kaur (“the Applicant”) worked for Bervar Pty Ltd (“the Company”) for almost five years, during which time the Applicant made steady progress through the Company over a series of promotions.  Over the course of her employment, the Applicant had disagreements with Cameron Blewett, the HR manager (“the HR Manager”), and fellow colleagues over changes in the Applicant’s responsibilities and overtime.  As a result, the Company then held a performance management meeting with the Applicant and several members of senior management.  The Applicant was provided with no notice to this meeting and was not made aware that she could bring a support person, despite the Applicant being a migrant with limited English language skills.  Two hours after this meeting, due to stress, the Applicant left work without clocking out.  The HR Manager then called the Applicant’s mobile later that day to carry out a “welfare check”.  The Applicant instructed that the HR Manager speak to her husband.  The HR Manager claims that during this call, the Applicant’s husband advised that the Applicant would not be returning to work due to bullying and harassment and would be making a claim to “Fair Work”.  The HR Manager stated he accepted this as a resignation.

Ultimately, in assessing liability, Judge Blake found in United Workers’ Union v Bervar Pty Ltd [2022] FedCFamC2G 418 (“Liability Case”), that the HR Manager:

  • assumed the Applicant’s husband had authority to speak for the Applicant;
  • accepted the Applicant’s resignation from employment despite never speaking to the Applicant directly;
  • terminated the Applicant’s employment due to concerns the Applicant would make an application to “Fair Work”; and
  • had engaged in unlawful adverse action (by accepting a purported resignation which had not occurred) for unlawful reasons.

As a result of this conduct, Judge Blake found that the Company had breached section 340 of the FW Act, which prohibits a person from taking adverse action (including dismissal) against another person because that person proposed to exercise a workplace right, including bringing applications in the FWC. 

It was also held that the HR Manager was personally liable under section 550 of the FW Act as he was the only participant in the telephone call with the Applicant’s husband and was the person who decided to bring the Applicant’s employment with the Company to an end.

Compensation and Penalties Case

The Court ordered the Company to pay the Applicant $47,834.26 as compensation for economic loss and $9,000.00 as general damages. The Court also ordered the employer to pay a penalty of $37,800.00.

In determining what pecuniary penalty to impose on the HR Manager, Judge Blake considered the HR Manager failed to comply with the basic requirements of a person with HR management status in his mismanagement of the termination of the Applicant. Judge Blake further noted that the HR Manager declined the opportunity to acknowledge his mistakes in the management process and failed to show any “contrition or remorse” for the manner in which he terminated the Applicant’s employment. 

Accordingly, the Court considered the circumstances of the case were egregious and there was a high need for specific and general deterrence.  As a result, Judge Blake served a penalty at 60% of the maximum (FY2021 up to $12,600.00 per contravention for an individual), discounted due to it being a first offence, which resulted in the HR Manager being fined $7,560.00.

Practical Implications

The Liability and Compensation Cases serve as an important reminder that employers and those people involved in a contravention of a civil remedy provision under the FW Act, such as HR Managers, may face significant financial implications if correct procedures are not followed in the treatment and termination of employees.  If you would like assistance or advice regarding your obligations under the FW Act or further information on accessorial liability and how you can manage the risk, please contact the team at HR Law.

If you would like to consider these cases in further detail, please see below:

To view the Liability Case, click here.

To view the Compensation and Penalties Case, click here.

WHAT YOU MAY HAVE MISSED

Recently, Jill Hignett, Managing Partner of HR Law hosted a Keeping Abreast Of The Changing HR Compliance Landscape Webinar

In this complementary Webinar, Jill Hignett discussed how to keep abreast in the changing HR compliance landscape, including:

  • How to understand the growing complexity of HR compliance; and
  • An overview of the emerging legislation that will impact the HR function including:
  • Human rights requirements;
  • Domestic & Family Violence;
  • Disability reforms;
  • Changing payroll and wages requirements; and
  • EBA and payroll requirements.

Jill also provided some insight into other complex areas of employment law such as the employee/employers rights on flexible work arrangements as well as the essentials to include in an audit plan to ensure an organisation is HR compliant with these complex new requirements.

To access the recording of the Webinar, click here.

Connect with us on LinkedIn

If you are not already connected with us and you would like to keep up to date with topical employment law matters, please follow us on LinkedIn and subscribe to our email updates.

We also post articles regularly on our website.  Please email us at info@hrlaw.com.au and we will make sure we add you to our mailing list.

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.

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