Employment & Safety – Tips and Trends: Edition 6

EMPLOYMENT

  • Restraint on CFO? Supreme Court says NO – In the recent decision of Just Group Ltd v Peck [2016] VSC 614, a restraint of trade clause preventing an employee from working at a rival fashion retailer was held to be unenforceable. Just Group sought to enforce a post-employment restraint clause that barred its former CFO from working for 50 different companies, in any capacity whatsoever, for up to 24 months, when she decided to leave the company to work for Cotton On. The terms of the restraint were held to be broader than what was reasonable to protect the legitimate interests of Just Group, and therefore unenforceable. If employers are wanting to be able to rely on post-employment restraints, they need to be carefully drafted (and tailored to suit the role and industry) and should not ‘over-reach’.
  • Risky business: the perils of self-representation – In the recent decision of Trustee for the MTGI Trust v Johnston [2016] FCAFC 140, the Federal Court dismissed an appeal from a self-represented employer who claimed it was denied procedural fairness in an unfair dismissal hearing before the Fair Work Commission. The Full Court confirmed that while a Commission has a duty to assist self-represented litigants, this does not extend to “making a case” for them, and the level of assistance will depend on the circumstances. Given the employer was represented by an experienced CEO, the Commission was held to have satisfied the required level of assistance. If employers do not have suitable personnel with advocacy or tribunal experience,  a failure to seek legal representation can be costly.
  • More time for gardening – The NSW Supreme Court has clarified the circumstances in which gardening leave may be taken into account when considering the restraint period under a contract of employment. In DP World Sydney Ltd v Guy [2016] NSWSC 1072, a dispute arose as to whether the period of gardening leave should count towards a restraint period of 3 months. The Court held that the employment relationship did not end at the time of the commencement of the gardening leave but after it concluded, and so on this basis, the employee was restrained from working with a competitor for the longer period. This decision highlights the utility of gardening leave provisions, and the importance of having clear wording in restraint and notice provisions in employment contracts.

SAFETY

  • Spotlight on Safety: Dreamworld tragedy – Workplace Health and Safety Queensland is auditing theme parks throughout Queensland in the wake of the recent deaths of four tourists on a family ride at Dreamworld.  The Queensland Industrial Relations Minister has stated that the audits will be conducted by specialist personnel and completed by the end of November. The Dreamworld tragedy is a high-profile example of the potentially dire consequences of an unsafe workplace. Under the Harmonised WHS legislation duties are owed to non-workers (such as visitors to a worksite) as well as employees and contractors.
  • Harmonisation update – Recommendations recently tabled in the Victorian Parliament endorsed embracing key aspects of the Harmonised WHS legislation. Suggested changes include the adoption of the concept of PCBUs (‘persons conducting a business or undertaking’, which is broader than the concept of an employer) and the model legislation’s wide definition of ‘worker’ (encompassing contractors and labour-hire employees). Meanwhile in Western Australia, the possible introduction of laws mirroring the Harmonised Scheme will not be further considered until after the next State election in March 2017.
  • The risks of conducting investigations unreasonably – If you think an employee has engaged in misconduct, don’t ambush them with allegations after calling a meeting to discuss career progression. Definitely don’t persist if the employee breaks down in tears. This is the lesson to be learned from a recent out-of-court settlement, involving a NSW Government agency, worth more than $1 million. The employee’s supervisors were accused of bullying her by confronting her with the accusations during a meeting called to provide feedback in relation to a job application. It was also alleged that they refused her request to transfer to a different department, and verbally ‘attacked’ her during a mediation. The employee claimed incapacity for work caused by this chain of events. All disciplinary measures and processes should be conducted reasonably in a transparent and sensitive manner to ensure compliance with WHS obligations and avoid accusations of bullying.

If you have any queries or would like further information regarding this edition, please contact:

David Dilger
Partner
M: 0428 238 819
E: ddilger@pageseager.com.au

Rod Collinson
Partner
M: 0430 221 067
E: rcollinson@pageseager.com.au

Luke Gattuso
Partner
M: 0411 989 292
E: lgattuso@pageseager.com.au

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