Business and Company Law MA506 Tutorial Eleven Unit Coordinator: Dr. Tushar Das Chapter 33 Tutorial Questions Tutorial Questions Discussion Questions Is there a uniform employment law throughout Australia? Employment law is generally uniform throughout Australia since the main legislation applying to employment is under the Commonwealth Fair Work Act 2009. Other legislation applies nationally such as Work Health and Safety Act 2011 (Cth) and the Sex Discrimination Act 1984 (Cth), though there is some different law applying to State employees in certain States. Generally, however, common law principles are much the same throughout Australia. What is the role of the Fair Work Commission? The Fair Work Commission (FWC) is the peak national workplace relations tribunal, with powers and duties outlined in the Fair Work Act (FWA) to set wages, resolve disputes and ensure the FWA is complied with. The FWC cooperates with the Fair Work Ombudsman who takes an active role in resolving disputes as they occur and ensuring that there are no breaches of the Fair Work Act if possible. These executive bodies are independent from the government and proactively will inspect workplaces for compliance with the Fair Work Act. What kind of duties are expected of employees? Do these duties have to be specifically stated in a contract of employment to be enforceable? Duties owed by employees are determined by any existing contract of employment, by industrial agreements for a particular industry and from implied duties under the common law. An employer may impose certain duties within a contract, eg a very specific requirement as to non-disclosure of information, or requirements in the manner in which an employee is to perform their work. Most duties however are implied by common sense and from industry practices, and can be determined by what a reasonable “bystander” would expect. Any reasonable person would expect an employee to arrive on time for work, to work diligently, to always ensure they act in the interests of employer when carrying out work, eg to ensure that tools and equipment are kept safe and used properly. Such common sense standards would be expected of any employee and do not need to be spelt out in a written contract. Problem Questions James Smith employs a number of workers in his pest control business. The workers are members of an industrial union and are paid award rates, plus penalties (extra pay) whenever they work overtime or on weekends. One employee (Jeff) has worked for James for many years, in fact he worked for James’s father before James took on the sole responsibility for running the pest control business.Jeff has decided to retire and declares to James that he is now not going to work full time. However, Jeff says that he is happy to do odd work for James if he ever needs him. Jeff has a reasonable income from his superannuation, and he also receives some income by serving drinks at the local social club on a Saturday night.On one weekend James asks Jeff to investigate a mouse plague at a client’s bakery since he has to attend a family function. James promises to pay Jeff $250 for work that should take about six hours. Jeff picks up a business vehicle from James’s premises which contains all the tools and chemicals needed to remove any type of pest. Jeff does his best to locate the source of the vermin within the bakery and attempts to crawl under the floor. In so doing Jeff dislodges a number of electrical wires, but also strains his back.Jeff is injured and needs medical treatment. He cannot work at the social club and so has lost significant income, as well as incurring various medical costs. In the meantime, the baker has lost a day’s production while the dislodged wires were fixed by an electrician that the baker had to employ. The baker is not happy with James and suggests he should be compensated.Discuss whether James is liable to the baker or to Jeff. Alternatively, explain whether Jeff may be liable to James or the baker. The issue is whether the relationship between James and Jeff is one of employer and employee, or rather one of engaging a contractor (Jeff) who is then liable for his own actions. Jeff would obviously argue that he is an employee, and that therefore James is his employer and responsible for not only his (Jeff’s) injuries which may require compensation, but also liable to the baker for any damage done while work was carried out under the responsibility of James. Jeff would point to the criteria of Hollis v Vabu whereby he would claim to be an employee on the grounds that he did not work for himself, he did not own any tools, did not seek out work and was totally under the control of James in any tasks allocated to him. Further, Jeff would argue that he was injured while carrying out work for James, and that crawling under a floor was an entirely reasonable expectation of an employee carrying out their work. Jeff might ask for compensation for lost income. James might attempt to argue that Jeff is no longer an employee and that given the independence of Jeff, who now does other work and is not reliant on James for his income, then Jeff is an independent contractor. If Jeff is an independent contractor then he is liable for his own injuries, and further may be liable to the baker for any damage caused by his work. Rubberstuff is medium-sized business which manufactures rubber mats for cars and for the household. There are some 15 workers in the factory, including office staff and a manager. The workers belong to various unions according to the type of work they do. The workers on the factory floor are employed under an enterprise agreement which their union negotiated some 18 months previously.In the press there have been some reports of dangerous fumes that may be emitted from rubber products, particularly during the production process before a final product is sealed in the factory. There are scientific means of measuring any fumes or emissions from rubber, though this requires extensive testing. Rubberstuff management believes any testing will disrupt production and cause the business to run behind on a valuable contract it is currently completing. A request from the union for an inspection of the workplace by a scientist and a union official from union headquarters has been refused.The union believes that the workers are now subject to a dangerous work situation and should discontinue working until the matter is resolved. The management believes that the union is calling for unlawful industrial action and is breaching their employment contract. The management have promised to investigate the issue, but not until the end of the current production contract.Discuss the rights of both the business and the union to deal with this industrial issue; explain whether the union has the right to call a strike; and outline the rights of the business to prevent such action. The issue in this situation is whether any threatened industrial action by employees is permissible as protected, or whether it is unprotected industrial action which may leave the union open to a claim for compensation by an employer for any losses. If the union is seeking to take industrial action then they should have a vote first and give requisite notices to the employer, while the Fair Work Commission will attempt to resolve the situation between employers and employees. The Fair Work Act does permit industrial action under “permitted matters”, one of which could be the dangerous situation affecting the workers on the factor floor. Much also depends on what is contained in the enterprise agreement and whether there is reference to working conditions and potential dangers to workers. Ultimately if there is an unsafe work situation and workers are at risk then there is no compulsion to work in such an environment and workers can refuse to work, and this is not considered to be industrial action. The union might ask for appropriate representatives to inspect the factory, and refusal might be seen as a contravention of the Fair Work Act. The union is best to refer the matter to the Fair Work Ombudsman to undertake an inspection and further to try and resolve the situation. If the Union does undertake inappropriate and unlawful industrial action, then it runs the risk of staff being dismissed and possible payment of compensation. However, any unreasonable refusal to act on reports of unsafe working conditions could also weigh on the employer, and further could be a breach of Health and Safety legislation.
