TOP 10 HR ISSUES IN 2018

What a year 2017 was for all of us involved in HR and workplace law! This year is also shaping up to be a big one for HR practitioners and legal counsel. Looking back to some of the most topical decisions and outcomes from the last twelve months, here are 10 key issues that are likely to be relevant to your workplace in 2018.

1. The spiralling of #MeToo sexual harassment complaints

Following the downfall of a number of celebrities in 2017 as a consequence of their misdeeds and the #MeToo phenomenon, sexual harassment is undoubtedly the biggest HR issue in the world at the moment! The trend set in a number of decisions in Australia in recent years has seen compensation for victims of sexual harassment exceeding $300,000.

Tip: The message being sent by judges and the community in general is that sexual harassment must be eliminated from the workplace. To reduce the risk of an employer being held vicariously liable for the sexual harassment, you must have an up-to-date sexual harassment policy compliant with the judicial expectations emerging from the case law; ensure training is conducted for all employees regularly; and undertake prompt, transparent and appropriate investigations if a complaint is received.

2. Bullying compensation hits 1.4 million

More workers are alleging psychological injuries from workplace bullying. While anti-bullying orders in the Fair Work Commission are not aimed at compensating victims of bullying, the same is not so if a bullying cause of action is based on common law negligence and filed in the Supreme Court.

In Robinson v State of Queensland [2017] QSC 165, the Supreme Court of Queensland awarded an executive employee 1.4 million in damages (plus costs) after finding that she had been subjected to “repeated managerial mistreatment” by her boss, the CEO of a health organisation. The employer was held to have been liable in negligence for failing in its duty of care to provide a safe system of work.

Tip: Judges are willing to award significant damages where psychological injuries due to workplace bullying can be proven. Employers should aim to identify psychological risks in the workplace, such as bullying, and ensure investigations, and if applicable, disciplinary action, is undertaken promptly. Do you have a readily accessible grievance procedure that enables employees to raise complaints?

3. The power of implied terms in contracts of employment

Many employers are surprised to learn that the express terms contained in written contracts of employment are not the only terms that regulate the employment relationship. The common law has long held that terms can be “implied” into an employment contract as a matter of law, fact or industry custom/practice. In other words, these are invisible duties and obligations binding on employers and employees.

Last year, two cases demonstrated the benefit of implied terms for employers. In Avenia v Railway & Transport Health Fund Ltd [2017] FCA 859, an employer was lawfully able to suspend an employee while undertaking a workplace investigation, despite there being no express suspension clause in the written contract. Likewise, in Grace Worldwide (Australia) Pty Limited v Steve Alves [2017] NSWSC 1296, it was lawful to place a senior employee on 3 months’ gardening leave, even though the employee alleged “repudiation”, because no such clause was contained in the written employment contract.

Tip: Employers should seek advice about the circumstances where implied terms can be called to the rescue to support disciplinary or dismissal outcomes. In some cases, the invisible obligations are more important than what is contained in the written contract. Having said that, contemplating and including express provisions in written contracts will avoid disputes arising in the first place. Check out my article 5 reasons to update written contracts of employment.

4. Industrial disputes spiked

Industrial disputes in Australian workplaces spiked last year according to statistics from the ABS, with the number of working days lost to disputation (such as strikes) at the highest levels since 2013.

A large number of enterprise agreements are due to nominally expire on 30 June 2018 covering employers and employees in all industries. Once the nominal expiry date passes, employees can take protected industrial action to support or advance claims in respect of an agreement that will cover them. The Fair Work Act 2009 provides a range of options for employers to respond to protected industrial action, including locking out employees, or means of suspending or stopping the action in certain situations.

Tip: Employers with enterprise agreements nominally expiring on 30 June 2018 should start planning and negotiations with employees/unions now. A carefully planned industrial strategy may serve to minimise the disruption caused by strikes and other disputation, and may prevent unsatisfactory terms in enterprise agreements. Check out my articles Industrial disputes on the increase and Enterprise bargaining tips for employers.

5. Amendments to the Fair Work Act

A range of new amendments occurred in 2017 that will impact upon HR this year. For example, the Fair Work Amendment (Corrupting Benefits) Act 2017, which commenced on 16 August 2017, requires that employers disclose to employees during enterprise agreement negotiations certain benefits received by the employer or a union in an enterprise agreement.

The Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 also commenced operation on 15 September 2017, holding franchisors liable if a franchisee contravenes certain provisions of the Fair Work Act. New "serious contraventions" accessorial liability provisions were also introduced increasing penalties for companies to $630,000 per contravention.

6. Termination of enterprise agreements

Last year we saw employers finding creative ways of dealing with unsustainable enterprise bargaining demands from unions as an alternative to accepting unpalatable industrial outcomes. For example, in a major decision that is likely to have implications for other employers, Murdoch University successfully argued that its enterprise agreement covering 3,558 employees should be terminated because it inhibited the financial and operational performance of the university. Detailed evidence was given of the university’s dire financial situation linked back to provisions in its enterprise agreement which it said increased costs and reduced flexibility. The Commission agreed, and terminated the agreement despite intense union opposition.

Tip: The Murdoch University decision will have implications for other enterprise agreements coming up for expiry this year. Consider the industrial strategy used in this case if your current enterprise agreement inhibits operational and financial flexibility, and negotiations with unions are reaching an impasse. Also check out my article on Enterprise bargaining tips for employers.

7. Nasty behaviour invalidates restraint

It is getting harder to enforce post-employment restraints, particularly in Victoria. Last year, the Court of Appeal in Crowe Horwath (Aust) Pty Ltd v Loone [2017] VSCA 181, held that restraint of trade clauses in employment contracts are unenforceable against a former employee if the employer has done something to “repudiate” the contract before the employment ends, and the employee has accepted the repudiation and effectively resigned.

In this case, a senior accountant resigned following a dispute about payment of bonuses. His former employer argued that a restraint of trade clause in his contract prevented him from engaging in competition with the former employer or undertaking any work for their clients for 12 months. The Court held that because the employer did not comply with its own contract (to pay the employee a bonus) the breach amounted to repudiation of the contract, which in turn permitted the employee to lawfully end his employment. It also meant that the restraint of trade clause in the contract could not survive.

Tip: Relationships can sour when an employee resigns to join a competitive business. Employers need to take care to ensure that they comply with the express terms of a written contract of employment if they want the benefit of enforcing a restraint of trade clause in the contract (assuming of course, that the restraint is validly drafted in the first place).

8. Drug and alcohol testing

In Shannon Green v Lincon Logistics Pty Ltd [2017] FWC 4916, the Fair Work Commission outlined the importance of employers having a clear drug and alcohol policy and applying it consistently. In this case, an employee was held to be unfairly dismissed following random drug testing in the workplace. The employer asked the employee to undergo a urine test, and then later requested a blood test to verify the original result. The employee refused to undergo a blood test and was dismissed. The Commission identified that the employer’s drug and alcohol policy did not specify the method of testing to be used, and there was evidence of inconsistent methods used in the past.

Tip: Random drug testing in the workplace is often legitimate particularly in high risk occupations, but a very carefully drafted policy containing an accredited process of testing methods consistent with applicable Australian Standards will be necessary to justify dismissal for non-compliance. We have industry approved policies for use by employers wishing to ensure a robust drug and alcohol testing regime.

9. Labour hire licensing arrangements

The Victorian Government has recently introduced the Labour Hire Licensing Bill 2017 into Parliament, which will impact direct providers of labour hire services and hosts. The Bill establishes a licensing scheme for labour hire providers and creates civil and criminal offences for breaches of the scheme. It will require labour hire providers to pay licensing fees, pass fit and proper person tests and demonstrate compliance with workplace laws and employee entitlements.

Tip: Any clients providing or using labour hire in Victoria should seek information about the proposed changes to ensure compliance ahead of the introduction of the licensing scheme. Check out our article, Labour hire licensing laws in Victoria and South Australia, for further information.

10. Royal Commission report makes recommendations to protect children from abuse

Clients in the education sector will be aware of the recent release of the final report by the Royal Commission into Institutional Responses to Child Sexual Abuse. The 17-volume work of the Royal Commission is one of the world’s largest inquiries into child abuse. The Australian government must now consider the recommendations and consider which ones should be implemented.

Tip: The final report is essential reading for anyone working in the education sector or with children in schools. Check out our article, Royal Commission findings and recommendations relevant to schools, for key learnings from the Royal Commission.

Further information

Colin Biggers & Paisley will be holding a range of complimentary webinars and boardroom briefings throughout the year covering the above matters and other case law and legislative insights relevant to the year ahead. Please email your details to [email protected] if you wish to receive registration details for these events.

You can also access all of our newsletters and alerts from the Insights tab on our website.

I wish you and your team all the best for the year ahead!