Review of Fair Work Act
To: Fair Work Act Review Panel
17 February 2012
Queries regarding this submission should be directed to:
Contact personFrancesca Steele
Ph(03) 9607 9389
Table of Contents
Contents
Introduction
Issues......
Safety Net......
Bargaining & Agreement Making......
Transfer of Business......
General Protections......
Unfair Dismissal......
Non-legal Representation......
Introduction
The Law Institute of Victoria’s (LIV) Workplace Relations Section (‘the Section’) welcomes the opportunity to provide comments to the Fair Work Act Review Background Paper (‘the Paper’).
The LIV is Victoria’s peak body for lawyers and those who work with them in the legal sector, representing over 14,500 members. The LIV’s Workplace Relations Section is comprised of lawyers representing employers, employees, unions, community legal centres and government bodies. As such we are able to provide a broad and balanced range of perspectives to this review.
The Section has a history of contributing to shaping effective workplace legislation. In 2008, the Section provided comments into the Senate Inquiry of the Fair Work Bill 2008 and subsequently has been actively involved in consultation regarding the operation of the Fair Work Act 2009 (Cth) (‘the Act’). The LIV believes that the Act is a vast improvement on the Workplace Relations Act 1996 as it achieves a fairer balance between the interests of employees and employers.
In our submission, the LIV has commented on a select range of issues in particular areas where our members have indicated the operation of the Act could be improved.
Issues
Safety Net
Requests for Flexible Working Arrangements
Section 65 of the Act provides that requests can be made for flexible working arrangements for employees who have responsibility for the care of a child under school age, or under 18 and has a disability. The Act also provides that the employer must give the employee a written response to the request within 21 days stating whether the request is granted or refused, that the employer may only refuse the request on ‘reasonable business grounds’, and that if the employer refuses the request, the written response must include details of the reason for the refusal. The various subsections of section 65 attract civil remedies if breached except for section 65(5), under which the employer may only refuse the request on ‘reasonable business grounds’. The LIV suggests that if breached, this provision should attract civil remedies also. This would ensure that there were a mechanism to challenge anemployer’s refusalof the request on alleged"reasonable business grounds".
Bargaining & Agreement Making
Annual Leave
The LIV expresses concern over the intention of the Act in relation to annual leave following the decision in Mr Irving Warren; Hull-Moody Finishes Pty Ltd; Mr Romano Sidotti[2011] FWAFB 6709 (“Hull-Moody”) which has sought to interpret the meaning of the annual leave provisions in the Act in a way that undermines the safety net.
In Hull-Moody, the Full Bench of Fair Work Australia(FWA) found that the obligation to provide 4 weeks’ paid annual leave in s 87(1) of the Act (5 weeks in the case of shift workers) does not require an employer to pay the employee at the same time that leave is taken. The LIV notes that the Full Bench was not provided with an alternative viewpoint by a union or employee representative at the hearing through no fault of its own. FWA found, in the context of assessing whether an enterprise agreement passed the better off overall test – that it is acceptable if the annual leave payment is rolled up in wages paid during the year in a way that leaves the employee no worse off.
In direct contrast to the decision, the Act does not allow for annual leave to be paid in lieu of taking it except when an employee's employment ends, or in other very limited circumstances (see s94 of the Act). We submit this is because the drafters of the legislation intended for an employee to take annual leave each year. As such there is as a discrepancy, as the Hull-Moody decision undermines this principle.
The LIV suggests that allowing an employee to be paid annual leave progressively throughout the year will have the obvious effect of providing an employee with a clear incentive not to take his or her unpaid leave each year. An employee who does not take regular annual leave is not taking important leisure time away from the workplace and is therefore more likely to be stressed and fatigued whilst at work. An employee who is stressed and fatigued is more likely to make mistakes in the workplace thereby placing him or herself and work colleagues at risk of injury or illness. A fatigued employee is also more likely to have increased unplanned absences and reduced productivity. Employees who are not taking 4weeks of leave each year are also reducing their opportunities to spend valuable time on their personal lives, for example, with their families. The effects of not taking regular leave are examined detail by Cairncross and Waller[1]whom cite the National Occupational Health and Safety Commission’s statistic that accidents and diseases may conservatively cost the Australian economy $37 billion per year.
The LIV expresses concern that the overall effect of an employee not taking at least 4 weeks’ leave each year is detrimental to the individual, to families, to the employer and to society as a whole. The LIV believes that FWA has either incorrectly interpreted s 87(1) and the objectives of the Act, or alternatively that s 87(1) effectively provides for an unintentional ‘loophole’ which requires amending. In this regard, the LIV submits that the Review Panel should recommend an amendment to the Act that requires an employee to be paid at the same time annual leave is taken.
Transfer of Business
Transferring Work
The Transfer of Business provisions contained at Part 2-8 of the Act significantly broaden the type of situations that will constitute a transfer of business, particularly in outsourcing situations.
Section 311 sets out the four requirements that must be satisfied for there to be a transfer of business. The LIV generally believes that the four step test simplifies the task of determining when a transfer of business will occur.
The third requirement of the transfer of business test requires that the work (the transferring work) an employee performs for his or her new employer is the same or substantially the same as the work the employee performed for the previous employer. This requirement places the focus on the work performed by the employee. This is a significant shift from the pre Fair Work Act position where the High Court’s “character of the business” test was applied[2].
The LIV submits that this provision may have unintended consequences in outsourcing situations. For example, where the call centre activities of an organization such as a bank are outsourced to a call centre company, under the current provisions the bank’s enterprise agreement would transmit to the call centre business. This has the potential to be impractical on many levels; for example, this could result in a call centre company that provides outsourced services to a range of employers being bound by a number of significantly different enterprise agreements.
In such circumstances, the LIV contends that the transferring work requirement may be inconsistent with the object of Part 2-8 of the Act which seeks to provide “a balance between the protection of employees’ terms and conditions of employment under enterprise agreements… and the interests of employers in running their enterprises efficiently”.
The LIV believes that these issues could be rectified by replacing the transferring work requirement in the Act with the “character of the business” test. This would ensure that a transfer of business would occur only where the part of the business being transferredfrom the old employer is of the same character as the part of the business to which it is being transferred to in the new employer.
General Protections
Discrimination and Reasonable Adjustments
InconsistentState and Federal legislative requirements dealing with the same issue are not in the public interest. All State and Federal anti-discrimination legislation provide for tests of both ‘direct’ and ‘indirect’ discrimination in establishing the meaning of ‘discrimination’. Furthermore, many anti-discrimination statutes also include within the meaning of ‘discrimination’ a notion of ‘reasonable adjustments’ or ‘reasonable accommodation’ in respect of various protected attributes. For example,the Equal Opportunity Act 2010 (Vic) provides that there are positive duties for employers, respectively, to make reasonable adjustments for and / or to reasonably accommodate an employee or prospective employee with a disability or with family and / or carer’s responsibilities. A provision which made clear that the meaning of ‘discrimination’ in the Fair Work Act incorporates notions of both ‘direct’ and ‘indirect’ discrimination and ‘reasonable adjustments’ or ‘reasonable accommodation’ should be adopted in the federal Act so that the objects of the Act, in particular section 3 (a), (d) and (e),can be fully realized.
Section 3 provides;
(a)providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia's future economic prosperity and take into account Australia's international labour obligations; and
(d) assisting employees to balance their work and family responsibilities by providing for flexible working arrangements; and
(e) enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented, protecting against unfair treatment and discrimination, providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms.
In this regard, the LIV recommends that there should be an explicitdefinition in the Fair Work Act, or, alternatively, it should be made clear in theExplanatory Memorandum to the Act, to explain that:
- the meaning of ‘discrimination’ in the Fair Work Act incorporates notions of:
- both ‘direct’ and ‘indirect’ discrimination; and
- ‘reasonable adjustments’ for or ‘reasonable accommodation’ of the protected attributes; and
- the obligation on employers to make reasonable adjustments for or to accommodate an employee’s protected attributeapplies beforethe employer may be entitled to rely on the inherent requirements exception in the Act.
Unfair Dismissal
Timeframe for lodging Complaints
Section 394(2)(a) of the Act provides that thetimeframe for lodging complaints is within 14 days after the dismissal has taken effect. The LIV is concerned that the timeframe is too restrictive, and that feedback from member practitioners indicates that individuals are often distressed, confused, and vulnerable after being dismissed, and, if not aware of the obligation, they will usually take more than 14 days to seek advice. In addition, if individuals are not aware of their legal rights they may not seek advice from the appropriate legal representative in the first instance. These factors have obvious implications in terms of extending the timeframe within which the individual actually lodges a complaint.
Supporting evidence provided from JobWatch has indicated that callers with queries in relation to unfair dismissal applications contact JobWatch on average between 21 days and three months from the date of termination of employment. This is for a variety of common reasons including, for example:
“Jack, a worker in his late 40s, worked as a spray painter for the same company for over 6 years. He was dismissed without warning along with some other workmates for poor performance. Jack was so upset that he stayed in bed for a couple of weeks with depression (his wife was overseas at the time). He discussed the situation with his wife when she returned and then contacted JobWatch to see whether he could do anything about the termination. By that point it had been a month since the termination took effect, rendering him without access to the complaint mechanism under the Fair Work Act”.
In the interests of providing a balanced approach to unfair dismissal claims and retaining consistency in the Act, the LIV supports extending the timeframe within which to make an unfair dismissal complaint to 60 days, which reflects the timeframes forthe adverse action provisions in the Act.
The LIV further suggests that in order to better achieve the primary remedy of re-instatement, this timeframe within which to make a complaint should begin from the date the employee is notified of a dismissal, rather than from the date when the dismissal takes effect (this could have the same effect as applying for an injunction, ie, stop the termination of employment from being effective).
This recommendation takes into account the scenario where, for example, notice is given of termination to take effect in two weeks’ time and the employee continues to work for the period of notice. The LIV has been advised that often unrepresented clients do not know the date on which the termination takes effect, particularly if they are distressed and distracted during that period but they generally remember the date that they have been notified of the termination. We suggest that it is clearer for all parties if the timeframe within which to lodge a complaint begins at the time the employee is notified of the dismissal (although this should not be enacted without extending the timeframes for the lodging of complaints, as, otherwise, the timeframe would be shortened). The LIV notes that the further benefit of this process is that once the employee is notified, he or she couldimmediately make an unfair dismissal application, driving the matter to be brought to a head quickly. If the parties are willing, this will provide an immediate opportunity to resolve the issues and potentially repair the relationship, encouraging retraction of the termination before it takes effect.
In addition, the LIV suggests that extending the timeframe within which to lodge an unfair dismissal claim will also reduce the number of unfounded claims, as LIV members suggest that parties will have more time to properly assess the situation before considering whether to lodge an application and more time to meaningfully negotiate a resolution before taking legal action. This is of benefit to employees, employers, representatives and will maximise the resources of Fair Work Australia.
Non-Legal Representation
Code of Conduct
LIV members have reported a number of serious issues relating to the behaviour and conduct of non-legal representatives at Fair Work Australia.
This conduct includes behaviour such as;
- Misrepresentation of evidentiary material,amounting to misleading conduct;
- Providing contrived and unfounded submissions to Fair Work Australia;
- Not acting in the interests of those whom the ‘advocate’ represents; and
- Making threats to lodge further unfounded complaints if the matter does not settle.
While we are not in any way suggesting that issues relating to the behaviour and conduct of advocates/ representatives are confined to non-lawyer advocates, we are emphasising that the behaviour of legal practitioners is regulated and they can be held to account for their actions.
The LIV recognises that non-lawyer advocates are often extremely experienced in the jurisdiction in which they appear, but are not bound by the same professional duties and obligations to Fair Work Australia as legal practitioners.
The LIV wishes to highlight the range of professional and ethical obligations and duties of legal practitioners other than barristers under the Professional Conduct and Practice Rules 2005 (Rules) made by the LIV under s72 of the Legal Practice Act 1996 (Vic). These Rules impose on legal practitioners appearing at Fair Work Australia a number of obligations that are not imposed upon self-represented parties or non-lawyer advocates.[3] They include; independence,[4] frankness to the court or tribunal,[5] integrity of evidence,[6]duty to the client[7], communications with an opponent,[8] integrity of hearings,[9] relations with third parties[10] and the standard of conduct of the practitioner.[11] Similar obligations apply to barristers as set out in the Victorian Bar Practice Rules.
We are of the view that these obligations and duties,together with their required level of training and expertise, make lawyers the most appropriate parties to assist parties in presenting or defending a matter in Fair Work Australia.
LIV members recommend that where non-lawyer advocates represent parties in Fair Work Australia, that they be held accountable for their behaviour and conduct in a way that upholds the values and objects of the Act and the tribunal.
The LIV suggests that Fair Work Australia introduce a Code of Conduct (the Code) that applies to any party who interacts with, or appears before Fair Work Australia. The effect of this Code would be to introduce a standard of behaviour and a sense of accountability with which all parties must comply . This Code should include standards of behaviour to be upheld within Fair Work Australia proceedings and throughout all stages of the complaint process, duties and responsibilities of each party to the client, tribunal, their representative and the other party, and provide guidance as to the meaning of relevant aspects of legal process such as “without prejudice” discussions.