Overseas snippets – January 2019

Labour hire changes on the horizon

An Australian woman employed by a labour hire agent has been reinstated to her position after the agent dismissed her on the orders of the host business

The recent Australian decision of Star v WorkPac Pty Ltd has put current labour hire practices under threat. Ms Star was employed by WorkPac as a casual employee to work in a mine operated by BMA. After commencing work, Ms Star was told by WorkPac that BMA were disestablishing her position. She was not assigned to an alternative role and understood her employment was terminated.

The Australian Fair Work Commission found her employment was terminated when WorkPac complied with BMA’s decision to remove her from the mine. The Commission found WorkPac did not have valid reason for the dismissal and should have considered alternative roles. WorkPac was ordered to reinstate Ms Star but BMA refused to reinstate her to the mine. Ms Star’s union sought relief and BMA was required to allow Ms Star to return to work.

This case emphasises that labour hire companies cannot ignore dismissal requirements and merely pass the buck to the client. It also indicates that host businesses should be aware that they may not able to remove casual or temporary staff from their workplace without good reason.

This case is interesting in the New Zealand context as our Government has given signals that they intend to further regulate this sector and potentially expand protections for temporary workers.


A reminder of employees’ duties of loyalty

A business’s competitor has been ordered to pay over $14 million to the business after the competitor assisted the business’s employees to divert clients to the competitor

Two employees of an Australian pre-paid funeral business approached their employer’s competitor with a plan to divert business to the competitor. The competitor assisted the employees with this plan while they were still employed by the employer and after the employees had started working for the competitor. The Federal Court ordered the competitor to account for its profits in the first five years of the plan.

On appeal the competitor was ordered to account for  the total capital value of the business appropriated,  being $14,838,063, rather than the profits alone. The competitor could not prove any of its increased business did not come from the appropriated business from the employer, nor could it show that after five years the business it had appropriated would expire.

Employers and employees should take note of the duties of fidelity owed by employees to their employers to protect the employer’s business and to act in their employer’s best interest. This duty exists whether or not employment agreements contain clauses to this effect. Businesses that are approached by the employees of their competitors with ‘business plans’ should be aware of the potential cost of assisting those employees to breach their duty of fidelity.


“Fat ginger pikey” jibe not harassment

The UK’s Employment Appeal Tribunal has upheld a decision of the Employment Tribunal which found that calling an employee a “fat ginger pikey” did not amount to harassment

The employee was part of a competitive sales team with a culture of teasing and jibing which the employee participated in. When a colleague made the ‘fat ginger pikey’ jibe he did not react or otherwise complain at the time. Later, the employee was put on a performance improvement plan. The employee then brought a grievance in relation to the ‘fat ginger pikey’ jibe alleging it amounted to harassment and discrimination based on disability and race.

The Employment Tribunal found that the employee was ultimately dismissed due to poor performance and the employment relationship breaking down. He was treated in the same way as other employees who performed poorly and the dismissal process was not discriminatory.

The harassment and discrimination claims failed. The employee’s colleagues knew he was diabetic, which was considered a disability, but the employee was unable to prove his diabetes and his size were linked. Plus no one considered him ‘fat’. Further only one colleague knew about the employee’s links with the travelling community. The jibe was simply a generic, unflattering remark.

This case is a good example of how important context is to harassment claims. In this case the context of the employee actively participating in the teasing culture and not raising a complaint until he felt his employment was threatened meant that the Tribunal correctly determined he had not been harassed or discriminated against. When an employee alleges harassment or discrimination employers should carefully consider the wider context of the remarks made including the workplace culture.

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