Emerging issues for Australian labour
law: The challenges for regulating
effectively in the new economy
Dr Troy Sarina
Macquarie University
Presentation for Legal Studies State
Conference 2014
O Dr Troy Sarina
Who Am I?
O Department of Marketing and Management, Faculty of Business
and Economics, Macquarie University
O Email: troy.sarina@mq.edu.au
O Areas of interest
O Labour Law
O Employment relations strategies
O Employee engagement
O Professional experience
O Human Resources Country Road Australia
O National Industrial Relations Manager, Qantas Airways
Outline of presentation
O Developments in unfair dismissal: the role of
social media at work and the legal response
O Comment on the emergence of the Bullying
provisions in Fair Work Act (2009)
O Reassessing the impact of the Fair Work Act
(2009) to deliver sustainable industries =>
Focus on Australian aviation
The origins of statutory unfair
dismissal provisions
O Borne out of weaknesses associated with
common law remedies for termination
- No reinstatement (no specific
performance of personal contracts)
-limited damages (‘reasonable notice’)
O The law needing to step in to balance
principles of contract with the reality of
working lives of citizens
What were the guiding principles of
unfair dismissal provisions?
O ‘Fair go all round’ principle (see s.381 (2))
- Balancing the needs of all the parties that
are involved in the dispute (employers and
employees)
O ‘First Federal enactment seen in Industrial
Relations Reform Act 1993 (Cth) (see.
S.170DE)
O Now found under Part 3-2 of Fair Work
Who is eligible to bring a
claim?
O See ss. 382 ff.
- ‘minimum qualifying period’ = 6
month (S.383)
- Covered by an award or enterprise
agreement OR under high income
threshold ($129,300 July 2013)
- employee must have been dismissed or
forced to resign because of the employers
conduct
- Dismissal must be ‘harsh, unjust or
unreasonable’ (s.385)
What constitutes are ‘harsh’
dismissal?
O See s. 387
- Has a valid reason been given?
- Notification of the reason?
- Opportunity to respond to reasons related
to capacity or conduct?
- Allowed to have a support person present
at discussions?
- Warning od unsatisfactory performance?
-Size of employer’s enterprise (relevant to
procedures followed) and presence of HRM
- “Any other matters FWA considers
relevant”
Remedies?
O Reinstatement to same or no less favourable
position with the same entity
O Continuity of employment: s. 391 (2)
O Restoration of lost pay
O Compensation in lieu of reinstatement: s. 391
(1)- capped at 6 months pay (s 395(5))
Factors considered? Effect on viability of employer’s
enterprise, employee’s length of service, reduction
for any employee misconduct (s.392(2), “Any other
matter the FWA considers relevant)
A useful resource for
understanding unfair dismissal
Unfair dismissal benchbook
http://benchbooks.fwc.gov.au/unfair/
New publication by FWC outlining:
- the origins of unfair dismissal regime
- how disputes can be resolved
- summary of case law on important
cases
Applying dismissal principles
to new spheres
The rise of social media and
the implications for the law
O 80.1 % of people use the internet
O Facebook reaches up to 69.5% of 17 million
people in Australia who are online (BursonMarstellar survey 2013)
O Australians use social media forums for 7 hours
and 17 minutes per month (Neilsen survey,
2013)
See: Thornthwaite, L (2013), ‘Social media, unfair
dismissal and the regulation of employees’
conduct outside work’ in Australian Journal of
Labour Law, 26, pp.164-184.
Using social media at work
O Voicing workplace grievances
O Employers investigating worker lives
O “cyberloafing” – use of social media to mock
or bully workers => adverse impact on
productivity at the workplace
O Leading to the “blurring of the lines between
private and public life”
How has this boundary been
defined by the law?
O At common law, an employee is under the duty
of fidelity and good faith in relation to their
employer (implied duty)
O Statute and other industrial instruments have
curtailed this control e.g. Awards
O See for example Ross, VP in Rose v Telstra
Corporation Ltd [1998] AIRC 1592, employees
are “entitled to a private life”
O However, there are limitations to this
entitlement, See for example McManus v ScottCharlton (1996) 140 ALR 625
Has the growth of social media enhanced
the ability for employers to control the lives
of employees?
O See Applicant v Respondent [2010] FWA
1062
- Comments made on Facebook leading to
dismissal
- Cased turned on whether applicant was
outside time limit to make application to FWA
Establishing a connection between the
alleged conduct and work
O Lukazewski v Capones Pizzeria Kyneton [2009]
AIRC 280
- Application to dismiss a vexatious claim
under the unfair dismissal regime
-Mr Lukazsewski claimed he was dismissed
due to a post on facebook stating that he was
“pissed off” (with no explicit reference to his
employer)
- Held that there were legitimate grounds
for appeal as there was real doubt as to whether
Mr Lukazewski had in fact been dismissed for a
valid reason
The lines remain “blurred”
between private and public life
O
Damien O’Keefe v Williams Muir’s Pty Ltd T/A Troy Williams The
Good Guys [2011] FWA 4311
- Focused on the comments made by Mr O’Keefe on Facebook
regarding errors in payment for commissions he was owed
- Mr O’Keefe’s statements related to serious misconduct
- Reference to handbooks and policies at the workplace which
required workers to be courteous and polite to stakeholders
- Source of the allegation, he “wonders how the f—k work can be so
f—ling useless and mess up my pay again. C—unts are going down tomorrow”
- Conduct found to have undermined the business as well as the
implied duty of trust and fidelity within the employment relationship
-Application of unfair dismissal failed and appeal was not
allowed
“The [employer] has rightfully submitted, in my view, that the separation
between home and work is now less pronounced that it once used to be” –
Deputy President Swan
In contrast ….
O Stutsel v Linfox Australia Pty Ltd (2011)
- Mr Stutsel dismissed for alleged serious misconduct after posting
comments that were both racially derogatory and sexually
discriminatory towards two separate managers.
- Application upheld
- Roberts C gave weighting to a number of factors including: the fact
that Mr Stutsel was inexperienced with facebook, the he used the
maximum privacy setting (characterised NOT as a public forum), he
had removed the comments quickly and had shown genuine
contrition, and the fact that the company did not have a social
media policy in force.
- The nature of the way in which the comments are made will effect
the way they should be understood
- This conversation had ‘the flavour of a conversation in a pub or
café, although conducted in an electronic form’
More recently..
O Little v Credit Corp Group Limited t/as Credit Corp Group
[2013] FWC 9642
- Mr Little- Manager at Credit Corp
-Posted on Facebook comments about sexually
harassing a new worker as well as comparing their work to being
anally raped
-Further derogatory comments on a Christian based
financials services site
- Appeal dismissed
- DP Sams found: applicants comments would cause
hurt and humiliation to employees as well as damage the
reputation of CCG at large.
- Mr little was entitled to express his views in a forum
such as facebook but could not do it in a manner that injured
CCG’s business
Factors considered in social
media dismissal cases
O
O
O
O
O
O
O
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O
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The nature and severity of the comments
The source of the post
Whether the employer or employee are named
Whether co-workers have viewed the post
Public availability of the post
Whether the employers business has been damaged
Was the comment deliberate
Was is withdrawn quickly
Did the employee display remorse about the post?
Has the organisation adopted and communicated a
comprehensive social media policy?
New workplace bullying provisions in
the Fair Work Act 2009
O Part 6- 4B of The Act
A worker is bullied at work if:
(a) while the worker is at work in a constitutionallycovered business:
(i) an individual; or
(ii) a group of individuals;
repeatedly behaves unreasonably towards the
worker, or a group of workers of which the worker is a member;
and
(b) that behaviour creates a risk to health and safety.
(2) To avoid doubt, subsection (1) does not apply to
reasonable management action carried out in a reasonable
manner.
Re-evaluating the ability of the Fair Work
Act to deliver sustainable industries
O By promoting collective bargaining at the
enterprise level as the main industrial tool
for achieving the objective of increased
productivity and fairness (see section 176 of
The Act)
O Ensuring the process of bargaining is
governed by good faith obligations that
extend to both parties (see section 228 of
the Act)
What have been the outcomes
at Qantas?
O A ‘hybrid’ approach which has delivered some success:
- Highlights include pre tax profit of $1.4 billion in 2008
- Maintain pre tax profit from 2008-2013
- Return in 2013 to top 10 ranked airlines in the world (SKYTRAX,
2013)
- By comparison, other ‘legacy carriers’ have not survived
O However, there have also been some considerable difficulties:
- Continued incidences of industrial disputation. ‘High mark’ being
the lock out of 2011
- Struggling to return international carrier routes to profitability
- Alleged decline in employee morale
- A $235 million half year loss (2014), announcement of 5000 job
losses
Why have these outcomes occurred?
Main proposition:
• Notwithstanding its achievements, ER outcomes at
Qantas have not been optimal, thus hindering its ability
to adapt to a more competitive aviation market
• Legal framework governing ER struggles to reconcile
contradictory objectives
O ‘Single employer’ regulatory model encourages firms to
‘externalise’ activities to reduce costs
O ‘Good faith bargaining’ (GFB) encourages parties to pursue
‘integrative’ (i.e. mutual gains) outcomes
O Result? Employers and unions working towards different
objectives, thereby limiting long term competitiveness
Theoretical framework
O Product market conditions shape ER strategy (Brown, 2008)
O
Transition from protected to liberal product markets will place prevailing
employment conditions under pressure
O Employer response conceptualised as a ‘strategic choice’ (Walton et
al., 1994)
Integrative – cooperative, mutual gains outcomes
O Distributive – adversarial, zero-sum outcomes
O Avoidance – bypass unions, negotiate directly with workforce
O
O Externalisation – a variant of ‘avoidance’
Bypass workforce, engage new workers through other firms to reduce labour
costs; common among ‘legacy firms’ (Harrison & Kelley, 1993; Rieple & Helm,
2008)
O Externalisation produces ER risks, e.g. inferior conditions, low morale quality
(Davis-Blake & Broschak, 2009; James et al., 2007; Walsh and Deery, 2006)
O Disaffected stakeholders may seek to damage employer’s reputation if unable to
achieve beneficial outcomes (O’Callaghan, 2007; Fombrum et al., 2000); may
produce ‘mutual losses’ rather than ‘mutual gains’
O
Impact of the single employer
model
O The single employer model of bargaining under the Fair Work Act
(2009) maintains managerial prerogative despite the nature of the
commercial relationship between Qantas and subsidiaries
“The operating Agreements between Qantas and Jetconnect and the employment
contracts entered into between Jetconnect and its pilots cannot held to be shams.
Even though Qantas exercises a considerable degree of control and influence
over the operation of its subsidiary, this is not sufficient to disregard the legal
personality of the subsidiary”
Boulton J and Hampton C in Australian and International Plots Association v Qantas Airways Ltd (2011) 211
IR 220
O Given market pressures faced by Qantas, and the capacity to use
the single employer model to reduce labour costs, management
decisions to externalise can be seen as a ‘rational choice’
The impact of good faith
bargaining
O Aimed at encouraging the parties to pursue ‘integrative’
outcomes BUT…
O
O
O
O
Has had little impact changing the behaviour of the parties
Reinforces ‘distributive’ approaches to bargaining
Emergence of less frank discussions
High levels of mistrust of management due to the pursuit of ‘low road’
ER strategies in subsidiaries
O Reflects similar findings regarding the impact of GFB
‘The good faith bargaining provisions – they look good on
paper but when push comes to shove at the negotiating
table they really don’t mean anything’
Forsyth et al (2012), Fair Work’s Influence in the Bargaining Process: Research ReportFair Work Australia Research Partnership
Conclusion
O Qantas Group’s survival an achievement
O Positive ER with some unions and Qantas
O But hybrid ER strategy has had negative consequences
O ER would be enhanced by adopting a ‘high road’ relational
coordination approach
O GFB (and integrative bargaining) compatible with this approach, but
undermined by incentives offered by single employer model
O But addressing fragmented ER outcomes could raise labour costs
significantly, with no guarantee of productivity dividends
O A pure ‘low road’ ER approach unviable (unless all employment is
offshored, which may negatively impact market share)
O Qantas case suggests that core components of the bargaining
framework enshrined in labour law are incongruous, which
frustrates the parties’ ability to pursue ‘mutual gains’ strategies
O Qantas at a crossroads – maintaining hybrid strategy will become
increasingly difficult
The market realities facing
Qantas
‘Qantas is, however, the national carrier. It is competing on its own
as a fully privatised entity with purely commercial motivations
against an ever-increasing range of mainly state-owned or
supported airlines. It is carrying the legacy baggage that its
competitors generally don’t have.’
Stephen Bartholomeusz, Business Spectator, 28 November 2013
See, Sarina, T and Wright C (2014), ‘Mutual gains or mutual
losses? Legal contradiction ,organisational fragmentation and
employment relations, outcomes at Qantas Group’, currently
under review Journal of Industrial Relations
THANK YOU!
QUESTIONS?
THOUGHTS?