Kim McLagan: Good

Andrew Douglas: Annual wage review.

Kim McLagan: I’m getting a headache now.

Andrew Douglas: Yeah. I’m getting a headache. It’s remuneration time, and we’ve all got a headache here because we’ve got to recover the cost to the 4.75% increase for award employees. And the difficulty, so there’s two, there’s 5.93 for people who are minimum wage. That’s very low number of employees who are minimum wage. And look, it’s fallen way behind the cost of living very reasonably. The problem with the award increase is that there’s a level of disingenuousness that existed both in the Fair Work Commission, and, unfortunately, the rather uneducated media who said,

“Well, it affects 2.8 million people that they’re on awards.” You know, who get, but that’s not true, because most workers in Australia work with that award underpinning what they’re doing or enterprise agreement that sits with it. So this doesn’t measure the impact of enterprise agreement costs going forward. Now, you can imagine getting this decision today, and I’m negotiating enterprise agreement. And I know that inflation’s going to drop down. I don’t know when Trump will stop bombing Iran. And nobody really knows that, including himself.

Yeah. But what we do know is that it’s likely over the next two to three years, we’ll see a flattening of inflation. But I’m negotiating now, and I’m trying to keep 2% or 1% above what is the award. 4.7% will have absorbed the 3%, which was the current EA rate this year at what EAs were doing. So there’s going to be a huge push on not just for the 4.7%, but the accrued loss in this year. That’s how we’re going to start negotiating.

At the end of one year, that’s 5.2%, okay, in accumulated cost, running into a second year, which should be 3%. But because of this rate rise, there’s likely to be 4.5%. And suddenly, in real terms, you’ve got a 3% total growth in costs over a two-year period. The inflationary pressure this puts on is extraordinary. And it means we will have a surge in inflation, which will completely absorb any benefit that anyone got. And it’s really for our government to stop saying that the award rate has to marry the CPI or better, because we can’t afford an economy. What this will do, as I’ve said, to the southwest of Melbourne, where 40% of Victoria’s manufacturing, it’ll kill them. The north, logistics, fuel costs, wage costs.

I don’t think anyone quite understands that although we are moving rapidly towards a technological change in the way we get work done, we’re not getting there quick enough for this. And it is going to cause unemployment. And it is going to cause a whole lot of psychological harm that sits above it as people struggle to make ends meet, but understand their job is under pressure. And we’re going to start seeing repetitive restructuring going on to try and get to a stage where a business can survive. And you know what it’s like. In the middle of a restructure, if you are an employee, whether you are on the list or not, it’s harming you.

Kim McLagan: Yeah.

Andrew Douglas: So I think it’s a disappointing decision. I’m very pleased with the people that get more money, because I don’t, it’s hard at the moment, I agree.

Kim McLagan: Yeah.

Andrew Douglas: But it wasn’t really all that well thought through. Why don’t we go into the case study, unless you’ve got something to add?

Kim McLagan: Oh, the only thing I was going to add, ’cause we’ve got here as well as common law contracts, is a lot of employers are paying above award rates.

Andrew Douglas: Yes.

Kim McLagan: And so we’ve got the offset clauses in the contracts, but that’s going to have an impact on that as well, isn’t It?

Andrew Douglas: Well, it means if you’re paying 2% more and suddenly you jump to 4.75%, 4.75 is going to eat that over-award amount. So you’re going to be beneath the boot test on your common law contracts.

Kim McLagan: Yeah, yeah.

Andrew Douglas: And when you increase it, the extra amount, you’re still just meeting award, and suddenly you are not an attractive employer. So you’re still going to have to meet the boot test, common law or not.

Kim McLagan: Yeah.

Andrew Douglas: Based on award. And for those who are paying over award, it’s pretty spooky. Yeah. You know, you’re right. We get on with the case study.

Kim McLagan: Okay. Angus worked for Rooftop, a truss company in the western suburbs. He was a supervisor. Rooftop had policies and procedures prepared by a consultant. They were brief and to the point but offered little practical guidance. Angus had been with the business for seven years. During that time, he had observed the owner bind and lift 10 trusses at a time using a forklift and load them onto a truck trailer. The traffic management plan required a three-meter exclusion zone around the forklift. The forklift was fitted with flashing lights and emitted a loud beeping noise when operating.

However, the owner commonly used coworkers to steady the trusses while they were being lifted because of their length and the risk of them becoming unbalanced and falling from the forklift. The owner’s son was not as easy-going. He was the 34-year-old mechanical engineer who had worked at Toyota before it closed. He took workplace safety seriously. One day, he was walking along a walkway 3.5 meters above the ground when he saw Angus, assisted by two co-workers, lifting a load of trusses with his forklift and moving towards a trailer to place them on it.

Because Angus was driving forward, he did not see a maintenance worker standing in front of him until he was only two meters away. Angus braked suddenly. The trusses shook and then slid off the forklift tines onto a worker standing to his left, tearing the skin on his leg, dislocating his knee, and shattering his patella. I must say, I was very glad this didn’t result in a death, because they often do. And I was reading the case study and I thought, “Okay, brace yourself.”

Andrew Douglas: No, no, no, But no, this is good. I’ve been killing enough people in my case studies. I gave it a break, okay?

Kim McLagan: So an ambulance was called, and WorkSafe was notified. When the immediate aftermath of the incident had settled, the owner’s son called Angus into his office. Before Angus could speak, the owner’s son asked, “Have you anything to say?” Angus burst into tears and stammered, “I can’t have this conversation with you now,” before leaving the office. The injured worker was Terry, Angus’s closest friend, the best man at his wedding, and due to marry Angus’s eldest sister the following week.

Andrew Douglas: And the name of my dog.

Kim McLagan: Oh.

Andrew Douglas: Sorry.

Kim McLagan: Angus was distraught and overwhelmed with guilt. He could not face the owner’s son. Angus visited his doctor, who placed him on stress leave. Two days later, he received an email from the owner’s son. The email stated, “I asked whether you had anything to say about the incident involving Terry, and you angrily left the room and the workplace. Given your failure to respond to my question and your serious breach of safety law, I have no choice but to terminate your employment immediately.”

Andrew Douglas: Okay, questions. Did the failing in procedural fairness make the demi dismissal unfair?

Kim McLagan: Yep. Absolutely.

Andrew Douglas: I think that was easy, wasn’t it?

Kim McLagan: Yeah.

Andrew Douglas: Totally unfair.

Kim McLagan: No opportunity of responding.

Andrew Douglas: And the answer is-

Kim McLagan: No procedural fairness.

Andrew Douglas: Yeah, no procedural fairness. And there was an answer. And the answer was, “Well, this is a process. We might have a system, but without a system that your father’s propagated for a number of years and this is how we do it.”

Kim McLagan: Yeah.

Andrew Douglas: “And there isn’t another safe way to do it?” Because that’s the question that’s left open here. How do you do something which is 10-meter-long truss sitting on the front of two forks? How do you balance it? How do you do it? Without another thing. Trouble anyway. Did Angus breach safety law? Yes, he did.

Kim McLagan: Yeah.

Andrew Douglas: Yeah. And the question here is very straightforward. Did he exercise reasonable care to prevent harm to himself or others? No, he didn’t.

Kim McLagan: No.

Andrew Douglas: Would he be prosecuted? No, he wouldn’t. Because the organization has failed to have a system in place that did. So he’d get off scoot free.

Kim McLagan: Yeah.

Andrew Douglas: But he certainly breached.

Kim McLagan: So that brings the next question, did Rooftop breach?

Andrew Douglas: Absolutely. Without a safe system, doing such an inherently dangerous thing, they’re liable. They’re liable for a breach of system. So failed to do everything reasonably practical for a system which puts the officers at risk.

Kim McLagan: Given that the owner’s son knew of his father’s conduct and chose to terminate Angus in a procedurally unfair manner while being aware of his vulnerability, Could he personally be liable under safety law? And would Rooftop also be liable?

Andrew Douglas: Yeah. So this is all the modern cases which we are looking. This is the defense industry case, Secretary of Education in New South Wales. When you are aware of someone’s vulnerability and you’re not following process, and that’s further impacting the person’s vulnerability, you’ve breached all your consultation obligations under safety law, which is a breach.

Kim McLagan: Yeah.

Andrew Douglas: And you placed a person at risk. So at that stage, yes. The safety regulator could become involved, and you could be prosecuted for it.

Kim McLagan: Could Angus’s breach of safety law have allowed his employment to be lawfully terminated?

Andrew Douglas: Could under some circumstances. If you had a proper system, if you’d been inducted and trained, you could demonstrate he was competent. And if the system itself was safe, yes, you could. But the condemnation that sat before means no. So that’s the end of it.

Kim McLagan: Would Angus have a valid General Protections claim?

Andrew Douglas: Yeah, lay down was there. Really easy one that, I mean, the reason for termination was because, in expressing his vulnerability, he left the room. “I can’t deal with this now.” That’s code for, “It’s not safe for me.” And I terminate you for saying “It’s not safe for me,” no matter how I characterize it, it’s all over. So no good claim.

Kim McLagan: Okay. Would Angus have a strong workers’ compensate, I’ll start again.

Andrew Douglas: You do. You do. I’ll get you a gin and tonic. No, that’s how it started, didn’t it?

Kim McLagan: I think I need hair of the dog. Would Angus have a strong workers’ compensation claim arising from the owner’s son’s confrontation with him in the aftermath of the accident, as well as from the incident itself? So certainly from the incident itself.

Andrew Douglas: Yeah. I thought there was a great, so when we were chatting about this before, Kim said, “Would the words alone give rise?” And the answer is, if you can characterize the form of management, it’s not-

Kim McLagan: Reasonable management.

Andrew Douglas: Reasonable management action. But it’s not the easy part. The easy part is just the incident itself caused him harm.

Kim McLagan: Yeah.

Andrew Douglas: And it showed he was caused harm by what occurred with the owner’s son.

Kim McLagan: Yeah.

Andrew Douglas: So yeah, I think it’s a pretty easy claim to get up.

Kim McLagan: Yeah.

Andrew Douglas: And the termination process afterwards, all of that,

Kim McLagan: Right.

Andrew Douglas: All of that process was not reasonable management. And the important thing is, after you terminate someone doesn’t close the door on workers’ compensation.

Kim McLagan: That’s it. We’re done.

Andrew Douglas: That’s it. Is it really?

Kim McLagan: Whew.

Andrew Douglas: Whew. Thank goodness, it’s time to get a drink. See you next week. Cheers. Bye-bye.