Thinking | 23 April 2014
The Working Paper Issue 14
Recent developments in the new anti-bullying jurisdiction in the Fair Work Commission
As highlighted in The Working Paper Issue 13, the Fair Work Commission (FWC)’s new anti-bullying jurisdiction commenced on 1 January 2014.
This new jurisdiction opened up a new avenue for workers who reasonably believe that they are being bullied at work to seek relief from bullying by applying to the FWC for an order to stop the bullying. If the FWC is satisfied that the worker has been bullied and that there is a risk that the bullying will continue, it has the power to make any order it thinks is appropriate (with the exception of orders for pecuniary payment).
Given the wide scope of orders in the FWC’s arsenal, close attention has been paid to how the FWC will exercise its new powers, what anti-bullying orders it will make, how those orders will be implemented, and what the resulting impact will be on businesses and their workforce.
It is still early days and as of mid-February only 66 applications had been made, 1 substantially lower than FWC’s anticipated average rate of 67 applications per week.2
Despite this, recent developments offer some limited but important indications of the scope and reach of this new jurisdiction. These developments have shown that:
- Anti-bullying orders only apply to preventing future bullying conduct and are not aimed at punishing past conduct: In a decision released last month, the FWC’s full bench rejected an argument that it could not hear and determine bullying claims relating to conduct which occurred before the anti-bullying jurisdiction’s commencement on 1 January 2014.3
The full bench held that in dealing with a worker’s claim, the FWC can consider past bullying behaviour in forming a view about whether that worker has been bullied. However, the full bench also made clear that any orders the FWC makes will be directed at stopping future conduct, not at punishing past conduct.
- Anti-bullying orders may target the perpetrator’s specific behaviours and impose conditions on the both the perpetrator and the worker: Issued only late March, the FWC’s first substantive anti-bullying order included orders restraining the perpetrator from having contact with the worker alone, making comments about the worker’s clothes and appearance, and emailing or texting the worker.4 The FWC also ordered the worker not to arrive at work before a certain time (presumably to avoid crossing paths with the perpetrator).
These types of orders indicate that even if an order is not binding on an employer, the employer will still need to play an important role in supervising compliance with an anti-bullying order imposed on its employees. For this reason, it is important for employers to be aware of and understand the scope of anti-bullying orders and seek clarification if they are unsure as to how the orders are to be actioned on a day to day basis.
- So far, supervisors and managers have been the subject of most applications for anti-bullying orders: During a public address in late February, the FWC’s Commissioner Cribb indicated that a high proportion of applications had been made by workers against their supervisors or managers.5
This indicates that supervisors and managers responsible for managing staff are vulnerable to the issue of bullying particularly if they are making decisions adverse to the interests of staff.
To this end, it is important to note that the definition of bullying does not include reasonable management action carried out in a reasonable way. In many cases employers and managers who are the subject of a claim of bullying under the anti-bullying provisions in the Fair Work Act 2009 (Cth) (Fair Work Act) may seek to dispute the claim on the ground that they took ‘reasonable management action’.
The FWC’s decisions of what amounts to ‘reasonable management action’ carried out in a reasonable way will therefore be important decisions for managers and employers. No such decisions have been handed down but we anticipate this will only be a matter of time, so ‘watch this space’.
Finally, another burning issue is whether unions can apply for anti-bullying applications on behalf of workers. Recently the National Union of Workers (NUW) applied to the FWC’s full bench for anti-bullying orders on behalf of workers engaged to work at a Caterpillar Australia Pty Ltd (Caterpillar) site. Caterpillar and the employer of the workers opposed the application including on the ground that the NUW does not have standing to bring the application because it is not a ‘worker’. The NUW withdrew its application at the eleventh hour but has since confirmed it will be pursuing the case and will re-lodge its application.
As the Fair Work Act provides that only a ‘worker’ can apply for a stop bullying order, the NUW will need to establish that the provisions have the effect of allowing a union to apply for orders on behalf of their members. Significantly, the lack of any reference to unions in the anti-bullying provisions can be contrasted with other provisions in the Fair Work Act under which unions have express recognition (such as in relation to enterprise bargaining) and rights to bring a claim on behalf of their members (such as in relation to general protections applications).
More broadly, the NUW’s application may also indicate the role that the anti-bullying provisions may play in the context of broader industrial activity: the NUW recently confirmed that it is pursuing a general protections claim in the Federal Court on behalf of two Caterpillar workers, and the NUW is also party to a Caterpillar enterprise agreement which is nearing its nominal expiry date and which is currently being renegotiated.
Tips for managing the issue of bullying
There is little doubt that the new FWC anti-bullying jurisdiction is aimed at stopping bullying that is occurring in Australian workplaces. However, prevention is always better than cure and employers through their managers and supervisors can take proactive steps to manage the risk of bullying in the workplace before a matter escalates to the FWC. These steps include:
- address any problem behaviours early and be fair in dealings with staff;
- promote and reinforce the employer’s workplace bullying, complaint handling and associated policies (and ensure good workplace policies are in place);
- carry out performance reviews on a regular bi-annual or annual basis and give honest and fair feedback on performance that is linked to pre-determined competencies and position descriptions for the role;
- monitor and respond appropriately to potential issues of bullying. Employers should have regard to relevant work health and safety guides on preventing and responding to bullying, including the recent draft guide on Preventing and Responding to Workplace Bullying released by Safe Work Australia.
1See https://www.slideshare.net/informaoz/anna-lee-cribb (slide 15)
2Per comments made by FWC General Manager Bernadette O’Neill (Commonwealth, Senate Estimates Committee: Education, Employment and Workplace Relations Legislation Committee, 3 June 2013, 115-6 (Bernadette O’Neill))
3Ms Kathleen McInnes  FWCFB 1440 (6 March 2014)
4Applicant v Respondent, PR548852 (21 March 2014)
5See https://www.slideshare.net/informaoz/anna-lee-cribb (slide 16)
“I’m sick, and I’m not sure when I will be back to work”: The challenges of managing ill and injured workers
It does not matter what industry you are in, every employer will inevitably face the challenge of managing an ill or injured employee. For employers, a key challenge can be to understand the legal obligations and rights an employer has when faced with the uncertainty of whether an employee who is absent from work will be able to return and in what capacity.
There are a multitude of legal issues that can arise when dealing with an ill or injured worker, including:
- complying with disability discrimination legislation;
- the impact of workers’ compensation legislation (if the injury is work related and a compensable injury);
- compliance with obligations under work health and safety legislation owed to the injured employee and others in the workplace;
- the risk of claims under the general protections provisions in the Fair Work Act 2009 (Cth) (FW Act) and claims arising if the employee is dismissed from their employment;
- the expectation to accept, and not challenge, the evidence the employee provides from a qualified medical practitioner substantiating that the employee is ill or injured;
- the impact of documented procedures under enterprise agreements; and
- the impact of privacy obligations in respect of requesting and dealing with information about an employee’s health.
The recent decision of the Federal Court in Australian & International Pilots Association v Qantas Airways Limited (Qantas case) illustrates the benefits for an employer to understand all the issues presented to them when dealing with an ill or injured employee and the importance of managing their way through them carefully so as to minimise their legal risk.
What was the Qantas case about?
In the Qantas case, the Australian & International Pilots Association (Association) alleged that Qantas had contravened the general protections provisions in the FW Act when it threatened to take disciplinary action against a long term ill employee who failed to furnish Qantas with details regarding his medical condition and ongoing capacity to work.
The employee, First Officer Gregory Kiernan (FO Kiernan) commenced sick leave on 11 July 2012 due to suffering depression and was expected to be absent from work until 12 October 2012.
On 10 October 2012, his treating doctor provided a further medical certificate stating only that FO Kiernan was ‘suffering a medical condition’ and would be unfit for ‘normal work’ until 10 January 2013. On 19 November 2012, Qantas wrote to FO Kiernan asking that he provide a report from his doctor detailing FO Kiernan’s diagnosis, prognosis and capacity to return to pre injury duties and the anticipated time frame for his return. FO Kiernan was also requested to attend a meeting with Qantas so they could discuss with him how Qantas could assist FO Kiernan.
The Association alleged that Qantas’s requests were not lawful or reasonable as FO Kiernan had not exhausted his leave benefit and, FO Kiernan had complied with the evidentiary requirements to support his sick leave.
Qantas made a further request for a medical report, including a report setting out if FO Kiernan could perform the duties of a pilot, his capacity for restricted duties, and any accommodations that should be made to enable a return to work.
FO Kiernan did not provide any medical report as requested, but instead provided a further medical certificate on 8 January 2013 certifying FO Kiernan unfit for duties until 28 March 2013. Qantas subsequently issued FO Kiernan with a disciplinary letter regarding his failure to follow a lawful and reasonable direction to provide the medical information requested and asking him to show cause as to why his employment should not be terminated (show cause letter).
The Association alleged that issuing the show cause letter was adverse action taken against FO Kiernan because he had exercised his workplace right to elect to provide a medical certificate only, which the Association alleged was the only requirement for providing medical information under the provisions of the relevant Qantas enterprise agreement.
The three key issues for determination by Justice Rares of the Federal Court were:
- Did FO Kiernan have a workplace right arising under the enterprise agreement to elect to provide only the medical certificate? Justice Rares found FO Kiernan did not have the ‘workplace right’ as alleged by the Association.
- Was it adverse action to issue the show cause letter threatening disciplinary action if FO Kiernan failed to provide the medical report? Justice Rares was not satisfied that in the circumstances of this case the show cause letter was adverse action. This was because Justice Rares found that the disciplinary action was only a possibility in the event FO Kiernan did not produce the medical report and provide reasons why disciplinary should not be taken against him. The letter was not a statement that Qantas intended to take disciplinary action come what may.
- Did Qantas make the threat because FO Kiernan had exercised his workplace right? Justice Rares was satisfied that Qantas’ request for medical information and the issuing of the show cause letter was not motivated by FO Kiernan’s rights to enjoy benefits under the enterprise agreement.
Importantly, Justice Rares affirmed the finding in the case of the earlier Federal Court case of Blackadder (2002) that an employer has a contractual right to request an employee provide to it particulars of the employee’s condition and such other medical evidence regarding the employee’s fitness for duties, and if necessary to, lawfully direct an employee to attend a medical examination.
Justice Rares determined that this contractual right is not displaced by an employee’s entitlement to take sick leave arising under statute or an industrial instrument.
Lessons for employers
The Qantas case affirms the right employers have to request information, including the provision of medical reports, from ill and injured employees. Nonetheless, employers should proceed cautiously when doing so to ensure a request is reasonable in all the circumstances and the employer has a proper basis for the request. It was relevant to Justice Rares that FO Kiernan has been on sick leave for a substantial period of time.
Employers should also ensure that when dealing with an ill or injured employee they have proper regard to their legal rights and obligations and the legal risks associated with disciplining and terminating the employment of an ill or injured employee.
Taking away the employer’s role in Government-funded Paid Parental Leave
The Paid Parental Leave Amendment Bill 2014 (PPLA Bill) was introduced into Federal Parliament by the Minister for Small Business on 19 March 2014.
The PPLA Bill seeks to amend the Paid Parental Leave Act (2010) (PPL Act) to remove the mandatory employer role in administering the current government-funded parental leave payments (PL payments).
The passing of the PPLA Bill would mean that it would no longer be a compulsory requirement for employers to perform the “paymaster” role in the provision of PL payments to their eligible employees. Instead, from 1 July 2014, an employee would be paid PL payments directly by the Department of Human Services (DHS), unless their employer chose to “opt in” to making the PL payments to the employee, and the employee agreed for their employer to pay them.
Under the PPLA Bill, an employer will only be required to provide the PL payments if an ‘employer determination’ is in force for the employer and the employee. An employer determination can only be made if the employer has made an election to pay instalments of PL payments, the election applies to the relevant employee, and certain other conditions are met, including the employee agreeing to their employer paying them.
The PPLA Bill also provides that if an employer determination is made for an employer and employee, but the employer no longer wishes to administer the PL payments to that employee, the employer can decline the “paymaster” role and DHS will provide the PL payments to the employee.
In the Second Reading Speech, the Minister for Small Business said the proposed amendments are in line with the government’s pre-election commitment to “reduce the red tape burden and compliance costs on business by ensuring that they are not required to be the paymaster for the government’s paid parental leave scheme.”
The PPLA Bill is limited to amending only the administrative arrangements for the provision of PL payments to employees. The PPLA Bill does not affect eligibility, entitlement or rates of pay associated with PL payments.
The Abbott Government’s plan to pass a new Bill (proposed Abbott Bill) amending the Paid Parental Leave scheme itself is scheduled to be introduced by 1 July 2014, with implementation to commence on 1 July 2015.
If the proposed Abbott Bill is passed, eligible employees will be entitled to a maximum of 26 weeks’ paid leave set at the employee’s actual income level (capped at a total of $75,000), or at the national minimum wage if higher, plus superannuation. By contrast, the current Paid Parental Leave scheme entitles eligible employees to a maximum of 18 weeks’ paid leave set at the national minimum wage.
How will the evolution of Australian privacy law affect employers?
The recent significant changes to the Privacy Act 1988 (Cth) (Privacy Act), which have impacted most private sector entities, have resulted in many private sector employers asking: how does this impact our handling of employee information?
While the answer to that question, at this stage, is that employee records continue to be exempt from the coverage of the Privacy Act by virtue of an ‘employee records exemption’, employers need to be mindful of the limited application of this exemption. Additionally, employers should be aware that there may still be instances where the reformed Privacy Act (as well as health records and workplace surveillance legislation) will be relevant to some of their dealings with their employees and importantly, the reformed Privacy Act still applies to recruitment processes.
Privacy Act amendments
On 12 March 2014 the reforms to the Privacy Act took effect, introducing a number of significant changes.
Some key features of the amended Privacy Act are as follows:
The introduction of the 13 Australian Privacy Principles (APPs) which replaced the 10 National Privacy Principles that previously applied to private sector entities covered by the Privacy Act.
- The strengthening of the Australian Information Commissioner’s powers to enforce privacy laws, including the power to prosecute organisations for serious or repeated breaches of the Privacy Act and seek penalties of up to $1.7m.
- The introduction of a more comprehensive credit reporting system and a mandatory credit reporting privacy code that binds all credit reporting bodies, most credit providers and some other entities (such as trade and mortgage insurers).
- Increasing legal obligations regarding overseas disclosures of personal information and the use of personal information for direct marketing.
Employee Records Exemption
Of relevance to private sector employers is that the reforms to the Privacy Act did not include the removal of the ‘employee records exemption’. This exemption provides that the Privacy Act does not apply to an employer’s handling of personal information about an individual if it is directly related to:
(a) a current or former employment relationship between the employer and the individual; and
(b) an employee record held by the employer relating to the individual.
Employee records refer to personal information relating to the employment of the employee including health information about the employee and personal information about the employee’s engagement, training, disciplining or resignation, dismissal, terms and conditions of employment, personal and emergency contact details, performance or conduct, hours of work, salary or wages, trade union membership, leave, taxation, banking or superannuation affairs.
The rationale behind the introduction of the employee records exemption in the Privacy Act (which occurred in 2000 with the passing of provisions to make the Privacy Act applicable to the private sector) was to enable privacy protection of employee records to be dealt with under workplace relations legislation. However, it is widely viewed that such legislation does not provide the required level of protection. Certainly, the Australian Law Reform Commission following its 2008 inquiry into the Privacy Act that led to the recent reforms (ALRC privacy inquiry) holds this view and recommended the removal of the employee records exemption so that the Privacy Act applies to an employer’s handling of its current and former employees’ personal information.
In power at the time the ALRC handed down its report on the ALRC privacy inquiry, the Labor Government indicated it would aim to remove the employee records exemption from the Privacy Act in a further stage of reforms. As we are now in a different political climate, the future of the employee records exemption remains uncertain. Employers should therefore take a ‘watch this space’ approach with regard to the ongoing application of the employee records exemption.
In any event, employers should be aware that the employee records exemption has limited application. As it will only apply to an act or practice that is directly related to the employment relationship with the individual, an employer must ensure it:
- considers the purposes for which it is handling an employee’s personal information; and
- where the information is not directly related to the employment relationship, handle the information in accordance with the Privacy Act and the Australian Privacy Principles.
It should also be noted that separate to any application of the Privacy Act to personal information of employees, health records legislation may apply to the handling of any health-related information of an employee, and that obligations of confidence are generally owed by employers to their employees when handling any form of employee personal information. Accordingly, employers should always ensure they handle employee information accordingly and treat it as confidential information.
One area in particular where employers need to be mindful of the application of the Privacy Act is employee monitoring. Employers are increasingly seeking to monitor employees’ use of workplace email and internet to prevent any misuse of employer-owned technology systems.
While at common law an employer can, without consent, generally access and monitor any information passing to and from a workplace computer, the existence of the Privacy Act as well as workplace surveillance legislation in some jurisdictions has modified this position.
Computer, internet and email monitoring of employees by employers is regulated by:
- the Privacy Act to the extent that the relevant emails or records contain information that is not directly related to the employment relationship, for example, a personal email exchange between an employee and their friend, where the employee has used their work email address; and
- legislation in various Australian jurisdictions (specifically, New South Wales and the Australian Capital Territory) which directly regulates surveillance of workplace computer use.
Accordingly, employers need to ensure they are complying with such legislation when undertaking computer, internet and email monitoring. Some key compliance strategies with respect to such monitoring include:
- ensuring employment contracts include a clause requiring employees to comply with employer policies and procedures, including email, internet and social media policies;
- having in place email, internet and social media policies that specify expectations of appropriate use of such technology and make clear that email, internet and social media use at work or that is work-related will be monitored to assess compliance;
- bringing the policies to the attention of the employees through training and regular email/intranet reminders of the policies; and
- if specific workplace surveillance legislation applies, ensure the notification requirements of the legislation are complied with.
It is important to note that the employee records exemption does not apply to information held about job applicants who are not yet, or who do not become, employees. This is because the requisite employment relationship does not exist. In this regard, the collection, use, disclosure, and storage of personal information about job applicants during the recruitment process must be handled in accordance with the Privacy Act and the APPs. Additionally, job applicants are able to request access to and correction of the personal information held about them by a prospective employer.
Some key strategies employers can adopt to ensure compliance with the Privacy Act when undertaking recruitment processes are:
- ensure personal information collected from or about an applicant is necessary and relevant to the applicant’s potential employment;
- provide applicants with privacy collection notices, setting out what and how personal information is being collected, why that information is being collected, how that information will be used, to whom that information may be disclosed, how that information will be stored and (if applicable) retained, and how the applicant can request access to and correction of that information;
- allow an applicant access to their personal information on request (unless an exception under the Privacy Act applies);
- obtain consent from applicants to conduct background checks and collect certain information from third parties, such as referees and recruitment agencies;
- only use and disclose information about a job applicant for the purpose of assessing that applicant’s suitability for the role; and
- have policies in place relating to the destruction of personal information gathered during the recruitment process.
Where to from here?
Notwithstanding the continued application of the employee records exemption, employers should ensure they are well placed to deal with their compliance obligations under the reformed Privacy Act.
Some key tips to keep in mind to ensure employers are meeting their obligations are:
- review and update privacy policies to ensure they comply with the requirements under the APPs;
- educate and train staff on the new privacy obligations and ensure staff have access to your revised privacy policies;
- review and update employment policies and processes, in particular email, internet and social media policies and recruitment processes, to ensure they are consistent with privacy and workplace surveillance obligations; and
- identify and rectify any gaps with privacy compliance processes and implement new business processes and practices required to ensure compliance with the Privacy Act, particularly with regard to direct marketing, overseas disclosures of personal information, information security and privacy complaint handling.
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