1 September 2014: Workplace Relations Update for Executives On-the-go

Qantas brought down by poor policy management

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In this edition:

  • Qantas grounded by poor policy management;
  • Two cases illustrating the changing landscape of sexual harassment claims; and
  • WA harmonisation of WHS laws is getting closer.

Qantas brought down by poor policy management

A recent case before the Fair Work Commission (Commission) provides yet another example of a company’s decision to dismiss an employee has been overturned for being unfair. In the case of Qantas and two flight attendants (Albert Chew v Qantas Airways Limited; Margaret Leong v Qantas Airways Limited [2014] FWC 4885), the poor management of policy and poor record keeping practices factored into the Commission’s decision to reverse Qantas’ decision and reinstate the employees.

Two flight attendants

Albert Chew and Margaret Leong worked for Qantas Airways Limited (Qantas) as flight attendants. They held senior positions. Mr Chew was a Customer Service Supervisor and had worked for Qantas for over 26 years without a blemish on his record. Ms Leong worked for Qantas for over 20 years. Both had Qantas Cabcharge cards.

On 15 trips to and from the airport the pair, who lived near each other, allowed the driver of the hire car to charge the same fare twice, rather than charging a single fare. Because of this conduct, they were fired. They appealed Qantas’s decisions to the Commission, which ordered their reinstatement. The decision gives some important lessons for employers who issue Cabcharge and other charge cards as part of their business.

An Impotent Policy

Qantas had a Cabcharge policy in place. In fact, it explicitly stated that only cabs were to be used, not hire car services and that only one Cabcharge was allowed to be used (per the relevant Passenger Transport Act). Ultimately however, the mere existence of that policy was not enough to protect Qantas. In their claims, the flight attendants stated that:

  • they had no awareness of Qantas policies on the use of hire cars and charge cards;
  • they never signed such a policy; and
  • their behaviour was not fraudulent.

The difficulty for Qantas in this case was that despite the policy being in place, its employees were unaware of its existence or content. Qantas’s defence came undone when the Commission pointed out that:

  • ‘Qantas was unable to produce the signed policies or other records’;
  • ‘the evidence was… that it was standard practice for flight attendants to use hire cars/ limousines. This was not contradicted by Qantas’; and
  • ‘there was… no evidence that the applicants had signed or even sighted the [Cabcharge] Policy. Furthermore, there was no evidence of an educational program provided to Flight Attendants on the use of the cards or the travel policy generally’.

In the words of the Commission:

  • ‘I find this somewhat surprising, given the cards were distributed relatively recently in early 2012. Good management practice would have maintained them in the flight attendants’ personnel files’; and
  • ‘Qantas’s procedures for rolling out the cards and ensuring their appropriate use could have been better’.

An Unfair Dismissal. 

The decision to terminate the employment of Mr Chew and Ms Leong was made on the basis of a breach of Qantas’s ‘Standards of Conduct Policy’. The decision was not based solely on the breach of the Cabcharge policy. The Commission went on to remark that Qantas did not base its decision on an allegation that Mr Chew and Ms Leong engaged in fraudulent activity.

When determining whether a dismissal is unfair, the Commission takes into account a wide range of matters. In light of all the factors, it found that the dismissal was unfair, and some other penalty was appropriate. It took into account:

  • Mr Chew and Ms Leong’s long service with Qantas;
  • their apologies and contrition; and
  • the substantial impact of their dismissal in the current state of the airline industry.

A Happy Ending

In the end, the Commission found that ‘there was not a valid reason… for the dismissal of Mr Chew and Ms Leong’. They were reinstated.

They did not get off scot-free however, and did have to suffer the penalty of lost wages between their dismissal and subsequent reinstatement.

The lessons in this case are simple. If you have a policy, you must ensure that it is implemented properly, and it is not just left to languish. Qantas may well have succeeded in this case if it did this. If it ensured that all employees read the policy, understood, and signed it, it may well have made out its case. But more importantly, this entire incident may well never have happened.

Sexual harassment: two landmark cases

Two recent sexual harassment cases decided in the Federal Court send important warnings to employers on the importance of having robust policies and procedures in place to help manage the risks arising from inappropriate workplace behaviour. The cases also emphasis that sexual harassment can take many forms, not just physical conduct.

The Full Federal Court’s appeal decision in Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82saw the amount of damages awarded to the victim of sexual harassment increased from $18,000 to $130,000 (damages plus economic loss). The Court had previously held that the complainant, a project manager at Oracle Corporation Australia Pty Ltd, had been harassed by a male co-worker on at least 11 separate occasions in 2008, in private and in front of other employees. The offensive conduct involved a series of slurs and sexual advances. Oracle was found liable for the perpetrator’s conduct as it had failed to show that it took all reasonable steps to prevent the sexual harassment. Oracle was originally ordered to pay $18,000 in damages for the distress caused.

The victim appealed the decision, and the Full Court overturned the original amount of damages finding that it was ‘disproportionately low having regard to the loss and damage she suffered’ and that a higher amount was justified due to the nature and extent of her injuries and ‘prevailing community standards’. The higher amount took account of the damage done to the victim’s personal relationship as a result of the sexual harassment.

The significant financial penalty imposed on Oracle is a reminder to all employers of the serious nature of sexual harassment. In this case, the significantly increased penalty was emblematic of the Court’s serious view of sexual harassment and discrimination.  Indeed, the Court made the statement that it was ‘unable to discern any in-principle difference’ between a bullying and harassment case, and a sexual harassment case. It is interesting to note that during Oracle’s internal investigation into the allegations, the perpetrator had written the victim a letter apologising for what he called ‘light-hearted banter’.

The perpetrator’s description of his conduct as ‘light-hearted banter’, and his attempt to trivialise its impact on the victim, demonstrates the extent to which some people are still ignorant of the serious nature of harassment and that one of the essential elements of harassment is that the behaviour is unwelcome.  It also shows that employers should ensure that they provide clear training on what constitutes inappropriate and illegal behaviour in the workplace.

A second landmark decision by the Federal Court in Vergara v Ewin [2014] FCAFC 100 emphasises that workplace sexual harassment can occur both in and outside of the office.

In that case the complainant was a chartered accountant at entertainment company Living and Leisure Australia Limited (LLA). The Court found that on four occasions in May 2009 she was sexually harassed by a casual accountant, Mr Vergara, employed by LLA. The first three incidents occurred over a three-day period and involved mainly spoken words. The behaviour commenced when Mr Vergara turned the lights off in the office the pair shared at the end of the day and told the complainant that he wanted to talk to her. She agreed and they went to a nearby pub where she was propositioned in ‘very explicit and crude terms’. Mr Vergara later tried to kiss her as they walked to a nearby train station. The fourth incident involved sexual intercourse after a work event at the Melbourne Aquarium. Due to being intoxicated at the time, the complainant had no recollection of the fourth incident taking place.

Mr Vergara appealed the Court’s original finding against him that also saw the complainant awarded nearly $500,000 in damages. Mr Vergara challenged the Court’s initial finding that the incidents of sexual harassment had occurred at a ‘workplace’, as that term is defined in the Sexual Discrimination Act 1984 (Cth). In the Act ‘workplace’ is defined to mean ‘a place at which a workplace participant works or otherwise carries out functions in connection with being a workplace participant.’

The Court held that:

  • a workplace ‘may be a fixed or moving location’; and
  • going to the pub was triggered by what had commenced at the office and therefore the function of both locations was that of ‘workplace’

The first three incidents were all examples of sexual harassment, even though some of them occurred outside the office. The fourth incident occurred at the office and was sexual assault. The Court’s decision in this case is important because it stands for the proposition that sexual harassment can occur outside the office, if there is a sufficient work connection. It is also important that employers are alert to the fact that harassment is not confined to actions between employees, but can extend to conduct between an employee and a contractor – as Mr Vergara was in this case.

Both cases are warnings to employers to ensure that they have adequate harassment and dispute resolution policies in place and that their staff are trained to understand those policies and more importantly, what behaviour constitutes sexual harassment and where it can occur.

WA WHS Laws: harmonisation getting closer?

On 12 August the Western Australian (WA) Minister for Commerce, the Hon Michael Mischin MLC announced that a WA version of the model workplace health and safety (WHS) bill would become available as a draft bill for 3 months of public comment. We’ve previously written about how WA is getting closer to harmonising its WHS laws and this latest announcement is a positive sign that the wheels of action are still in motion.

WA and Victoria are currently the only jurisdictions that have not introduced model WHS laws. While Victoria announced last year that it would not be participating in the national format, the WA government has been ever so slowly but, as is apparent now, surely edging towards implementation. The WA government participated in all of the joint talks and negotiations in developing the harmonised health and safety laws with all of the States, Territories and Federal Government, but has put forward a number of reasons and reviews over the last 3 years to explain its extreme caution in proceeding.

The WA delays have been in some part due to concerns that the impact of the new laws on small businesses in WA outweighed the benefits of a harmonised system. This was addressed by the government commissioning a regulatory impact statement (RIS) to look at the impact of the legislation specifically on WA. The RIS was completed in 2012. The WA government was also concerned that national changes to WHS in the mining sector (which has its own safety legislation) should be completed, so that all of the changes could be introduced at one time. The model mining changes were finalised in 2013. In his Parliamentary statement Mr Mischin spun WA’s delayed introduction as a positive in light of the ‘delays and controversy’ which have plagued the progress of the model legislation elsewhere. Watching the other States and Territories introduce their own model WHS laws had allowed WA ‘the opportunity to observe their experience, to measure the costs of any changes that have been implemented and to consider the advantages and disadvantages of their having made them’.

In the most positive sign in the last 12 months, the WA government will be putting out a ‘green bill’ (draft bill for public comment) based on the model WHS laws and reflecting its core provisions. The green bill has not yet been released, but once it is, it will be open to public comment for three months. According to Mr Mischin, the bill is a ‘tailored’ version of the model WHS laws designed to suit the WA environment and ‘refined to reduce red tape and to maintain the compliance burden at an acceptable level’.

The regulatory impact statement (RIS) which had been provided to the government in 2011, has also finally been made available on the WorkSafe WA website.

The Council of Australian Governments (COAG) is currently investigating ways in which the model WHS laws could be improved, with a particular focus on reducing red tape. COAG’s review is due to be completed by the end of 2014. The outcome of COAG’s review, in addition to the WA RIS and the public comments that the WA government anticipates receiving on the WA green bill, will be used as ‘a foundation upon which the government can consider the best WHS regime for Western Australia’.

In the meantime, the WA mining and resources which have their own separate legislation, will also be brought on board. The Minister also announced that it had approved the continued development of the previously foreshadowed Resources Safety Bill to ‘further modernise resources industry regulation’. The new legislation will incorporate elements of the National Mine Safety Framework and the nationally developed model WHS laws. The new Resources Safety Act will initially replace the Mines Safety and Inspection Act 1994 (WA).

Minister for Mines and Petroleum Bill Marmion said that ‘the best aspects of the model laws will be adopted with those which do not suit the unique Western Australian context amended or removed as necessary’, guided by an intention to ‘place a greater focus on risk management and to be less prescriptive’, with ‘the onus . . . placed on industry to demonstrate they understand hazards and have control measures in place.’ The WA government expects that the resources legislation will be in place by mid-2016.  The public consultation period for the green bill might mean that the introduction and implementation of the model WHS laws takes longer, however one would hope that the timing of the new WHS laws matches that of the resources legislation.


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This blog is a guide to keep readers updated with the latest information. It is not intended as legal advice or as advice that should be relied on by readers. The information contained in this blog may have been updated since its posting, or it may not apply in all circumstances. If you require specific or legal advice, please contact us on 1300 132 090 and we will be happy to assist.

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