Industrial relations exam notes

Employment and
Industrial Relations Law

Notes

Employment and Industrial Relations Law Notes – S1/2007

Table of Contents
Topic 1 – Australian Labour Laws .................................................................................................. 6
What are labour laws? ...................................................................................................................... 6
The development of labour laws in Australia .................................................................................... 6
Topic 2 – Who is an Employee?..................................................................................................... 8
The employment relationship – ‘balancing the indicia’ ..................................................................... 8
Applying the multi-factor test ........................................................................................................... 8
Control .......................................................................................................................................... 8
The mode of remuneration ........................................................................................................... 9
Provision and maintenance of equipment .................................................................................... 9
The obligation to work .................................................................................................................. 9
The nature of the task ................................................................................................................... 9
Delegation ..................................................................................................................................... 9
Deduction of income tax ............................................................................................................... 9
Name of worker in the contract .................................................................................................. 10
The magnitude of the contract amount ...................................................................................... 10
The power to withhold money .................................................................................................... 10
How the parties refer to the relationship ................................................................................... 10
Other ‘work’ relationships ............................................................................................................... 10
Casual workers, outworkers and apprentices ............................................................................. 10
No legal relationship ................................................................................................................... 10
Principal and contractor/principal and sub-contractor ............................................................... 11
Principal and agent ..................................................................................................................... 11
Officers........................................................................................................................................ 11
Company directors ...................................................................................................................... 12
Partnership ................................................................................................................................. 12
Bailment ...................................................................................................................................... 12
Deemed employees .................................................................................................................... 13
Dual status .................................................................................................................................. 13
Topic 3 – Making Employment Contracts .................................................................................... 14
Making the contract of employment............................................................................................... 14
Advertisements, Interviews and pre-contractual negotiations ................................................... 14
Trade Practices Act ..................................................................................................................... 14
Forming a valid contract of employment .................................................................................... 15
Sources of the laws that govern the employment relationship ....................................................... 16
The interaction of the laws that govern the employment relationship ...................................... 17
Topic 4 – Employment Rights and Obligations ............................................................................. 18
Express terms in the contract of employment ................................................................................. 18
Variation of the terms of the contract of employment ............................................................... 18
Terms implied into the contract of employment ............................................................................. 18
Terms implied for business efficacy ............................................................................................ 19
Implication due to industry custom practice .............................................................................. 19

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Work rules................................................................................................................................... 19
Terms implied at common law .................................................................................................... 19
Terms implied by common law: employer’s rights and responsibilities ........................................... 20
The duty to pay wages and to provide work ............................................................................... 20
The duty of ‘reasonable treatment’ ............................................................................................ 20
The duty to provide medical care ............................................................................................... 20
The duty to provide a reference ................................................................................................. 21
The duty to provide accommodation .......................................................................................... 21
Terms implied by common law: employee’s rights and responsibilities .......................................... 21
The duty to co-operate and obey................................................................................................ 21
The duty to use care, skill and competence ................................................................................ 21
The duty to change place of work ............................................................................................... 22
Duty to do other work................................................................................................................. 22
The duty of fidelity and good faith – ‘faithful service’................................................................. 22
Duties related to disclosure ........................................................................................................ 23
Intellectual property rights ......................................................................................................... 25
Restraints of trade .......................................................................................................................... 25
Statutory rights that apply to the employment relationship ........................................................... 26
Topic 5 – Terminating Employment Contracts ............................................................................. 27
Terminating the employment relationship ...................................................................................... 27
Termination at common law ........................................................................................................... 27
Termination by mutual agreement ............................................................................................. 27
Termination by operation of the terms of the contract: ‘giving notice’ ...................................... 27
Summary (instant) dismissal ....................................................................................................... 29
Repudiation of the contract by the employer ............................................................................. 30
Termination by operation of law ................................................................................................ 30
Remedies for wrongful dismissal ..................................................................................................... 31
Terms that survive the termination of the contract ........................................................................ 32
Topic 6 – Liability for Employee Conduct ..................................................................................... 33
Contracts: liability of employer and employees for contracts entered into by employee ................ 33
Liability of the employer for contracts entered into by its employee ......................................... 33
Liability of the employee for contracts entered into during employment .................................. 33
Rights and obligations of the employer in tort ................................................................................ 34
Vicarious liability ......................................................................................................................... 35
Action for loss of services ........................................................................................................... 35
Rights and obligations of the employee in tort ............................................................................... 36
Employee’s liability in tort .......................................................................................................... 36
Employee’s right to indemnity .................................................................................................... 36
Rights of the employee in tort .................................................................................................... 36
Other forms of liability .................................................................................................................... 37
Statutory and criminal liability .................................................................................................... 37
Employee’s liability for industrial action ..................................................................................... 37
Topic 7 – The Australian Industrial Relations System ................................................................... 38
Federal Constitutional power to make industrial relations laws ..................................................... 38
Federal institutions ......................................................................................................................... 38

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The Australian Industrial Relations Commission ......................................................................... 38
The Australian Fair Pay Commission (AFPC) ................................................................................ 38
The Federal Court & Federal Magistrates’ Court ........................................................................ 39
The industrial registry ................................................................................................................. 39
The inspectorate ......................................................................................................................... 39
The employment advocate ......................................................................................................... 40
Special tribunals .......................................................................................................................... 40
The States’ systems of industrial relations ...................................................................................... 40
State powers ............................................................................................................................... 40
State Institutions ......................................................................................................................... 40
Participants in the industrial relations system ................................................................................ 41
Unions ......................................................................................................................................... 41
Employers and employer associations ........................................................................................ 41
State governments ...................................................................................................................... 41
The interaction between state and federal laws ............................................................................. 41
Federal intervention and state inconsistency: limitations derived from the federal system ...... 42
Topic 8 - Resolving Industrial Disputes: from Arbitration to ‘Choices’ .......................................... 44
The Hawke-Keating accords ............................................................................................................ 44
‘Flesh and blood’ – industrial disputes and the conciliation and arbitration system .................. 44
‘Work Choices’ – a ‘simpler, fairer … and better balance*d+’ system .......................................... 45
Key elements of Work Choices ........................................................................................................ 45
Who does the WRA cover? ......................................................................................................... 45
The Australian Fair Pay and Conditions Standard ....................................................................... 46
Dispute Resolution ...................................................................................................................... 48
Workplace agreements ................................................................................................................... 49
The “no disadvantage” test – gone ............................................................................................. 49
Types of agreements ................................................................................................................... 50
Content of Workplace Agreements............................................................................................. 52
The role of awards .......................................................................................................................... 53
Award simplification ................................................................................................................... 53
Preserved entitlements ............................................................................................................... 54
Award rationalisation .................................................................................................................. 54
Variation of awards ..................................................................................................................... 54
Protected conditions ................................................................................................................... 54
Interaction between instruments .................................................................................................... 55
Transmission of business ................................................................................................................. 55
Topic 9 – Regulating Industrial Action ......................................................................................... 56
Industrial action and the right to strike ........................................................................................... 56
Is there a right to strike? ............................................................................................................. 56
The value of industrial action ...................................................................................................... 57
Freedom of association ................................................................................................................... 57
The right to associate and to not ................................................................................................ 57
Prohibitions relating to freedom of association .......................................................................... 58
Trade union rights of entry to the workplace .................................................................................. 58
Industrial torts and the WRA ........................................................................................................... 59

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Interference with contract .......................................................................................................... 59
Conspiracy................................................................................................................................... 60
Intimidation ................................................................................................................................ 62
Picketing...................................................................................................................................... 62
Defence of justification ............................................................................................................... 62
Remedies .................................................................................................................................... 62
Protected action under the WRA ................................................................................................ 63
Individual Employee’s liability for industrial action..................................................................... 64
Secondary Boycotts: s 45D Trade Practices Act 1974 (Cth) ............................................................. 64
What is a secondary boycott? ..................................................................................................... 64
Determining the purpose of the first and second person ........................................................... 65
Permitted boycotts ..................................................................................................................... 66
Remedies .................................................................................................................................... 66
Topic 10 - Unfair and Unlawful Termination ................................................................................ 67
Terminating the employment relationship ...................................................................................... 67
Protection from termination under the WRA .................................................................................. 67
Two causes of action ................................................................................................................... 68
Unfair dismissal claims under the WRA........................................................................................... 69
Redundancies and ‘operational requirements’ ........................................................................... 70
Transfer of business .................................................................................................................... 70
Unlawful termination claims under the WRA .................................................................................. 70
Summary of Unfair Dismissal & Unlawful Termination laws under the WRA ............................ 72

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Topic 1 – Australian Labour Laws
What are labour laws?
Labour laws cover a diverse range of laws – including contract, torts, constitutional law, administrative law, criminal law, social security, and immigration, as well as a wide range of legislative provisions covering topics such discrimination, occupational health and safety, union regulation, and unfair dismissal.
Labour laws reflect three unifying themes:


“the need to rationalize the relationship between the individual units of labour (workers) and those who own or control capital and require labour for the purpose of their enterprises



(employers);



the need to regulate collective relationships between organised labour and capital and/ or the state; and



the need to moderate the operation of the market in the interests of any or all of workers, unions, employers and the public.”

It is important to remember that labour law traditionally only covers paid ‘work’, and members of society who otherwise make a great contribution (whether social or welfare, sure as home-makers, volunteers and indigenous communities) go unprotected by labour laws.
It is also significant to note at this point that a range of working relationships are not governed by labour laws, including people who are self-employed, independent contractors, some “outworkers”, partnerships, and directors of companies.
What is also significant is that the so-called non-standard forms of employment, particularly casual and agency employment, are becoming a more common form of employment, leaving many employees poorly protected and regulated by labour laws.
There are two predominant views on who the labour laws serve:


The worker: ‘The state’s objective must be to enact laws which will relieve employees from some of the consequences of their relative lack of power’.



The market: ‘suggests that the function of the law should merely be to facilitate the individual transaction between the seller and purchaser of labour … a vindication of ‘
“freedom of choice” and the operation of the forces of supply and demand’.

The development of labour laws in Australia
Australian labour law is largely derived from the British experience through the Industrial Revolution and from our own Labour movement since federation. In more recent times, the two major political parties have been at logger heads over how to deal with industrial relations.

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International law, in the form of both customary international law and the International Labour
Organisation have also had some impact on the direction of our labour laws, but are neither definitive nor binding upon us.

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Topic 2 – Who is an Employee?
The distinction between employees and other categories of workers is essential in employment law as many of the rights, remedies and obligations the laws provide are available only to ‘employees’.
Only an employee can:
1. Get protection from an award etc
2. Make a claim alleging unfair dismissal
3. Gain protection where a third party is injured due to the employee’s negligence, and
4. Gain the benefits of employment such as holiday pay, sick leave, long service leave, superannuation. The employment relationship – „balancing the indicia‟
The test traditionally used is the “multi-factor” test.
When the test is applied, the court may balance the factors noted below, looking at the circumstances of each case when doing so. No particular factor officially has more weight than the others, what is the more important factors will depend entirely on the facts of the case (however, the factor of “control” remains very significant in determining the legal nature of a working relationship). The factors used include the following:
•
•
•
•
•
•
•
•
•
•

Stevens v Broadribb Sawmilling Co Pty Ltd (1986)
Control
Mode of remuneration
Obligation to work
Nature of the task
Delegation
Tax arrangements
Description in contract
Contract amount
Power to withhold money
The parties’ description of the relationship

See also the factors described by Creighton & Stewart in [11.33].
Merely calling a relationship one of independent contractor ‘will not be determinative if the balance of the evidence indicates’ that it is an employment relationship.
TB [11.34]

Applying the multi-factor test
Control
The factor of “control” remains very significant in determining the legal nature of a working relationship. Holliv v Vabu [2001]

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It is important to look at how much independence the worker has, and conversely, how much control over the work performed the employer has.

The mode of remuneration
Where a worker is paid a weekly wage, he or she is more likely to be an employee;
Where a worker is paid a lump sum he or she is less likely to be an employee.

Provision and maintenance of equipment
Where the person in charge provides and maintains equipment (such as tools, motor vehicles etc) there is more likely to be an employment relationship;
Where the worker provides and maintains his/her own equipment there is less likely to be an employment relationship.

The obligation to work
Where the time and place of work are dictated by the person in charge, there is more likely to be an employment relationship;
Where the time and place of work are dictated by the worker there is less likely to be an employment relationship.

The nature of the task
Where the task will be continuing indefinitely, there is more likely to be an employment relationship;
Where the task is to perform a fixed item of work that will come to an end of its own accord, there is less likely to be an employment relationship.

Delegation
Generally, the ability to delegate or sub-contract the work to others, mediates against there being an employment relationship.
Stevens v Broadribb
Where the worker is unable to hire other workers to do his/her job, there is more likely to be an employment relationship;
Where the worker does have the power to delegate work by hiring other workers to perform his/her allotted task, he or she is less likely to be an employee.

Deduction of income tax
Where a worker has money deducted on a weekly basis (that is, PAYG tax) the worker is more likely to be an employee;
Where the worker is paid an amount, and the worker must pay tax from that amount (that is, PPS tax) the worker is less likely to be an employee.

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Name of worker in the contract
Where the worker enters into the contract using his or her own name, then the relationship is more likely to be that of employer and employee;
Where the worker enters into the contract using a name other than his or her own name (for example, a company name), then the relationship is less likely to be one of employment.

The magnitude of the contract amount
Where the contract amount is small, the relationship is more likely to be one of employment;
Where the contract is for a large amount, the relationship is less likely to be one of employment.

The power to withhold money
Where the hirer must pay the worker, no matter whether the work is performed properly or not, the relationship is more likely to be one of employment;
Where the hirer can withhold money due to poor or inadequate performance, the relationship is less likely to be one of employment.

How the parties refer to the relationship
Generally, the courts are suspicious of contracts that specify that a worker is a sub-contractor, as classifying somebody as a subcontractor relieves the person in charge of many obligations, including the obligation to pay superannuation, long service leave, holiday pay and have workers’ compensation. RV Foster: Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (1952)
However, sub-contractual arrangements can be carefully crafted so as to ensure that each element that comprises the employer/employee relationship is notably absent.
However, the contract must be drafted carefully to write out the employer-employee relationship.
BWIU v Odco Pty Ltd (1991)

Other „work‟ relationships
Casual workers, outworkers and apprentices
While causal workers may be ‘employees’ because they are in an employment relationship, they tend to hold fewer rights than other employees.
Outworkers and apprentices have special rules governing them, which normally elevates them to the level of a normal employee (and in the case of apprentices, they have additional rights; though they tend to suffer when it comes to pay rate). However, abuse of outworkers especially is still rampant.

No legal relationship
In certain circumstances the court will hold that there is no legal relationship between the parties due to a lack of intention to create legal relations.

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Generally speaking, where work is done for religious, charitable or social motives or due to a person’s position in a family, the presumption is that there is no legal relationship.
Dietrich v Dare (1980)
However, the presumption may be rebutted if the agreement was really commercial in nature. In determining whether the contract was really commercial in nature, the court takes into account:
i)

what was said;

ii) the context of the discussion; iii) the conduct of the parties; and iv) the gravity of the consequences to the innocent party if a breach occurs.

Principal and contractor/principal and sub-contractor
The most frequently encountered relationship, other than the employment relationship, is that of principal and contractor. The following factors have been held to be indicative of such a relationship:
a) The power to delegate, that is, the power of the worker to employ other persons to do the work which must be performed.
Stevens v Brodribb Sawmilling Co Pty Ltd (1986)
b) Engagement to do a particular job or produce a particular result (for example, an electrician engaged to install the wiring in a new house).

Principal and agent
An agent is a person who:
i)

Is authorised to act on behalf of a principal;

ii) Has agreed to so act; and, iii) Has power to effect a legal relationship on behalf of the principal.
The indicators for a principal and agent relationship are:
a) lack of control;
b) remuneration by commission (or commission plus an amount for time spent);
c) working for more than one employer; and
d) the type of work done (for example, people selling time-shares in real property).

Officers
Usually company directors are officers and not employees.
The essence of being an officer is that power is derived from an independent source, rather than being derived from a superior. Other indicia are tenure, and a post to which a series of successive workers can be appointed.

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Some examples of officers are some public servants such as Judges, Court Registrars and the
Ombudsman.

Company directors
In the case of a company director, the power is derived from the company’s Articles of Association and Memorandum. Whilst there is no tenure, a company must always have (at least) two directors, and successive persons may be appointed to fulfil that role.
Company directors may also be employees. It is important to distinguish the roles when it comes to employment matters.
The following indicia help to distinguish directors who are merely officers from directors who are also employees:
Title/description
An ‘executive director’ is more likely to be an officer than a ‘managing director’ who will usually also be an employee of the company.
How the director is remunerated
Fees paid on an ad hoc basis (for example, depending on profits) are indicative of an officer, whereas a weekly wage is indicative of an employment relationship.
The duties of the director
A director who is merely an officer will perform less day-to-day duties, whereas a director who is also an employee will be involved in the day-to-day running of the company.
Whether the appointment of the director is evidenced by a contract of service or a minute
The former is indicative of a director who is also an employee, whereas the later is indicative of a director who is an officer.

Partnership
A partnership exists where two (or more) people are bound together by a contract between themselves, which has some joint object or purpose.
There are three indicia of a partnership. They are:
1. Remuneration drawn on profits, rather than a weekly or monthly wage/salary;
2. No person acting as the employer of the other, that is, no person in charge;
3. A stated intention that the workers are partners (for example, a partnership agreement).

Bailment
A bailment exists where one person delivers a moveable object to another person so that the other person can use the object for the purpose of earning a living.

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The classic example of a bailment is a taxi driver, although in some circumstances a taxi driver may be an employee.
The multi-factor test is used to distinguish bailees (that is, the person who receives the moveable object) from employees who merely receive an object that is then used by the worker to earn income. Deemed employees
Deemed employees are workers who are not really employees. However, they are deemed (or said to be) employees for the purpose of applying a particular statute.
Examples of deemed employees are:
Industrial Relations Act 1996: Schedule 1 and s 5(3) Industrial Relations Act 1996 (NSW).


commercial cleaners,



mobile bread vendors,



milk vendors,



cleaners,



carpenters,



person who renovate or repair,



bread vendors,



clothing vendors,



painters,



joiners,



brick layers,



ready-mixed concrete drivers (in some circumstances).

Others may be deemed employees for the purposes of OHS laws, such as bush fire brigade volunteers. There are no categories of “deemed employees” under the WRA.

Dual status
It is possible for a worker to have a dual status. For example, as we saw earlier, a director may be both an officer and an employee. Where there is dual status, the worker will be able to gain access to the various protections if the incident for which the protection is sought occurred whilst the worker was acting as an employee.

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Topic 3 – Making Employment Contracts
Making the contract of employment
Advertisements, Interviews and pre-contractual negotiations
The pre-contractual relationship between an employer and prospective employees is regulated both by fair trading laws and antidiscrimination laws at federal, state and territory level.
The federal anti-discrimination laws prohibit discrimination on several bases including:










Race
Racial vilification
Sex
Marital Status
Pregnancy
Family Responsibilities
Sexual Harassment
Disability and Disability Harassment, and
Age.

Discrimination is made unlawful in all aspects of the employment relationship (and a range of other types of work relationships), including advertisements, interview and selection procedures, and the terms and conditions upon which a person is employed or when their employment is terminated.
Discriminations is defined as “less favourable treatment” on any of the above prescribed grounds.
A complainant generally needs to establish that the alleged discriminator has required them, as a member of a protected group, to comply with a requirement or condition with which they cannot comply, which is unreasonable, and with which a substantially greater proportion of those falling outside the group are able to comply.
Australian Iron & Steel Pty Ltd v Banovic (1989)
Organisations with more than 100 employees are required to file an annual report on their programs to eliminate discrimination against women and increase equal opportunity employment in their workplace. Failure to do so may result in a naming and shaming.
Equal Opportunity for Women in the Workplace Act 1999 (Cth)
As well as discrimination, there are also laws against sexual harassment in the workplace. TB [14.32]

Trade Practices Act
The Trade Practices Act 1975 (Cth) prevents corporations involved in trade or commerce (that is, companies and other business entities) from engaging in misleading, deceptive and other unfair practices, which applies to their dealings with prospective employees. s52 TPA
Section 53B also applies in particular to employment situations:

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A corporation shall not, in relation to employment that is to be, or may be, offered by the corporation or by another person, engage in conduct that is likely to mislead persons seeking the employment as to the availability, nature, terms or conditions of, or any other matter relating to, the employment.

Forming a valid contract of employment
In general, the rules concerning the formation of contracts of employment are the same as those that apply to the formation of any other simple contract.
However, there are some deviations:
Offer and acceptance
Generally speaking, the majority of terms in an employment contract are not stated in an offer of employment. Under these circumstances, the offer is valid provided the other terms may be implied, or may be filled in by awards, statutes, and so on. This will be true in most cases. This is significant because otherwise the offer may fail as being too vague or uncertain to be accepted.
While an offer may be withdrawn at any time prior to acceptance, estoppel may prevent an offer being withdrawn if the employer has acted in such a way that it would be inequitable for it to go back on its promise to employ the job applicant.
Intention to create legal relations
Traditionally, contract law principles have worked on the assumption that where a bargain to do work is made for social, charitable, political or familial reasons there is a presumption that the parties did not intend to be legally bound by their agreement.
However, this is no longer entirely the case.
Ermogenous v Greek Orthodox Community of SA Inc [2002]
Consideration
Problems with consideration rarely arise in employment relationships, as statutes, awards or certified agreements generally apply and prescribe the minimum amount that must be paid to employees in return for work.
Capacity
Only a person or entity with a separate legal entity can enter into a contract. Some of the main subject matters that arise in employment contracts are:
a) Corporations
Pursuant to the Corporations Law (s 123) corporations (that is, companies) may enter into contracts.
Corporations have the same legal status to enter contracts as natural persons. A company’s power is limited by its Memorandum and Articles. Any act done or contract entered into which is beyond the power of the company as set out in the memorandum and articles is ‘ultra vires’ (beyond the company’s power). However, under the Corporations Law, a company is bound by its contracts even if it acts ultra vires (s 161 Corporations Law).

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When an employment contract has been entered into by a company prior to the company’s formation, the company may be estopped from denying the contract existed. Further, a contract that is entered into prior to the company being properly formed may be ratified by conduct. In other words, the contract will be made valid if the company continues with the employment relationship once the company is properly formed.
b) Minors
The Minors (Property and Contracts) Act 1970 (NSW) makes 18 years the age of majority (s 6) – that is, the age at which a minor may (amongst other things) enter into a contract.
Sections 18 and 19 make a contract presumptively binding on a minor if the contract is entered into for the minor’s benefit, and at the time it is entered into the minor understands the contract.
In the employment context, an employment contract will almost always be for the minor’s benefit.
In most cases the minor will understand the obligations created by the contract Further under s 6(3) once the minor participates in the employment contract, the contract becomes binding.
Privity
Only those with privity to a contract may enforce it. Though technically this does not affect the contract’s formation, it is worth noting here, as it is important to clarify just who are the parties to the contract. Keep in mind, that those employed by employment agencies will enter a contract with the employment agency and not the business for which they actually perform the work. Corporate arrangements such as those in Patrick Stevedores v MUA are also worth noting in this regard.
Genuine consent
The essence of a contract is that the parties understand and agree to the contract that they are entering into. For this to occur, there must be genuine and mutual agreement as to the contract and its terms. If there is not full knowledge and understanding, the contract will lack genuine consent and will not be binding. The courts have developed a series of recognised situations in which genuine consent is absent. They are:
1. Mistake
2. Misrepresentation
3. Duress
4. Undue influence (abuse of power)
5. Unconscionable conduct (unfair advantage)
6. Illegality.

Sources of the laws that govern the employment relationship
Once we have identified that a working relationship has been established through a contract and that it is a relationship of employment (through the ‘multi-factor’ test), the next step is to define the laws that are applicable to that relationship.

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Though the legal heart of the employment relationship is a contract, a range of other laws also govern the employment relationship. These include Industrial Awards, a Collective Certified
Agreement, or by an Australian Workplace Agreement (‘AWA’). The employment relationship will also be regulated by a variety of statutory provisions that establish the rights and responsibilities respectively of employers and of employees.
Finding the actual award or certified agreement is now a fairly straightforward task as federal, state and territory governments maintain databases containing those that have been made or certified within their jurisdiction, except Australian Workplace Agreements. In any case, a particular employer or employee should have a copy, or at least access to a copy, of the award or agreement applicable to them.

The interaction of the laws that govern the employment relationship
What Byrne’s case makes clear for us is that the different sources of law that regulate an employment relationship remain distinct and separate from one another.
Nonetheless, generally speaking, any inconsistency between these sets of laws will be answered in favour of the employee – in other words, usually the most generous provision will prevail. Note, however, that the employee cannot assert any rights that are derived from a statute, award or registered certified agreement, within a claim based on the contract, but must use separate proceedings to assert that right.
In summary:
1.

Statutory provisions and terms in awards, and probably those in registered collective certified agreements, are not incorporated into the contract of employment as implied terms. They only become terms of the contract if the parties expressly provide for this in the contract. 2.

If a term of the contract is inconsistent with a statutory provision, the more generous of the two will prevail, provided the employee is able to validly assert the statutory right.

3.

If a term of the contract of employment is inconsistent with an award condition, the more generous of the two will prevail, provided the award applies to the employee.

4.

If a collective certified agreement applies to the employee, it “will usually prevail over the contract unless that contract is more beneficial to the employee”.

5.

Despite the “apparent intent of the *WRA that AWAs+ regulate the totality of the parties’ relationship … there is certainly nothing in the legislation to say that ‘contracting up’ is not possible”. If this approach is accepted by the courts, then it would be possible to contract
“up” – that is, obtain enforceable better conditions in a contract – as compared to those contained in any applicable AWA.

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Topic 4 – Employment Rights and Obligations
Some contracts of employment are made in a very informal manner. Usually, the only matters which have been agreed to tend to be the amount that will be paid and the time that the employee will commence work. In fact, it is rare that a contract sets out all of the terms and conditions of an employment relationship.

Express terms in the contract of employment
The parties may agree orally or in writing what the express terms of the contract are. Provided that the terms are not contrary to a statute or an award, the terms will be binding.
For all matters that are covered by an express term of the contract, the court need not – and will not
– look further to imply terms into the contract, though it will look at awards, certified agreements or statutes to determine the respective rights of the parties to the employment contract.

Variation of the terms of the contract of employment
(Keep in mind it is also possible to vary implied terms, however, it is far more common that only express terms are consciously varied by the parties).
A contract for employment may be altered by mutual consent of all parties. Sometimes the changes may be of such a nature that in fact the current contract is being substituted by a new one.TB [12.09]
Generally, terms of an employment contract cannot be altered unilaterally. Chittick v Ackland (1984)
However, some public sector authorities have the power to alter employment changes as they see fit. There is some question as to whether a provision in the contract allowing for the employer to change the conditions of employment from time to time is valid. At the very least, it would require some form of extrinsic standard of reasonableness.
This ban on unilateral variations applies to contractual conditions. It does not apply to variations which come under the ambit of instructions as to how work is performed. This can cause some trickiness when it comes to implied terms.
TB [12.08]

Terms implied into the contract of employment
Terms will only be implied in a contract when the express terms do not include a matter that ought to or should have been included in it.
Terms may be implied by law or by fact (as is with normal contract law).
There are a number of categories by which terms can be implied. Broadly, in relation to employment contracts, these are:
1. For business efficacy
2. Due to industry custom and practice
3. Where work rules embody the terms, and

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4. At common law.

Terms implied for business efficacy
Terms implied by fact normally have several requirements:
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977)
1. It must be reasonable and equitable
2. It must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it
3. It must be so obvious that “it goes without saying”
4. It must be capable of clear expression
5. It must not contradict any express terms of the contract
However, in the case of employment contracts which are either purely oral, or at least not fully expressed in writing (which realistically covers almost all employment contracts).
In such cases the test is now whether “implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case”.
Byrne v Australia Airlines Ltd (1995), TB [12.04]

Implication due to industry custom practice
A term will be implied into a contract of employment due to industry custom and practice if:
1. There is a custom that is so well known and accepted that everyone in the parties’ situation could reasonably be presumed to have incorporated the term into their contract;
2. The term to be implied must not contradict an express term of the contact.
It is not relevant whether the parties had knowledge of this term.
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986)

Work rules
Work rules (that is, rules concerning conduct of employees whilst at work) may become part of the contract of employment.
For example, a staff handbook may become part of the contract of employment.

Terms implied at common law
There are a large number of terms that can be implied at common law.

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Terms implied by common law: employer‟s rights and responsibilities The duty to pay wages and to provide work
Generally, the employee can only earn wages by actually rendering whatever “service” is required by the employer.
Automatic Fire Sprinklers Pty Ltd v Watson (1946), per Dixon J
However, it is common for this (common law) position to be ousted by a contrary agreement.
Thus it is possible for wages to be awarded for being available to perform work, and there may be additional conditions applied to the payment of wages.
An employer has an obligation to provide an opportunity to employees to work.
Thus, the common law “duty to provide work” is perhaps better expressed as the obligation to pay the employee, and provided that is occurring there is no general obligation to provide work for that payment. Collier v Sunday Referee Publishing Co [1940]
There are two main exceptions to this rule:

TB [13.13]

1. Where wages are dependent on the performance of work, for example, where wages are only payable on completion of a specified task or where payment is linked to work, such as piece work.
2. Where the employee can establish need to perform publicly to maintain reputation.

The duty of „reasonable treatment‟
There is a duty on an employer not to do anything that is likely to damage the relationship between the employer and the employee.
For example, in Bliss v South East Thames Regional Health Authority [1987] ICR 700, the employer tried to make the employee undergo a psychiatric test without any reason to do so. The employee refused. The court held that the employer could not force the employee to take the psychiatric test, as this would constitute a breach of the implied duty to co-operate.
Further to this duty, there is also a duty on the employer to draw to their employees’ attention the terms of their employment that potentially conferred valuable benefits.
Scally v Southern Health and Social Services Board [1992] (UK)
There is also a duty to respect the confidentiality of any information provided by their employees.
Woods v WM Car Services Ltd [1982]

The duty to provide medical care
It is generally accepted that there is no implied duty to provide medical care for an employee who is sick or injured at work; however OHS laws will override this.
However, there is a common law duty to get medical help or assistance.
For example, in M’Keating v Frame 1921 SC 382, an employee died from double pneumonia. The court held that there was no duty to provide medical assistance, but there was a duty to get medical

Employment and Industrial Relations Law Notes – S1/2007 help. The employer, who had done nothing to assist the dying employee, had breached the contract of employment.

The duty to provide a reference
In general there is no implied duty to provide a reference to an employee.
However, where a reference is supplied, the reference should be correct.
If the information is incorrect, the employer may be liable to a third party who relies on the reference for negligent misstatement, or to the employee for defamation or negligent misstatement.
Spring v Guardian Assurance Pty Ltd and Ors [1995]

The duty to provide accommodation
There is generally no implied duty to provide accommodation, although where domestic service is involved or, there is a necessity for accommodation (for example, an oil rig or mine in an outback location), then the court will imply a term to the effect that the employer must provide its employee with accommodation.
In addition, an award or certified agreement may specify that accommodation must be provided.

Terms implied by common law: employee‟s rights and responsibilities If an employee breaches a term of their contract of employment, they may be liable to be sued for damages, and the employer will likely be entitled to terminate the employment.

The duty to co-operate and obey
Implied into every employment contract is a general duty to obey the employer’s lawful and reasonable directions.
R v Darling Island Stevedoring & Lighterage Co Ltd (1938)
‘Lawful behaviour’ excludes orders to perform unlawful actions or actions which would expose the worker to personal danger.
TB [13.52]
Reasonable directions must be divined from the surrounding circumstances, and relate to the nature of the work performed.
Beyond complying with appropriate instructions, the employee must also ‘co-operate’ with their employer. This would seem to imply that employees must not be insolent or swear at superiors, assault other workers, or engage in acts of dishonesty or theft at the employer’s expense.
Employees may have to comply with a reasonable request for a medical examination on order to establish fitness for work.
Additionally, employees must be truthful in answers to questions put to them by their employer, so long as the question is reasonable and fair in those circumstances.
TB [13.54] – [13.56]

The duty to use care, skill and competence
The employee is expected to have the necessary skill to do the job he or she is hired for. An employee is generally obliged to perform work with a reasonable degree of competence or skill, the requisite standard varying according to the type of work in question.
Harmer v Cornelius (1858)

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If an employee has made no claim to expertise in the work they are asked to perform, the employer cannot complain if it is not up to the standards expected of someone who has that expertise.

The duty to change place of work
One example of the exercise of the managerial authority is the direction to change the place of work. Such a term may be expressly included within the agreement – a ‘mobility’ clause, though it must still be exercised reasonably.
A term may also be implied that an employee has a duty to change his or her place of work. The courts use the following factors in order to determine whether the term will be implied:
1. The nature of the business engaged in (for example, a sales person would be more likely to have to change place of work than a person who works on a factory floor).
2. Whether the employee had worked at other sites previously without objection. If he or she had, then a term will be more likely to be implied.
3. Whether there is provision in the contract of employment (or the award) for ‘away from home’ expenses.
4. What the employee was told when commencing employment. Where the employee was told that he or she would be expected to work elsewhere, then a term would be more likely to be implied.
5. Arrangements made subsequently with other employees. The fact that other employees have been required to work elsewhere will assist the court in implying a term concerning an employee who was employed at an earlier date.
6. The distance of the move. Where the distance of the move is small and insubstantial, the court will usually imply the term. If the distance of the move is considerable, then the court will be less likely to imply the term, and more weight will be placed on the previous factors.
Eaton v Western (1882)

Duty to do other work
The general rule is that an employee only has an obligation to do the work that he or she is hired for.
However, an employer may have the managerial authority to require the employee to adopt a change in method of work.
For example, in Cresswell v Board of Inland Revenue [1984], the employees were told to use a new computer system, instead of the paper system they had used previously. The court held that they were only changing the method and not the type of work that was being performed. There was no breach of the contract of employment by the employer in requiring them to change their method of work. The duty of fidelity and good faith – „faithful service‟
Solicitation of customers

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An employee cannot solicit the employer’s customers whilst he or she is working for an employer.
Once the employee has ceased working for the employer he or she generally can solicit the former employer’s customers, subject to any valid restraint of trade in the contract of employment.
Sanders v Parry [1967]
Use of employee’s spare time
An employee is not prevented from working ‘outside’ of their employment, unless this contradicts a term of the contract.
However, employees may do what they like in their spare time provided that they do not harm their employer’s business. The more highly skilled the employee, the more likely this may do so.
The duty to report derelictions and answer questions
Prospective employees must answer questions put to them in an honest manner. However, there is no obligation to volunteer information when going for a job interview. Current employees must at least answer reasonable questions that are put to them in an honest manner.
There is no common law duty to report derelictions unless:
a) The employee who has witnessed the breach is in a senior/responsible position; or,
b) The employer’s property has been damaged due to the dereliction of duty.
Receipt of bribes or secret commissions
An employee will breach his or her contract of employment (as well as possibly breaching the criminal law) if a bribe or secret commission is accepted.
Reading v Attorney-General [1951]
Duty to account for property
An employee must give the employer all property received in the course of employment.
Boston Deep Sea Fishing & Ice Co v Ansell (1888)

Duties related to disclosure
Generally speaking, an employee cannot use or disclose the employer’s confidential information other than for work related purposes during their employment.
However, after the employment finishes, the employee may be able to use or disclose confidential information gained from their employer.
A distinction is made between two types of information in relation to this, each of which is treated differently by the courts. These are:
a) objective information is information the employee must take positive steps to acquire (for example, a customer list which needs to be photocopied by the employee).
b) subjective information is information acquired during the normal course of work (for example, names of clients to whom an employee makes deliveries); and

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An employee may not use objective confidential information after employment has finished, and doing would amount to a breach of the duty of fidelity and good faith.
However, subjective information is treated a bit differently, and it can be possible for the employee to use or disclose post-employment. In Faccenda Chicken Ltd v Fowler & Ors [1986], the court described the test which should be applied in order to determine whether subjective information can be used after the employee’s employment has finished.
The factors are:
a) The nature of the employment (if the employee is frequently involved in using confidential information, then a term would be more likely to be implied that the employee cannot use the information after the employment has finished).
b) The nature of the information (if the information is in the nature of a trade secret, then the court will be more likely to imply a term that the information cannot be used after the employment ceases).
c) Whether confidentiality was ‘pressed’ by the employer (if the information was, for example, kept under lock and key, the court would be more likely to imply a term that the information could not be used after the employment ceased).
d) Whether the confidential information can be easily isolated from other information acquired by the employee. If the confidential information can be easily isolated (for example, if it were a recipe which was kept in a safe), then the court would be more likely to imply a term that the employee could not use the information after the employment ceased.
Exceptions to the non-disclosure rules
There are a number of exceptions to the rules related to use and disclosure of confidential information. Public interest
If disclosure of otherwise confidential information is ‘in the public interest’ and ‘to the proper authority’, then there will be no breach of the contract of employment.
For example, in Lion Laboratories Limited v Evans [1984], the court found that no breach of contract had taken place where employees disclosed that their employer had concerns about whether an alcohol breath testing unit, which it produced, worked.
Note that in some jurisdictions, including NSW, legislation specifically protects public sector workers who have disclosed information concerning corruption, maladministration and other forms of wrongdoing in the public interest.
Protected Disclosures Act 1994 (NSW)
Disclosure under court order
Where an employee is subpoenaed to give evidence in court, he or she will not have breached the duty of fidelity and good faith in disclosing otherwise confidential information.

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Industrial law proceedings
Employees are entitled to make a complaint about their employer’s failure to comply with industrial laws. In addition, a complaint may be made if the employee is being victimised by the employer due to being a member of a union.

Intellectual property rights
The common law rule is that where an invention is made ‘in the course of employment’, that is, using the time, opportunity, information or facilities of the employer, the invention belongs to the employer. Triplex Safety Glasses Co Ltd v Socrah [1937]
It should be noted that if an invention is made after an employee ceases employment, it is most likely that (if any issue arises) it will be whether the employee has used confidential information in order to make the invention.
Intellectual property rights are usually expressly covered in the employment contract.

Restraints of trade
The common law duty of fidelity comes to an end when the contract comes to an end. However, in many instances, employers wish to protect their business operations after employees leave. They may do so by including express restrictive terms in the contract to that effect.
These conditions in the contract of employment prevent the employee from engaging in similar work or work in competition with the employer. The restraint may apply during the employee’s employment, but typically apply after the employment relationship has ended.
Generally speaking, the common law has not been tolerant of such clauses, seeing them as against public policy because they unduly restrain a person’s freedom to contract, and thus amount to a restraint of trade. Nonetheless they have and will be upheld.
The test as to whether a restraint is enforceable is whether it is reasonable, that is, they will be upheld provided they are “no wider than is reasonably necessary to protect the employer’s interests, when judged in terms of the duration and area of its coverage and the activities restrained”.
What is reasonable depends on the facts in each case. However, the following factors may be used in order to assist in determining whether a restraint of trade is unreasonable:
1. The closer the relationship between the employee and the employer’s customers, the more likely a restraint will be reasonable.
2. The more dependent the employer is on the long-term patronage of its customers, the more likely a restraint will be reasonable.
3. The more senior the employee is, the more likely a restraint will be reasonable.
4. The nature of the business and the nature of the locality. Where the business is one that is likely to involve the employee handling secrets, and/or the locality is one where the employee is more likely to be able to seriously damage the business of the employer, then it will be more likely that the restraint will be reasonable.

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5. Only a restraint that gives no more than adequate protection will be reasonable. In this factor, the term of the restraint (that is, how long the restraint lasts for) and the geographical area that is covered by the restraint are taken into account.
6. Restraints designed to protect trade secrets or confidential information may be more likely to be considered reasonable.
7. Restraints that operate only during the employee’s employment are more likely to be considered reasonable.
At common law, a restraint of trade that is unreasonable will be void.
In the event that the offending part can be severed (or cut away) from the rest of the contract, so that the remainder of the contract still makes sense, the court will remove the offending part.
Similarly, if part of the restraint is unreasonable, whereas another part is reasonable, the offending part may be severed.
Some state laws, such as the Restraints of Trade Act 1976 (NSW) govern restraints of trade. Where the NSW Supreme Court finds that a restraint (or part of a restraint) is unreasonable, the court may rewrite the restraint of trade clause so that it is reasonable.

Statutory rights that apply to the employment relationship
•

Legislation related to public sector employment: TB [12.29] – [12.34]

•

Hours of work: TB [13.28] – [13.33]

•

Leave entitlements: TB [13.34] – [13.43]

•

Superannuation: TB [13.44] – [13.51]

•

Discrimination and Equal Opportunity laws: TB [14.19] – [14.44]

•

Industrial victimisation: TB [14.45] (which we will discuss in more detail in later topics)

•

Protection for whistleblowers: TB [14.65] – [14.66]

•

Privacy rights: TB [14.67] – [14.72]

•

Occupational Health and Safety: TB Chapter 19.

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Topic 5 – Terminating Employment Contracts
Terminating the employment relationship
Obviously, employers and employees require some procedure to bring their relationship to an end.
In some cases, this is done by mutual agreement by the parties, or at least by means of one party
‘giving notice’ and therefore lawfully bringing the contract of employment to an end.
Significantly more controversy arises when the employer ‘fires’ or wants to ‘fire’ the employee.
There are three main ways in which an employee can challenge his or her termination of employment in Australian laws:
1. At common law for wrongful dismissal
2. For unfair/unlawful dismissal under the Workplace Relations Act 1996 (Cth)
3. For unfair dismissal under state laws.
Due to the Due to the Byrne principle, breaching an award condition that defines how the employment relationship is to be ended does not give rise to a separate claim for breach of statutory duty. Arguably the same principles apply to similar conditions found in Certified Agreements.

Termination at common law
A contract can be brought to an end (rightly or wrongfully) on the basis of the following principles:
•

By mutual agreement of the parties

•

By operation of the terms of the agreement (by notice given by the employer or by resignation by the employee)

•

Due to a breach by the employee of the terms of the agreement (Summary or Instant dismissal) •

Repudiation by the employer by a breach of the contractual agreement, and

•

By operation of law – especially Frustration, including the winding up of corporate entity or change to corporate structure.

Termination by mutual agreement
Whether or not the contract is for a fixed term or event, the parties may both agree to terminate it.
There is no cause of action for wrongful dismissal in these circumstances.

Termination by operation of the terms of the contract: „giving notice‟
Fixed term/fixed time contracts
If the contract has a fixed period or is for a fixed event (for example, a defined task), it will ‘naturally’ terminate when that period expires or the event occurs, unless of course the period of time

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Employment and Industrial Relations Law Notes – S1/2007 specified in or the content of the contract is varied. Consequently, the contract ends in accordance with the agreement made at the beginning of its term.
In these circumstances, there is no action for wrongful dismissal.
The concept of notice
At common law, either party can lawfully terminate the contract by giving the other party ‘notice’. In other words, the employer may tell the employee that the contract of employment will cease at some specified time in the future.
Alternately, an employer can terminate the contract of employment immediately and give payment in lieu of notice. The employer gives an amount of pay which is equal to the period of notice, instead of allowing the worker to ‘work out’ the period of notice. The payout must be equivalent to the period of notice specified in the contract, or the award or certified agreement, or what is a
“reasonable period of notice”. s661 WRA
Equally, the employee may also give proper notice, and resign from their employment. Where there is a resignation, there is no dismissal, and therefore, the employee cannot claim wrongful dismissal.
However, if proper notice is not given, the employee is liable at common law for an action for breach of contract.
In some circumstances, an employee’s resignation is considered to be forced or against their will.
This is described as a “constructive dismissal”, and where this is the case, the employee can make a claim for wrongful dismissal.
The effect of giving notice (or failing to do so)
Where the employer gives proper notice to the employee, the employee cannot sue the employer at common law for wrongful dismissal, no matter what the reason for the dismissal is - even if there is no reason given or the reason is wrong. Provided that the period of notice (or payment in lieu thereof) is proper, the dismissal cannot be challenged at common law.
If the employee fails to give proper notice, there can no claim for wrongful dismissal, but as indicated, the employer may claim a breach of contract.
‘Proper’ notice
Whether or not the notice is proper relates mainly to the amount of time given to the other party to make them aware of the intention to bring the contract to an end.
As a rule of thumb, the longer the worker has been employed in that position, and the more senior the position they hold, the longer the period of notice is to be. To give an example of implied terms of reasonable notice, an unskilled worker with a few months service will only be entitled to receive one to two weeks’ notice. A senior executive with 30 years experience would be more likely to receive between nine months’ and one year’s notice. A middle manager on a mid range salary with five year’s experience would be more likely to receive three to six months’ notice.
Withdrawal of notice

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The general rule is that once notice is given, the contract will end at the end of the notice period.
The notice generally cannot be unilaterally withdrawn.
Birrell v Australian National Airlines Commission (1984)
The main exception to this rule is where notice is given in ‘the heat of the moment’. In this case, notice may be withdrawn, provided that the withdrawal occurs immediately after the employee’s emotions have subsided.
Achal v Electrolux (1993)
Conflict between the amount of notice in an award or certified agreement and a contract
Where a contract provides less notice than an award or certified agreement, the latter provision will prevail. Where the contract provides more notice than the award or certified agreement, the contract will prevail.

Summary (instant) dismissal
Sometimes the employer will be entitled to dismiss an employee without giving any notice or payment in lieu thereof.
This right may be implied into the contract, irrespective of the fact that other provisions define how the contract may be terminated, unless the right is explicitly excluded (either in writing, or through implication). The employer has the right at common law to summarily or instantly dismiss an employee who breaches the terms of the contract, provided the breach is sufficiently serious or evinces an intention to repudiate the contract. If the breach is not sufficient enough, the employer will need to rely on another method (such as notice) to dismiss the employee.
An employer may not rely on any breaches for which it had previously elected to waive the right of termination, but subsequently changed its mind.
McCasker v Darling Downs Co-operative Bacon Association Ltd (1988)
Some examples of grounds for summary dismissal include (but keep in mind cases turn on their facts): •

Failure to obey the lawful and reasonable commands on the employer.
Adami v Maison De Luxe Limited (1924)

•

Neglect (where it is of a very serious nature).

•

Utter incompetence (though it may be doubtful under unfair dismissal law).

•

Misconduct.

Does summary dismissal require procedural fairness?
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Other claims related to breaches of employment obligations
Apart from dismissal, employers may impose other sanctions on employees for various reasons, including: •

Minor reprimands

•

Withhold wages (in some select cases, using the no work, no pay principle)

•

Suspend with pay (though it is unlikely there is any legal authority for it)

•

Seek an order for specific performance

•

Seek a declaration as to the true position under the contract

•

Take an action for damages (under contract)

Repudiation of the contract by the employer
Theoretically, an employee may retire immediately when the employer breaches the contract in a sufficient manner also.
TB [15.22]
The contract could also be repudiated by other means, such as a company takeover, a change in the place of work, a change in duties, or a change in wages.
TB [15.56] – [15.60], SG 5.13 – 5.14
In the case of repudiation by the employer, the employee may attempt to recover damages or money for wages, etc. from the employer.
Action can be taken for any moneys owed under award, order or certified agreement. s720(1), WRA
If, during an action for a breach of an award or agreement, it becomes apparent that the employee has been underpaid, the court may order the appropriate payment be made. s719(6), WRA
In the case of AWAs, there is a statutory action for damages that can be taken to recover the amount of any loss or damage suffered from the breach of an AWA. There is no reason to think that the amount awarded would be calculated any differently to that for an action in contract. s170vw, WRA
Alternatively, the employee may also try to recover under a general action in contract, or a civil action for debt.
TB [13.84]

Termination by operation of law
As with other types of contracts, an employment contract can be frustrated, and is thus terminated by operation of law.
Generally, frustration occurs when an event occurs which, through no fault of the parties, makes the contract impossible to perform, or substantially different from the contract originally entered into by the parties.
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982)
Note that downturns in business are generally considered to be the ordinary risks in business taken by the employer, and so are not events leading to frustration of the contract.

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Insolvency/ Bankruptcy/ Winding up of corporate employer
The fact that a company is insolvent or has been declared bankrupt does not necessarily bring an end to the employment relationship.
Contracts of employment will be terminated by an order for the compulsory winding up of a company and constitutes a dismissal by the company, rather than frustration of the contract.
Contracts of employment may continue during a period of voluntary administration on the basis that the aim of voluntary administration is to keep the company running.
With regards to the recovery of employee entitlements upon the insolvency of a business, under
Corporations Laws, employees are given priority ahead of unsecured creditors for unpaid wages and other entitlements. s556(1)(e)-(h) Corporations Act
In practice, however, a company’s remaining assets are usually absorbed by its secured creditors, leaving nothing for the employees

Remedies for wrongful dismissal
As in actions for breach of other types of contracts, generally, the remedies available to the employee are specific performance (reinstatement) or injunctions, and damages.
Reinstatement/ Specific Performance
The courts have been very reluctant to grant specific performance of a contract of employment. In other words, they very rarely reinstate employees to their former position.
This does not necessarily apply to employees of large corporations.
Turner v Australasian Coal and Sale Employees’ Federation (1984)
Damages
The only damages available at common law for a wrongful dismissal are the amount the employee would have earned if he or she had been lawfully dismissed. The employee also has the common law duty to mitigate their loss – that is, the employee must make reasonable attempts to find alternative employment. The amount of damages will be measured against proper notice, that is:
1. The agreed amount of notice; or,
2. The amount of notice set out in the award or certified agreement or relevant statute; or,
3. In the absence of either agreed notice or notice prescribed in an award, reasonable notice.
As a consequence, in most cases the amount that the employee can gain is minimal.
Some employees may be able to claim ‘the life of their employment contract’ – subject to the
“foreseeable events which might have brought the employment to an end”.
TB [16.11]

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Terms that survive the termination of the contract
It is important to identify the terms that may remain on foot (that is, remain operative) after the contract comes to an end.
Generally speaking, the obligations created in the terms of the contract will cease when the contract is terminated, especially if the contract is lawfully terminated.
However, terms that are expressly intended to have effect once the contract is terminated will continue. Restrictive terms may not be enforceable by an employer who repudiates or otherwise has wrongfully terminated the contract.
Kaufman v McGillicuddy (1914), Rock Refrigeration Ltd v Jones [1997]
In the case of third party claims, if the employer is vicariously liable for the employee’s conduct (and thus the conduct giving rise to third party’s claim), the employer will remain vicariously liable even if the contract is terminated.
However, an employee is unlikely to be able to rely on statutory rights to indemnity because the statutes that create this right specifically state that the employee cannot gain indemnity where they are guilty of serious and/ or wilful misconduct (which could amount to a repudiation of the contract, giving rise to the right to summarily dismiss them).

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Topic 6 – Liability for Employee Conduct
Contracts: liability of employer and employees for contracts entered into by employee
Liability of the employer for contracts entered into by its employee
There are two main ways that an employer can become liable for a contract that is entered into by its employee.
1. where the employee has acted as an agent of the employer.
2. where the employer has ratified a contract entered into by its employee.
Liability as a result of agency
An employer will be liable for contracts entered into by its employee when the employee has acted as the agent of the employer. Agency arises most frequently where the employee has either:
1. Express authority
2. Implied authority, or
3. Ostensible authority.
An employee has express authority to enter into a contract where he or she receives either written or oral authority to enter into the contract.
Implied authority arises where the employee is involved in carrying on the business of the employer.
In that case, the employee will have implied authority to do whatever is usual, incidental and necessary for the carrying on of the business of the employer.
Ostensible authority arises where the words or conduct of the employer result in the employee appearing to the outside world to be the agent of the employer.
Summers v Soloman (1857)
However, where the third party has actual knowledge that the employee does not have authority, there will be no ostensible authority.
Midland Bank Limited v Reckitt [1933]
Liability arising from ratification by the employer
Where an employer ratifies a contract entered into by its employee, the employer will be liable for the contract whether or not the employee (when he or she entered into the contract) was acting as an agent of the employer.

Liability of the employee for contracts entered into during employment
Where the employee has express or implied authority
Generally, where an employee acts with the authority of the employer, he or she will not be personally liable to the third party for the contracts he or she enters into.

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The main exceptions are:
a) Where the employee enters into the contract separately on his or her own behalf, as well as entering into the contract on behalf of the employer. For example, if an employer and an employee agreed that a car would be purchased jointly by the employer and the employee, and the employee signed both for the employer and for him/herself when purchasing the car, then the employee (as well as the employer) would be personally liable.
b) Where the employee does not disclose that he or she is acting as the agent of the employer.
Where the third party is not made aware of the fact that the employee is acting on behalf of the employer, the employee will be liable for any contract he or she enters into.
In the event that the employee is personally liable, the third party must decide whether to sue the employer or the employee separately, or to sue both. As a matter of prudence, it is preferable for the third party to sue both the employee and the employer.
Where the employee does not have express or implied authority
An employee who enters into a contract, purportedly on behalf of the employer, in a situation where he or she has no authority, will be liable to the third party. However, different situations result in the possibility of different types of action against the employee.
1. If the employee knows that he or she does not have authority, yet deliberately states that he or she does, then the employee may be sued in tort for deceit.
2. If the employee honestly but mistakenly believes that he or she has authority, but in fact does not, then the employee will be liable provided that the third party entered into the contract on the faith of the employee’s authority and suffered loss due to it.
Collen v Wright (1857)
3. Where the employee negligently and incorrectly represents that he or she has authority and the third party suffers loss due to reliance on the representation, the employee will be liable in the tort of negligent misstatement.
Hedley Byrne & Co Limited v Heller and Partners Limited [1964]

Rights and obligations of the employer in tort
Employers will be liable for their own actions that may give rise to a tort.
This will be so in three situations, and does not preclude the employee from also being potentially liable for their tort:
a) Where the employer has authorised the tort; or
b) Where the employer has ratified the tort; or,
c) Where the employer unreasonably fails to control the conduct of an employee where it is reasonably foreseeable that harm may be sustained by a third party.
The employer will be directly liable for the tortuous act, and may be sued by the third party with or without the employee being joined to the action.

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Vicarious liability
In general, an employer will be vicariously liable if an employee commits a tort against a third person. However, there are two main exceptions to this rule. They are:
1. An employer will not be liable where the tort occurred outside the course of employment.
2. An employer will not be liable where the conduct in question was prohibited and the employer has not gained a benefit from the conduct.
If the action by the employee is intentional or deliberate – generally, there will be no liability unless the employer gains some benefit from the conduct. However, if it is endorsed by the employer – expressly or impliedly – it will give rise to vicarious liability.
If employee acts out of some personal motivation such as personal spite or resentment, the employer will not be held liable as the act cannot be said to be in the course of employment or linked in any way with performance of duties of employment.
Can the employee’s conduct be described as a frolic and detour? If so, the employer will not be liable. Broadly the issue boils down to whether or not the employee can be considered ‘on the job’ at the time the conduct took place. If so, vicarious liability will arise; if not, there is no employer liability on this basis.
Where the employee has gone on a ‘frolic and detour’, and a tort has occurred, the employee will not be considered to have been acting in the course of employment. Consequently the employer will not be vicariously liable.

Action for loss of services
An employer may bring an action for loss of services where an employee is wrongfully injured by the conduct of a third party.
Where a person has been wrongfully injured (negligently or otherwise) by the conduct of a third party, that third party may be liable for the costs incurred from this loss (such as the continueing wages paid out whilst the employee is not able to perform their duties).
Commissioner for Railways v Scott (1959)
The conduct must cause injury, merely removing the employees services (by some other means) is not sufficient. Killing of the employee also does not attract liability under this action.
Damages payable are assessed by reference to the actual loss by the employer as a direct result of the injury.
The employer has a duty to mitigate the loss (typically by employing another person to fill the injured employee’s role).
Such an action cannot be taken for the loss of the services of a Policeman or a member of the armed forces. AG for NSW v Perpetual Trustee Co Ltd [1955]

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Rights and obligations of the employee in tort
Employee‟s liability in tort
An employee will be primarily liable for torts that he or she has committed, whether or not the employer is also liable. Generally, this question is answered by application of the principles of tort laws. If an employee has committed a tort, they are liable for it.
Mill v Hawker
Further, ignorance that the conduct is tortious also provides the employee no defence to the tort, unless “the conduct is not manifestly unlawful ... the employee believes it to be lawful and acts in a purely ministerial capacity rather than exercises any independent judgment”.
Stephens v Ewall
The employer’s vicarious liability – if any – does not dissolve the employee’s personal responsibility.
There is no principle of vicarious immunity – that is, if the employer is not liable, it does not follow that the employee is not liable for tortious conduct performed within the course of employment.
Vicarious liability, however, does allow for the employee to sue the employer (if they are vicariously liable) for any losses suffered from a court proceeding taken against the employee by the third party. Employee‟s right to indemnity
At common law, there is no duty of the employer to indemnify an employee for torts committed during their employment.
Lister v Romfield Ice & Cold Storage
The employee, on the other hand, does have a common law duty to indemnify the employer for liability arising from their tortious conduct. Unless, the employer is blameless, the employee will be liable to indemnify the employer 100%.
When the employer is insured, the insurance company cannot seek indemnity from the employee
(to recover money it has paid out to an injured third party) unless the employee’s conduct was serious or wilful misconduct. s66 Insurance Contracts Act 1984 (Cth)
This does not apply to workers compensation, personal injury motor vehicle insurance, and applies only where the employer could be held to be vicariously liable. s66(b) ICA
In some states, including New South Wales, if an employer is vicariously liable for an employee’s conduct, they are obliged to indemnify them unless the employee is guilty of serious and wilful misconduct. Further, the employer cannot seek contribution from the employee.

Rights of the employee in tort
There is no corresponding action by which an employee can claim compensation from a third party for any interference with the contract of employment, as is the case in which an employer may bring an action for loss of services where an employee is wrongfully injured by the conduct of a third party. There could be a right in tort for a negligent reference sent by a previous employer to a prospective employer. Spring v Guardian Insurance Plc [1995]
This authority, however, does not yet go so far as to allow recovery of economic loss.

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Other forms of liability
Statutory and criminal liability
Generally speaking, an employee cannot escape or be indemnified from criminal liability just because the conduct has occurred in the course of their employment. An employer will only be held to be involved in criminal activity of their employee if the elements of the offence can also be proven against the employer. The same principles will apply to the breach of a statutory duty
(provided it is not a non-delegable duty held by the employer) or an offence created by statute.

Employee‟s liability for industrial action
An employee gains some protection from legal claims under the WRA.
See Topic 9.

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Topic 7 – The Australian Industrial Relations System
Federal Constitutional power to make industrial relations laws
The main power (Section 51 (xxxv)) provides an extremely limited right to make laws concerning the conciliation and arbitration of “interstate” disputes.
However, the Work Choices legislation has diminished the significance of the ‘industrial’ power and the role of the Australian Industrial Relations Commission in industrial disputes, and has instead emphasized the role of the ‘corporations’ power (Section 51(xx)) to authorize the federal government’s laws.
Indeed this shift in the constitutional basis for the legislation has been validated by a recent High
Court challenge by state governments.
NSW v Commonwealth [2006]

Federal institutions
The Australian Industrial Relations Commission
The AIRC cannot exercise judicial power. This is the exclusive domain of the courts.
R v Kirby; Ex parte Boilermakers’ Society of Australia (1956)
What judicial power is remains harder to define. It is felt that the AIRC would be exceeding its authority of it seeks to enforce pre-existing legal rights rather than create new ones.
The key functions of the AIRC are to hear unfair dismissal cases, deal with unlawful terminations, and dispute resolution as per procedures in agreements, traditional industrial disputes and award rationalisation and simplification. s62, WRA
In doing so, the AIRC can take into account a number of matters, including:


The public interest.

s103, WRA



Discrimination issues.

s104, WRA



Racial Discrimination Act, Sex Discrimination Act, Disability Discrimination Act and Age
Discrimination Act. s105, WRA



Family Responsibilities Convention.

s106, WRA



Safety, health and welfare of employees.

s107, WRA



The need to act quickly

s108, WRA



The need to avoid technicalities and facilitate fair conduct of proceedings.

s109, WRA

It also has a fair number of powers, though most of these remain fairly weak.

s111, WRA

The Australian Fair Pay Commission (AFPC)
The AFPC is primarily tasked with:

s22, WRA

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(a) adjusting the standard FMW (short for Federal Minimum Wage);
(b) determining or adjusting special FMWs for junior employees, employees with disabilities or employees to whom training arrangements apply;
(c) determining or adjusting basic periodic rates of pay and basic piece rates of pay payable to employees or employees of particular classifications;
(d) determining or adjusting casual loadings.

The Federal Court & Federal Magistrates‟ Court
The Federal Court has jurisdiction with respect to a number of matters:


The interpretation of awards and agreements.



The enforcement of awards and agreements.



Various offences relating to the making of agreements.



Questions of law referred by the Commission or the Registrar.



Enforcement of s127 orders relating to industrial action.



Freedom of association matters under Part XA.



Review of unfair contracts under ss127A-127C.



Proceedings in relation to unlawful terminations under Subdivision C of Division 3 of Part
VIA.

ss848, 849, WRA ss719, 720, 170VW-170WA, WRA
Part VIB Division 10, s170VV ss122, 148, WRA

The Federal court also has general jurisdiction over any non-criminal matter arising under federal law. s39(1A)(c), Judiciary Act 1903 (Cth)
The Federal Court has the power to grant awards with respect to the cases before it as it sees fit
(including damages and injunctions). s22, Federal Court of Australia Act 1976 (Cth)
However, this general power does not extend to issues coming under the WRA, or awards and agreements that are related to the WRA.
CFMEU v Gordonstone Coal Management Pty Ltd (2000)
The Federal Court cannot order costs either, unless it the proceedings were instituted vexatiously or without reasonable cause. s824, WRA

The industrial registry
The registries function is mostly administrative in nature, including the maintaining of a register of organisations, holding copies of and publishing awards, and providing general administrative support to the Commission.

The inspectorate
It is the inspectorate’s job to ensure (and inspect) that the WRA is being adhered to in the workplace, typically on the side of employees. They make sure there has been no breach of the Act, nor any awards or agreements. s169, WRA

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It should be noted that the inspectorate is heavily underfunded and understaffed, and remains a rather ineffective (though doubtlessly welcome when successful) tool for employees.

The employment advocate
The employment advocate has several roles:

s151, WRA



Providing advice and assistance to employees and employers (especially in small business) about their rights and obligations under the WRA, and in relation to AWAs, awards and statutory entitlements.



Dealing with the filing and approval of AWAs.



Investigating alleged contraventions of AWAs, of penalty provisions relating to AWAs in Part
VID, and of the freedom of association provisions in Part XA.



Providing free legal advice and assistance to parties in proceedings under Parts VID and XA of the WRA if the Employment Advocate considers this would promote the enforcement of the provisions of those Parts.

The employment advocate must observe and directions given to them by the Minister.
And provide the Minister with an annual report.

s152, WRA s155, WRA

The powers of staff conducting an investigation on behalf of the employment advocate have similar powers to that of the inspectorate.
The employment advocate is much more pro-employer then employee, and is designed to champion
AWAs in the workplace.

Special tribunals
TB [5.29]

The States‟ systems of industrial relations
State powers
While extensive, though, State powers are not unlimited, as they must exist validly within the federal system of government and law making authority. Obviously as the Commonwealth has been found to have power over industrial relations through the corporations head of power, the ability of States to legislate on industrial relations has been severely diminished.

State Institutions
As in other areas of law making, provided the States have power over a matter, State parliaments face few Constitutional limits in their capacity to make laws. Generally speaking, the States are empowered to make laws “for the peace, welfare and good government of the people” in their jurisdiction (with some capacity for those laws to have extra territorial effect), except of course in those areas specifically reserved as Commonwealth heads of power.

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Thus States are not limited to making laws in relation to “industrial disputes”, can make common rules, and can legislate in a much broader range of areas incidental to industrial relations without resort to international laws (for example, via the “external affairs” power as might the
Commonwealth). Equally, they are not limited in the form of tribunal that they establish to perform adjudicative functions in industrials matters. The limitations established in the Boilermaker’s case do not apply to State constitutions.
TB [5.30] – [5.38]

Participants in the industrial relations system
Unions
A union may be a party to an industrial dispute in its own right, not just as a representative of the workers concerned, and it may legitimately concern itself with the employment conditions of any workers who are or would be eligible to join it, whether or not they are currently members or even workers. This gives unions an important stake in the IR system, though the Coalition government of recent years has tried its utmost to marginalise the unions and remove them from the process entirely.
The ACTU also plays an important role, though it is not a union and cannot be registered as such. As an umbrella organisation, it is pivotal in being the public united face, and works hard on several issues that cross the divides between unions.
TB [5.48]

Employers and employer associations
Similar to unions, there are many employer associations that are also registered under federal legislation. However, they tend not to have the same aura of power around them, and are much more fractured, lacking a single umbrella group like the ACTU.
TB [5.50]

State governments
TB [5.53]

The interaction between state and federal laws
As indicated, while the state industrial systems suffer little constitutional constraint, they must still exist validly within the federal structure.
One of the principal questions that has arisen in the context of these federal limitations is the capacity of the federal parliament and the AIRC to make laws and awards in relation to state employees, that is, employees employed by state governments.
In principle, a federal award, particularly as it concerns minimum wages and working conditions, may validly apply to state employees. The Engineers case (Amalgamated Society of Engineers v
Adelaide Steamship Co Ltd (1920) 28 CLR 129) established that federal legislative powers must be given their natural interpretation; the High Court specifically held that s 51(xxxv) of the Constitution permitted federal award coverage of state employees.
State employers excluded under the amended WRA who were covered by Federal awards will continue under these awards for a transition period. Unless state employers restructure their as an incorporated body, such as a company, they and their employees are required to negotiate awards

Employment and Industrial Relations Law Notes – S1/2007 under State laws; eventually the Federal laws will cease to apply to them whether they have negotiated a State award or not.
Employers who had already structured their business as an incorporated body before the WRA was amended, have been transferred into the new Federal system. Transitional arrangements have been implemented as part of the amendments to the WRA that preserve employee entitlements under
State awards in so far as they do not contain any ‘prohibited content’ or if the employer and employees negotiate to discontinue that entitlement.
It must be noted that State employees who were covered by what are called unregistered State awards or who were not covered by any award before the WRA was amended, will retain any entitlements that are provided in State legislation for a period of three years.

Federal intervention and state inconsistency: limitations derived from the federal system
Limitations upon the federal system
The High Court’s interpretation of the federal system established by the Constitution imposes two limitations upon the right of federal parliament in exercising its law making powers. The first is that the federal parliament cannot pass a law that discriminates against or between states. s117 Constitution
The second limitation is that federal parliament cannot pass “laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments”. Re Australian Education Union; Ex parte Victoria (1995)
The High Court has held that an award which purported to invalidate redundancies offered to teachers infringed the implied limitation because it was crucial to a state’s capacity to function as a government to determine the number and identity of employees it wished to make redundant.
Inconsistency: limitations upon the state system
The amended WRA has placed greater limitations upon the state industrial relations system.
Section 16 of the amended WRA excludes State and Territory industrial laws from applying to those whose employment is governed by the WRA, so that a clearer distinction is now drawn between the two systems. Section 16 specifically lists the State and Territory laws that will continue to apply including those described as ‘non-excluded’ matters set out in s16(3).
There are two forms of inconsistency that may arise between a federal award, and a state Act or award. Direct inconsistency will arise where a federal award directly clashes with a state award or law. For example, if a federal award provided for pay to a particular employee of $400.00 per week, and a state award provided for payment of $350.00 per week, then the federal award would prevail due to the operation of s 109 of the Constitution.
Where the Federal Government has enacted legislation that is so exhaustive and detailed that it
‘covers the field’ then any state law covering the same area of operation will be invalid (whether or not there is a direct inconsistency). In order for the Federal Government to cover the field, however,

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Employment and Industrial Relations Law Notes – S1/2007 extremely detailed legislation must have been enacted. Accordingly, the covering the field test is rarely invoked in employment law.

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Topic 8 - Resolving Industrial Disputes: from
Arbitration to „Choices‟
The Hawke-Keating accords
The past two decades have witnessed a radical departure from centralisation, leaving us with a decentralised system based upon enterprise bargaining and more recently individual Australian
Workplace Agreements. This shift has its modern genesis in the Accords struck by the Hawke and then Keating Governments with the ACTU.
Accord 1 (February 1983): the actual arrangement; the concept of the ‘social wage’. *BLF deregistered in Victoria.]
Accord 2 (September 1985): Indexation was reduced to ‘partial indexation’, offset by tax relief. The concept of superannuation appeared.
Accord 3 (March 1987): the ‘Award Restructuring and Efficiency Principle’ (and productivity gains the ‘spark which led to enterprise bargaining’: (Reading 8.1: 179). The ‘real wage’ was abandoned signifying a sea change by which the system ‘moved away from a pure entitlement (principle), to one requiring productivity offsets’ (quoting Niland: 179).
Accord 4 (August 1988): Elaborating ‘Structural Efficiency Principle’. Federal Act expressly endorses the principle of ‘direct negotiation’ but does not require union involvement, paving the path towards
‘legislative recognition of individual agreements which could displace otherwise applicable awards’.
Accord 5 (April 1989): Efficiency improvement initiatives driven to the enterprise level – fostering micro-economic rather than macro economic reform [Pilots union shot down – strike a disaster.]
Accord 6 (February 1990): Enterprise bargaining intensified; superannuation increased.
Restructuring of the union movement begins. ‘Commission agreed to endorse individual enterprise level wage increases based on productivity improvements provided they met their enterprise bargaining principles’ setting the tone for developments ever since (Reading 8.1:182).
Accord 7 (April 1993): consolidating the system of enterprise level bargaining. However, AIRC becomes part of the process where parties fail to bargain in ‘good faith’ to ‘ensure a “safety net” increase in those situations where the parties could not reach agreement’ (182). AIRC enunciates the Enterprise Awards Principles.
Accord 8 (The swan’s song – May 1995): Enterprise bargaining was now integral to the system; the
Safety net adjustments were enunciated – the sense of minimum entitlement. The new unlawful termination provision was introduced (Topic 5), and then modified because it ‘was too successful’
(183).

„Flesh and blood‟ – industrial disputes and the conciliation and arbitration system
A key feature of the system created at federation to manage industrial relations, was compulsory conciliation and arbitration. This system resolved industrial disputes by means of the conciliation

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and arbitration of disputes and their resolution through determinations about pay and conditions within a particular industry. These determinations are called awards.
Awards are distinctive from other types of employment agreements, in that they relate to an entire industry rather than a group of workers based at enterprise level. Awards also have the capacity to promote minimum national standards of employment.
The award system is a distinctive feature of the Australian IR system. However, the award system has become a less prominent feature of the IR system since the enactment of the WRA, and most recently as a consequence of the Work Choices legislation.

„Work Choices‟ – a „simpler, fairer … and better balance[d]‟ system
From Monday 27 March 2006, the Australian industrial relations system ceased to have a focus on collective bargaining practices, and instead shifted to a ‘system that will provide more choice and flexibility for employers and their businesses’ and employees, that is ‘simpler, fairer and … *will+ provide better balance in the workplace’, and that ‘will offer better ways to reward effort, increase wages and balance work and family life’.
Instead of awards, the IR system has now shifted focus to two other types of workplace agreement:
Collective Agreements that apply to all employees within an organisation, and Australian Workplace
Agreements (AWAs) that apply between an individual employer and employee.

Key elements of Work Choices
Three types of employment agreements are made possible by the Work Choices legislation: awards, and two forms of workplace agreements – collective agreements and Australian Workplace
Agreements (AWAs). Each of these is created under and regulated by the WRA as amended in a distinct way.
However, there are also some key elements established in the WRA as amended that apply to all of these forms of agreements.

Who does the WRA cover?
An employer is defined as being:

s6, WRA



A constitutional corporation



The Commonwealth



A Commonwealth authority



Those who employ light crew officers, maritime employees or waterside workers in connection with interstate or overseas trade or commerce=



A body incorporated in a Territory



Any person or entity that carries on an activity (whether of a commercial, governmental or other nature) in a Territory and employs persons in connection with that activity.

Employment and Industrial Relations Law Notes – S1/2007
An employee is simply defined as someone in the employment of an employer, except on a vocational placement. s5, WRA
An ‘excluded employer’ is an employer who does not fit within the meaning of s6, but who at the date of commencement of the Work Choices legislation, was covered by a Federal Award. Unless, this type of employer is covered by some form of state agreement, then the federal award will continue to apply to their workplace for a ‘transitional’ five year period, though this award must be rationalized to conform to the five ‘allowable award matters’.
Schedule 6, WRA
While an ‘excluded employer’s’ workplace is governed by a Federal award, they must observe the provisions of the WRA (as amended) that apply to Federal Awards. Otherwise, they are subject to state laws but may be covered by the parts of the WRA that are supported by the broader constitutional powers, such as the external affairs powers.

The Australian Fair Pay and Conditions Standard
Under Part 7 of the amended WR Act, the Standard covers five “matters” listed in s 171(2): basic rates of pay and casual loadings, maximum ordinary hours of work, annual leave, personal leave and parental leave.
The AFPC interacts with a Workplace Agreement by setting the benchmark of wages and conditions that should be observed. It does not prevent these conditions from being ‘bargained up’; that is, these conditions can be made higher in a workplace agreement, but not lower. The Regulation governs what amounts to ‘more favourable’ conditions that do not breach the AFPC Standard.
Basic rates of pay and casual loadings
Employees are entitled, as a minimum requirement under the WR Act, to be paid for each hour they work at a basic rate calculated in accordance either with an applicable Australian Pay and
Classification Scale (APCS), or a Federal Minimum Wage (FMW).
Division 2, Part 7, WRA
It is only the Australian Fair Pay Commission (AFPC) that can vary APCSs, or indeed create new
APCSs.
In making decisions on wage levels, the Commission’s general objective must be to promote
“economic prosperity”. While it should continue to provide a “safety net for the low paid”, it must also consider “the capacity for the unemployed and low paid to obtain and remain in employment”, as well as “employment and competitiveness across the economy”. s23, WRA
Employees must be paid at whatever frequency is stipulated in an agreement or contract; except that where an APCS contains frequency of payment provisions derived from an award, the parties cannot agree on a frequency of longer than a month. In the absence of any stipulation, the default rule is that an employee must be paid at least fortnightly in arrears. s189, WRA
An APCS will also include whatever casual loading may have applied under the relevant pre-reform wage instrument. A workplace agreement may subsequently set a lower casual loading than that contained in the relevant APCS, but not less than 20%. That is also the default loading for non-award employees who are engaged as casuals.

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There is a general power for federal system employers to stand down workers without pay whenever they “cannot usefully be employed” because of a strike, breakdown of machinery or any
“stoppage of work for any cause for which the employer cannot reasonably be held responsible” s691A, WRA
Stand downs in other situations are prohibited. s691B, WRA
Maximum ordinary hours per week
There is a notional maximum of 38 ordinary working hours per week. But that figure may be averaged over an agreed period of up to a year; and employees may in any event be required or requested to work “reasonable additional hours”, judged according to a range of factors that include both the employee’s personal circumstances (including any family responsibilities) and the employer’s operational needs.
Division 3, Part 7, WRA
There is no requirement that any overtime rates be paid for additional hours.
Annual leave
The minimum entitlement to paid annual leave is expressed as 1/13th of the “nominal” (ie, ordinary) hours worked by an employee. This equates to four weeks’ leave per year, though some shiftworkers are entitled to an extra week.
Division 4, Part 7, WRA
Workplace agreements may provide for the cashing out of up to two of those weeks, but only on written request from a worker. s233, WRA
Such agreements are specifically prohibited from providing for accrued leave to be foregone, other than at the employee’s written election.
For the purpose of Division 4, leave is generally taken to accrue each month and is cumulative. There are also rules as to when an employee can request, or an employer can direct, that leave be taken.
Personal leave
There is an annual entitlement to ten days’ paid sick leave or carer’s leave (collectively known as
“personal/carer’s leave”), plus an extra two days’ unpaid carer’s leave on each occasion it is needed.
Division 5, Part 7, WRA
The entitlement to unpaid carer’s leave is extended to casual employees, but they are not eligible for any other type of personal leave.
Carer’s leave may be taken to provide care or support for a member of the employee’s immediate family or household because of some illness, injury or unexpected emergency. To obtain either sick or carer’s leave, the employee must notify the employer and provide any documentary evidence that the employer may require, in each case as soon as reasonably practicable.
The paid leave entitlement is taken to accrue every four weeks and is cumulative, though an employee is not entitled to take more than ten days’ paid carer’s leave over any twelve-month period. An employer must also provide two days’ paid compassionate leave whenever a family or household member dies or sustains a life-threatening injury or illness. There appears to be no limit as the

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Employment and Industrial Relations Law Notes – S1/2007 number of “occasions” on which such leave may be taken. If the employer demands, the employee must provide any evidence that the employer “reasonably requires” as to the relevant death, illness or injury.
It is possible under the Standard for an employee to agree with their employer to cash out paid personal/carer’s leave, provided they retain a balance of at least one and a half times their annual entitlement (ie, 15 days for a full-time employee). s245A, WRA
Parental leave
The core minimum entitlement, as under the pre-reform Act, is up to twelve months’ unpaid parental leave, although one change is to extend the entitlement to casuals with at least 12 months’ regular and systematic employment.
Division 6, Part 7, WRA
By virtue of Division 6 of Part 12, which in constitutional terms is based on the external affairs power, the minimum standards on parental leave are extended to all eligible employees, not just those working for federal system employers.

Dispute Resolution
The Work Choices amendments introduced significantly altered dispute resolution processes, with a stated purpose of encouraging parties to resolve their disputes themselves, either at the workplace, or with the assistance of a nominated third party.
The AIRC has lost its powers of compulsory arbitration, subject to only limited exceptions (including applications to vary awards, and the making of “workplace determinations” under Division 8 of Part
9 where a bargaining period has been terminated). Under the amended WR Act, there is no longer any general provision for industrial disputes to be notified to the AIRC, other than in relation to excluded employers.
Parties may seek assistance from the AIRC to resolve a dispute as to the negotiation of a collective agreement, but only where all parties agree.
Division 4, Part 13, WRA
Even then, the Commission may not make any order or otherwise compel a party to do anything, even if the parties have agreed it should have that power. s706(5), WRA
Parties to a workplace agreement are still able to expressly authorise the AIRC not just to conciliate or mediate disputes arising under the agreement, but to arbitrate. But in performing that role the
AIRC may only utilise powers expressly conferred by the parties, rather than automatically being able to call upon the general powers conferred by s111.
Division 5, WRA
Model dispute resolution process
A new model dispute resolution process is now incorporated into all federal awards and workplace determinations, all notional agreements preserving State awards and all preserved State agreements, overriding anything to the contrary in each instrument. ss504(6), 514, Schedule 8 cll 15A, 36, WRA
It also applies by default to any new workplace agreement that fails to specify otherwise. s353(2), WRA
And may be used where there is a dispute as to any of the minimum employment entitlements

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Employment and Industrial Relations Law Notes – S1/2007 stipulated under the Act, other than those relating to wages. ss175, 609, 614, 691, WRA
In all cases, however, parties retain the right to initiate court proceedings to resolve the dispute in question. s693, WRA
The model process set out in Division 2 of Part 13 provides for a tiered procedure, commencing at the workplace level, with assisted dispute resolution in the form of mediation, conciliation or (but only if the parties agree) arbitration as a last resort. Parties have the choice of nominating either the
AIRC or another third party to assist their dispute resolution, with the AIRC being the default option in the absence of any agreement.

Workplace agreements
A major feature of the Workplace Relations Act 1996 (Cth) has been the promotion and encouragement of workplace agreements; that is, agreements made at an enterprise level rather than across an industry.
Workplace Agreements are now the main form of agreement between employers and employees to regulate the conditions of employment. To be a Workplace Agreement, the agreement must comply with the provisions of either the Federal Act or state enterprise Act and be registered in accordance with the procedures set out in the relevant Act.
There are two categories of Workplace Agreements in the WRA: Collective Agreements (previously
Certified Agreements), which maintain a collective bargaining approach, and Australian Workplace
Agreements, which involve an employer and employee entering into individual agreements.
The Federal Government and many state governments, including New South Wales, have encouraged workplace agreements. It is perceived that an agreement made at the enterprise level will be better suited to the individual needs of the employer and its workers than an award which is made to cover a group of employers, or even a whole industry.

The “no disadvantage” test – gone
A key feature of the Enterprise system originally established by the WRA was the “no disadvantage” test. The basic premise of this test was that no employee should be disadvantaged by entering into a workplace agreement as compared to his or her position under an award.
The AIRC and the Employment Advocate applied the no disadvantage test to determine whether a
Certified Agreement or an AWA should be certified or approved. The test was:
170XA When does an agreement pass the no disadvantage test?
(1) An agreement passes the no disadvantage test if it does not disadvantage employees in relation to their terms and conditions of employment.
(2) Subject to sections 170XB, 170XC and 170XD, an agreement disadvantages employees in relation to their terms and conditions of employment only if its approval or certification would result, on balance, in a reduction in the overall terms and conditions of employment of those employees under: (a) relevant awards or designated awards; and

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(b) any law of the Commonwealth, or of a State or Territory, that the Employment Advocate or the Commission (as the case may be) considers relevant.

Note that all of the sections relating to the ‘no disadvantage test’ have been repealed as a result of the Work Choices amendments.
When applying the no disadvantage test, the relevant authority had to determine whether or not the worker had suffered overall disadvantage in the conditions of his or her employment as compared with the conditions of employment that were (or would have been) applied under the award governing the employee’s work and any commonwealth, state or territory law that the
Commission or Employment Advocate considers relevant.
The no disadvantage test involved the balancing of terms and conditions of employment.
Consequently, a drop in one condition of employment may be out-weighed by a gain in another condition of employment.
However, even if the AIRC or the Employment Advocate took the view that the workplace agreement did not pass the “no disadvantage” test, it could still certify the agreement if it was not contrary to the “public interest” to do so. s170LT(3), WRA
However, the NDT has been removed by the Work Choices legislation and, as explained above, to a degree replaced by the Australian Fair Pay and Conditions Standard.

Types of agreements
Workplace Agreements are defined in Part 8 of the WRA.
The Agreements that can be made are either individual Australian Workplace Agreements (AWAs). s326, WRA
Or Collective Agreements. ss327-331, WRA
Five types of Collective Agreements may be formed:


Employee collective agreements;

s327, WRA



Union collective agreements,

s328, WRA



Union greenfields agreements;

s329, WRA



Employer greenfields agreements,

s330, WRA



Multiple-business agreements. Our focus is upon s327 Agreements (Employee Collective
Agreements), but make note of any differences that apply to the other types of collective agreements. s331, WRA

A greenfields agreement is an agreement that can be used for any new business established by an employer and allow an agreement to be made before any employees are actually hired. While such agreements may still be made with a union (a “union greenfields agreement”), it is also now possible to register an “employer greenfields agreement”, which is apparently an agreement between an employer and … itself! In effect, the employer is allowed in this situation to set terms by unilateral declaration. Employment and Industrial Relations Law Notes – S1/2007
Importantly, “new business” is broadly defined for this purpose to include any “new business, new project or new undertaking” that an employer is proposing to establish, or any “new activities” for a government agency. s323, WRA
Employer greenfields “agreements” may have a nominal duration of up to a year, though they will be able to continue past that date unless terminated or replaced. The nominal duration for all other types of workplace agreement, including union greenfields agreements, is up to five years. s352, WRA
It is not duress for an employer to make an AWA a “condition of engagement”. s400(6), WRA
It remains to be seen whether this is interpreted to cover situations where a worker transferring to a new employer is required to sign an AWA as a condition of keeping what is effectively their old job
(see eg Schanka v Employment National (Administration) Pty Ltd (2001) 112 FCR 101, where this was held to be duress).
All types of workplace agreements are now lodged with the Office of the Employment Advocate
(OEA), rather than the AIRC.
Agreements can start operating from the point of their lodgment, and with no need for a formal hearing. With the exception of multiple-business agreements, which as before are only available if a public interest test is satisfied (s332, WRA, WR Regs Ch 2 reg 8.1), there is no approval process as such. Agreements are able to come into operation even if there has not been strict compliance with the prelodgment procedure. s347(2), WRA
Employers are, however, required to lodge a declaration confirming that the statutory requirements have been met, including that they have obtained the consent of the individual employee (in the case of an AWA) or a majority of the affected employees (in the case of a collective agreement).
Employers who lodge false declarations may be prosecuted and the Federal Court or the Federal
Magistrates Court has the power to declare agreements to be invalid where the statutory requirements have not been met. s409, WRA
If an employer lodges an appropriate declaration, indicating that the employee(s) concerned have given their approval, the variation or termination may take effect — again, even if the proper procedures have not been followed.
Divisions 8 & 9, Part 8, WRA
There is also a right of unilateral termination for any party (including a majority of employees in the case of a collective agreement) after an agreement has passed its nominal expiry date. This can be done simply by giving 90 days’ notice to the other party or parties, or as little as 14 days notice if the right to terminate has been specified in the agreement itself. ss392, 393, WRA
However, this does not apply to prereform agreements.
Where an agreement is unilaterally terminated, any redundancy provisions in the agreement will remain binding for a further twelve months — unless a new agreement is struck in the meantime. s399A, WRA

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Content of Workplace Agreements
Despite the government’s emphasis upon the ability of parties to “reach an agreement of their choice”, regulations may specify certain subject matter to be “prohibited content” that cannot be included in workplace agreements. s356, WRA
The list of prohibited content specified by Reg 8.5, Chapter 2, WR Regs is a lengthy one. It includes:
•

any provision relating to the renegotiation of the agreement;

•

a term prohibiting or restricting a person bound by the agreement from disclosing details about it;

•

a term that directly or indirectly restrict the offering or making of AWAs;

•

restrictions or conditions on the use of independent contractors or labour-hire arrangements; •

terms that contravene the freedom of association provisions in Part 16 of the Act, or that encourage or discourage union membership;

•

any provision permitting industrial action;

•

various union-related entitlements, including deduction of union dues from wages, trade union training leave, paid union meetings, mandatory union involvement in dispute resolution, rights of entry for union officials, and the provision of information about employees to unions; and

•

any terms that confer a right or remedy in relation to the harsh, unjust or unreasonable termination of an employee’s employment.

Also prohibited is any term that has the effect of discriminating against an employee for reasons such as race, sex, age, disability and so on.
Reg 8.6, Chapter 2, WR Regs
Exceptions are made in relation to rates of pay that comply with the minimum standards on wages set elsewhere in the WR Act (so that for instance junior rates of pay could not be attacked on this ground), any discrimination based on the “inherent requirements” of a job, and certain practices at religious institutions.
A term of an agreement is prohibited to the extent that it deals with a matter that does not “pertain to the employment relationship”, except where the matter in question is “incidental or ancillary” to a matter that does pertain, where it is a “machinery matter”, or where it is “so trivial that it should be disregarded as insignificant”. This effectively means that there will be many provisions in agreements that might potentially be challenged as “non-pertaining”. Reg 8.7, Chapter 2, WR Regs
Where a term of an agreement does contain prohibited content, it is void to that extent. s358, WRA
Financial penalties may be imposed if an employer “recklessly” includes a term in a workplace agreement that turns out to contain prohibited content. s357, WRA
Or indeed if any person (presumably including an adviser to one of the parties) recklessly seeks to have such a term included, or misrepresents a term as not containing prohibited content.

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Employment and Industrial Relations Law Notes – S1/2007 ss365, 366
However, employers (though nobody else, it would appear) are able to get written rulings from the
OEA as to what is or is not prohibited. s357(2), WRA; WR Regs Ch 2 reg 8.9
While these are not binding on a court, the employer cannot be prosecuted for including prohibited content if they had relied on such a ruling to give them clearance.
The OEA is also empowered to vary agreements to remove prohibited content, either on application or on its own initiative. ss359 – 364, WRA
In addition to the new rules on prohibited content, there are also restrictions on the extent to which agreements can “call up” (ie, incorporate by reference) content from other instruments. s355, WRA

The role of awards
Award simplification
By virtue of Part 10 of the WR Act, federal awards continue to provide a minimum safety net for those not covered by workplace agreements, but have had their permissible content further reduced. Matters which have become non-allowable under Division 2 include:
•

wage rates for basic hours of work, casual loadings and classification standards — these now form part of APCSs, as discussed above;

•

annual leave, personal leave and parental leave (also now covered by the Standard);

•

long service leave;

•

union picnic days;

•

leave for dispute resolution training or union training;

•

restrictions on the range or duration of training arrangements;

•

superannuation;

•

jury service;

•

restrictions on, or conditions for, the engagement of contractors or labour hire workers;

•

conversion from casual status to another type of employment;

•

notice of termination;

•

redundancy pay for businesses with fewer than 15 employees;

•

mandatory union involvement in dispute resolution.

Provisions dealing with non-allowable matters are taken to have ceased to have effect as from the date of commencement. s525, WRA
The AIRC is now expected to “simplify” all existing awards by removing non-allowable provisions. s547, WRA

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The process of simplification has not yet occurred. This means that all official copies of federal awards, including those available online, do not now give an accurate impression of each award’s enforceable content.

Preserved entitlements
Under Division 3 of Part 10, certain provisions in pre-reform awards are taken to be preserved, even if they would not otherwise be allowable. Indeed they will continue to have effect even if the awards in which they are contained are subsequently rationalised as part of the process described below.
Such “preserved award entitlements” are those relating to annual, personal or parental leave, though only where those terms are “more generous” than the Standard (see above). Also preserved are entitlements relating to long service leave, notice of termination, jury service and (but only until
30 June 2008) superannuation.
But there is still nothing to stop these preserved conditions being bargained away in workplace agreements. Award rationalisation
Now that the reforms have taken effect, the only new awards will be those created as part of a process of “award rationalisation” under Division 4 of Part 10.Under these provisions, the task of rationalising awards is to be performed by the AIRC.
The AIRC may only act in accordance with an “award rationalisation request” made by the Minister for Workplace Relations. If no request is forthcoming, the AIRC has no power of its own to create new awards. s540, WRA
Any new awards created through this process will be able to apply either to specified employers or to classes of employers. s543, WRA
As with APCSs, however, rationalised awards must not operate by reference to State or Territory boundaries. s535, WRA

Variation of awards
The AIRC now has only a limited power to vary awards besides simplifying or rationalising awards.
It may act to remove discriminatory provisions or ambiguities, or to make a variation that is
“essential to the maintenance of minimum safety net entitlements”. s553, WRA
The AIRC may also vary an award to make it binding on a particular employer under Division 6 of Part
10. But in the absence of an agreement to be bound between the employer and a majority of its employees, it must be shown that reasonable but unsuccessful efforts have first been made to make a workplace agreement. Furthermore a union can only make such an application if it is acting on behalf of one or more of the relevant employees.

Protected conditions
Certain federal award provisions are deemed to be “protected” (not to be confused with the concept of “preserved” entitlements, as above). These protected conditions are those relating to

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Employment and Industrial Relations Law Notes – S1/2007 rest breaks and meal breaks, incentive-based payments and bonuses, annual leave loadings, days to be observed as or instead of public holidays, certain allowances, overtime or shift work loadings, penalty rates and outwork. s354,WRA Where workers have been subject to a preserved State agreement or a NAPSA under Schedule 8, a similar list of conditions is taken to be protected: Division 6A of Part 2 and Division 6 of Part 3. Such
“protected preserved conditions” or “protected notional conditions” may be drawn either from a
State award or from a State or Territory statute that applied to the workers in question.
The main significance of conditions being protected is that they are deemed to be included in a workplace agreement unless explicitly excluded or modified (apart from outworker conditions, which cannot be overridden). They will also be taken to apply where an agreement made under the new system is terminated but not replaced. s399, WRA

Interaction between instruments
A federal award can have no effect for an employee while a workplace agreement is in operation. s349, WRA
This was previously the case for AWAs, but is now extended to collective agreements as well.
Indeed, once a workplace agreement under the new system is in place for a given employee or group of employees, they can never again be entirely covered by an award while working for that employer. If an agreement is terminated, any protected conditions will apply, but the balance of any otherwise applicable award will not revive. s399, WRA
An AWA always overrides an otherwise applicable collective agreement. s348(2), WRA
Hence even where an employer is bound by a collective agreement, they may at any time offer selected workers individual agreements that provide either superior or inferior conditions.
There cannot be more than one workplace agreement applicable to an employee at any given time. s348(1), WRA

Transmission of business
An award or agreement that was binding on a business (the transmittor) will only bind someone who acquires all or part of that business (the transmittee) to the extent that the transmittee hires employees who previously worked for the transmittor. The old instruments will not apply to any new employees the transmittee may hire; and even in relation to transferring employees the old instruments will cease to have effect after 12 months.
Part 11, WRA
Together with the availability of employer greenfields “agreements”, the new transmission of business provisions may provide opportunities for some employers to escape the operation of awards and agreements merely by restructuring their operations and transferring their existing workers to new entities.

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Topic 9 – Regulating Industrial Action
Industrial action generally refers to the action taken by employee and employer groups to respond to conflict between them and the breakdown of their negotiations. Typically, we tend to understand industrial action as action taken by groups of workers against the bosses, such as pickets, strikes and work to rule campaigns. What tends to be less acknowledged within public perceptions of industrial action is that employers and employer groups also take action against employees when there is industrial conflict. For instance, they may lock workers out of the workplace, suspend payment of wages, and sack them.

Industrial action and the right to strike
Strike action is used generally to refer to the range of actions taken by both employee groups and employers when they are engaged in industrial conflict. It includes stop works, pickets, lockouts and
“goslows”.
For the purposes of the WRA, industrial action can mean:

s420, WRA

1. the performance of work by an employee in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of the work;
2. a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee;
3. a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work;
4. the lockout of employees from their employment by the employer of the employees; but does not include the following:
5. action by employees that is authorised or agreed to by the employer of the employees;
6. action by an employer that is authorised or agreed to by or on behalf of employees of the employer; 7. action by an employee if:
i)

the action was based on a reasonable concern by the employee about an imminent risk to his or her health or safety; and

ii) the employee did not unreasonably fail to comply with a direction of his or her employer to perform other available work, whether at the same or another workplace, that was safe and appropriate for the employee to perform.

Is there a right to strike?
In Australia there is no general right to strike.
National Workforce Pty Ltd v Australian Manufacturing Workers Union [1998]

Employment and Industrial Relations Law Notes – S1/2007
To a degree, the Workplace Relations Act 1996 (Cth) enshrines a “right” to strike, although only in the circumstances defined in the Act.

The value of industrial action
Keenoy and Kelly present a critique of perceptions that tend to affect how we view strike actions.
First they point to the information about strikes in the form of their socially visible presence in the media. They say that strike action excites public attention because it is ‘a dramatic and brutal rupture of the employment relationship’ (314). They suggest that media representations help to establish a public image where employees and unions are to blame, and that strikes are considered simply as not necessary or legitimate. The causes of the strike may not be accurately reported and the events leading up to the dispute may not be clear in the public mind: ‘what was a private, relatively secretive process of negotiation is, all at once, thrust into the floodlights and transformed into rhetoric, propaganda and backbiting’ (315). The outcomes too, remain hazy given that both sides come out smiling about their ‘win’. Nonetheless, Keenoy and Kelly argue strongly in favour of strikes as a valuable and legitimate form of communication within the bargaining process, a means by which each party can test the limits of the other’s resolve, an unsurprising response to deadlock in negotiations, and at times, the ‘only method through which the parties can be “persuaded” or induced to change their position’ (315).
Secondly they argue that the statistical information generated about industrial disputes – while it means something – can be taken out of context to help explain (or instead, confuse) the phenomena of strikes. In their view, this type of information has tended to generate some commonly held assumptions about strikes – which do not hold true.
These assumptions are (317):


Industrial disputes are a major source of economic losses;



Because unions instigate strikes they are also the cause of industrial disputes;



No one profits from industrial disputes;



There is a clear-cut distinction between ‘political’ and ‘industrial’ disputes; and



Employees have a right to strike.

Freedom of association
The right to associate and to not
This concept of freedom of association emanates from international principles that enshrine the rights of workers to form trade unions for the protection of their interests. Article 8(1) of the
International Covenant on Economic, Social and Cultural Rights (the ICESCR) reads:
The State Parties to the present Covenant undertake to ensure:
(a) The right of everyone to form trade unions and join the trade union of his choice, subject only to the rules of the organization concerned, for the promotion and protection of his [sic] economic and social interests.

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Again this right is limited by reference to the national interest and public safety.
Part 16, WRA sets out the provisions to protect “Freedom of Association” of both employees and employers. Closed shop arrangements are now impossible at law, as it is unlawful to discriminate against employees on the ground they do not belong to a union. ss792 & 793, WRA
Any provision of an agreement or award that contravenes freedom of association is nullified. The
AIRC is specifically empowered to alter or remove the objectionable provisions in an award or agreement. ss810 – 813, WRA
This includes provisions which merely encourage union membership.
Compulsory union fees are also forbidden. If a non-member gains a benefit from a unions work, they do not owe the union any fees. Voluntary fees are fine however, as long as there is no coercion. ss801 – 803 & 809 – 812, WRA

Prohibitions relating to freedom of association
Part 16 of the WR Act, dealing with freedom of association, has been re-enacted in slightly different form, and with certain prohibitions (especially those directed to unions) being expanded. s792 of the WRA prohibits an employer from dismissing, injuring in employment, refusing to hire or otherwise detrimentally altering an employee’s position or the terms on which he or she is hired for a prohibited reason, as set out in s793. Thus, protection is afforded to those who engage in trade union activities.
An employee (or independent contractor) who has a complaint under s792 can bring an action to the Federal Court, who can make the orders specified in s807.
Thus where there has been “industrial” victimisation, the Federal Court may order the employer to pay up to approximately $30,000.00 (300 penalty units) (if the employer is a company) and up to approximately $6,000.00 (60 penalty units) in other cases. Where an employee has been dismissed, the employee may be reinstated and paid lost wages.
One change concerns the reversal of the onus of proof in infringement proceedings. While s 809 still provides that the onus is on the defendant to show that they did not engage in the alleged conduct for a prohibited reason, this no longer applies where the plaintiff is seeking an interim injunction. It is also provided that where an employer is alleged to have taken action against an employee or jobseeker because of their entitlement to the benefit of an industrial instrument or the Standard, this must have been the “sole or dominant reason” for the action in question, not merely a reason
(s792(4)). Both changes are plainly intended to make it harder for unions to bring freedom of association cases against employers who have restructured their operations or their employment conditions in a bid to get staff onto individual agreements, rather than collectively negotiated or arbitrated terms.

Trade union rights of entry to the workplace
An officer or employee of a union may apply to obtain a permit of entry into a workplace. s740, WRA

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The permit entitles the union representative to enter the premises of an employer in the event that he or she suspects that a breach of the WRA, a Federal Award or a
Certified Agreement has occurred.
Rights of entry clauses are prohibited content if included in a workplace agreement, and cannot be included as an allowable award matter. s518, WRA
Due to this, the following only apply where union officials are seeking to invoke rights of entry granted under State or Territory occupational health and safety laws, at least where federal system employers are concerned. These requirements are in addition to any under the respective state or territory OH&S laws.
There are stringent requirements for officials who wish to obtain and then maintain an entry permit; and the procedures they must observe when entering workplaces are tight, including the need to conduct meetings in any room or area stipulated by the employer, and to follow a required route to get there. ss751, 765, WRA
Officials who wish to investigate a breach of an award or an agreement, or of the Act itself, may only do so if the suspected breach affects at least one employee who is a member of the relevant union. s747, WRA
An official has no right of entry for the purpose of holding discussions with members of their union, unless the union is bound by an award or collective agreement that covers work carried out by those members. s760, WRA

Industrial torts and the WRA
The common law principles in tort law have been developed to regulate industrial action by trade unions and their members. Generally, these are referred to as the industrial torts.
Of course, the existence of principles that define these distinct torts does not preclude actions being brought by an employer (or perhaps any other party affected by the action) on the basis of the more
‘usual’ types of torts, such as negligence or trespass.

Interference with contract
The tort can be reduced to a single general definition: “it is wrongful to induce or persuade another person to break their contract”.
Slattery v Keirs (1903)
There are several elements that must be proven for the tort to exist. Each of the elements must be satisfied in order to prove that the tort has occurred, they are:
(1) The defendant must have knowledge of the contract between the plaintiff and the third party. (a) However, detailed knowledge of the contract is not necessary.Torquay Hotel v Cousins [1969]
(b) If the plaintiff should have known of the contract then this is sufficient (ie constructive knowledge is sufficient).Carlton and United Breweries Ltd v Tooth & Co Limited (1986)

Employment and Industrial Relations Law Notes – S1/2007
If a ‘blind eye’ were deliberately turned by the perpetrator to the possibility of a contract then this pre-condition would be satisfied. Bent’s Brewery v Hogan [1945]
(2) The defendant must intend to cause a substantial breach or hinder performance of the contract. (This factor is closely linked to knowledge, as without knowledge of the contract there can be no intention to breach it).
If the defendant should have known that their actions would have caused the breach, and continued regardless, then this will be considered satisfied. Bent’s Brewery v Hogan [1945]
(3) There must be a contract in existence between the plaintiff and a third party.
Hadmor Productions v Hamilton [1983]
An expectation that a contract will result is not enough. A party may interfere with such an expectation. (4) There must have been a breach of contract or a substantial hindrance of performance of the contract. Torquay Hotel v Cousins [1969]
For example, if a union called its employees out on strike there would be a breach of the contract of employment between those employees and their employer.
(5) The interference must be unlawful. To determine whether the interference was unlawful, it is necessary to distinguish direct from indirect interference. This is because a direct interference is deemed to be unlawful, whereas, unlawfulness must be proven where the interference is indirect.
(a) Direct interference Where (A) stops (B) from performing a contract with (C) there will be direct interference. For example, if a union (A) told certain employees (B) to go on strike, in order to hurt their employer (C) then there will have been direct interference. Where there is direct interference the court deems that the interference is unlawful.
Consequently, this factor or element is automatically satisfied.
(b) Indirect interference (Secondary Boycott) Where (A) stops (B) from performing a contract in order to put pressure on (C), so that (C) will either fail to supply or fail to purchase from (D) (the target) there is indirect interference. For example, a union
(A) could call on workers (B) of an employer (C) who either normally supplied or purchased goods from the real target (D) in order that indirect pressure could be put on (D). This would constitute indirect interference. Where there is indirect interference with contract, there must be proof of ‘unlawful means’.
Where there is a clear breach of contract there is the requisite unlawfulness.
DC Thomson & Co Ltd v Deakin [1952]
Intimidating somebody so that they don’t fulfil their contract is also unlawful.
Sumwalt Ice and Coal Co v Knickerbocker Ice Co (1911)

Conspiracy
There are two forms of the tort of conspiracy. The first is conspiracy to injure (which is rarely used today). The second is conspiracy by unlawful means.

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Conspiracy to injure
Conspiracy to injure occurs where ‘two or more persons act in combination in order to damage the plaintiff’. Each element of the tort of conspiracy must be proven. The elements for conspiracy to injure are:
1. Agreement. There must be an agreement between two or more persons to take concerted action. For example, there may be an agreement between a union and its members to take strike action.
2. Intention to injure. In order for the tort to have occurred, the defendant must intend to injure the plaintiff in its trade or business.
McKernan v Fraser (1931)
However, where there is a ‘legitimate business interest’ (such as causing injury to further one’s own economic prosperity), no tort will be committed (see *3+ below).
Where there are multiple parties involved, the courts will look at the intention of each party separately to see if there was an intention to injure. Only the parties with a ‘bad motive’ will be liable.
McKernan v Fraser (1931)
Where the parties act partly out of malice or spite, and partly due to a legitimate business reason, the court looks at the dominant purpose.
Crofter Hand Woven Harris Tweed Co Limited & Ors v Veitch and Anor [1946]
If the dominant purpose is, for example, hatred or jealousy, then the tort will have been committed. 3. Unlawful purpose. An unlawful purpose (unlike ‘unlawfulness’ in the other torts), involves a bad or malevolent purpose. Examples of bad or malevolent purposes are revenge or to satisfy a personal grudge. By contrast, if the parties have made an agreement the purpose of which is to advance or protect a legitimate business interest, then the element will not have been satisfied.
The pursuit of legitimate trade union objectives is lawful and considered a legitimate business interest. Reynolds v Shipping Federation Ltd [1924]
For example, it is legitimate for a trade union to combine with its members to increase the members’ wages and conditions.
McKernan v Fraser
Conspiracy by unlawful means
The same elements are necessary to establish conspiracy by unlawful means as are necessary for conspiracy to injure except:
1. There is no need for an unlawful purpose.
Faccenda Chicken Ltd v Fowler & Ors [1986]
Nor is a legitimate business interest a justification for the act.
2. Unlawful conduct must be involved. This includes a breach of contract, a crime or a tort.
For example, in Ansett Transport Industries (Operations) Pty Ltd & Ors v Australia Federation of Air
Pilots & Ors [1991] ICR 636, the Federation told pilots (as part of a dispute over wages) to only work
9.00 am to 5.00 pm. This involved a breach of the pilots’ contracts of employment and therefore constituted the tort of conspiracy by unlawful means.

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Intimidation
The elements of intimidation are:

Morgan v Fry & Ors [1947]

1. There must be a threat.
However, the threat may be implied. For example, in Latham v Singleton & Ors (1981) 1 IR
47, the union wanted an employee to be sacked. Every time the employee attended work, the other workers, in accordance with a union directive, walked off the job. This was enough to constitute a ‘threat’ even though the union never threatened industrial action if the worker was not sacked. By contrast, if the union were merely to say that it had a dispute with a particular employee that would not be sufficient to constitute a threat.
2. The employer must bow to the threat. For example, in Latham’s case the employer eventually sacked the employee. This was sufficient to show that the employer had bowed to the threat.
3. The threat must be of ‘unlawful conduct’. This includes a breach of contract, a tort and a breach of the criminal law. For example, not working with an employee would constitute a breach of the contract of employment between the employer and the employees who were carrying out the threat. The threat of mounting a ‘sit-in’ involves the tort of trespass. Finally, a threat to destroy the employer’s equipment would constitute a breach of the criminal law.
4. The threat must be without justification. The defence of justification is only available if it can be proved that the action was taken in order to protect the health and safety of employees. Ranger Uranium (below)

Picketing
The tort of picketing occurs where a picket attempts to prevent persons entering or leaving the place of employment, particularly where force is involved.
TB [18.78]
In Dollar Sweets Pty Ltd v Federated Confectioners Association of Australia [1986] VR 383, picketers using violence and threats against truck drivers attempting to make deliveries were found to have committed the torts of interference with contracts and intimidation.

Defence of justification
Generally speaking, the courts have not upheld the defence of justification.
It appears that the only time that justification may succeed is where the action is taken to protect the health and safety of workers.
Ranger Uranium Mines v Federated Miscellaneous Workers Union of Australia (1978)

Remedies
Injunction
The main remedy for industrial torts is an injunction to stop the breaching party from continuing with its conduct. For example, an injunction may be issued to stop a strike.

Employment and Industrial Relations Law Notes – S1/2007
However, the right to an injunction will be lost if there is delay in bringing the injunctive action, if there is any consent to the tortuous action by the victim, or a lack of ‘clean hands’ (that is, where the person seeking the injunction has in some way been culpable).
Damages are the other main remedy. However, it is rare that an employer will seek damages, as this makes working together with a union, after the tort has ceased, far more difficult. If awarded, damages will be awarded in an amount to put the plaintiff in the position it would have been in, if the tort had not occurred. There is a duty to mitigate (or reduce) loss, which probably has more effect in cases of extremely prolonged industrial action.

Protected action under the WRA
Section 420, WRA defines ‘industrial action’ for the purposes of ‘strike’ protections (see above).
An employee cannot be sued by an employer under an industrial tort if their action is ‘protected’.
Industrial action will only be protected (ie, lawful) if it occurs in a bargaining period and is for the purpose of supporting claims made in respect of a proposed collective agreement, or responding to industrial action taken by another party in relation to such an agreement. s435, WRA
The significance of this is that those involved in protected industrial action cannot be sued under the industrial torts. s447, WRA
And cannot be dismissed or threatened with dismissal by their employer for taking part in the action. s448, WRA
They also cannot, however, be paid wages while they are engaged in industrial action. s507, WRA
And it is not unlawful for the employer to refuse to pay them or to take corresponding industrial action by which employees are stood down. s448, WRA
Generally speaking, there is no right to social security for striking workers because they are technically employed and do not comply with the criteria used to gain benefits.
Note, however, that only ‘protected persons’ (see 438(3)) may lawfully engage in the ‘protected industrial action’. Basically, this means that non-union members cannot be involved in industrial action that was organised at the workplace by a relevant union. In addition, industrial action that involves personal injury, wilful or reckless destruction of, or damage to, property, the unlawful taking, keeping or use of property or any form of defamation is NOT protected by s435.
The concept of “AWA industrial action” has been abolished, so that it is not possible to take protected industrial action while bargaining for an AWA. Consequently, it may be lawful to take industrial action while a bargaining period is in place to negotiate a collective workplace agreement, but not during a bargaining period to negotiate an AWA.
Industrial action cannot lawfully commence before the nominal expiry date of a collective agreement. s494, WRA
Or by an employer before the nominal expiry date of an AWA. s495, WRA
In order to engage in protected industrial action, employees or their union must have it authorised by a secret ballot; the ballot must involve at least half of the relevant workers, and the action must be supported by at least a majority of them to be valid. s449 & Part 9, Division 4, WRA

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The only exception to this is when the industrial action is taken in response to a lock-out by the employer. The Act defines ‘complex and detailed procedures that must be followed in relation to the holding of such a ballot’, which are akin – almost – to those governing government elections. These are, at least, likely to inhibit the use of industrial action as a bargaining strategy, and make proposed industrial actions prone to court challenges to prevent them from occurring (Part 9, Division 6) as well as intervention by the Government Minister (Part 9, Division 7).
In addition, specific types of industrial action (eg. pattern bargaining) are prohibited from occurring during the bargaining period. ss436 – 446, WRA
Moreover, industrial action is not protected if the bargaining period is suspended for any reason. s437, WRA
Note that once a certified agreement is finalised and certified, the WRA prohibits any further industrial action during the life of that agreement. However, the Federal Court has held that
‘matters that were not settled by a certified agreement can be the subject of legitimate industrial action during the life of that agreement’ (Denise O’Reilly and Tony Wood, ‘Federal Court Confirms
Availability of Protected Industrial Action within Life of a Certified Agreement’, Findlaw.com, March
2004). As the WRA has been amended since this decision, it is not clear if it will continue to provide protection in these circumstances. Indeed, s 440 of the Act now seems to preclude any industrial action during the life of a certified agreement.
In addition, an action in tort cannot be made against a union, its officers or members in relation to strike action. s435, WRA
Nonetheless, union officials are now vulnerable to action against them for breaches of the WRA as the AIRC must make orders to prevent industrial action from taking place if it is not protected action
(s496), and s728 covers a wide range of persons who may be potentially liable for involvement in contravention of the Act.

Individual Employee‟s liability for industrial action
The WRA and the supporting regulations now contain specific penalties that deal with employees and employee associations who engage in unprotected industrial action or who contravene orders of the AIRC related to industrial action. Where appropriate the AIRC may grant an injunction to prevent breaches of the protected action provisions of the WRA.

Secondary Boycotts: s 45D Trade Practices Act 1974 (Cth)
What is a secondary boycott?
Secondary boycotts for the purpose of causing substantial loss or damage
(1) In the circumstances specified in subsection (3) or (4), a person must not, in concert with a second person, engage in conduct:
(a) that hinders or prevents:
i.

a third person supplying goods or services to a fourth person (who is not an employer of the first person or the second person); or

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a third person acquiring goods or services from a fourth person (who is not an employer of the first person or the second person); and

(b) that is engaged in for the purpose, and would have or be likely to have the effect, of causing substantial loss or damage to the business of the fourth person.
Note 1: Conduct that would otherwise contravene this section can be authorised under subsection
88(7).
Note 2: This section also has effect subject to section 45DD, which deals with permitted boycotts.
(2) A person is taken to engage in conduct for a purpose mentioned in subsection (1) if the person engages in the conduct for purposes that include that purpose.
(3) Subsection (1) applies if the fourth person is a corporation.
(4) Subsection (1) also applies if:
(a) the third person is a corporation and the fourth person is not a corporation; and
(b) the conduct would have or be likely to have the effect of causing substantial loss or damage to the business of the third person.

s45D, TPA 1974 (Cth)
Secondary boycotts are very similar to indirect interference with contract.
The tort occurs where (A) in concert with (B) puts pressure on (C) so that (C) will stop having business dealings with (D). For example, a union (A) may act in concert with its members (B) by calling them out on strike, so that pressure can be put on a supplier or purchaser (C) of the real target of the union’s action (D).
The elements for a secondary boycott are:
Tillman’s Butcheries Pty Ltd v A-asian Meat Industry Employees Union of Australia (1979)
1. There must be a person in concert with another person engaging in conduct.
2. Their conduct must hinder or prevent the supply (or purchase) of goods or services by a third person to a corporation.
3. The conduct must be engaged in for the purpose of causing substantial loss or damage to the business of the corporation. And,
4. The conduct must be such that it would have, or be likely to have, the effect of causing substantial loss or damage to the business of the corporation.

Determining the purpose of the first and second person
There must be a common purpose between the first and the second person to cause substantial loss or damage to the target company.
Under statute, where the first and second persons have mixed purposes, it is sufficient if only one of the purposes is to cause substantial loss or damage to the target company. s45D(2), TPA 1974 (Cth)

Employment and Industrial Relations Law Notes – S1/2007

Permitted boycotts
1. Where the boycott is related to conditions of employment, hours of work or working conditions of a worker who is either the first or second person or another worker employed by the employer of the first or second person. s45DD(1) & (2) TPA 1974 (Cth)
2. Where the conduct was engaged in substantially for environmental or consumer protection, and where the conduct does not involve industrial action.
An example of the latter would be where an environmental group (A) called on consumers (B) to boycott the supplier or purchaser (C) of the target company (D). For example, Greenpeace could call on consumers not to purchase goods from a particular retailer that was known to distribute products of a cosmetic company that used animals to test its cosmetics.

Remedies
The most frequently used remedy for boycotts is an injunction. The process and rules are the same as that for an injunction on the industrial torts above.
Again, seeking damages is rare, but where damages are sought, the amounts can often be large.
In addition, the court may impose a penalty on the first and/or second person of up to $750,000.

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Topic 10 - Unfair and Unlawful Termination
‘Terms that survive the termination of the contract’ has equal relevance here (see Topic 5).

Terminating the employment relationship
There are three main ways in which an employee can challenge his or her termination of employment in Australian laws:
1. At common law for wrongful dismissal (see Topic 5)
2. For unfair/unlawful dismissal under the Workplace Relations Act 1996 (Cth)
3. For unfair dismissal under state laws.
These mechanisms are distinct from one another.
Byrne
A breach of a termination of employment clause in an award or Workplace Agreement does not provide a basis to claim for breach of statutory duty (accordingly any breaches of these statutory based rights must be dealt with as breaches of the WRA or relevant state industrial legislation, so that they are a criminal offence that may attract a fine, and do not give the person affected by the breach any rights of compensation).
The Work Choices legislation has made significant changes to the operation of these laws, by reducing the categories of employees who can use them, by limiting their application to employers with more than 100 employees. In addition, the termination of a person’s employment on the basis of the ‘operational reasons’ related to the employer’s business is not a form of unfair dismissal.

Protection from termination under the WRA
All employees of federal system employers are now potentially eligible to bring an unfair dismissal claim in the AIRC under Subdivision B. They no longer need to be covered by an award or agreement.
Division 4, Part 12, WRA
By contrast, those who work for excluded employers are now barred from bringing a federal unfair dismissal claim, even if they are still covered during the transitional period by a federal instrument.
Whether such workers can bring a claim under State law instead will depend on the terms of the applicable State legislation and on any arguments of inconsistency under s 109 of the Constitution.
No claim may be brought against any employer with 100 or fewer employees at the date of termination. s643(10), WRA
In determining how many employees a business has for this purpose, all full-time and part-time employees (including the dismissed worker) are counted, except that casuals with less than 12 months’ service are disregarded. The workforces of companies that are “related” within the meaning of the Corporations Act 2001 (Cth) are to be counted together, but no account is taken of associated but unincorporated entities.
Nor can any claim be made in relation to any dismissal effected “for genuine operational reasons or for reasons that include genuine operational reasons”. s643(8), WRA
“Operational reasons” are defined to include “reasons of an economic, technological, structural or similar nature”.

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However, it has been held that an employer could not plead operational reasons for dismissing an employee whose allegedly poor work was said to be contributing to his employer’s financial problems. Evans v CLB No 1 Pty Ltd (AIRC, PR973439, 4/8/06)
Even where unfair dismissal rights still apply, employees now have to serve a qualifying period of six months before they are eligible to bring a claim, unless their employers have agreed on a shorter qualifying period. s643(6), WRA
None of the reforms affect the right of all employees, whether working for federal system employers or not, to pursue a court claim for unlawful termination under Subdivision C, which would normally be on the basis that they have been dismissed for certain discriminatory reasons in breach of s659.

Two causes of action
The WRA creates two causes of action for wrongful terminations of employment: unfair termination of employment and unlawful termination.
In general, unfair dismissal claims may be dealt with by the AIRC, while it may conciliate but not make a determination that a termination is unlawful.
Obviously, perhaps, the two causes of action relate to different improper behaviours by the employer, though it is possible for an action by the employer to give rise to both types of action. If this is the case, the employee must elect at a certain point in their claim as to which claim they intend to pursue.
Only “employees” may bring claims under the WRA
These claims are only available to employees (see Topic 2).
However, there are significant differences in the categories of employees who are covered by each claim. In addition, a wide range of categories of employees is excluded from bringing either claim.
The employer must terminate the employment contract
Either cause of action can only be commenced if there is a “termination of employment at the initiative of the employer”. s642(1), WRA
Thus, an employee who resigns (rather than being dismissed) is unable to make a claim for unlawful dismissal under the WRA.
Some examples of resignations are:
1. Telling the employer to ‘stick your job up your f...ing arse, you weak pack of bastards’.
Bruce William Wilson v Australian Meat Holdings Pty Ltd Aberdeen Division (1994)
2. After an argument between the employee and the employer the employee saying ‘do the right thing, give me a week’s notice’. Robert Mervyn Hardie v P & H Fibreglass Pty Ltd (1992).
3. Saying ‘I am resigning’.

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However, an employee who is forced to or given no alternative but to resign is considered to have been subjected to constructive dismissal. Where there has been a constructive dismissal, the employee will be able to make a claim under the Act.
Ingrid Margurite Lanske v Clare Realty Pty Ltd (trading as Peninsula Nursing Home) (1992)
‘fair go all round’
Both forms of action are subject to the ‘fair go all round’:
‘The procedures and remedies referred to in paragraphs (1)(a) and (b), and the manner of deciding on and working out such remedies, are intended to ensure that, in the consideration of an application in respect of a termination of employment, a “fair go all round” is accorded to both the employer and employee concerned’. s635(2), WRA
This requires consideration of:

Re Loty and Holloway v Australian Workers’ Union [1971]

•

The right of the employer to manage his or her business

•

The nature and quality of the work being performed

•

The circumstances surrounding the dismissal (which is required by the Act);

•

The likely practical outcome of a reinstatement order

Costs
Costs are awarded in only very limited circumstances under the WRA.
For an unfair dismissal (under s654) costs may be awarded under against:


A party whose claim is without reasonable cause, or



A party who unreasonably failed to agree to a settlement, or



s658, WRA

A party (or personally against their legal representative) who causes costs due to unreasonable act or omission during proceedings.

For a breach of s659 costs may only be awarded against:

s666, WRA



A party whose claim is vexatious or without reasonable cause, or



A party who causes costs due to unreasonable act or omission during proceedings.

Note that legal (or other) representatives who do not conduct unfair dismissal claims appropriately may be made personally liable for some costs.

Unfair dismissal claims under the WRA
See summary at end of topic.

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Redundancies and „operational requirements‟
No claim can be made in relation to any dismissal effected “for genuine operational reasons or for reasons that include genuine operational reasons”. s643(8), WRA
“Operational reasons” are defined to include “reasons of an economic, technological, structural or similar nature”.
However, it has been held that an employer could not plead operational reasons for dismissing an employee whose allegedly poor work was said to be contributing to his employer’s financial problems. Evans v CLB No 1 Pty Ltd (AIRC, PR973439, 4/8/06)
It is on the employer to show that there was genuine operational reasons for the termination.
Kenefick v Australian Submarine Corporation [No 2] (1996)
It is also held that there is no valid reason under operational requirements to fire someone and hire someone who fills the same role.
Scrivens Goldenpower Electronics Pty Ltd (1996)

Transfer of business
A change of employer will usually end the contract of employment. If proper notice is not given, the employee may sue the employer for repudiation, or redundancy provisions may apply. The employee may also enter a new contract with the new employer.
Where an employer is insolvent or wound up note that under Corporations Laws, employees are given priority ahead of unsecured creditors for unpaid wages and other entitlements. s556(1)(e) - (h), Corporations Act

Unlawful termination claims under the WRA
See summary at end of topic.
Keep in mind the ‘fair go all round’ concept.

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Summary of Unfair Dismissal & Unlawful Termination laws under the WRA

Workplace
Relations Act
1996 (Cth)

Section 643
(1) Subject to subsections (5), (6), (8) and (10), an employee whose employment has been terminated by the employer may apply to the Commission for relief in respect of the termination of that employment:
(a) on the ground that the termination was harsh, unjust or unreasonable; or
(b) on the ground of an alleged contravention of section 659, 660 or 661; or
(c) on any combination of grounds in paragraph (b) or on a ground or grounds in paragraph (b) and the ground in paragraph (a).

Jurisdiction to commence proceedings
Who can claim?

Only employees are able to bring claims: s 5 – see Topic 2. But see specific limitations below.
There is a $50.00 filing fee (indexed): s 644.
In certain circumstances, a trade union may lodge the claim on behalf of an employee.
Must be a termination: ―termination of employment at the initiative of the employer‖: s 642(1). See C,W&B, 2004: [7.3] – [7.6]

There must be a
Dismissal/
Termination

A resignation is not a dismissal: see Topic 5.
If employee is forced to resign, it may be a constructive dismissal: s 642(4).
A threatened dismissal does not provide a basis for a claim under the WRA, but see discussion of proposed terminations & redundancies: ss 660 & 668.
Claims must be lodged with the AIRC within 21 days of the dismissal: s 643(14)&(15). This section acknowledges that the

Time limits

Commission may allow proceedings out of time if it would be unfair not to do so. See note to s 643(15) Brodie-Hanns v MTV

Publishing Ltd (1995), and C&S, 2005: [16.34].

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Tribunal with jurisdiction to hear claim
Unfair dismissal

Tribunal?

Unlawful termination

Proceedings commence in the AIRC: s 643(1). AIRC has

Proceedings commence in the AIRC: 643(1). AIRC must

power to conciliate and arbitrate the matter: s 650 & 652.

attempt to conciliate: s 650 but does NOT have power to

If conciliation unsuccessful, AIRC must issue Certificate: s
651.
Applicant must then elect within 7 days to proceed to arbitration or withdraw: s 651(6).
Federal Court has no jurisdiction in unfair dismissal claims.

arbitrate the matter.
If conciliation unsuccessful, AIRC must issue Certificate: s
651.
Applicant must then elect within 28 days to proceed to withdraw or proceed to Federal Magistrates Court: s 651(6).
Federal Magistrates Court (or other court of competent jurisdiction) determines unlawful termination claim: s 663.

Effect of other proceedings on capacity to commence under WRA
Unfair dismissal:
Effect of other proceedings commenced?
Concurrent
proceedings under unfair and unlawful. Unlawful termination:

If proceedings have been commenced in concurrent jurisdiction cannot lodge claim. However, if concurrent proceedings completed (and found to lack jurisdiction) or are withdrawn, then can lodge claim: s 672 & 674.
The facts may give rise to a claim of both unfair dismissal and of unlawful termination. However, if the matter is not resolved by the AIRC by conciliation, the applicant must elect to continue the unfair dismissal claim, and therefore proceed by arbitration OR to continue the unlawful termination claim, and therefore proceed in the Federal Court: s 651.

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Categories of employees who can claim
Unfair dismissal
Employees covered

Unlawful termination

Only certain categories of employees may apply:

All ―employees‖ may apply: s 637(3)-(6) except for those that

s 643 and to be eligible employee must have completed a qualifying period of employment (generally 6 months): s 643
(6)&(7)
The categories of employees who are eligible (subject to exclusions below) to apply are:


Employees employed by a constitutional corporation
(company) with at more than 100 employees: s 643(10)
And those employed by s 6 Employers:






Commonwealth public sector
Territory (other than those in Norfolk Island)
Those involved in overseas, interstate, or territory trade and commerce, who employ maritime worker, waterside worker, or flight crews
Victorian employers: part 21

are excluded by the regulations: s 639

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Categories of employees who cannot claim unfair dismissal*
Employees excluded by s 638

Employees who are not able to make claims for unfair termination: s 638 (1)
(a) employees under fixed term contract
(b) employees under contract for specified task
(c) certain probationary employees
(d) casual employees who have been employed for less than 12 months (see s 638(4))
(e) certain trainees
(f) employees not employed under award-derived conditions
(g) employees engaged in seasonal work (see 638 (8)&(9))
[See also the definitions in s 642.]

Continues…

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Categories of employees who cannot claim unfair dismissal*
Other employees excluded And:




Employees employed by a constitutional corporation (company) with 100 employees or less: s 643(10)
Employees who are employed by an employer that does not meet the definition in s 6.
Those listed in the Regulations: s 639.
One specific category excluded by regulation is employees who earn $94,900 or above. [We are not looking at the
Regulations in the context of this unit, However, be aware, that certain employees may be prevented from bringing a claim for unfair and/ or unlawful termination as a consequences of the exclusions listed by the Regulation.]

*NOTE WELL – though it looks like they do, these exclusions do not apply to the unlawful termination provisions: s 638(2).
However, the Regulations can exclude certain employees from being eligible to apply for unlawful termination.

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Matters to be proved
Unfair dismissal
Matters to be proved to make out claim Unlawful termination

Is it harsh, unreasonable or unjust?

Is the termination unlawful?
The following grounds for termination are unlawful:
 Termination for a prohibited reason: s 659
In relation to s 659 claims, employer bears burden of proof –

Three principal grounds:
 Lack of valid reason to terminate
 Law of procedural fairness, or
 Circumstances surrounding the termination do not warrant dismissal
To determine if ―harsh, unreasonable or unjust, Commission will consider factors in s 652(3):
(a) whether there was a valid reason for the termination related to the employee‘s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the employee was notified of that reason; and
(c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and
(d) if the termination related to unsatisfactory performance by the employee—whether the employee had been warned about that unsatisfactory performance before the termination; and
(e) the degree to which the size of the employer‘s undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and

Continues…

defence if proves dismissal for reason(s) that did NOT include prohibited reason: s 664.


Failure to notify DSS of termination or proposed termination: s 660
 Insufficient notice: s 661 unless there is a ground for summary (instant) dismissal: s 661(1)(c)&(7). Note notice periods for workers over 45 years: s 661(2).
These considerations must be factored against the ‗fair go all round‘. Employment and Industrial Relations Law Notes – S1/2007

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Matters to be proved
Unfair dismissal

Matters to be proved to make out claim Dismissal for
‗operational
reasons‘

Continued from above….
To determine if ―harsh, unreasonable or unjust, Commission will consider factors in s 652(3):
(f) the degree to which the absence of dedicated human resource management specialists or expertise in the undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and
(g) any other matters that the Commission considers relevant.
These considerations must be factored against the ‗fair go all round.
Unfair dismissal: s 643
8) An application under subsection (1) must not be made on the ground referred to in paragraph (1)(a), or on grounds that include that ground, if the employee‘s employment was terminated for genuine operational reasons or for reasons that include genuine operational reasons.
9) For the purposes of subsection (8), operational reasons are reasons of an economic, technological, structural or similar nature relating to the employer‘s undertaking, establishment, service or business, or to a part of the employer‘s undertaking, establishment, service or business.

If employer argues or Commission considers that the termination was made on basis of genuine operational reasons,
Commission must hold a hearing to deal with the operational reasons issue before taking any further action in relation to the application: s 649(1).
If, after hearing, Commission satisfied that termination was on account of genuine operational reasons, claim will be dismissed: s 649(2).

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Remedies available
Unfair dismissal: s 654

Remedies

Breach of s 659 (prohibited reasons): s 665(1)













Re-instatement or compensation in lieu of reinstatement
Re-employment or
Compensation for remuneration lost (up to max of 6 months remuneration if was under award-derived conditions (11) or $32,000 (as indexed) if not under award-derived conditions (12)
 Other orders Commission thinks fit.
If reinstatement or re-employment ordered, Commission can

Penalty of up to $10,000
Re-instatement or compensation in lieu of reinstatement
Compensation for remuneration lost (capped at $32,000)
No damages for distress or humiliation: s 665(2)
Other necessary orders
Consequential orders
CANNOT order an injunction: s 665(9)

also order payment of lost remuneration and/or no break in continuity of service with respect to other benefits.
Calculation of compensation Compensation is determined according to the following considerations: s 654(8):
a) Effect on financial viability of employer
b) Length of service
c) Amount of remuneration payable if hadn‘t been terminated d) Employee‘s efforts to mitigate loss
e) Any misconduct by the employee that contributed to decision to dismiss
f) Any other relevant matter

Compensation is determined according to the considerations set out in ss 665(2)-(5) with a cap of $32,000 (indexed annually) Employment and Industrial Relations Law Notes – S1/2007

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Remedies available
Breach of s 660 (failure to notify Centrelink): s 665(6)



Penalty of up to $1,000
Order requiring the employer not to terminate the employment of employees pursuant to the decision, except as permitted by the order Consequential orders
 CANNOT order an injunction: s 665(9)
Breach of s 661 (insufficient notice): s 665(7)

Remedies



Remedies

Costs

May be awarded under s 658 against:



Order employer to pay to the employee an amount of damages equal to the value of the notice which should have been given
 CANNOT order an injunction: s 665(9)
 Costs: s 666
May only be awarded under s 666 against:

A party whose claim is without reasonable cause, or
 A party whose claim is vexatious or without reasonable
A party who unreasonably failed to agree to a settlement, cause, or or  A party who causes costs due to unreasonable act or
 A party (or personally against their legal representative) omission during proceedings. who causes costs due to unreasonable act or omission during proceedings.
C & S = Breen Creighton and Andrew Stewart, Labour Law, 4th ed, The Federation Press, Sydney, 2005
C, W & B = Colvin J, Watson G, and Burns P (eds), The Workplace Relations Handbook, 2nd ed, Butterworths, Sydney, 2004
Prepared by Jennifer Nielsen – last updated 24/05/07