26 November 2014: Workplace Relations Update for Executives On-the-Go

Sickies costing $33 billion a year

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In this edition:

  • sickies costing $33 billion a year;
  • victim awarded $733,000 for ‘systematic’ sexual harassment; and
  • WA seeks feedback on new mining safety laws.

Sickies costing $33 billion a year

A 2014 Absence Management & Wellbeing Survey by an absence management agency, Direct Health Solutions, has found that employees are taking nearly 10 sick days a year, costing employers over $33 billion in payroll and lost productivity costs.

According to an article in the Sydney Morning Herald, the survey says that employees averaged 9.5 days of sick leave in 2013, at a cost of $3,230 per employee;

  • employers said that the most common reasons for short-term employee absence was unexpected illness (82%) and carer’s leave (68%);
  • employees are most likely to be absent on a Tuesday and least likely to be absent on a Friday;
  • four out of five organisations indicated that short-term absences of two days or less were most problematic; and
  • employees in the tourism and hospitality industries had the highest level of absenteeism at 11.9 days a year and the healthcare and manufacturing industries had the lowest levels of staff absences at 7.5 and 7.4 days each.

Although these statistics provide an interesting insight into the economic cost of illness, the average number of sick days taken was still less than the amount allowed by law and it’s impossible to tell if the sick leave was genuine or not – a regular consideration for employers.

Being sick is not illegal

Employees have the right to take sick leave under the provisions of the Fair Work Act 2009 (Cth) (or theMinimum Conditions of Employment Act 1993 (WA) for WA system employees). The Fair Work Act entitles employees to 10 days of paid leave each year if the employee is not fit for work because of a personal illness or injury. Similar rights apply for carer’s leave. Employers are generally entitled to require employees who have taken sick leave to provide them with evidence that would satisfy ‘a reasonable person’ that the leave is genuine sick leave.

A number of awards and Enterprise Agreements provide for the type of evidence an employer may request. For example, medical certificates or statutory declarations, or the other ‘reasonable evidence’. Some awards and Enterprise Agreements also provide for one or two days of absence before evidence is required or may be requested.

It should also be noted that there is no exemption for self-inflicted injury or illness. For example, an employee suffering a hangover who is unfit to work is still entitled to sick leave.

For employers, it can be genuinely difficulty to tell whether an employee is legitimately sick, or merely ‘faking it’.. Many employers are further frustrated by medical certificates which indicate only that the employee was unfit for work because of a ‘medical condition’.

Certificates may not be enough

Generally, the case law is clear in that a medical certificate is sufficient to establish an employee’s entitlement to sick leave. An employer’s gut feel, or even some non-medical evidence that the employee is fit to work is insufficient to refute a medical certificate. However, a recent case has shown that in some limited circumstances an employer can ask for more evidence in addition to a medical certificate in order to have ‘reasonable evidence’.

In February this year, the Federal Court found that Qantas could seek more than just a basic medical certificate from a pilot who had been on long-term personal/sick leave. In the case of Australian and International Pilots Association v Qantas Airways Ltd [2014] FCA 32 Qantas had threatened possible disciplinary action against one of its pilots who had been away from work and had provided multiple medical certificates specifying only that the pilot was ‘suffering from a medical condition and will be unfit for normal work’. He failed to provide Qantas with the more detailed medical report they had requested, which would indicate his ‘diagnosis, prognosis, capacity to return to your pre-injury duties and the anticipated time frame’. Qantas argued that this additional information was key to ensuring its compliance with its safety obligations under the Work Health and Safety Act 2011 (NSW).

A clause in their 500-plus page enterprise agreement provided that ‘if a flight crew member reports sick on the same day that he or she is contacted for duty or on the following day, the Company may require the flight crew member to produce a medical certificate or other evidence of unfitness for duty’.

Justice Rares held that Qantas had acted within its rights as the enterprise agreement did not exhaustively cover Qantas’s and its employees’ contractual rights in relation to either being required to undergo a medical examination, or provide further information in relation to a medical condition.

According to Justice Rares, Qantas required the information for legitimate and proper purposes and that the generally, ‘uninformative medical certificates’ told it nothing about how to plan for the pilot’s absence or return to work ‘beyond him not being there for a period that might or might not be further extended’.

The Court found the enterprise agreement and the Work Health and Safety Act imposed certain obligations on Qantas, and this provided it with the implied contractual right to require its pilots to provide certain medical evidence and to attend meetings to discuss their condition.

Things to consider

As the results of the survey show, and most employers intuitively know, employee absence from work can have a serious economic impact. That said, employees are legally entitled to sick leave. While it is still a little early to rely on the Qantas case in demanding more information in addition to a medical certificate, it should be kept in mind as a possible option in circumstances where a sick or injured worker’s impact on workplace safety is a key issue, and more information is needed to protect the safety of the employee or others.

In the meantime, each employer should analyse frequent absences and investigate things that they can control. Are employees taking sick leave because they are being bullied? Harassed? Stressed with unrealistic deadlines? Underworked? Are there systems in place to prevent, identify, and address those issues?

Courts send a clear message: victim award $733,000 for ‘systematic’ sexual harassment

An employee of an insurance and financial broker has been awarded over $733,000 in damages in a sexual harassment case tried in the NSW District Court. The full case is available here.

The victim had a successful career as an insurance clerk in various companies. She was an expert in aviation underwriting, and through various business dealings, had come to be employed by Mr G, who owned an insurance brokerage company. She began to work with Mr G on 7 July 2008, and ceased working with him on 12 December 2008. She was 46 years old at the relevant time of these incidents.

The case

In 2013, she sued the company. Judge Levy tried the case and found that the victim was sexually harassed.

The victim described some of this conduct as ‘thinking you’ve been raped before you’ve been raped’, and as ‘too revolting for words’. Over the course of her employment Mr G subjected her to at least 12 instances of extreme groping, touching, rubbing up against her, kissing her, and making lewd comments. Whilst the victim was on sick leave, he turned up at her house, let himself onto her property, repeatedly rang her house and her mobile, and had to eventually be removed by police.

As a result of these incidents, she obtained workers compensation payments and remained out of work. During this time, she received a death threat which police traced to Mr G’s accountant’s office (the identity of the caller was unclear, and Mr G denied being this person).

After this, the victim’s psychological health ‘spiralled into decline’. She found it difficult to work, and sought psychological and psychiatric help. She said that ‘if she had to go anywhere she would have feelings of dread, stomach churning, vomiting, increased visits to the bathroom, interference with sleep and the need to take extra Valium’.

In the course of the victim’s illness, she was assessed by different medical practitioners at least 11 times. They all supported her diagnosis of illness and her worker’s compensation claim. The court found that the victim had suffered ‘significant psychiatric illness as a consequence of these cumulative events’.

Damages for sexual harassment

Judge Levy found that the company was negligent in preventing the sexual harassment. In reaching his finding, the Judge referred to Mr G as the ‘mind, will and embodiment’ of the defendant company. His Honour awarded damages based on calculations including past earnings lost by the victim, future lost earnings, and lost superannuation, totalling over $700,000.

This case illustrates the magnitude of damages that can be awarded in cases such as these, where the harassment left the victim unable to work due to her psychiatric injuries.

However other recent cases have also seen increased awards of damages to victims of sexual harassment. We recently wrote about two landmark cases on this issue. One of these cases, Richardson v Oracle Corporation Australia, involved an award of damages of over $130,000 arising from a sexual harassment claim, and that was without taking into account compensation for past and future earnings.

The courts have sent a clear message that community expectations demand that incidents of sexual harassment must be treated seriously. And for employers, that means having systems in place to address the risk: policies, training staff and managers, monitoring, avenues for complaints, and prompt and appropriate investigations and corrective measures if sexual harassment is identified.

WA Resources Safety Update – consolidating for simplicity

We’ve previously written about the status of the introduction of a Resources Safety Bill which will apply the harmonised WHS laws to mine sites. This Bill has yet to be introduced but in the meantime, the Western Australian Department of Mines and Petroleum (Department) has announced a consultation process as part of the reform currently underway of the legislation for mining, petroleum and major hazard facilities (MHFs) in that State. Currently, the safety obligations for these industries are contained within six pieces of legislation and regulation.

The Department wants stakeholders ‘to provide input on five proposed options to structure the safety legislation for mining, petroleum and MHFs’ and to see if that input supports the unification of the various areas of legislation into a single Act.

The five options are:

  1. one safety Act for mining, petroleum and MHF and one regulator (the Department);
  2. two Acts – one for petroleum and MHF and one for mines safety and one regulator (the Department);
  3. four Acts – one each for mining and petroleum and two for the various MHF safety provisions and two regulators (the Department for MHFs and WorkSafe for occupational health and safety (OHS) for the others);
  4. three Acts – one for mining and petroleum and two for the various MHF safety provisions and two regulators (the Department for MHFs and WorkSafe for OHS for the others); and
  5. six acts – maintain the status quo where mining, petroleum and MHF are all dealt with under separate Acts and retain the existing two regulators (the Department and WorkSafe).

The Department prefers option one as it ‘best fulfils the objectives of the reform and would deliver high levels of safety as well as the greatest benefit to the WA community.’

The deadline for providing responses to the Consultation Paper close at 5:00pm WST on Friday, 19 December 2014. A forum is also being held in Perth on Wednesday 26 November. It is expected that the DMP will publish a Decision Regulatory Impact Statement (RIS) on its website by 31 January 2015.

Contact Details

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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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