Andrew Douglas: Annual wage case, again, what were they thinking? A national wage case goes, we’re going to knock it up to 3.5% because we’re catching up what we didn’t do last time.

Nina Hoang: Wait, that’s not what they said.

Andrew Douglas: Yeah.

Nina Hoang: That they’re catching up.

Andrew Douglas: Yeah. Like at the moment when you look at what’s going through in enterprise agreements, we’re looking at 2 to 2 1/2% growth, okay.

Nina Hoang: Oh, there was no way they were going to do it as low as 2 though.

Andrew Douglas: Well, no, that’s what the government, our Labour government was suggesting the low end of 2%.

Nina Hoang: No, our governments said,

Andrew Douglas: Unions were saying 4.5.

Nina Hoang: Between 2 to 3 is at least needed to make sure no loss of real wage growth.

Andrew Douglas: No, but they said, what they said is, look, there’s been a level of restraint that’s been exercised over the last few years for a number of reasons. I tell you, we nearly lost our director there. I dunno what’s going on there. But this is a poor decision, which is driven by satisfying

Nina Hoang: I think they just tried to meet in the middle between what the employees wanted and what the unions wanted.

Andrew Douglas: And they might as well just draw a line because actually trying to catch up on their last three orders is nonsense. ’cause then each order they have contemplates the fiscal circumstances at a time.

So saying you’re playing catch up, shouldn’t they said last time running going to give you 2 point, whatever it was, but you can play catch up next time? Honestly, gimme a break.

Nina Hoang: But look, with the annual wage case, I think there is a misunderstanding for a lot of people that, oh, it doesn’t impact me because it only applies to people who are on the award.

And most people would be, or at least most of our clients would have people who are paid well above the award. But it is a good reminder just to check and reconcile and make sure that the rates that you have are sufficiently offsetting everything that you want.

Andrew Douglas: And can I say four years ago, probably you were 18 to 20% above the award as an example, but the repeated national wage case levels increase have been quite dramatic over the last three years.

And so you must actually do the calculation and make sure that the rates are above. And then the next question you come to is, are you really going to do that to your employees or are you going to pass on an amount which reflects the national wage case or something so that they’re meeting the cost of living changes ’cause the cost of living is much more than the CPI.

Nina Hoang: Oh yeah.

Andrew Douglas: So if you’re living on $100,000, under $100,000, the things that we have like fuel, cigarettes, alcohol, all those things have actually gone through the roof. And basic groceries have gone through the roof.

Nina Hoang: Mm.

Andrew Douglas: So they’re much closer to 10% than 3.5%.

Nina Hoang: Yeah. That’s why 2% wouldn’t have worked. ’cause it’s lower than CPI.

Andrew Douglas: Well, yes and no. I think there was a really strong argument to say that, we do need to restrain wages at the moment ’cause the inflationary effect of them where we are.

Nina Hoang: Ah.

Andrew Douglas: And I think it’s a mistake to pour a whole lot of money into wages where there’s been no productivity gain at all.

Nina Hoang: Oh.

Andrew Douglas: And that’s one of the things they found in the case is a very low productivity gain. So what you are paying is more for less. Doesn’t make a lot of sense for me. Not that I’m mean as an employer. I just think it doesn’t make a lot of sense. Why don’t we do the case study? I looked after you. Come on. Look, you’re in the housing market. You’re going to buy a bigger house than me. Come on. I’m not mean.

Nina Hoang: Okay. All right. I’m going to do the case study. You got to cut all of that. Oh yeah. So,

Andrew Douglas: Now you’re done. Don’t leave it in.

Nina Hoang: Dominic was employed as a sales executive in a software business. His role included both sales and products set up, maintenance and uncommon mix, but necessary due to the complex and at times volatile interaction between the apps they sold with Microsoft.

Andrew Douglas: Can I say, that’s very common in this market that not only do you sell, but you make it land, fix it and maintain it. And that’s often in the sales area, the back office around building IT. Anyway, just,

Nina Hoang: As in like, you have to set it up for them as well.

Andrew Douglas: Yeah, yeah. And make sure that it fits in ’cause it always conflicts with the software.

Nina Hoang: Oh, okay. The business was in its scale up phase and had completed two capital raisings with rapid uptake in app purchases by consumers and even more rapid growth in new employees.

The two business owners, Rory and Cassie, were bullish about growth but poor at planning. They left the delivery of budgeted outcomes to the three divisional heads, Dominic, sales, Cam, treasury and Monique, IT infrastructure. New staff continued to arrive while the underlying platform that supported the three apps began to buckle under the increased load. Tension grew between Dominic who faced sales targets and integration problems and Monique, whose system architecture was beginning to fail.

The business had no safety processes in place to manage psychological hazards and use no measurement tools. However, internal pressures were obvious, personal leaves skyrocketed. Staff turnover exceeded 30%, and daily conduct became increasingly aggressive, demanding and unforgiving. Dominic was not sleeping. He developed sudden and severe skin rashes and his emotions became difficult to control. When Rory asked what was going on, Dominic shouted, “It’s all effed. You know that.”

Dominic struck gold when he sold the performance management app for a first tier accounting firm with the potential to deploy it globally. However, within two days of deployment, the platform crashed. Dominic awoke at 3M to see his mobile phone flashing with hostile emails and messages from the accounting firm and other major clients. He turned it off, took two sleeping pills and drifted into a deep sleep. Mm. That’s very depressing.

Andrew Douglas: A bit depressing, isn’t it? So the question, does Dominic have a valid workers’ comp claim?

Nina Hoang: Yeah.

Andrew Douglas: Yeah, there’s absolutely no doubt.

Nina Hoang: Yeah.

Andrew Douglas: That level of subjective pressure that he exists, would, there’s not a reasonable person test for that. As long as he would perceive that as a pressure that would be compensable. Still compensable in New South Wales at the moment. Maybe not now.

Nina Hoang: I think also sometimes people view it through the lens of, look, this is the kind of situation we’re in. Obviously there’s a lot of high pressure because, but that’s not what makes it reasonable.

Andrew Douglas: No.

Nina Hoang: And you don’t justify it by that. It’s not like an industry standard or anything like that.

Andrew Douglas: Yeah. So the difficulty probably for Dominic is, if he worked in Victoria, he’d have to demonstrate he had a disease, a diagnosed disease, but he’d have no trouble getting that across the line. So it’s up and running. Two.

Nina Hoang: Rory has decided to terminate Dominic because of his verbal outbursts and failure to respond to clients. Is there risk in general protections or discrimination law?

Andrew Douglas: Well, I think this goes back to Burke and Suncorp, doesn’t it?

Nina Hoang: Yeah.

Andrew Douglas: Which is,

Nina Hoang: Showing visible sides.

Andrew Douglas: Yeah. Any reasonable person reviewing how he was performing and behaving, Dominic, would understand there’s something going wrong.

Nina Hoang: Yeah.

Andrew Douglas: And on that basis, terminating him when he’s agitating the very issues that he’s dealing with, you’d be in a lot of trouble.

Nina Hoang: Yeah ’cause you can’t willfully turn a blind eye. Like sometimes people think, oh, if I don’t address it or no one’s raised the complaint, then it’s not a live issue.

Andrew Douglas: And that was what Burke and Suncorp did.

Nina Hoang: Yeah.

Andrew Douglas: It turned it around in 2015. The law changed. You can’t turn a blind eye. But the other part of this, and it’s worth remembering is Burke and Suncorp was based on two obligations that came under safety, providing a safe place of work, and also being mindful of people’s mental state to be actually constantly observe and determine they’re safe to do their work.

Here the evidence is, he clearly wasn’t safe to do his work and his behaviour reflected that lack of safety. So monitoring health would’ve said to you, okay, I need to intervene to provide a safe workplace. So the next question is, are there any breaches of safety law? If so, by who? Who would be charged? And what is the potential sentencing involved?

Nina Hoang: Yeah. So definitely the fact that they knew that there was something wrong and they didn’t intervene, so Rory and Cassie, definitely.

Andrew Douglas: Yeah. I think if we go a step back a bit from just the termination part. ’cause there’s a temptation from employment lawyers, primary employment lawyers, and also from HR people to look at the termination and not do the deeper dive. The deeper dive here is there was no system and there was increasing pressure and harm was being caused.

Nina Hoang: Yeah. There was clear psychosocial hazards.

Andrew Douglas: So although the harm was done to Dominic, there was significant harm organizationally wide. I think this is a really,

Nina Hoang: Is it very toxic culture?

Andrew Douglas: Yeah. This is a bit worse than the facts behind the VBA or there hasn’t been a death as in the VBA case. But I think this is a case where reckless endangerment sits cleanly on the table, both the organisation and for Rory and Cassie.

Nina Hoang: Yeah.

Andrew Douglas: And particularly for Rory, because he had agency in what was occurring. We’re starting with question four.

Nina Hoang: When Dominic became angry with Rory, should it have been investigated? Would a cultural review have been a more effective intervention? How could a poll survey and focus groups have been used? What other lag evidence could have been helpful before the incident to support early intervention?

Andrew Douglas: Now this is my question ’cause sometimes,

Nina Hoang: clearly. It’s very long.

Andrew Douglas: No, no, it is. And it’s got the grammar of me as well. Sometimes we go for an investigation that doesn’t help us a great deal. Here, we’ve got a whole lot of evidence which we should have been collecting as part of building a governance structure around psychological hazards.

But what you should most definitely have done here is provide the support for Dominic. But this is a cultural review issue. This is getting in and saying what are the pressure points across the organisation? And to do that, you’ve got to use things like pulse surveys in the hot points to identify what are the particular hazards that are evident.

And then you’ve got to actually go and test that in focus groups sometimes with individual discussions. But you’ve got to start looking at exit interviews. You’ve got to start looking at where the incidents are. You’ve got to do all those things to inform you as to what you do. Because when it’s as bad as this, you’re going for low hanging fruit. What are the two or three things you can do straight away, which will make it safe?

Nina Hoang: Hmm.

Andrew Douglas: So that’s it for me actually.

Nina Hoang: Yeah. Thanks for tuning in. Give us a thumbs up.

Andrew Douglas: Yeah, You want the thumbs up this week?

Nina Hoang: And see you next time.

Andrew Douglas: Cheers. Bye-bye.

Nina Hoang: Bye.