Tom Daly: Brings us to the main topic.

Jim Babalis: Bring us to the main topic here. So, listen, this one here is quite interesting. So it’s around the working from home changes and what does this mean effectively for Victorian employers? It’s really a refresher. As we all know, the Labour government has made some amendments recently introducing the bill, the Equal Opportunity Amendment Work from Home Bill. First reading was passed on the 16th of June, and the second reading was moved on the 17th of June. Key dates are that, as of 1 September 2026, the legislation will commence for non-small business employers.

Tom Daly: So, I think it’s two days a week, all eligible employees will be entitled to work from home two days a week unless the employer can sort of give a reasonable reason why that shouldn’t be allowed.

Jim Babalis: Yeah, so the expanded memorandum really covers everything. So just for everyone’s benefit, whilst, you know, it will commence on the 1st of September, it will effectively have operative effect as of the 1st of July next year effective for small businesses. So you’re right, Tom, the working from home period is two days per week for all eligible employees who work greater than 38 hours per week, or a pro rata for employees who work less than that.

Tom Daly: Doesn’t apply to casuals?

Jim Babalis: No, it doesn’t apply to casuals.

Tom Daly: The regular full-time workers.

Jim Babalis: Yeah. It will be quite interesting, because the Victorian Equal Opportunity and Human Rights Commission and VCAT will, to some extent, have joint jurisdiction in some respect to resolve disputes, but VCAT will resolve the disputes if they fail at conciliation. So effectively we can escalate a jurisdiction. That will be interesting.

Tom Daly: But it’s just really swinging the balance really in the employee’s favor to assert their right to work from home, basically.

Jim Babalis: Absolutely. So, you know, there’s obviously key considerations. Certain employees are excluded, like you indicated, casuals. But in terms of VCAT’s workload, this is going to be quite interesting, because it is quite extensive as it is.

Tom Daly: Already backed up.

Jim Babalis: Backed up. Matter’s not being heard for some months. In the new dispute framework, employees will be able to seek interim orders, which is going to be quite interesting, which will effectively permit working from home while a dispute is still to be resolved. So, I think that will, that’s actually-

Tom Daly: So, if you say, “I need to work from home two days a week,” and then you’re my employer, you disagree, I can do it while we wait for, or I can seek interim orders and I do it until we can resolve it finally. So that just adds to VCAT’s workload.

Jim Babalis: It will add to the workload, but, obviously, be maybe kicking the can down the road a little bit. And that does, obviously, come up a little bit. There has been some literature, as well, that contested issues may not, you know, maybe around whether, not necessarily concern whether employees can work from home, but will, obviously, cover maybe three key themes. Number one, who qualifies for the entitlement? Two, a situation when an employee can reasonably limit it. As well as, I guess, situations, or questions, or issues that might come up as, you know, are these resolved through VCAT, which will, ultimately, I guess, maybe overburden them more than what they currently are? So that’s going to be a bit of an issue.

Tom Daly: So, I guess, if you’re a small business anticipating these new laws, some things to consider might be, you know, do you have the systems or the equipment in place to allow workers to safely work from home, you know, as of, what was it? July next year?

Jim Babalis: Yeah.

Tom Daly: You know, how will you assess, you know, which of your employees can work remotely effectively. Or if they can’t, how can you sort of, you know, plan for that?

Jim Babalis: And I think it probably goes to more operational challenges and logistical challenges, as well. So, obviously, you know, developing the processes where, you know, you need to, obviously, do performance reviews, performance appraisals, et cetera, for those who are working from home. That will be challenging. Little bit of a harking back to COVID a little bit. You know, obviously, ergonomic setups in a working from home situation, proper equipment, et cetera. And, obviously, the challenges about time zones, which is going to be interesting. Listen, that will clearly affect, I guess, you know, cross-jurisdictional employers, as well. So I guess, from our perspective, I guess employees should really note that a feature of the bill is that employees who are already eligible to request, you know, these arrangements under the act and wish to do so would be excluded from this entitlement. And this might create, I guess, the prospect of different working from home rights that might apply to employees within the same workplace depending on personal circumstances. That’s going to be an additional challenge and circumstance. I think our tip is here, watch this space.

Tom Daly: Mm.

Jim Babalis: Yeah. All right, so we’re up to, I guess, our-

Tom Daly: Our case study.

Jim Babalis: Case study. So, Tom, I’m going to let you read it.

Tom Daly: I’ll read it out for the people. So, “Ryan was unhappy at work. He had told his employer, Cedric, that he felt undervalued. Ryan was an electrician and had also raised concerns that there was not enough A-Grade electricians to properly supervise the apprentices. It was common for apprentices to be left unsupervised on construction sites despite regularly performing high-risk electrical work involving energized or live systems. Ryan was one of only two qualified A-Grade electricians supervising seven apprentices. Cedric was the owner of Supa-Sparkiest,” which is the company.

Yeah, “Cedric was the owner of Supa-Sparkiest. Ryan was his most senior electrician, and had worked for him for more than seven years. There was no doubt that their relationship had become increasingly fractious. Cedric was an old-school electrician. While he was highly competent in domestic electrical work, he relied heavily on Ryan’s expertise in the commercial construction sector. Ryan was well-known and highly respected among several commercial builders, many of whom he had played football with, and regarded him as a safe, practical, and reliable electrician.” Scroll down so you can follow as well.

Jim Babalis: Oh, I am, don’t worry.

Tom Daly: “Ryan was also a member of the Electrical Trades Union and was the elected shop steward at Supa-Sparkiest. Several of Ryan’s friends in the commercial construction industry encouraged him to establish his own business. Cedric became aware of these discussions. And during Ryan’s next salary review, required him to sign a restraint of trade agreement. In return, Cedric substantially increased Ryan’s salary and agreed to pay him 10% of the net profit of the business, payable quarterly.

Cedric resented the arrangement, but believed he could not afford to lose Ryan. The restraint clause provided that Ryan could not directly or indirectly establish, participate in, or be involved in any business of the same or a similar nature for 12 months following the termination of his employment. The restraint applied throughout Australia and specifically prohibited Ryan from working for any client of Supa-Sparkiest with whom the business had dealt with during the previous two years.”

Where are we? “Sometime later, Ryan again raised his concerns regarding the inadequate supervision of apprentices. He also told Cedric that the restraint agreement and Cedric’s treatment of him had significantly damaged the trust between them. This is when Cedric became furious.” So a long one, this one. “He instructed the company’s IT consultants to search Ryan’s work emails and electronic documents. They discovered three documents. The first was a completed, but unsigned and undated, NAB loan application seeking an overdraft facility for a commercial building business that Ryan intended to establish with his friend Trevor.

The second was an ASIC company registration confirming the incorporation of a company called Mosh Pit Builders. The third was draught advertising material describing Mosh Pit Builders as an innovative industry disruptor specializing in high-tech warehouse infrastructure. Cedric confronted Ryan with these documents. He accused Ryan of breaching his fiduciary duties by establishing a business in competition with Supa-Sparkiest. Ryan denied the allegation. He explained that Mosh Pit Builders was only a business idea and not an operating business.

He had not commenced trading, had not used any confidential information belonging to Supa-Sparkiest, had not used any company resources, and had not breached any duty owed to Cedric. Nevertheless, emboldened by the documents, particularly the completed loan application, Cedric dismissed Ryan on the spot. Ryan later wrote to Cedric accepting Cedric’s repudiation of the employment contract and advising that he had lodged a complaint with Energy Safe Victoria regarding the company’s electrical safety practices. Cedric subsequently discovered that two days later, Ryan had commenced employment as an electrician with one of Supa-Sparkiest’ competitors.” So, I hope everyone got all that.

Jim Babalis: So, there’s a lot to it, but there’s definitely the theme of Australia trades has come up. But I think there’s some key questions in this, aren’t there?

Tom Daly: Yeah. So I guess the first one is, would Ryan have any good claims for either breach of contract, unfair dismissal, or a general protections claim against Supa-Sparkiest?

Jim Babalis: In short, yes to all three. All three claims are definitely available. So we’ll just start with the breach of contract issues. So Ryan has a strong claim for reg, sorry, for wrongful dismissal, because Cedric repudiated the employment contract by dismissing him without a lawful justification and Ryan accepted that repudiation. A breach of contract claim is particularly available because Ryan may recover anticipatory damages, including the high salary and the 10% quarterly profit share he would’ve received had the contract continued effectively. In terms of unfair dismissal, that’s also available, Tom.

Tom Daly: Yeah, he was an award-covered employee.

Jim Babalis: Yeah, so Ryan was an award-covered employee, right, and therefore eligible to bring an unfair dismissal claim. There was also no valid reason for the dismissal. Ryan had merely explored the possibility of establishing a future business. He had not effectively commenced trading or competed with Supa-Sparkiest, misused confidential information or solicited clients.

Tom Daly: So that’s a real lack.

Jim Babalis: Yeah.

Tom Daly: That brings it back to those cases we talked about before.

Jim Babalis: Yeah.

Tom Daly: Like, planning something is not the same as doing it.

Jim Babalis: Preparatory steps.

Tom Daly: Yeah, not looked at the same way.

Jim Babalis: Yeah. So that’s a bit of a theme. So, accordingly, I guess, you know, the dismissal was likely to be harsh, unjust, and unreasonable. It also brings us to the issue of whether there’s a general protections claim. And the answer is once again, yes. Ryan has a very strong general protections claim. You know, a substantial and operative reason for his dismissal appears to have been that he exercised workplace rights by-

Tom Daly: By safety concerns.

Jim Babalis: Safety concerns. You know, raising those concerns, acting as an ETU or shop steward, you know, obviously, the union component to this, representing employees on workplace issues, complaining about workplace safety. All these constitute, you know, an exercise of workplace rights and industrial activities under the Fair Work Act.

Tom Daly: So, yeah, you can’t dismiss people for raising any of those things.

Jim Babalis: Nope.

Tom Daly: And, again, did he breach the non-compete restraint? Well, firstly, the non-compete restraint was a part of the contract which was repudiated. So, the employer can’t be allowed to repudiate a contract and, at the same time, enforce-

Jim Babalis: Once again, the answer is no.

Tom Daly: According to that, yeah.

Jim Babalis: So, I guess there’s two principal reasons if we could really just cover it off very quickly. So the first one is that Cedric repudiated the employment contract by unlawfully dismissing Ryan, and that’s a key consideration. Excuse me, Ryan accepted that repudiation. And there’s, obviously, the important case of Crowe Horwath v Loone, a 2017 Victorian Supreme Court of Appeal decision, where a party who repudiates an employment contract cannot subsequently enforce a post-employment restraint contained, you know, within that contract. Secondly, the restraint itself is likely to be excessively broad. The restraint purported to apply for at least 12 months throughout Australia and to any small business. You know, whilst, you know, parts of such a restraint might be capable of being read down, particularly, I guess, under the equivalent, you know, New South Wales, you know, Restraints of Trade Act of 1976.

Tom Daly: So, what would that look like if they were to read it down? They might say, “Well, you can,” even though the clause was for 12 months throughout Australia and for any business, like, in New South Wales, they maybe say, “Well, six months, we’ll allow six months,” or “we’ll allow Victoria.”

Jim Babalis: Yeah, I guess it’s more, you know, statutory and, you know, technical based in that sense. But I think here it’d be almost, you know, completely unenforceable because of the repudiation of the contract.

Tom Daly: Right, that’s the main, yep.

Jim Babalis: Yeah.

Tom Daly: Could Energy Safe Victoria prosecute Supa-Sparkiest for the inadequate ratio of A-Grade electricians supervising apprentices? I think this one’s pretty obvious.

Jim Babalis: Short answer, once again, is absolutely yes. So, Energy Safe Victoria could prosecute if the apprentices were undertaking high-risk electrical work without the legally required supervision. Apprentices, as we all well know, performing energized or other high-risk electrical work must be directly supervised by, at the absolute minimum, a qualified A-Grade electrician. While one qualified electrician may supervise up to three apprentices on the same work site in accordance with the appropriate circumstances, apprentices who perform high-risk work must also, must always, sorry, receive appropriate onsite supervision. On the facts provided, having only two qualified electricians supervising seven apprentices combined with evidence that left unsupervised work whilst undertaking live electrical work, this would provide a strong basis for regulatory enforcement and potential prosecution. In short.

Tom Daly: Basically, you can’t-

Jim Babalis: No.

Tom Daly: You need more supervision.

Jim Babalis: Absolutely.

Tom Daly: Yeah, yeah, yeah.

Jim Babalis: Absolutely. Well, I think that brings us to the end, Tom. Obviously, a really good run of cases today and, you know, obviously, topics and presentations in the case study, but great presenting with you.

Tom Daly: Thank you. Thank you.