On Point - Issue #5
Employment Class Actions
- There has been some recent high-profile employment class actions. Class actions are called representative proceedings. Representative proceedings require a single employee claimant to represent a specified group of employees.
- Employment claims are particularly susceptible to representative proceedings. It is common for many employees to be covered by a single industrial instrument. Competing interpretations can arise due to the fluid nature of workplaces and the way industrial instruments are drafted. Representative proceedings are an alternative procedure to dispute resolution in the Fair Work Commission.
- Representative proceedings are contained in Part IVA of the Federal Court Act 1976 (Cth). A minimum of seven (7) represented employees are required to commence a proceeding. Once a group of employees are identified, they become part of the proceeding. If an employee does not wish to be a part of the proceeding they can choose to ‘opt out’ through a written notice.
- The Federal Court (“the Court”) has judicial oversight of representative proceedings. The Court must be satisfied that the representative has a sufficient interest in the proceeding and continues to adequately represent the group. However, powers relating to litigation funding are limited.
- Any final settlement and subsequent distribution of entitlements must be approved by the Court.