Industrial tribunals 'rewriting legislation'

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Industrial tribunals 'rewriting legislation'

Employers who have honestly dismissed workers for transgressions after thorough investigations have not necessarily done enough to satisfy the federal Industrial Relations Commission, according to one labour lawyer.

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Employers who have honestly dismissed workers for transgressions after thorough investigations have not necessarily done enough to satisfy the federal Industrial Relations Commission, according to one labour lawyer.

Joe Catanzariti, a partner at Clayton Utz, told the audience at a Sydney conference on HR law he thought the Commission had 'raised the bar too high' in a recent case (King v Freshmore) where an employer had sacked a worker, believing he had threatened another employee to the point where he thought his and his family’s lives were at risk.

A full bench overturned an original decision which upheld the termination. That decision said that after a full investigation, it was open to the employer on the evidence available to decide that dismissal was the right avenue.

But the full bench said it was not up to the employer to decide whether the conduct had occurred, it was up to the Commission, a decision Catanzariti said was 'wrong':

You have to ask yourself, what more can the employer do? The Commission’s saying it will decide [if there was an objectively valid reason for dismissal], and that’s a very high threshold. I don’t believe a ‘beyond a reasonable doubt’ test was ever contemplated [in the Commission], and that’s running very close.

Catanzariti said King v Freshmore was 'a problem judgement' and predicted longer cases in the Commission as employers provided more and more evidence to satisfy their cases:

They went too far. If the employer’s belief was flawed, I’d have no problem with it, but they haven’t said that. Even if the grounds are reasonable, and the inquiry was reasonable, it’s not enough.

He said that because the issue arose on the Commission’s reading of the legislation, 'these are the sorts of things legislation can’t fix'.

While Catanzariti said there was no doubt such a decision would have had a different result if the case had been run in the NSW IRC, he said that jurisdiction was also 'rewriting legislation'.

Referring to the case of Beahan v Bush Boake Allen, he said a full bench of the NSW IRC had 'turned aside' Parliament’s clear intention of stopping executives from claiming unfair dismissal under the unfair contracts strand of the legislation, by introducing a $69,200 cut-off limit.

'They even listened to parts of Hansard dealing with the second reading speech, where then IR Minister Jeff Shaw said that’s what the amendments meant, but said "It couldn’t mean that" ', he told the conference delegates.

Catanzariti said the decision had been 'a bit nonsensical, but my instinct is the Government’s not interested in amending the legislation to have it mean what they meant it to'.

As a consequence, he said, every unfair contract could now be challenged. Although a new filing fee of $550 in that stream was meant to deter people, the process was actually a lot faster, so he thought applicants wouldn’t be put off.

Other 'hot topics' Catanzariti discussed included:

  • The 'three warning myth' – 'Unless an award or industrial agreement spells this out, I don’t know where this came from', he said. 'Each case turns on its facts – if an employee steals $100 from the till, you don’t have to wait until he steals $300 before you can sack him.'
  • Demotion as unfair dismissal - demotion may constitute a dismissal, although this is 'a very vexed issue, especially where the salary isn’t cut'. He advised employers to pay better attention to the drafting of contracts, writing them to allow for position changes/demotions if the business’s fortunes changed.
  • Employees offering to resign – 'These are very grey cases', Catanzariti said. 'It’s better to get it in writing, but don’t draft it for them.' He also advised the resignation must be voluntary, unambiguous and made in plain circumstances (if made under extreme pressure, in a temper, or in the heat of the moment, the Commission might rule they were not resignations).
  • Employee versus independent contractor – while each case turned on its merits, Catanzariti said there were 'no guarantees', and employers may find commissions went out of their way to make someone an employee if it meant them being able to access unfair dismissal remedies.
 
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