Recent cases tell a cautionary tale to employers and employees about public comment and expressing personal views in the course of employment. With the increasing use and prevalence of social media, employers are taking steps to, as far as possible, control and monitor employees’ private activities online.

We have seen much conjecture in the media over the last 48 hours after the High Court’s decision in Comcare v Banjeri^[1]. After a protracted legal battle, the High Court ultimately decided that the implied freedom of political communication cannot be invoked as a shield in the face of internal policies and procedures (in this instance, the Australian Public Service guidelines) which were created to protect the independence and impartiality of the public service.

You may be thinking that this all sounds very familiar…

That’s because much has also been written about the dismissal of Israel Folau after he chose to post negative views against a range of people including the gay and transgender community on Instragram saying:

“Warning: Drunks. Homosexuals. Adulterers. Liars. Fornicators. Thieves. Atheists. Idolaters. Hell awaits you.”

In the shadow of public outcry, Folau’s contract with Rugby Australia was terminated on the basis that he breached the player code of conduct. A code of conduct that requires employees to treat everyone equally regardless of sexual orientation, gender, religion or race is typical in many organisations to promote diversity and inclusion and prevent discrimination. It’s also common for a code to place sanctions on those who use social media platforms to air personal views which could put the organisation into disrepute. 

In many respects, both of these cases appear to be quite similar on their face. Both feature an aggrieved employee whose employment was terminated for making posts on social media that their employers did not agree with.

While Rugby Australia stressed that Folau’s dismissal was not because of his religious beliefs, Folau has recently made a claim for unfair dismissal under section 772 of the Fair Work Act 2009 (Cth) alleging that the termination was because of his religion, and therefore, unlawful. Under this section, Folau will also need to prove that his Instragram post constituted an exercise of religious freedom.

On the other hand, the Banjeri case was not in relation to the Fair Work Act, but rather she went straight to the Constitution to argue that her implied freedom of political communication had been interfered with.

What does other case law say?

Remember the recent case of a woman who made disparaging, derogatory and offensive comments about her employer’s clients in an email and then accidentally copied those clients into an email? The Fair Work Commission’s decision in the case of Georgia Sologinkin v Cosmetic Suppliers Pty Ltd^[2] is instructive. It sets out a useful test when determining how to deal with an employee who has engaged in similar conduct.

This two-step test requires an analysis of:

1. Whether the conduct is so serious that the employer can no longer maintain trust and confidence; and
2. If the personal view has been disclosed to the public, would it cause embarrassment and disparagement to the employer?

If the answer is yes to both, then dismissal may be justified.

Similarly, in the case of Nirmal Singh v Aerocare Flight Support Pty Ltd^[3], an employee was dismissed for breaching the employer’s social media policy by posting on Facebook “we will support ISIS”. The employee lodged a claim for unfair dismissal, believing it was not procedurally fair, just or reasonable to terminate his employment. The Fair Work Commission rejected the applicant’s claim, stating that a comment of that nature could not have been made without enquiry or silence, and evidently had the potential to cause harm to his employer.

The Fair Work Commission in other decisions has also reiterated the importance of having a social media policy to protect the reputation of a business and clearly outline what is expected of its employees.

What does this mean for constitutional freedoms and employment law?

The Morrison government’s proposed Religious Discrimination Act (or “Folau’s Law”),, will consider what protections are available for those who hold, and express, their religious beliefs.  It remains to be seen what this Act, if passed through Parliament, will mean for employers and employees as they navigate the difficult balance between how their personal and private beliefs impact their working life.

There is little case law to provide a definitive ruling on where to draw the line on freedom of religious expression in employment law. However, similar cases point to the Courts agreeing that an employer can terminate employment in matters where it is clear that disrepute is likely and can be evidenced.

The outcome of the Folau case will hopefully provide greater clarity on how an individual’s right to hold and express religious views interacts with an employer’s ability to ‘control’ an employee’s behaviour in the public arena and on social media. 

As to the freedom of political speech, the judges of the High Court stressed that while the Constitution offers an implied right to free political communication, this is distinct from a personal guarantee for free speech. The test applied in Banjeri was that a law must have an unjustified burden on the implied freedom of political communication as a whole for it to be infringed.

Both cases however highlight the challenges faced by employers to get the balance right between protecting fundamental rights and freedoms and protecting the reputation of their organisation. 

How can Moores help?

If you’re having trouble determining what is and isn’t appropriate behaviour outside the workplace, or need assistance drafting a legally compliant social media policy, please do not hesitate to contact us.

^{[1] [2019] HCA 23.
[2] [2017] FWC 1838.
[3] [2016] FWC 6186.}

Applications can now be made by schools for the Local Schools Community Fund, as announced in the May budget.

Each federal electorate is allotted a sum of up to $200,000, and government, Catholic and Independent Schools are all eligible. 

Schools can apply for between $1,000 to $20,000 per project. Schools may apply for more than one project.

Schools wanting to participate need to check whether their local MP is participating, because this determines whether funds are available. The MP sits on the committee which decides the projects to be funded, and the committee puts forward its recommendations in November 2019.

It appears that if the MP is not participating, then the committee does not sit in that electorate, and the funds are tipped into other electorates.

Eligibility

Schools must be in receipt of Australian Education Act funding, and projects must be small scale capital or non-capital projects.

Example of such projects are:

• master-planning;
• small scale extensions / refurbishments;
• installation of computer or ICT facilities / equipment / software;
• playground and sporting equipment;
• shade structures;
• landscaping;
• procurement of musical facilities, furniture, computer equipment (e.g. digital whiteboards), library resources;
• air-conditioning;
• measures to target student wellbeing;
• counselling or youth mental health support;
• excursions for students from remote areas;
• additional English as a second language support for refugee students; and
• specific facilities for students with a disability in a school.

Retrospective funding is not available, and facilities to be used primarily by international (ie non-funded) students or pre-schoolers (again, not funded as schools) will not be eligible. Given the VRQA’s recent requirement to show reasonable adjustments in all land and buildings, schools might consider the fund to aid the addition of required features for disability access.

Projects must be completed by 31 December 2020.

Application

Applications are assessed, and schools need to address these considerations:

• Who will benefit from the project;
• Expected benefits of the project for the school community;
• How the project provides value for public money;
• If the project can proceed without the funding.

Application Form

The online application form is available here: https://schools.education.gov.au/ 

Approved Applications

Notification shall be sent to approved schools in early December 2019.

Funds shall be paid to the approved authority from the beginning of 2020. If there are unspent funds after the completion of the project, they must be returned to the department.

How we can help

The team at Moores advise extensively on regulatory compliance in education, reviews and agreements.

Practice Leader Cecelia Irvine-So is not only a parent of children at an independent school but also a school board member.

For more information regarding the Community Fund or to discuss any of the above, please do not hesitate to contact us.

This week the Australian Charities and Not-for-profits Commission (ACNC) released Guidance on the External Conduct Standards (ECS). The ECS came into effect on 23 July 2019, imposing additional governance, recordkeeping and oversight obligations on registered charities with activities outside of Australia.

Here are seven things registered charities need to know about the ACNC ECS Guidance.

1. The reach of the ECS may be broader than you think
   The ECS is commonly understood to apply to the activities of registered charities operating overseas and any third parties with which they collaborate. This example included in the ACNC’s Guidance suggests that the reach of the ECS may extend beyond this to the activities of any organisations that a charity’s partner works with as part of the collaboration.The Australian charity must comply with the External Conduct Standards for its own activities overseas as well as those of its overseas partner charity and the other organisations the partner charity works with on this project.This would require charities to put in place “reasonable steps” to monitor the activities not only of partners, but any organisations that that their partner in turn proposes to work with. Charities will need to assess how their partners choose organisations to work with to carry out collaborative projects and what controls those organisations have in place.
   
2. Even when dealing with an ACNC registered third party, you may still be subject to the ECS
   Many charities understood that the ECS would not apply to overseas activities being conducted solely through another ACNC registered charity. However, if money is transferred by a donor charity to the overseas account of an ACNC registered recipient charity, the ECS will still apply to the “management” of the money by the donor charity. The donor charity must, for example, ensure that the money is transferred through secure means to the recipient charity’s account. The donor charity will not need to comply with the ECS in respect of the recipient charity’s activities overseas. The ECS would not apply at all to the donor charity if the recipient charity’s bank account was located in Australia.  
   
3. Minor activities and small amounts of money may still be caught
   Many of our clients have inquired about whether minor activities are subject to the ECS. The Guidance confirms that a charity “is generally considered to operate outside Australia even if its overseas activities are just a minor part of its work or if it only sends a small amount of money overseas. This is true even when such activities are conducted through a third party”. [emphasis added]
   
   The Guidance further states the Standards will not apply if:- The overseas activity is “directly related to the Charity’s purpose in Australia”, and
   – The activity is “incidental to its operation in Australia”.This means that the ECS will apply to minor activities and small amounts of money unless these overseas operations are “incidental” to a charity’s Australian operations. “Incidental” means that it is “a minor part of a charity’s work benefitting people in Australia”. The Guidance provides examples of “incidental” overseas activities, including sending an Australian beneficiary overseas for cancer treatment, sending staff to an overseas conference and obtaining small amounts of supplies from overseas companies.Unfortunately the case remains that all overseas operations (irrespective of size) will be subject to the ECS if those activities are pursued to benefit people or purposes outside Australia.
   
4. Examples of ways to meet the ECS
   Much like the Governance Standards, the ECS are expressed as high-level principles rather than precise rules. In particular, many of the ECS require charities to take “reasonable steps” or maintain “reasonable procedures”. This means that each registered charity must consider factors including the context in which it is operating overseas and the scale and nature of its overseas operations to determine how to comply with the ECS.The Guidelines include considerations that charities should take into account when determining what steps might be “reasonable”. They also include useful “Ways to meet the Standard” for each of the four standards. Charities should be aware that these are examples only – each charity must consider what response is reasonable to each Standard in light of their own circumstances.
    
5. Drilling down on Australian laws with extraterritorial application
   
   ECS 1 includes a requirement for charities to comply with Australian laws relating to a number of specified areas (such as money laundering and slavery). The Guidance includes a helpful (but unfortunately not exhaustive) list of legislation that “may be relevant” to these key areas, highlighting provisions of those Acts to which charities may wish to pay particular attention.
    
6. No template policies and procedures
   
   Many smaller charities (or charities whose overseas operations are minor) were hoping for template policies and procedures to assist them to comply with the ECS. No such luck, other than a link to the existing Conflict of Interest policy. All charities will need to develop their own policies and procedures in response to the ECS. For charities that are not ACFID members, this is likely to require a detailed and careful review of their overseas operations in light of each of the ECS.
    
7. Compliance and enforcement
   Most registered charities will be aware that the ACNC Governance Standards were in place for quite some time before the ACNC began to engage in significant, proactive compliance activity. We anticipate that any grace period in respect of the ECS will be much shorter, as:- the ACNC already has compliance infrastructure in place in respect of the Governance Standards;
   – the media and public are increasingly keen to hold charities to account, particularly where vulnerable persons are involved; and
   – the sector is much more aware of the ACNC’s role and its obligations.

The ACNC states that it will follow its existing regulatory approach, and will “take action if [it has] information that indicates a charity has seriously or deliberately breached the External Conduct Standards”. In practice, secrecy provisions continue to make it difficult to get a clear picture of how and when the ACNC uses its enforcement powers.

Next steps

The onus remains on charities to determine what might be considered “reasonable steps” to comply with the ECS. This will involve an assessment of the charity’s size (turnover and workers), the nature, scale and complexity of the overseas operations, whether the region it is operating in has particular risks and how capable third parties are of meeting the ECS. Policies and procedures may then need to be reviewed or developed to ensure compliance.

Our Not-for-profit team is working with clients to assist them to consider and apply the ECS in their own context. Please do not hesitate to contact us.

The NSW Department of Education has today released an updated version of its Not for Profit Guidelines for Non-Government Schools (June 2019 edition).

These replace the December 2018 version.

Given similarities between Victorian and NSW laws, and the operation of many school systems in both states, Victorian schools and systems should seriously consider the guidelines as best practice.

The new Guidelines impose new requirements in key areas, which, if not followed, will make the school non-compliant. These include:

1. Onsite ELCs, childcare and out of hours care;
2. Facilities (including Performing Arts Centres) which are hired out; and
3. Related Entity Transactions; and
4. Reimbursements to board and staff.

Other areas have been tightened. An example is the new requirement that, in relation to any compensation, settlements or one-off payments, a school must “ensure it has received legal advice that such payment is reasonable and not excessive”. Previously, a school needed only follow any legal advice (if obtained).

Another is fundraising. Any donations must be demonstrated as related to education of students at the school.

Another is finance. All school finance must meet the reasonable market value test.

Onsite ELCs, childcare and out of hours care

These are not considered part of the school by law. Under the new guidelines, schools can only fund these if all surplus returns to the school, and the school must not incur a liability from the operation.

This raises the issue of schools not only needing separate accounts, but potentially a separate entity and undoubtedly an agreement between the school and ELC.

Facilities (including Performing Arts Centres) which are hired out

A far-reaching prioritisation of the school’s use of facilities is now required, and a school may not incur a liability due to external use, nor contribute school funds to another’s use of the facilities.

Related Entity Transactions

The regulator will now expect that the school can demonstrate reasonable market value in accordance with the guidelines. New policies are also listed, including conflict of interest, fraud, staff delegations etc.

Reimbursements to board and staff

Reasons for all reimbursement must now be recorded. All travel, for which reimbursement is claimed, must relate to the position of the person and be proven to be not personal.

How we can help

Moores extensively advises on regulatory compliance in education, including NSW and Victorian compliance (inc. s 83) reviews and agreements. If you have any queries, please do not hesitate to contact us.

The new Guardianship and Administration Act 2019 passed through the Victorian parliament in May 2019 and received royal assent on 4 July 2019. It will commence once proclaimed and otherwise no later than 1 March 2020.

While VCAT has retained its powers in relation to making guardianship and administration orders, there have also been significant changes to guardianship and administration laws and reflect a more modern understanding of decision-making, capacity and disability.

For example, the Act provides for:

• Presumption that a person has decision-making capacity unless evidence is provided otherwise.
• Recognises that a person has decision-making capacity if the person can make decisions with support.
• Consideration to be given to a wider range of matters in making an order, such as the will and preferences of the proposed represented person and the wishes of any primary carer or relative.
• New eligibility requirements for proposed administrators and guardians, and a dispute resolution process for administrators and guardians who are appointed for the same represented person (with the decisions of the guardian to prevail over those of the administrator unless otherwise agreed or determined by VCAT).
• Orders to be more tailored to the individual.

There are also provisions designed to improve VCAT’s processes, including:

• More robust notice requirements.
• A presumption that the represented person must attend the VCAT hearing, unless they do not wish to attend or it would be impracticable.
• Video links and other systems to conduct proceedings.

Moores welcome the reforms.

How we can help

If you seek further advice about the guardianship and administration regime, or require specific assistance with a guardianship and administration matter, please do not hesitate to contact us.

This article is part of our Guardianship and Administration Bill series:
Guardianship & Administration Bill 2018 – Overview
Guardianship & Administration Bill 2018 – Administrator liability and new offences
Guardianship & Administration Bill 2018 – Supported Decision-Making

The Supreme Court of NSW has recently examined the rules relating to financial attorneys and executors stepping in as trustees in place of a self managed superfund (“SMSF”) member and considered if a particular appointment of trustee was valid.

The Relevant Law

In order for a SMSF to be eligible to receive the various tax concessions that are granted to superannuation funds it is necessary that it complies with the requirements of the Superannuation Industry (Supervision) Act 1993 (“the Act”) and regulations made under the Act. One of the key compliance requirements is in relation to who must be a trustee of a SMSF.

Section 17A of the Act provides that (in brief) each member of a SMSF must also be either:

• A trustee of the SMSF; or
• A director of a company which is trustee of the SMSF (a “corporate trustee”).

If the member is not able to personally act as the trustee, or director of the corporate trustee, then this does not cause the SMSF to be non-compliant provided that:

• The enduring financial attorney of the member acts in their place; or
• If the member is deceased, their executor acts in their place.

There is also a 6 month grace period in the Act if there is a temporary non-compliance with the trustee requirements.

The Facts – Dawson v Dawson [2019] NSWSC 826

The Dawson Superannuation Fund (“the Fund”) was established by husband and wife, Peter and Estelle. They were the only members and individual trustees of the Fund. Both of them had children from previous relationships.

Peter had:

• Appointed his son Tony (step-son to Estelle) as his enduring financial attorney; and
• Completed a Will nominating Estelle’s son-in-law, George, as his executor and leaving most of his estate to Estelle (notwithstanding they were in the process of separating at that time).

Peter became too unwell to continue as a trustee of the Fund and a deed was executed by Tony (in his capacity as financial attorney for Peter) and Estelle to nominate Tony as a replacement trustee for Peter. This deed was validly executed in accordance with the terms of the Fund trust deed and meant that the Fund was compliant with section 17A of the Act at that time.

Peter then died and there was a death benefit of $1.387M payable from the Fund on his behalf. Peter did not complete any binding nomination, so under the trust deed the trustee had discretion as to who was to receive payment of the death benefits.

George obtained probate for Peter’s estate and he and Estelle then executed a deed, without Tony’s agreement, which nominated George as a trustee of the Fund in place of Tony. They argued that:

• This was on the basis that Tony’s position as trustee was linked to him being the financial attorney for Peter and that his role as trustee had therefore automatically ended with Peter’s death; and
• It was necessary for George, as Peter’s executor, to become a trustee in order for the Fund to remain compliant.

Tony commenced proceedings seeking a declaration that he was still a trustee of the Fund and that the deed appointing George was invalid. Of course, the relevance of this was who would be the trustee for the purpose of deciding payment of the death benefit.

The Decision

The Court found that:

• The appointment of a trustee is personal in nature. This means that even if the trustee is the financial attorney of a member they will not hold the trustee role in their capacity as an attorney. They are therefore not automatically removed if the role as financial attorney ceases.
• The question of whether a trustee has been validly appointed or removed depends on the terms of the trust deed. In the circumstances, the appointment of George as a replacement trustee was not valid as it had not complied with the terms of the trust deed and instead relied on an automatic removal of Tony by reason of his financial attorney role ceasing.
• There is a difference between who should be the trustee to make the SMSF compliant and who is actually the trustee.
• A deceased member generally continues to be a ‘member’ of a SMSF until their death benefit has been paid out. This means that their executor must become a trustee for the SMSF to be compliant.
• It was likely the Fund was not compliant and while that was not the issue before the court, it was an issue the parties would need to address (probably with the ATO!).

Key Lessons

This case highlights:

• That it is crucial to read the trust deed whenever you are dealing with the control of an SMSF. Failing to validly appoint and remove trustees in accordance with the trust deed will make the appointments invalid and the Court will not intervene to rectify a non-compliant fund.
• The importance of comprehensive estate planning that considers both incapacity and death.
• Binding death benefit nominations remain a crucial estate planning tool – the issue in this case would probably never have arisen if the trustee did not have discretion for payment of the death benefit.
• Trustee roles impose personal obligations on the trustee – they are not held subject to the terms of any power of attorney.  

If you require further information regarding your self managed superfund, please do not hesitate to contact us.

When parents separate one of the aspects that can be overlooked as parties focus on the division of property and children’s living arrangements is the clarification on how the costs of the children will be met until they reach adulthood, which may be many years away.  

The costs of raising a child are significant. When a household becomes two at separation with duplicate expenses and less income in each, and often with one household having substantially less income than the other, the cost of raising a child is amplified. Expectations about the particular private school that the child will attend, the extracurricular activities the child will participate in and whether the child is to be covered by private health insurance need to be realistically reassessed.

When private school fees can reach as much as $30,000 per annum, the question as to how they are paid is frequently an issue that stands in the way of parties finalising a financial arrangement between them. 

When it comes to child support our top tips are:

1. Obtain a Child Support Assessment
   Do not delay in obtaining a child support assessment from the Commonwealth Department of Human Services. To get a sense of what you might be entitled to, the Department website contains a very useful calculator where you can plug in your details and obtain an accurate estimation. 
2. Formalise a child support arrangement
   In many circumstances it is important not only to the parent with the lesser income (who often also has the substantial care of the children) but also the parent earning more that the costs of raising children are agreed and formalised in a binding document. The parent who earns less wants to ensure that they will be able to make ends meet and the parent who earns more wants to ensure that their financial obligations are clearly defined and that they do not have to worry about the other parent seeking more at a later time.
3. Consider and negotiate child support at the same time as a property settlement
   Child support to be paid by one parent to another as calculated under the child support formula employed by the agency will never be sufficient to meet private school fees, private health insurance and other benefits for a child. The assessment will also vary as taxable incomes change from year to year. Often, especially in the case of a party managing their own business, taxable income is not reflective of the true income situation. Therefore it is highly desirable that the child support question is dealt with quickly and in conjunction with the property settlement.
   
   When it comes to private school fees, often a more creative solution is required where income alone will not be enough. It may be that a portion of sale proceeds of a home are set aside to meet this expense if both parties have their minds set on the private school for their child. 
   
4. A Binding child support agreement or a limited child support agreement?
   Parties should think carefully about entering into a binding child support agreement or a limited child support agreement to formalise payment arrangements. A binding child support agreement must be signed off by lawyers acting for each party. A limited child support agreement does not need to be signed off by lawyers but must provide that the parent who is entitled to receive child support, receives more than would have been received under the child support formula.
5. Flexible terms
   The terms of such agreements can be quite flexible to take into account changes in parties’ incomes or how financial responsibility is to be divided up. Agreements can provide for the payment of regular amounts from one party to another and or the payment of expenses directly to a school or other service provider as required.

How we can help

We would welcome a discussion with you or your clients about the risk of a prior agreement being terminated and how to ensure a future child support agreement is binding.

Please do not hesitate to contact us.

A new financial year means annual indexation and key changes relevant to the employment law sphere for all organisations to consider.

We’ve summarised the most important changes for organisations as of 1 July 2019.

National Minimum Wage and Modern Award Minimum Wage

The Fair Work Commission determined that both the national minimum wage and the modern award minimum wage would increase by 3.0%, taking effect from the first full pay period after 1 July 2019.

This will see an increase of the national minimum wage from $719.20 per week to $740.80 per week or $18.93 per hour to $19.49 per hour.

Note that modern awards do not apply to an employee who earns more than the high income threshold.

Unfair Dismissal

The high income threshold under section 382 of the Fair Work Act 2009 (Cth) operates as a limit to an employee’s eligibility to be protected from unfair dismissal.

The threshold has been increased from $145,400 to $148,700.

This means that employees who earn more than $148,700 and are not covered by an award cannot claim unfair dismissal.

This increase also means that the maximum cap for unfair dismissal compensation will increase to $74,350, equal to 26 weeks’ pay (previously $72,700).

Superannuation

The maximum superannuation contribution base has also increased from $54,030 to $55,270 per quarter (or $221,080 per annum), which means that earnings above this amount are not subject to compulsory contributions.

The superannuation guarantee remains at 9.5%.

Fair Work Information Statement

A reminder that the Fair Work Information Statement must be provided to employees when they commence employment. Ensure that you attach the updated version for 2019-2020. You can access the link to the new Statement here.

Portable Long Service Leave

Portable long service leave makes it fairer and easier for Victorians working in particular industries to access long service leave benefits and retain their entitlement even after they change employers.

Under the Long Service Benefits Portability Act 2018 (Vic) workers in:

• community services;
• contract cleaning; and
• the security industry

will benefit from the accrual of portable long service leave when changing employers, as long as they remain in the same industry.

Businesses that employ workers in these industries must register their business with the Portable Long Service Leave Authority between 1 July and 30 September 2019. Registration can be done online at the Portable Long Service Leave Authority website.

Employers must submit a Quarterly Return to the Authority, in October, January, April, and July each year. The first Quarterly Return must be submitted in October 2019.

What to include in the quarterly return?

Relevant employers will be required to provide:

• information about all workers who have worked for the business during that quarter;
• the days they have worked during the quarter; and
• the pay they received during the quarter.

How much will it cost?

The Governing Board of the Portable Long Service Benefits Authority has determined the Employer Levy as follows:

• 1.65% for community services;
• 1.80% for contract cleaning; and
• 1.80% for security.

This represents a percentage of the employee’s ordinary pay. The Quarterly Return calculates the contribution to be made by the employer and is based on each worker’s ordinary pay multiplied by the levy for their industry.

The employer contributions are then invested by the Authority and will be used to pay workers when they make a claim for long service.

Our Workplace Relations team can assist in determining on whether your organisation will be effected by these changes.

Penalty Rates

A reduction to public holiday and Sunday penalty rates under certain modern awards have also taken effect as of 1 July 2019. The applicable awards include:

• Hospitality Industry (General) Award 2010;
• Restaurant Industry Award 2010;
• General Retail Industry Award 2010;
• Fast Food Industry Award 2010; and
• Pharmacy Industry Award 2010.

Tax Free Threshold – “Genuine Redundancy” Payments

The tax free threshold for genuine redundancy payments has also increased. The first $10,638 will be tax free and then a further $5,320 for each completed year of service.

Next Steps

It’s so important that all organisations are across these changes. Compliance with employment law can be an extremely complex task and it’s essential that you have the right advice to avoid a claim down the track.

Our workplace relations team is able to assist in a range of ways including modern award interpretation and correct classification, drafting compliant employment contracts and providing advice on a range of complex workplace matters.

Should you require any assistance, please do not hesitate to contact us.

This article sets the foundations for conducting an investigation. In a series of articles over the coming months, we’ll explore the investigation process in more detail and provide our tips for a fair and defensible process.

When an allegation of misconduct is made, uncovering the truth can be a challenging task. Organisations may face anxious, distressed or defensive employees, a board or community demanding immediate action, or a workforce critical of moving too slowly. This pressure is compounded by the challenges associated with conducting a fair and reliable investigation, making factual findings, considering whether there has been a breach of law or policy, and determining how the organisation should respond.

Investigations conducted properly can instil trust and confidence and provide employers with a sound basis to effectively respond to misconduct. Where a process is flawed or procedurally unfair, courts and commissions are often scathing of the employer or investigator, leaving employers to defend an adverse action or unfair dismissal claim by the alleged perpetrator of the misconduct.

Given the risks associated with conducting a flawed investigation, employers should think carefully about whether an investigation is appropriate, and whether its people have the skills and experience to do it well. Investigations need not be perfect, but they should be fair and robust.

Is an investigation necessary?

Not all allegations of misconduct warrant an investigation. Investigations are not appropriate for trivial matters that will not lead to disciplinary action, even if the allegations are proven. Don’t rule out alternative dispute resolutions options such as mediation, counselling or coaching for interpersonal disputes that are unlikely to constitute bullying.

However, where allegations concern risks to health and safety, discrimination, harassment, bullying or criminal behaviour such as fraud, an investigation will often be required to ensure that standards of behaviour are maintained, risks are managed and legal obligations are met.

The following considerations will help to determine the best approach:

• What information is available?
• How serious are the allegations?
• If proven, would the alleged conduct breach employment obligations, policies or law?
• How significant are the risks to the individuals and the organisation?
• What options do your policies, procedures, contracts and industrial instruments provide for addressing the allegations?
• What the complainant is seeking? While you shouldn’t make any guarantees as to the outcome, this information may assist in determining the whether an investigation is appropriate.
• What’s your budget?

What type of investigation is appropriate?

If an investigation is appropriate, you’ll need to decide on the type of investigation. This will be determined by a range of factors such as time and cost constraints, whether there are issues of credibility, whether the matter would lead to disciplinary action, risks to the organisation, and whether you have sufficient information on the allegations.

An investigation could include:

• A preliminary inquiry to determine potential wrongdoing
• An investigation on the papers – where you are able to rely on documentary, visual or electronic records to make findings of fact
• Preliminary investigations with no findings of fact
• A full investigation with findings of fact about allegations on the balance of probabilities.

Who should investigate?

When you’ve determined the nature of the investigation, you then need to consider whether it should be conducted internally or externally and who should do it. We set out below some considerations for each option:

Internal investigations

• Cost effective – utilising internal resources can be a pragmatic and cost effective solution to deal with concerns that have arisen within the workplace. An internal investigator may better understand the organisation, the internal procedures, and the staff involved or implicated in the incident.  They may be able to provide a pragmatic approach to deal with the situation.
• Reputational damage – many workplace incidents can be exacerbated by the formality and disruption generated by a formal external investigation. Internal investigations can help the organisation contain the matter whilst under investigation.  However, this is must be balanced with the need not to give the impression that the matter has not been taken seriously.  In addition, the organisation may need to liaise with external parties conducting their own investigations such as the Police, ATO, WorkSafe and Fair Work Ombudsman.
• Efficient resolution – internal investigations may allow matters to be dealt with efficiently before they escalate. This approach may also send a positive message to the workforce that the organisation is being proactive in responding to concerns. However, organisations should carefully consider whether investigating a matter internally is appropriate for more serious or potentially litigious issues.
• Exposure to liability – conducting internal investigations may inadvertently expose an organisation to liability if the investigation is not handled correctly.  Common issues include a failure to comply with procedural fairness requirements such as not allowing the individuals to have a support person present at meetings, or a failure to provide allegations which are capable of being responded to.  Also, the investigation should follow a clear process and consider how the findings are communicated to employees.  If the investigation is flawed, individuals may make a claim that they have been treated unfairly in their employment or that their health has been impacted.
• Actual or inadvertent bias – personal friendships within the workplace or a history of management of issues may cloud the judgement of those involved in an internal investigation. We encourage organisations to carefully consider whether those conducting the investigation can act impartially, or equally importantly, give the broader impression that they are impartial in their investigative processes.

External investigators

• Impartiality – appointing an external investigator allows an organisation to demonstrate that the process is not tainted by bias or influence.  Care should be taken when deciding who within the organisation will be involved in briefing and liaising with the investigator to avoid any suggestion that the process is unfair or biased. 
• Confidence – engaging an expert external investigator may instil trust and confidence that the matter is being taken seriously. It also provides the opportunity for those involved or who have knowledge of the incident to participate honestly and openly safe in the knowledge that they are communicating with an external party and not someone who they will need to work alongside after the investigation is complete.
• Expertise – organisations should look to engage an external investigator experienced in their field to be a ‘safe pair of hands’ to manage a tricky situation.  An external investigator should have the skills and expertise to conduct the investigation, and may have insight into how other organisations have successfully resolved similar issues.
• Lack of control – when you relinquish control over an investigation, there’s a risk that you might not agree with the findings or be dissatisfied with the way that it is conducted.  If you’re convinced of the outcome, query whether you need an external investigation.
• Expense – external investigators do represent an additional cost to an organisation, however this must be considered against the cost to an organisation of having an employee act as an internal investigator in terms of absence from their usual role and loss of productivity.  Also consider whether the short term expense of appointing an external investigator will mitigate long term costs caused by poor handling of an investigation internally such as claims made against the organisation.

How we can help

Moores regularly advises clients how to respond to misconduct and manage workplace investigation, and can assist with conducting investigations and appointing an investigator. This can be helpful when you want to assert legal professional privilege over an investigation report. We can also provide training and coaching for your human resources and senior management teams on how to investigate allegations in line with your organisation’s policies, procedures and values.

If you would like to discuss our services further, or have any questions in this space, please don’t hesitate to contact us.

Click here to read Part 2 – Navigating the “human” element in Human Resource Investigations.

A recent decision of the Appeal Bench of the Fair Work Commission (FWC) has confirmed the importance of a fair and balanced investigation to successfully defend a claim for unfair dismissal, and challenged the assumption that reinstatement is only ordered in exceptional circumstances.

In Ryan Wilks Pty Ltd v Puszka [2019] FWCFB 3323, an employee was summarily dismissed from her employment for serious misconduct after becoming drunk at a farewell function hosted by a client and vomiting on the floor. While the employee admitted to the drunkenness and having vomited on the floor, she denied making disparaging comments about the client’s employees and sexually propositioning one of them, conduct of which she was also accused of.

The decision

At first instance, the FWC found that the employer’s flawed investigation into the allegations led it to erroneously conclude that the employee had engaged in all aspects of the alleged misconduct, and the employee was dismissed on that basis. Specifically, the employer relied on hearsay evidence in order to make the decision, and disregarded the fact that the person who was allegedly sexually harassed denied that it had happened.

Ultimately the FWC held that the nature and severity of the actual misconduct could not provide a sound, defensible or well-formed reason for the dismissal.

Commissioner Cambridge noted:

“Frankly, if one act of inoffensive drunkenness at an after work function provided valid reason for dismissal, I suspect that the majority of Australian workers may have potentially lost their jobs.” 

Reinstatement was ordered by the FWC on the basis that the dismissal was harsh, unjust or unreasonable. Importantly, the FWC remarked that notwithstanding the tension between the employer and employee caused by the legal proceedings, there must be a genuine loss of trust and confidence such that the employment relationship should not be re-established. In this case, the fact that the employer allowed the employee to continue to work unrestricted from the day of the function on 25 July 2018 until she was summarily dismissed on 2 August 2018, weakened the employer’s argument that reinstatement was not appropriate.

Lessons for employers

This case highlights the importance of a fair and balanced investigation process where an employer is considering dismissing an employee, and provides helpful insight into instances where the FWC will not consider there to be a genuine loss of trust and confidence within the employment relationship.

When considering termination, employers should:

• be sure to have robust investigation procedures embedded within the organisation;
• be sure to follow any investigation procedures to ensure procedural fairness;
• consider whether it is necessary to appoint an external body to investigate the misconduct (particularly where the investigation involves assessments of hearsay evidence and credibility); and
• rely on factors beyond any tension caused by legal proceedings to establish a lack of trust and confidence within the employment relationship.

How we can help

When and how to dismiss an employee can be a tricky road to navigate. Moores can assist you in determining whether the actions of an employee warrant a verbal or written warning, a final warning or dismissal on either a summary basis or with notice. For assistance with workplace relations matters, please do not hesitate to contact us.