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Friday Workplace Briefing

Unconscionability and Fixed Term Contracts – Termination at the Initiative of the Employer

In this week’s Friday Workplace Briefing, Andrew and Nina discuss when trying to avoid the FWC jurisdiction through the use of Fixed Term Contracts is unconscionable – termination at the initiative of the employer.

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About the Hosts

Managing Principal - Victoria

Senior Associate - Workplace Relations

Episode Transcript

Andrew Douglas: So before Nina goes absolutely crackers, I just want a couple of minutes of safe time for me.

What we’ve seen since the Qantas decision where the judges dug deep into, not only Qantas’s behaviour but the intentions that sat behind that behaviour, is a willingness of courts and tribunals to try and understand what was driving the behaviour of the employer.

And the case that we’re talking about today is a woman who’d been on a fixed, on a permanent contract for 10 years. She has picked up a second job and then they said to her, and this is the best version of it, “Look, you’ve complained about so much work, you want to just do the company secretary, but that’d be a fixed term one, or do you want to do the other one and we’ll get someone else to do it?” That’s effectively what they said. But they never said to her, “If you take the fixed term one, you cease being permanent employee and you lose all your rights and run fair dismissal.”

Look, and she’s doing it already.

I think when you come to us, we spend a lot of time engaging on strategy, sometimes to get an outcome which is counterintuitive to the facts we are presented with. And we build evidence around things to establish a pathway of legitimacy of decisions you have to make because of the complex people you’ve got involved with.

I think this is a case about an organisation that was trying to rid themself of somebody and found a useful method of doing it. But what the courts have done here, and they talked about it in Qantas as well, is they’ve started to look at more commercial terms of fairness around power and knowledge. And when you represent something, if you fail to tell someone that it’s a misrepresentation, so they’ve grabbed hold of this, it is unconscionable when you’re a person in power to represent to someone, well, you can have this and that solves your problem without telling them they lose all their entitlements. Nina.

Nina Hoang: I just think it’s ridiculous because right, in this discussion I’m not condoning what they did, but in this discussion she was presented with the two options. She’s also not a junior employee, she’s quite a senior role, she was company secretary, right?

Andrew Douglas: Yeah.

Nina Hoang: So she could have gone and sought her own legal advice. The idea that an employer, when they’re doing any kind of negotiation, say like reasonable business hours or a request for flexible working request, having to step out to an employee, here’s the benefits and disadvantages, of each option, is just bizarre.

Andrew Douglas: But can I just say dirty cases produce not good law sometimes, you know from the Qantas decision, this digging deep into Qantas’ decision making this case clearly, the judge or commissioner, whoever was involved, really took a very nasty view of the behaviour of the organisation.

Nina Hoang: Yeah.

Andrew Douglas: And they’ve tried to find some tools to actually determine why this person could get a jurisdiction to bring an unfair dismissal claim. And I guess my answer about this is, it’s here to stay, so you can wrestle with me as much as you like, but courts are going to start digging deeper into employer behaviour. Partly because these are beneficial legislation to protect workers, so-

Nina Hoang: But it’s already so beneficial.

Andrew Douglas: But we’re starting to get, that’s probably not our experience generally, but two or three plaintiff based firms who are really quite clever, who are now starting to know where to go to light the fire. And we’re going to see much more of the same.

So I’m just raising unconscionability, talking about what does it mean when you have a difference in power? What’s the level of disclosure? For the stuff you come to us and we say, “I know you need to get rid of this person, but the method you want to do is not going to work. You need to do something like this.” You’ve got to listen more carefully to the evidence development, and you’ve got to make sure you’re not sending texts and messages which are contrary to it.

So you can still structure the process, but that nasty, vituperative stuff of gossiping behind the scenes and stabbing someone in the back, they’re the things that come home to haunt you. And this is a case where whatever the tribunal was, didn’t like the employer at all.

Nina Hoang: Yeah, I want to make it clear, I’m not condoning unconscionable behaviour, but I guess-

Andrew Douglas: I think she is.

Nina Hoang: What I’m saying is, it just seems like it’s skewed once more to the employees. But like Andrew said, there are still ways to do things and make sure you have the right evidence to support it and then you’ll be okay.

Andrew Douglas: And remember it is a beneficial jurisdiction. It’s there to protect employees, Nina?

Nina Hoang: You’re just trying to set me up.

Andrew Douglas: It was fun, wasn’t it? Okay, so let’s get on now to our case study.

Nina Hoang: Which I haven’t had a chance to read yet.

Ambrose had played AFL. Like most players he had numerous surgeries but retired because of non-surgical problem in his left knee. He was a diabetic and even by the age of 34, had some peripheral neuritis leading to the rare disease of neuropathic anthrop-

Nina Hoang: When you come back, I always put in a few

Andrew Douglas: Anthropathy? What is a Charcot Knee?

Nina Hoang: That’s what it’s called, Charcot Knee.

Andrew Douglas: Ah.

The repeated micro damage to the knee playing football and systemic peripheral nerve damage from diabetes, although in its infancy, made his left knee weak and prone to giving way. He applied for work with Skinny Scaffold upon his retirement from football as a labourer. He was asked to sign a section 41 WIRC disclosure requiring him to disclose any preexisting injury or disease. His offer of employment required him to warrant, based on his state of knowledge at the time, there was no injury or disease that would prevent him from safely undertaking the inherent requirements of the job set out in the schedule.

The schedule set out the role and task required of him, including carrying scaffold material up to 25 kilos.

Although to look at him, he was built like a tank, he disclosed he had played football and had multiple surgeries.

Three weeks after starting work, he was climbing a ladder between the third and fourth floors, carrying a small bucket of couplers.

As he reached the top rung, his knee gave way and he slipped and fell to the platform below, the bucket of couplers fell through the protective netting onto the ground below, narrowly missing a team of workers.

The fall of two metres left him unconscious. As he woke up, he said to the foreman, “My effing left knee is rooted.” Subsequent discussions revealed he knew of the preexisting injury and disease process known as-whatever it is-

Andrew Douglas: Neuropathic Anthropopathy.

Nina Hoang: SS summarily terminated-

Andrew Douglas: So you do understand that I do this to Nina every week, don’t I?

Nina Hoang: Well, we’ve got record of you bullying me now every week.

SS summarily terminated his employment for failure to disclose under his contract of employment.

Andrew Douglas: That means it’s unconscionable by the way.

Nina Hoang: And sought to reject his workers’ compensation claim.

Then I’d support it.

Boris Blackburn (well known plaintiff lawyers) commenced a general protections claim.

Wow. So original.

Andrew Douglas: Okay, would Ambrose have any chance of his workers’ compensation claim being accepted, and what would be the impact of the termination of his employment?

So he did disclose that he had multiple surgeries. He didn’t disclose that this was non-surgical in nature.

Nina Hoang: Yeah.

Andrew Douglas: And he knew at the time of doing that, so the answer is, would his claim be accepted because it arose at a preexisting time? And the-

Nina Hoang: And he didn’t disclose it, right?

Andrew Douglas: Yeah. The difficulty with this is, it’s not an injury that arose at another workplace, it is a disease process that exists in his knee.

Nina Hoang: Like a non-work injury.

Andrew Douglas: So I think that his workers’ comp would probably be accepted and the termination of his employment means that it’d cap out the workers’ comp insurance.

Nina Hoang: Really?

Andrew Douglas: Yeah.

Nina Hoang: Just because it’s non-work related.

Andrew Douglas: Yeah. Look at the idea of section 41 is to capture, just say you injured yourself at the last place of work. So it’s really an indemnity clause.

Nina Hoang: Oh.

Andrew Douglas: And then you come and work for me and you don’t disclose it, then the liability falls on the past employer, not on this employer.

Nina Hoang: Yeah.

Andrew Douglas: So therefore you can say no to it.

Nina Hoang: Yeah.

Andrew Douglas: And section 41 can be used but not properly used, for the termination of employment. ‘Cause you’re not allowed to use section 41 under the act to terminate someone.

Nina Hoang: Yeah.

Andrew Douglas: I hope everyone understands you can’t use the benefits for workers’ compensation legislation for non workers’ compensation.

Nina Hoang: Yes, that’s right, yeah.

Andrew Douglas: So, I just thought I’d explain the technicality in the middle of it. You have an argument of rejecting the workers’ comp, it’d be worth a shot, but I think at the end of the day it would be accepted, but the termination of employment that comes afterwards, with a person with that nature of the knee injury, if it is accepted, is a premium killer.

So what other work you could do? Different question about a return to work and safe return to work. But if you’re a large scaffolder, say you had $5 million worth of REM, you probably just added a million dollars over three years onto your premiums. So not a great thing to do.

Two, was Skinny Scaffold safe to terminate Ambrose given his failure to disclose? And are there risks for general protections claim or any discrimination argument? Now, this is the different item, and this is the little unpoliced argument.

Nina Hoang: Yeah.

Andrew Douglas: Of saying, he had a duty to disclose to them once he knew what the nature of the job and the schedule was very accurate about the nature of the work that was going to be undertaken. Had he applied his mind that he would’ve said, “No, I can’t do it”. Particularly climbing as well.

Nina Hoang: Yeah.

Andrew Douglas: The types of things would aggravate it.

Nina Hoang: And because he’s carrying stuff that could be dropped onto other people, like it’s a very high risk.

Andrew Douglas: Yeah. You can see at the moment why the failure to do a pre-medical in heavy lifting, bending, climbing professions is a huge mistake.

Nina Hoang: Yeah.

Andrew Douglas: Because none of these problems would’ve existed at all if proper pre-medical had been done.

Nina Hoang: Yeah.

Andrew Douglas: But I understand the shortage of supply of talent at the moment means you’re grabbing whoever you can, he looks a big strong guy, so why wouldn’t you go with him?

But the short answer is, I think the general protections claim would have no chance of success, using little as an argument here because of the dishonesty and the knowledge at the time which he did this, I think you’re pretty safe with it.

Nina Hoang: Yeah, ’cause general protections, it’s not just that they have a condition, it’s that you had to terminate them because you were discriminated on the basis of that. And that wouldn’t-

Andrew Douglas: Yeah.

Nina Hoang: -be discrimination.

Andrew Douglas: That wouldn’t be

Nina Hoang: In this case.

Andrew Douglas: Not at all.

Nina Hoang: They can’t meet the inherent requirements.

Andrew Douglas: So let’s, there was a clear swimmings that said all scaffold equipment over five kilogrammes was not to be carried by hand, given the use of ladders, and a requirement for three points of connection.

In other words, when you’re going up a ladder, you must have three points of connection as you’re going. So you can’t do it.

Nina Hoang: Oh.

Andrew Douglas: Ambrose and other workers were not inducted into the rule, are there safety risks for SS?

Nina Hoang: Yes.

Andrew Douglas: They’re huge safety risks for SS.

Nina Hoang: Yes. Because they could say they weren’t aware of that.

Andrew Douglas: Yeah, and he suffered, you know, he collapsed but they could have killed someone with the couples that went over the edge.

Nina Hoang: Yeah.

Andrew Douglas: I think they’re in a bit of trouble and it’s not just a primary duty breach at that stage.

Nina Hoang: Right.

Andrew Douglas: I think it’s something much more serious.

Once Ambrose disclosed the physical issues in general terms, what should have SS done? Given their failure to do anything like that, what was their risk?

Nina Hoang: Do a fitness assessment.

Andrew Douglas: Yeah. And their failure to do that is a complete breach of their own obligations under the act of monitoring and managing health and providing a safe place of work.

Nina Hoang: Yeah.

Andrew Douglas: So I think once somebody says to you, I’ve had a number of bits of surgery and I played AFL footy, you’d really want to test the person to know what they can and can’t do, no matter how big their biceps were really.

So, I think you’re in real safety target territory doing that because you put on knowledge of a risk, ’cause you don’t know what the risk is.

Would Ambrose chance of exceeding-

Nina Hoang: Of succeeding.

Andrew Douglas: -in workplace claims be improved if he had complained of carrying and climbing, citing safety concerns? And at his termination meeting they described him as a troublemaker, complaining all the time about safety.

So in other words, if he raised the concerns about the climbing and carrying-

Nina Hoang: Oh, about the mean, yeah.

Andrew Douglas:And when they terminate him, they said specifically, you’re a real troublemaker around safety. He has all entitlements come.

Nina Hoang: Yeah, because then there’s evidence of them taking adverse action on basis of workplace complaint.

Andrew Douglas: Oh, there’s discrimination under safety law as well.

Nina Hoang: Under safety law, yeah.

Andrew Douglas: So, I just thought I’d add all those things together. We’re running a little bit late today ’cause Nina got a bit fixated on that issue.

Nina Hoang: I think you purposely worked me up. I think we’re over time because you made all these random comments that were unnecessary.

Andrew Douglas: And I chucked in words you couldn’t say as always. But look, lovely to have Nina back and really lovely=

Nina Hoang: Yeah, it’s lovely to be back.

Andrew Douglas: -to see all of you. Thumbs up please.

Nina Hoang: Yeah, give us a thumbs up.

Andrew Douglas: See you later. Cheers.

Nina Hoang: Bye.

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