Andrew Douglas:  Okay, I think we’re off to the main topic in Woollies and Coles.

Monnette Samo: Yeah, we are. This was actually really interesting.

Andrew Douglas:  It is interesting. So Woollies and Coles have recently been prosecuted. They paid about $30 million for the payments on annualised salaries. For those who don’t understand annualised salaries, when I pay, if I say to Minette, I’m going to pay you $120,000, the award payment’s 90, but that’ll deal with over time, holiday leave, loading, all those sort of things. You go, “Great.” Well that’s exactly what happened in Coles and Woolworths, except they failed to actually record-

Monnette Samo:  Record.

Andrew Douglas:  What those overtimes and things were. So they were unable to prove, and it’s a reverse obligation once the allegation is made, that people were paid the right amount of money in each pay period. Now the law is an annualised salaries, which are not set under the award. So there is a method of setting an annualised salary, which has a whole accounting system that sits next to it, which can have paid different, sorry, can have an annualised salary, which pays beneath what was worked in a particular period of time.

But there is a whole process and contracting issue that may go, we are talking about common law annualised salaries. And the law on that is, in every single pay period, you must be paid equal to or better than what the award would apply. And Woolworths and Coles couldn’t demonstrate it. And the judge in this case really helpfully set out the law so nobody could misunderstand it. Which is you do have bookkeeping responsibilities to record in each pay period what people worked. And if you don’t do that, it’s a breach of the act per se. And also you’re in trouble and you reverse onus ’cause you’re unable to demonstrate. It also said you can’t take, when you wildly overpaid in one period and allocate it to when you-

Monnette Samo:  Are underpaid.

Andrew Douglas: When you’re underpaid in another, each pay period sits on its own. So there’s a lot of people out there who think you don’t have to worry about it. The answer is, this case says you really, really do need to worry about it. In the last two weeks, I’ve given three bits of advice, which are all the same, which is, we’ve got an annualised salary, can you please just look at the people who are most likely to breach and do a reconciliation each pay period on those people. Then you’re pretty safe if that’s the minimum. But there is no harm in requiring people to enter time sheets and actually keep a regular record of what people do earn. So the reconciliation can be automated and you’re not at risk. If you don’t do those things, you are in breach for every pay period. Not in breach for a year.

Monnette Samo: Yeah. Right.

Andrew Douglas:  So if you breach in seven pay periods, that’s seven breaches of the Fair Work Act, seven breaches of failing to keep company records. They’re big penalties. So worth knowing. So I thought, you know, interesting case.

Monnette Samo: Yeah.

Andrew Douglas:  Monnette, it is the practise of this Friday workplace briefing that you actually read the case study.

Monnette Samo: Yeah.

Andrew Douglas:  But we’re going awfully slowly. See how you go with the case study. It’s up on the screen-

Monnette Samo: See if we can-

Andrew Douglas:  But if you want to refer to the paper ’cause it’s a safer place, that’s okay by me.

Monnette Samo:  That’s okay.

Andrew Douglas: Or would you like me to? Do you want to do it?

Monnette Samo:  Yeah, let’s do it.

Andrew Douglas:  Okay. Off you go.

Monnette Samo: All right. So Ivan was an afternoon shift worker, a supervisor who had worked for Perfect Paper Proprietary Limited for 19 years. He was known as a straight shooter, not loved by management and not really loved by anyone.

Andrew Douglas:  There was a bit of editorial licence in mind.

Monnette Samo: But he was a committed supervisor. He was hardworking, highly skilled and loyal. Perfect Paper was losing market share. It had been reluctant to invest in new capital and as a result its production flexibility was low. Volume could not be increased, and operational costs were high.

Andrew Douglas:  That’s, so if you understand that if you have old capital, it’s inflexible, you can’t grow it. You’re stuck, you got to it do it, goes stamp, stamp, stamp, stamp, stamp.

Monnette Samo:  Yeah.

Andrew Douglas:  Okay. It’s a real problem.

Monnette Samo: So the impact was apparent at the Preston site where Ivan worked. The site had three lines, but struggled to fill afternoon shifts with work. A decision was made to scrap line two on the afternoon shift at Preston. The union was notified but did not engage. A consultation process followed and seven employees from line two were retrenched. Ivan complained that the process failed to consider labour hire and contractor roles at the Coolaroo site. He was told to pull his head in as being on salary. He was part of the management team.

Andrew Douglas:  Alright, now I just stop there just for a second and let you know, there’s a recent case that talks quite clearly that you must consider contractors and labour hire when you go through redundancy process. Okay, so that’s why it’s there. Just to sort of trip you up, see how you want to go. Off you go.

Monnette Samo:  So two weeks later, Ivan was called into the office and told that his role was no longer required on the afternoon shift and that he was being retrenched. When he asked who would supervise, he was told that his role would not be replaced and that the leading hand on each line would manage it. Ivan raised the possibility of relocating to the Coolaroo site where the entire afternoon shift was labour hire or moving onto the day shift at Preston where the supervisor was new, had significant absenteeism and lacked Ivan’s mechanical background, as Ivan had already previously been in the maintenance supervisor role and was recognised for his high level of skill, but management refused.

Andrew Douglas:  Alright, well let’s get into questions. Okay, now the first question is, does Ivan or Ivan have a general protections claim? What do you reckon?

Monnette Samo:  Yes.

Andrew Douglas:  So what’s the protected workplace right?

Monnette Samo:  That’s a good. Got that out.

Andrew Douglas: No, I think we should, that was a good start, wasn’t it? So he’s raised a workplace right in respect of his retrenchment. He said no, it’s not lawful for you to do. It’s not a general claim. So he’s got a good general protections claim. Was Perfect Paper required to consider the day shift at Preston Coolaroo site?

Monnette Samo:   Yes.

Andrew Douglas:  Yeah. So definitely at Preston. ‘Cause it’s a comparable role and you don’t have an entitlement to choose. I’m only looking when I’m doing my assessment on afternoon shift and the Coolaroo site is labour hiring contractors. So definitely they’ve got to weigh that in. So it’s likely he shouldn’t have been retrenched. Was the retrenchment of Line 2 at Preston a genuine redundancy given the consultation was undertaken in accordance with the Award? And the answer is, well, it might have been undertaken in accordance with the Award, but it failed to properly consider alternatives. Suitable alternative employment. So no.

Monnette Samo: Redeployment.

Andrew Douglas: That was a mistake too. Ivan fell to pieces because of the way he was terminated. Does he have a common loss claim for psychological damages arising from his termination process under Elisha and Vision Australia? Now remember Elisha and Vision Australia is the case that said, in relation to discipline in termination, you can now bring a psychological claim, a claim for damages for psychological harm. So this was a termination process. So it was a restructuring termination process.

Not dissimilar to what was occurring in Elisha. Absolutely, that has the case. So we now have this issue, we’ve spoken about earlier today, what workers’ compensation attacking redundancy processes. We’ve got last week, the safety regulator attacking redundancy process and prosecuting. We’ve got the award and unions attacking under industrial law and now we’ve got the common law saying it’s going to hurt. So the lesson out of all this really is that when you’re contemplating doing a redundancy or termination, do it by the book. If you do it by the book.

Monnette Samo: Not that hard.

Andrew Douglas:  You know, if you do it by the book, you’re not going to fail.

Monnette Samo: Yeah.

Andrew Douglas:  Well, well done for surviving. That was a tough beginning wasn’t it?

Monnette Samo: Thank you. Yeah.

Andrew Douglas:  Well done.

Monnette Samo: Thank you. Thanks, Andrea.

Andrew Douglas:  Now remember, thumbs up, guys. See you later. Bye-Bye.

Monnette Samo: Bye.