Review of cases and legislation January – March 2001


Review of cases and legislation January – March 2001

The first quarter of 2001 has witnessed some important legal developments in the area of workplace relations, with tribunals delivering landmark decisions regarding transmission of business, termination and redundancy, and casual employment.


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The first quarter of 2001 has witnessed some important legal developments in the area of workplace relations, with tribunals delivering landmark decisions regarding transmission of business, termination and redundancy, and casual employment.  This article provides a summary of selected cases and outlines areas where legislative developments have occurred between  January and March 2001. 

Termination & Redundancy
Workers Compensation
Transmission of Business
Leave Entitlements
Freedom of Association
Casual Employment

Termination & redundancy
Toyota Motor Corporation v AFMEPKIU, Print T4675, [2000] 1540 IRCommA, (HR Link 4/2001)
  • Company effectively and regularly communicated policy regarding internet, email and intranet usage.  Policy was communicated by way of a pop-up message each month.

  • As a result company was vindicated in the dismissal of two long-standing employees who stored, received and transmitted pornographic material.

  • In upholding the summary dismissal of the two employees, Watson SDP found that the conduct of the two employees could not be characterised as private activity. This is because the misconduct occurred on company equipment, on company premises, within working time and in breach of a well-communicated policy.

  • Business needs to be proactive in communicating email and internet policies.

Robles v Colonial Services Pty Ltd, Print T3229, [2000] 1363 IRCommA, (HR Link 2001)
  • A valid reason for the termination of employment of an employee cannot be based upon unsubstantiated circumstantial evidence.

  • If an allegation of misconduct arises against an employee, then the employer must go beyond circumstantial evidence to justify the dismissal.

  • Cargill C found that the circumstantial evidence against the employee was equivocal and that on the balance of probabilities there was a chance that the employee was not responsible for the sending of offensive sexually explicit email.

King v State Bank of NSW, [2000] NSWIRComm 229, (HR Link 9/2001)
  • Reasonable notice for short period of employment.

  • State Commission emphasised the need for employers to be sensitive to the financial and emotional concerns of employees who are being retrenched.

  • Marks J awarded a former senior manager $15,000 for pain, suffering and psychological damage resulting from an unfair contract of employment.

  • While length of service usually determines the amount of required notice, other factors may be significant.

Chippington v Sterling Software (Pacific) Pty Ltd & Anor, [2001] NSWIRComm 17 (17 March 2001), (HR Link 31/2001)
  • Where sales-oriented employee derives considerable portion of remuneration from commission payments, the failure to incorporate commission payments when calculating severance pay may render the contract of employment unfair.

  • Maidment J determined that contract of employment was unfair to the extent that the company in calculating an employee's severance pay, failed to calculate an amount reflective of the employee's salary package and commission.

  • The employee's salary package in this instance was held to also include superannuation and a motor vehicle subsidy.


Workers compensation
Vetter v Lake Macquarie City Council, [2001] HCA 12 (8 March 2001), (HR Link 34/2001)
  • Decision examined scope of a worker's journey from work to home for the purposes of workers compensation.

  • High Court determined that employee who called in on her grandmother was undertaking a journey between work and home and was injured after the interruption of, or deviation from the journey.

  • Workers Compensation Act 1987 (NSW) does not require employees to take the shortest and most direct route from work to home. 

  • The scope of the Act canvasses journeys that are between work and home so long as there are no material increases in risk of injury from interruptions of, or deviations from the journey.


Transmission of business
Stellar Call Centres P/L v CPSU & Anor, [2001] FCA 106 (21 February 2001), (HR Link 20/2001)
  • Do employment conditions carry-over from a business that outsources work to the employees of the business doing the outsourcing?

  • Even if there exists complete identity between the duties and working conditions of employees of a transmittor and a transmittee, transmission does not occur unless the activities performed by the new employer are in substance identical in character with the business, or a distinct part of a business, of the old employer.

  • Full Court of Federal Court determined that activities of Stellar, namely the provision of telephone answering services, were not in substance identical to the character of Telstra's business—that being the provision of telecommunications services to customers.

  • The Full Court adopted the approach established by the High Court in PP Consultants.


Leave entitlements
Kaal v FCU, [2001] NSWIRComm 6 (6 February 2001), (HR Link 12001)
  • Employer sought exemption from operation of long service leave legislation.

  • Proposed scheme providing employees with opportunity to elect to receive monetary payments in lieu of actual long service leave held to be contrary to the statutory intent and purpose of long service leave legislation.

  • State Commission determined that such a scheme would contravene the provisions of s5(3) of the Long Service Leave Act 1955 (NSW).


Freedom of association
Section 298Z application by the OEA, PR900919 (9 February 2001), (HR Link 17/2001)
  • A clause in 236 certified agreements required new employees to pay a service fee.

  • McIntyre VP held that clause was not an objectionable provision that required or permitted conduct in contravention of the FOA provisions for a prohibited reason.

  • Decision highlights the fact that conduct under s298K(1) is in breach of the legislation only if it is undertaken for a prohibited reason.

  • OEA failed to establish existence of a prohibited reason.

  • Decision is now being appealed.
CPSU & Anor v Telstra Corporation Ltd, [2001] FCA 267 (21 March 2001), (HR Link 32001)
  • A managerial e-mail instruction (which was not acted upon) to discriminate against employees whose employment was covered by awards or certified agreements can constitute an alteration in the employment of award-based and certified agreement-based employees.

  • As the e-mail was not acted upon, it was held that the e-mail did not injure the employees. However, the e-mail had the effect of altering the position of the employees to their prejudice.

  • That is, e-mail had the effect of refining the manner in which employees were selected for redundancies, by requiring that preference be given in the redundancy selection process to employees who had signed AWAs.

  • Businesses need to be wary of how strategy is communicated at the managerial level.


  • Anti-Discrimination Amendment (Carers’ Responsibilities) Act 2000 (NSW), HR Link 21/2001.

  • Workplace (Occupants Protection) Act 2001 (NSW), HR Link 41/2001.

  • Occupational Health & Safety Act 2000 (NSW), HR Link 24/2001 and41/2001.

  • Copyright Amendment (Moral Rights) Act 2000 (Cth), HR Link 39/2001
    • Is an amendment to the Copyright Act 1968, and came into force on 21 December 2000.
    • Gives moral rights to individual authors and creators of artistic works, films, literary works, dramatic and musical works.
    • In the past ownership of copyright granted the owner unfettered rights in that work’s exploitation.
    • Moral rights are additional to, and separate from economic rights. Moral rights remain with author even though copyright transferred to another party.
    • For works created in the course of employment, a comprehensive consent can be given by an employee for the benefit of the employer.


Casual employment
AFMEPKIU Application re Metal Engineering and Associated Industries Award 1998, [2001] PR901028, (9 February 2001), (HR Link 1/2001 and 16/2001)
  • Metal industry employers may reasonably refuse a casual employee's election to convert to permanency, after six months regular and systematic work.

  • The refusal of the employer must be reasonable, and should a dispute arise regarding the refusal of an election to convert then the matter ought to be dealt through the dispute settlement processes of the Award.

  • The option of refusal enabled AIRC to quash claims that last year's landmark casuals decision marked the beginning of the end of casualisation.

Quest Personnel Temping Pty Ltd v Commissioner of Taxation, [2001] AATA 124 (20 February 2001), (HR Link 2)
  • If it is customary for a casual employee to work more than the minimum number of shifts stipulated in the employment contract, then those hours ought to be considered as 'ordinary hours of work' for the purposes of calculating an employer's superannuation guarantee liability.

  • The AAT decision highlights that casual workers are entitled to employer superannuation contributions that are based upon the actual hours worked, rather than the minimum hours stipulated in their employment contracts.

SDAEA, New South Wales v Librus Pty Ltd, t/as Dymocks Parramatta, [2001] NSWIRComm 46 (26 March 2001), (HR Link 37/2001)
  • Casual employees with less than six months service are not necessarily excluded from the scope of the unfair dismissal provisions of the Industrial Relations Act 1996 (NSW).

  • The Full Bench of the Industrial Relations Commission of New South Wales determined that the regulation excluding casuals from unfair dismissal provisions was limited to casuals engaged for a 'short period'. 

  • This did not, according to the Full Bench, mean that engagement on a casual basis for a period of less than six months necessarily equated to engagement for a 'short period'.


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