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Friday Workplace Briefing

The Long and Short of Fixed Term Contracts – Secure Jobs reform of fixed term contracts becomes law

In this week’s Friday Workplace Briefing, Andrew Douglas and Nina Hoang discuss the Secure Jobs reform of fixed term contracts becoming law today, what the new law means, how it operates and how you manage it.

To view the full episode and catch up with the week’s latest news and developments please visit this link.

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About the Hosts

Managing Principal - Victoria

Senior Associate - Workplace Relations

Episode Transcript

Andrew Douglas: All right.

Nina Hoang: Main topic.

Andrew Douglas: We’re doing all right.

Nina Hoang: Contracts.

Andrew Douglas: Talk to me about it.

Nina Hoang: So yeah, it’s now all officially in place. From the sixth of December the new changes to fixed term contracts has taken place. So these rules will apply for any fixed term contracts entered into on or from the sixth of December. So you have–

Andrew Douglas: So yesterday, for those who didn’t do it.

Nina Hoang: But they’re getting a different day.

Andrew Douglas: I know, sure, yesterday. Two days ago when you read-

Nina Hoang: But for any contracts that are existing prior to that, that haven’t yet ended, the rules don’t apply.

Andrew Douglas: Yep.

Nina Hoang: But if you have one that ends, which you said, like tomorrow–

Andrew Douglas: The eighth of December.

Nina Hoang: You can’t enter into a continuing fixed term contract because now the new rules apply.

Andrew Douglas: Of greater than two years.

Nina Hoang: No, no, no. As in, because it’s previously you had a fixed term contract, you can’t then have another one–

Andrew Douglas: Even if the first one was only six months.

Nina Hoang: Oh, if it was six months, yeah. You’ve got to apply all the rules. So the rules altogether is the total length of fixed term contract must be two years, including any options to renew. You can only renew it once. You can’t have like successive fixed term contracts if they’re for substantially the same role, unless you’ve got a significant break in between them. Yeah, I think those are the–

Andrew Douglas: But the maximum period you can have with success or not is two years.

Nina Hoang: Yeah, that’s right. Two years. But then recently they have introduced further amendments so that certain industries, so live performance professional sports and universities, it won’t apply for these industries until the First of July, 2024. So they’ve got a bit of–

Andrew Douglas: A non-government funded philanthropic instance.

Nina Hoang: Yeah, that’s right.

Andrew Douglas: I just thought I’d add that because I read it.

Nina Hoang: Yeah, so I’m not quite… I get it for the live performance and the professional sports.

Andrew Douglas: And for the charities that depend on the fixed term grants from government. And I think this is only a hiatus. This is a moratorium until 1 July next year.

Nina Hoang: Yeah. I suspect just so that they can kind of see how it’s going to work.

Andrew Douglas: And government itself can make the relevant adjustments to how they fund or support. And people can get behind that. And look, fascinating process. Not unexpected that labour would pursue this. And not an unreasonable thing to say. Look, if I’m going to put you on a permanent contract, am I trying to avoid the responsibilities that sit around permanent employment? So I don’t think it’s a bad thing.

Nina Hoang: No. And I think, look, it’s being sold as this massive change, but I don’t think it will impact a lot of–

Andrew Douglas: Well it’s not going to–

Nina Hoang: -on fixed term contracts. For example, people over the high income threshold, the rules don’t apply.

Andrew Douglas: And it’s greater than six months, the unfair dismissal one doesn’t apply.

Nina Hoang: Yeah. And if it’s like a temporary secondment, it wouldn’t apply, if it’s to do with a government grant, there are rules about that as well.

Andrew Douglas: Yeah.

Nina Hoang: So I think the media is spooking it as this massive scary thing, but I think it’s actually quite reasonable.

Andrew Douglas: Yeah. And the other part is I think it only affects three or four industries. So it definitely affects education, one of the industry groups. Definitely affects higher education and definitely affects charitable organisations because each one of them… In sport, of course, you’re giving people contracts based on time and performance, but they only get it for a few years. So I get all of that stuff.

Nina Hoang: But they’re definitely over the high income threshold.

Andrew Douglas: Well, yeah, some of them are, but remember, we only see AFL, we don’t see the levels beneath it.

Nina Hoang: That’s true.

Andrew Douglas: And that’s where the difficulty lies. So interesting stuff. I’m not going to do Miro the case because I reckon Tom who did this just stole that from the Fair Work site and if he didn’t, he is very creative and it won’t help us. Okay? So that was a case that Tom who did all the research. Thank you, Tom.

Nina Hoang: Yeah. Well, this was just a reminder for everyone that these rules are now in effect and if you–

Andrew Douglas: From 6 December. Two days ago when you hear this.

Nina Hoang: Okay. So if you enter into these contracts, they will essentially be void because they’ll be in breach, yeah.

Andrew Douglas: All right. And now for something completely different. I’m just looking at the time to make sure we’re going–

Nina Hoang: We are.

Andrew Douglas: Can you see that?

Nina Hoang: Yeah, yeah.

Andrew Douglas: I can’t see that.

Nina Hoang: Next to the recording.

Andrew Douglas: Actually, I can see it is but I actually can’t see the time. All right, we’re going to go to the case study, Nina, and you’re going to try and pronounce… Here we go.

Nina Hoang: Eirwen.

Andrew Douglas: Eirwen.

Nina Hoang: Eirwen. This is so mean. No one would be able to read this.

Eirwen was tired. It was nearly Christmas and year sixes were driving her mad. Eirwen was the head of Junior School For St. Gecko Private Women’s College.

Andrew Douglas: Gordon Gecko, Wall Street.

Nina Hoang: Yes. But why? Gecko–

Andrew Douglas: But this is an business, okay? So what did I think about? I thought of Michael Douglas.

Nina Hoang: Oh my gosh.

Andrew Douglas: He’s the principal, Michael Douglas is the principal.

Nina Hoang: Gecko had been established through entrepreneurial fund to create an elite achievement school in Melbourne’s inner southeast. Eirwen looked at her schedule. It was 5:00 PM and the parent function started in one hour. She knew two parents would be there who were in a fees dispute, both driving the latest Porsche Cayennes and one who constantly fought the school for extra resources for their daughter.

There was pressure from the principal to push for higher results. It was endless. She had not slept for two days. Didn’t feel hungry and was struggling to focus. She sipped on her Four Pillars Gin and soda.

Are we sponsoring them?

It was starting to work. She reread the last of seven emails over the last few days from the principal, admonishing her for poor student performance and attendance in sports. They had not performed well in either the tennis or basketball inter-school competitions despite having sporting scholarship students.

She knew it was her job but she couldn’t take too much more. Her doctor said she suffers from chronic anxiety and depression, but the prescribed drugs just weren’t doing what she needed. The gin did. Eirwen had raised with the principal the stress his missives were causing. He had said these are performance issues that must be addressed. She had taken brief stress leave after that conversation with the principal where a diagnosis and cause of stress were revealed. But the principal continued his relentless pursuit of excellence with her.

She finished her second gin and left the glass on her desk along with the bottle. The principal dropped into her office on the way to the function, he saw the glass and bottle, smelt it, and when he reached the function, he pulled Eirwen aside and asked if she had been drinking. She blushed and said just two glasses. He sent her home.

The school policy mirrored regulation 1.07 of the Fair Work Regulation. She had signed up on the policy and terminated a teacher for being intoxicated at work only two months ago. The next morning the principal carried out a disciplinary meeting. He allowed a support person, complied with process and summarily terminated her for drinking whilst at work.

Andrew Douglas: There we go. So the question is, does Eirwen have a good–

Nina Hoang: I hate this name. It’s so hard.

Andrew Douglas: What do you reckon? Do you reckon she’s got a good claim?

Nina Hoang: Well, I don’t think they’ve got any evidence of intoxication. So I think there’s a valid reason being the breach of policy. But I think they would look at harshness because she’s not shown any signs of intoxication. She’s not slurring, she’s not acting inappropriately in any manner, depending on if she talked about the stresses and stuff. That’s a mitigating factor as well.

Andrew Douglas: Yeah.

Nina Hoang: So I think she would succeed.

Andrew Douglas: Yeah, I think she’d succeed too.

Nina Hoang: I don’t think they would reinstate her though. I think the relationship’s probably destroyed.

Andrew Douglas: That’s right. Okay, so that’s good. You are tough, aren’t you? I’m never going to work for you. Eirwen successfully argued the termination was adverse action and she’d be arguing that on the basis of they knew her stress related condition, okay? And she’d obviously complained about her stress related condition too, and that she couldn’t be at work. She’d taken stress leave. He was aware of her stress. Still hard to draw causation, isn’t it?

Nina Hoang: Yeah, because I think like they’ve got a very clear reason for firing her for the termination. But could she say she was drinking because of the stress? So indirectly they were terminating her because of that?

Andrew Douglas: Well, I think that’s the argument. And can I say to you it’s one the courts would like.

Nina Hoang: That’s bizarre.

Andrew Douglas: Yeah. Well, the issue is for the decision making was a substantial reason for the decision to terminate based on a protected attribute.

So if she was an alcoholic, that would be a protected attribute. By the way, she’s not an alcoholic, she’s just a poor soul.

But she does suffer from anxiety and depression, which is a protected attribute. She’s drinking because she suffers from that and can’t manage the continual pressures that are placed upon her, so it does go to an attribute. It might be a characteristic of that attribute, but it’s still an attribute.

I think we’ve got the question, is it discrimination as well? I think we’re getting very close to an argument given the reverse onus in adverse, in general protections claims.

She may get over the line, because what’s missing from this is whether it affected her and there’s no evidence that affected her. She was actually medicating, an issue she has that the medications weren’t affecting, he was aware of it, he kept putting pressure on her and when she failed, she failed because of the pressure he was putting on her in relation to that protected attribute.

That is a causation. It’s tenuous, but I think most commissioners, particularly those that come from a union background would embrace her and go, no, she deserves the protection she gets. That’d be at the conciliation stage. I think most federal magistrates would, again, and again, majority of those except for a few years were labour based appointees, again, would really struggle to not find in her favour.

I think it would play out in the damages, to be honest. I don’t think she’d have a big claim of compensation.

Nina Hoang: Yeah.

Andrew Douglas: And just understand the law is a funny thing. There is law and it does tell you what to do, but what happens when judges and commissioners get involved in things is they mitigate their concerns by reducing the compensation or the opportunity that comes with it. So I don’t think it’s a big claim. I think she’d really struggle with discrimination. The same basis as the protected attribute, but there’s no reverse onus.

Nina Hoang: No.

Andrew Douglas: So look, she probably has been treated badly as a result of a stress. I’m not sure that there would be any court that would go with that. But you see how impressionistic it is at this stage? Because they could well go with it. All right, let’s go to the next question.

Nina Hoang: Did Gecko and the principal breach safety law? If so, how and what was the result?

Andrew Douglas: I think if we look at psychological hazards–

Nina Hoang: There were so many.

Andrew Douglas: Yeah, there was a lot, wasn’t there?

Nina Hoang: Yeah.

Andrew Douglas: It’s interesting, as we have this discussion, because we’re talking about worker’s comp as well, but we’ve got hazards here of volume of work. We’ve got–

Nina Hoang: Lack of support.

Andrew Douglas: Lack of support. Lack of fairness that sits around and bad treatment. Language and behaviours which are–

Nina Hoang: And probably bullying a little bit as well.

Andrew Douglas: Yeah.

Nina Hoang: Just repeated unreasonable behaviour.

Andrew Douglas: So I think you’ve definitely got a breach of primary duty, okay? So we’ve got the primary duty breach, section 21 breach and section 22, because the monitoring health, you’re aware of a problem, you do nothing about it. I want to say that that’s the really bad part here, you’re aware of a problem, you do nothing about it.

Nina Hoang: It’s a very Burke v Suncorp one.

Andrew Douglas: It is. So you can then, well, what’s the breach of the schools? Is it only that or could it be a reckless engagement one?

Nina Hoang: I don’t know if a serious injury–

Andrew Douglas: The likelihood of serious injury. It’s hard to know. This is the issue. I don’t think it would be prosecuted.

Nina Hoang: No.

Andrew Douglas: Does that make sense? Because there’s not enough damage done to be regulated with…

But I think in two or three years time it may be, because the regulator will take a greater interest. What I can say to you as a matter of fact, these facts would support a prosecution of reckless endangerment, because you know someone’s got depression and anxiety, you know they’re not coping, and yet you continue in a course and in that singular almost, so an almost Protestant affliction of saying this is an expectation you can’t explain the way by illness, so there’s a carelessness that comes with it. It is reckless endangerment factually, I don’t think it’d be prosecuted as that.

I think the principal would be for the purpose of this an officer, so I think there’s definitely a section 144 breach because in Victoria he has knowledge of the hazard and the risk and the impact it’s having. I think in any other state, objectively, he would be deemed to have that type of knowledge and the facts would bespeak, if that makes sense.

So I think he’s definitely a primary breach. I don’t think, again, the regulator would be too interested in prosecuting, but they may, with their recent rash of prosecuting bullying will look at a prosecution section 25 prosecution, which is somebody, and that can be any of us as an employer, sorry, an employee, whether it’s a principal or not, not exercising reasonable care to prevent the risk of injury to another. So I reckon that’s what the principal would be charged with, not the section 144 or the the due diligence breach, but whatever it is, they’re definite breaches. Okay? And that flows into the next question, which is–

Nina Hoang: We’ve got to talk about it quickly. 30 seconds.

Andrew Douglas: So workers’ comp has tried to exclude in Victoria and other jurisdictions are starting to follow the risk that sits around psychological claims. And they’re doing that by saying, look, there must be significant dysfunction and it must be a diagnosed disease. Well, we’ve got diagnosed disease. Do we have significant, don’t know, don’t have enough evidence, but I reckon when her doctor said, definitely yes, because she went on leave. So I think it’s compensable, was work the substantial cause? Yes, it was.

Nina Hoang: Definitely.

Andrew Douglas: So you’re in and playing with the new legislation in Victoria. And you’re in and playing in every other state and territory in Australia. So yeah, this is compensable. And you notice the way that safety law now informs the debate around what is compensable, and that’s what I want to get from this story is once you say it’s a psychological hazard and you say it caused an injury–

Nina Hoang: Then it has to be compensable.

Andrew Douglas: Then it has to be compensable. And I think that’s enough from us, isn’t it?

Nina Hoang: Yeah.

Andrew Douglas: And the next week our last one?

Nina Hoang: I think so.

Andrew Douglas: I think next week could be our last one. Thumbs up. Thanks for joining us. Cheers, bye bye.

Nina Hoang: Bye.

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This week, Andrew Douglas and Nina Hoang will take us through the top 10 issues facing HR, safety and injury management professionals.