2020 Top 5 Workplace Relations Updates
This year has seen many legislative and case developments which should be top of mind for employers (large and small operators) as we move into 2021. We summarise the main developments below:
1. Casual “double dipping”
Employers should be cautious of the possibility of having to pay casual employees leave entitlements and exposing themselves to significant underpayment claims.
In the decision of Workpac Pty Ltd v Rossato this year, the Full Federal Court decided that a casual employee was a permanent employee as they worked regular and systematic hours. Consequently the employee was found to be entitled to receive both its casual loading and paid leave entitlements.
For very specific reasons, the Full Federal Court did not allow Workpac to offset the 25% casual loading against monies owed for the leave entitlement.
Action: Employers should review their employment contracts for longstanding causal employees and review the rosters currently in place.
2. Wage Theft
The Wage Theft Bill 2020 was passed this year and is in response to several high-profile underpayment cases. The Victorian government is seeking to deter employers from dishonestly underpaying their employees and as such has introduced criminal liability:
- Fines of up to $991,320 for companies;
- Up to 10 years’ imprisonment for individuals.
The Wage Inspectorate Victoria, established by the Bill, will enforce the new laws. These new laws require dishonest intent, so an employer will not be found guilty of wage theft if they made an honest mistake or have exercised due diligence in paying wages and entitlements.
Action: Employers should familarise themselves with the Award and/or Enterprise Agreement that applies to the workplace, have in place procedures that effectively record hours worked and conduct regular audits.
3. Industrial Manslaughter
The Occupational Health and Safety Act 2004 (Vic) (OHS Act) was amended to insert a criminal offence for workplace manslaughter – taking effect on 1 July 2020. The offence contains the following elements:
- A body corporate or person can be charged, but they cannot be an employee or volunteer;
- They must owe the victim a duty under the OHS Act;
- They must breach the duty owed through negligent conduct;
- The breach must cause the death of the victim; and
- If the offender is a natural person, they must have acted consciously and voluntarily.
If found guilty, the following penalties would apply:
- Fines of up to $16.5 million for companies;
- Up to 20 years’ imprisonment for individuals.
Action: Employers should review their policies and procedures and ensure that they enforce safety compliance amongst their employees.
4. Insolvency laws
In September, the Federal Government announced its intention to overhaul Australia’s insolvency laws – the largest changes in 30 years. The changes, intended to commence on 1 January 2021, affect restructuring and insolvency making it easier for a small business (incorporated business with liabilities of less than $1 million) to engage in those processes.
Some features of these changes include:
- Business owners retain control of their companies while working with a Small Business Restructuring Practitioner (SBRP) to develop a Restructuring Plan;
- Restructuring Plan voted on by creditors;
- If the Plan is accepted, the SBRP will execute it;
- If the Plan is not approved, the company may choose to enter voluntary administration or access the simplified liquidation pathway.
Action: Small businesses should familarise themselves with the process and if required take action sooner rather than later.
5. Calculation of personal/carer’s leave
Under the Fair Work Act, an employee is entitled to 10 days of paid personal/carer’s leave in a year. The High Court in Mondalez v AMWU dealt with how much personal leave an employee who worked three 12-hour shifts per week was entitled to, with the union arguing the entitlement to be 120 hours (10 days x 12 hours).
The High Court ruled against that interpretation finding it unrealistic that two employees working the same number of hours over the year would be entitled to different hours of personal leave simply because of how those hours are worked (e.g. one worked three 12 hour shifts in a week while the other worked 7.2 hours over 5 days in a week).
The High Court clarified that the amount of personal leave accrued by an employee should be calculated as equivalent to 1/26 of the employees’ ordinary hours of work for the year.
Action: If employers are unsure about how personal leave should be accrued, deducted and paid, please get in touch with the Workplace Relations team.
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- Top 5 Workplace Relations Updates in 2020