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In Australia, the employee relations sector has been dominated by legislative changes over the past decade. Despite union membership levels reaching historic lows in the private sector, unions still enjoy special protections and enhanced bargaining rights. The 2009 reforms of the current Labor government have had a direct impact on businesses in all industries, particularly how they structure industrial agreements, union negotiations and relationships with employees. Our understanding of the limitations faced by clients and the impact of changing laws means the team approaches client issues on an individual basis and we work with clients to provide tailored and innovative solutions. Established in 1871, Freehills now dedicates more than 95 legal staff to its employee relations practice, making it Australia's largest and most experienced. Freehills is considered by many as the leading employment practice in the country. The group has substantial experience across Australia's key industry and government sectors, giving it an understanding of practical and commercial industry concerns. Key service offerings include employment law (contracts, terminations and redundancy issues), workplace relations, equal opportunity, discrimination and diversity, privacy, workplace health and safety and training.

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Australian Supreme Court Decision Holds Important Lesson for Companies with Australian Operations Regarding Use of Post-Employment Restraints

By Naomi Sheridan

On December 20, 2013, in Pet Tech Pty Ltd v Batson [2013] NSWSC 1954, Justice Young of the New South Wales (NSW) Supreme Court ruled that businesses that want to enter into enforceable post-employment restraint agreements in Australia must ensure those agreements are written in accordance with Australian law.  The decision holds an important lesson for any company with Australian operations.    

Pet Tech Pty Ltd brought proceedings against one of its former sales agents attempting to prevent the employee from using or retaining information that the company considered to be confidential.  Post-employment restraints like this are not uncommon in Australia, particularly for executive, management and sales employees.  However, in this case, the court noted that it was required to interpret the enforceability of a "very strange" agreement because the document appeared to be an "American document which has been adopted to Australia unthinkingly."  Accordingly, Justice Young said that "whatever its effect under American law might be I have to deal with its effect in New South Wales."  As such, the court advised the company "to get some local lawyers to draft an actually enforceable contract" to cover employees in the future.   

Because the company had failed to have its employees sign agreements that were legally compliant with Australian law, the court determined that the relevant clause upon which the company sought to rely came "very close to being void."  The clause in question which stated, "[the employee has] the burden in any dispute of showing that information is not [the company's] confidential information," placed the onus of disproving that something is not confidential information onto the employee.  The court found this clause to be problematic because "it virtually means that whatever the [company] says must be accepted by the court unless the contrary is proven."

Another important point the court highlighted was the fact that the agreement purported to not only bind the plaintiff company but also "its parents, subsidiaries and affiliates" (including the company's related U.S. entity), which is not an uncommon provision contained in U.S. confidentiality agreements. The court said that "a contract with more than one part is either a joint contract, a joint and several contract or a several contract.  . . .  if there is no specification as to whether the contract is joint or otherwise it is taken to be a joint contract.  The contract accordingly must be construed as one with not only the plaintiff but also jointly with its parents, subsidiaries and affiliates.  Under rule 6.20 of the Uniform Civil Procedure Rules 2005 all these people must be plaintiffs before the contract can be enforced."

As such, the use of broad post-employment restraint documents in Australia which purport to extend coverage to a company and its related entities should be carefully drafted to clearly spell out the document's intention should a dispute arise. Alternatively, as this case appears to indicate, companies that engage in these types of disputes will need to include relevant related entities as parties to the dispute.   

Pet Tech Pty Ltd presents a number of important lessons for U.S. companies doing business in Australia, and reinforces that it is extremely important to ensure that a company's employees are subject to terms and conditions of employment that are compliant with applicable local laws. 

In Australia, significant consequences can result from a company's failure to have legally compliant contracts.  If a business has related companies and/or a number of employees working in Australia, employers should undertake a review of the language in its current contracts.  The law in Australia is complex when it comes to post-employment restraints, non-competes and the protection of confidential information, intellectual property and proprietary information.  Accordingly, businesses should not adopt a one-size-fits-all approach.  Unless contract terms are properly drafted, they are unlikely to be enforceable.    

Australia Beefs Up Its Anti-Bullying Laws

By Naomi Sheridan

Australian workplaces have long been subject to anti-bullying laws, but effective January 1, 2014, workers have an additional avenue in which to bring workplace bullying complaints against employers.

Australian workers have been able to lodge workplace bullying complaints under workplace health and safety laws to the various health and safety authorities in each state of Australia. Now, the Fair Work Commission (the Commission) also has jurisdiction to deal with workplace bullying complaints as a result of the former government's pre-election amendments to the Fair Work Act 2009 (Cth) (the Act). The Commission has already received a small number of bullying claims, with some lodged as early as January 1. The Commission has not released the number of complaints it has received under the new amendments and is unlikely to do so ahead of its standard quarterly data release which will occur next in March.

Under the new system, a worker is now able to lodge an application to obtain an order that workplace bullying cease if it is found to be occurring in the workplace.

Under the Act, a worker is bullied at work if an individual or group of individuals repeatedly behaves unreasonably towards the worker or a group of workers of which the alleged victim is a member. The Act clarifies that reasonable management action that is carried out in a reasonable manner does not amount to bullying.

While the Commission cannot award damages for bullying claims under the amendment, it can order that bullying cease. If an employer does not take appropriate action, the worker can apply to the federal court, which can order fines against a corporation of up to $51,000 or against an individual of up to $10,200 (Australian dollars).

Workers may also lodge a workers' compensation claim with respect to any alleged illness or injury flowing from workplace bullying.

If recent unfair dismissal statistics are any indication of what is to come, Australian employers should expect to experience a steady rise in bullying complaints through this new system.

Any company with Australian operations should consider implementing the following steps:

  • Ensure that you have an up-to-date anti-bullying policy in place for your Australian workplaces.
  • Ensure that your anti-bullying policy contains an internal complaint procedure.
  • Ensure that all workers are regularly trained on equal opportunity matters including workplace bullying.
Tags: Bullying

The Implied Term of Mutual Trust and Confidence and an Employer's Compliance with Its Own Policies

By Ben Dudley, Partner, and Adam Lambert, Solicitor, Sydney.

The Federal Court has recently handed down a decision which found that a 'serious' breach of a redundancy policy by an employer amounted to a breach of the implied term of mutual trust and confidence, even though the relevant policy was expressly excluded from being incorporated into the contract of employment.

Employers will need to carefully review and consider the interaction between their policies and contracts of employment.

Employers should consider taking advice on steps available to minimise risks in this area, including by careful drafting of relevant policy and contractual documents.

Read the full post here.

High Court Clarifies 'Adverse Action' Law

By Chris Gardner, Partner, and Sonia Millen, Senior Associate.

The High Court has confirmed that employees who act inappropriately but do so under the guise of union activity are not immune from disciplinary investigation and action.

The High Court unanimously overturned the Full Federal Court decision - a decision of great concern amongst employers.

The High Court decision has brought greater clarity to the breadth of the general protections provisions in the Fair Work Act 2009 (Cth) and has implications well beyond the issue of inappropriate workplace behaviour by employees who are union representatives.

The Board of Bendigo Regional Institute of Technical and Further Education v Barclay - [2012] HCA 32

Read the full post here.

Employers' Right to Refuse Flexible Work Arrangements: Recent Developments

By Kate Jenkins, Partner, Trish Low, Senior Associate, and Melanie Smith, Solicitor.

In its recent review of the Fair Work Act 2009 (Cth), the Review Panel considered submissions on the operation of the right to request flexible work arrangements. The Act currently provides that certain employees responsible for the care of a child under school age, or a child with a disability who is under 18, can request a change in working arrangements to assist with their carer responsibilities. Employers can only refuse such a request on reasonable business grounds.

The Review Panel recommended that the right to request flexible work arrangements be extended to allow a wider range of people with caring responsibilities access to the provisions (e.g., for elder care). The Review Panel also recommended amendment so that an employer can only refuse a request for flexible work arrangements after the employer has held at least one meeting with the employee to discuss the request.

While the government has not yet indicated whether it will adopt and implement these recommendations, two recent cases provide some guidance on the considerations that are relevant when a decision to refuse a request for flexible work arrangements is made.

These cases demonstrate that employers have scope to refuse requests for flexible work arrangements where the arrangements conflict with the employer's genuine and reasonable operational needs.

Read the full post here.

Developing Trends in Social Media in the Workplace

By Kate Jenkins and Andrew Pollock, Solicitor

Freehills recently held an interactive panel discussion about the evolving impact of social media in the workplace.

Facilitated by former ABC Radio presenter Lisa Leong, the panel - comprising Kate Jenkins and Andrew Pollock from Freehills' Employee Relations group, and Robin Tarr and Stan Gallo from KPMG Forensic - answered questions submitted by attendees around the 'real-world' challenges that social media poses for HR professionals and lawyers.

In this update we take a look at the key questions put to the panel, and touch on some of the issues arising from the session, which we see as pivotal in shaping organisational approaches to social media over the coming years.

Read the full post here.

Update on Diversity Reporting Requirements

By Kate Jenkins and Lisa Croxford

The last two years have seen some significant changes in the diversity reporting requirements. These have largely, however, been limited to companies listed on the Australian Securities Exchange.

The Equal Opportunity for Women in the Workplace Amendment Bill 2012, recently passed in the House of Representatives, will 'raise the bar' for all employers if it becomes law.

The Bill requires all employers of over 100 employees to report against 'gender equality indicators'. Debate on a number of aspects of the Bill is expected in the Senate.

Now is therefore an ideal time for employers to reassess their current reporting processes, and to consider how to measure their organisation's progress against the new gender equality indicators proposed in the Bill.

Read the full post here.

An Update on Workplace Bullying and Harassment Claims: Employer Successes in Australia

By Kate Jenkins and Trish Low

In this article we examine two recent cases where employers have successfully defended bullying and sexual harassment claims made by former employees. The cases highlight a number of interesting factors, including:

  • the high degree of media attention that such cases now attract;
  • how media coverage can impact on an employee's claim for damages;
  • the level of scrutiny which the courts are prepared to subject a complainant's claims to - in particular, the court's willingness to test an employee's allegations that they have suffered psychological or psychiatric injury as a result workplace bullying or harassment; and
  • the costs associated with defending such claims and the courts' willingness to order applicants to pay costs, if their claims are spurious.

Read the full post here.

Top Tips for Effective Bargaining

By Anthony Wood and Natalie Spark.

As we approach the third anniversary of the commencement of the Fair Work Act 2009, Fair Work Australia is continuing to make decisions which either clarify or confuse bargaining processes. 

Will your organisation be bargaining this year? Is the business aligned on what it wants to achieve from negotiations? How can you use the legislation to your advantage in negotiations? In this article, we share our top tips for effective bargaining and provide insight on how you can use the legislation to your advantage.

Read the full post here.

Clarifying Contractor Management: Lessons from Biaida and Pilbara Infrastructure

By Kathryn Vanderloo and Harold Downes

The breadth of the primary duty under new harmonised WHS laws means that it more important than ever for businesses to understand their obligations to contractors and develop and implement sound contractor management strategies.

The recent decisions of the High Court of Australia in Biaida Poultry Pty v The Queen and the Supreme Court of Western Australia in Kirwin v The Pilbara Infrastructure Pty Ltd provide valuable guidance to businesses on what is expected to achieve compliance with work health and safety obligations (both pre- and post-harmonisation), particularly when engaging expert contractors.

This article provides an overview of the key principles that can be drawn from each case along with practical tips on what businesses should be doing with respect to contractor management. Choosing the correct contractor management strategy for each situation is important and doing so is likely to result in improved safety, legal and commercial outcomes.

Read the full post here.