Employment and Safety Update – April 2012

​Child care costs payable as compensation for unfair dismissal
To sack or not to sack for taking a “sickie”?
JJ Richards and Sons – a lesson in how not to deal with Unions. More…

Child care costs payable as compensation for unfair dismissal
By Susan Babidge, Senior Associate of Gadens Lawyers, Adelaide

Summary

Fair Work Australia (FWA) may take in to account, among other things, ‘any matter that FWA considers relevant’ when determining an amount for payment of compensation for unfair dismissal.  In Wong v Nytro Pty Ltd trading as Nitro Gym[2012] FWA 1927, FWA accepted that additional child care costs incurred by the applicant in looking for and taking up new employment could be taken into account when determining appropriate compensation.

Facts

The employee was dismissed from her part time job and originally told that she was redundant.  FWA found that the dismissal was not a ‘genuine redundancy’ because there had been no consultation in accordance with the relevant award. Alleged misconduct and performance issues were later raised by the employer. FWA found that the employer did not tell the employee that she was terminated for misconduct and had failed to give the employee an opportunity to respond to any reason for dismissal related to capacity or performance.  In the circumstances, FWA found that the dismissal was harsh, unjust and unreasonable.

As to remedy, FWA determined that reinstatement was impractical and so was required to determine appropriate compensation.  During the proceedings, the employee led evidence to show that she had incurred additional child care costs while looking for and taking up new employment.  FWA accepted and was prepared to take into account when determining compensation additional child care costs equal to the applicant’s period of unemployment as ‘a cost incurred directly as a result of the termination of employment’.

This decision represents the first known occasion that child care costs have been taken into account when determining unfair dismissal compensation orders.

Key lessons for employers

Employers should always have a valid reason for dismissal and ensure procedural fairness by giving an employee the opportunity to respond to any conduct or performance issues before taking the decision to terminate employment.  There are potentially a wide range of costs – including and in addition to childcare costs – that may be incurred by a former employee as a result of termination of employment.  Where termination is found to have been the result of unfair dismissal, such costs may be awarded against the employer.

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To sack or not to sack for taking a “sickie”?
By Tegen Tvede, Solicitor and John-Anthony Hodgens of Gadens Lawyers, Brisbane

Summary

A recent decision of Fair Work Australia has reinforced the seriousness of misusing personal leave.  The employee was dismissed after she took personal (sick) leave to travel interstate.  The dismissal was upheld, despite the fact that the validity of the employee’s medical certificate was not called into question.

Facts

The employee booked flights to attend her sister’s wedding interstate but shortly before the date, the wedding was cancelled.  The employee did not take steps to cancel her flights, because she understood the tickets were non-refundable.

On the eve of her intended departure, the employee consulted a doctor and obtained a medical certificate for the days that she planned to be interstate.  The medical certificate did not provide any explanation as to why the employee was unfit for work, but the employee gave evidence that she had consulted her doctor about a swollen/infected leg and her diabetes.

The employee called in sick to work, arranged for the medical certificate to be delivered to her employer and continued with her personal travel plans.

Critically for the employer, the employee had printed her airline tickets at a communal work printer, where her employer had seen them.  The employer noted that the dates for the flights and the dates for the medical certificate coincided and was suspicious that the employee had planned in advance to take sick leave for her trip instead of asking for and taking annual leave.

The employer reviewed the employee’s emails and did not find any emails relating to her trip.  However, when the employer reviewed the employee’s hard drive, it uncovered a number of permanently deleted emails about the trip.  These included one email between the employee and her son, in which she reprimanded her son for sending trip-related emails to her work email address.  Other emails between the employee and her son that were not trip-related had not been deleted from her inbox by the employee.

When the employee returned to work, the employer met with the employee to discuss what had transpired.  The employee failed to give a plausible explanation and was summarily dismissed on the basis that she had behaved deceitfully and could no longer be trusted.

Proceedings

Because the employer was a small business employer, the Small Business Fair Dismissal Code applied.  The Code permits summary dismissal ‘when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal’.

The employee complained that her conduct was not sufficiently serious to justify summary dismissal.  She argued that she only decided after her doctor’s appointment to continue with her travel plans, as she could recuperate interstate and be tended to by her family.  She also suggested that she had simply forgotten to apply for annual leave and thought that if she had applied, it would have been approved as her employer was reasonable about such matters.

The employer contended that the employee engaged in wilful or deliberate behaviour that was inconsistent with the continuation of the contract of employment.

Critically, the legitimacy of the medical certificate was not called into question and the employer gave evidence that had the employee remained at home during her leave period, it would not have been concerned.  Rather, the employer was concerned that the employee’s story ‘just didn’t stack up’, given that:

1. the employee did not seek paid or unpaid annual leave from the employer for the purpose of travelling interstate, either before or after she purchased her airline tickets;  and
2. the employee permanently deleted emails between her and her son relating to the trip, and admonished him for emailing her at work about the trip, while other emails between the employee and her son remained undeleted.

Finding in favour of the employer, Fair Work Australia concluded that it was fair for the employer to dismiss the employee, in circumstances where it believed on‘reasonable grounds – going fundamentally to good faith, fidelity and trust – that the… [employee’s] conduct was sufficiently serious to justify immediate dismissal’.

Key lessons for employers

This case is a reminder that misuse of personal leave can be serious enough to justify summary dismissal, where it can be demonstrated that through a course of wilful and deliberate deceitful conduct it affects an employer’s ability to maintain trust and confidence in the employment relationship.

Whilst relating to the operation of the Small Business Dismissal Code, the case still illustrates the general rule that employers should remember that ‘suspicion’ and ‘evidence’ are entirely different things.

Should you believe an employee has or intends to misuse personal leave, you should:

1. where possible, request a medical certificate from the employee under the terms of the relevant agreement or award or NES;
2. conduct a proper investigation into the circumstances for evidence that contradicts the basis of the certificate;
3. determine whether the employee’s conduct constitutes serious misconduct, having regard to all of the circumstances;
4. if the employee has engaged in serious misconduct and you are considering termination, have a meeting with the employee and a support person to tell the employee why you are considering termination and to give the employee an opportunity to respond before making any decision; and
5. if in doubt, seek advice.

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JJ Richards and Sons – a lesson in how not to deal with Unions.
By Alanna Fitzpatrick, Senior Associate and John-Anthony Hodgens of Gadens Lawyers, Brisbane

Summary

The Full Court of the Federal Court recently determined that the Fair Work Actprovides a union with the right to take protected industrial action to bring an unwilling employer to the bargaining table.

In JJ Richards & Son v Fair Work Australia, a Full Court of the Federal Court of Australia confirmed that a union can take protected industrial action in the face on an employer who does not wish to bargain for an enterprise agreement. Importantly, the Court confirmed that there is no requirement for a union to seek a majority support determination or scope order before undertaking protected industrial action.

Facts

The facts leading to this decision can be summarised as follows:

In early 2011, the TWU approached JJ Richards to bargain for an enterprise agreement. JJ Richards refused, indicating that, at that time, the Company did not consider that an enterprise agreement was viable for its business.

A short time later, the TWU applied for and obtained authorisation from Fair Work Australia to conduct a protected industrial action ballot to determine if the employees wished to take industrial action in support of their claim to pursue an enterprise agreement.

JJ Richards, and later the Australian Mines and Metal Association, challenged the order granted by Fair Work Australia.  JJ Richards contended that the Fair Work Actprevented a protected industrial action ballot being held and action taken before bargaining had commenced.

In a unanimous decision, a Full Court of the Federal Court of Australia considered the statutory scheme and found that there was no requirement in the legislation that required the parties to have commenced bargaining before a protected action ballot could be held.

The Court held that the only requirement to be satisfied is that the union must have ‘genuinely tried’ to bargain, which the Court found was satisfied by writing to the Company.

Key lessons for employers

Employers should take careful note of the decision and ensure that when in receipt of correspondence from a union seeking to initiate discussions relating to bargaining for an enterprise agreement that:

• the correspondence is carefully reviewed;
• any draft response carefully considered and well structured;
• avoid not responding at all; and
• advice is taken prior to issuing any response.