Employment, Workplace, Health & Safety Law

September 2017 news edition

EMPLOYMENT, WORKPLAC

FOUR YEAR RESTRAINT OF TRADE CLAUSE CONSIDERED APPROPRIAT

The Victorian Supreme Court confirmed a four year restraint period reasonable after taking into account the sale of the employee’s company stake and his continued employment at company.

Case Brief: Southern Cross Computer

Systems Pty Ltd v Palmer (No 2)

460

The IT Specialist (the employee) sold his 40% share in Southern Cross Computer Systems Pty Ltd (the Company) for $3.5 million to Ingenio Group Pty Ltd (Ingenio) as part of a Share Sale Agreement between the parties. The employee continued as a key employee of the Company, and despite a 4 year restraint period, worked one day a week with Blue Connections Pty Ltd (Connections), a Company competito

The Company sought an injunction to prevent the employee from providing services toConnections, soliciting other employees and retaining clients of the Company. Supreme Court (the Court) upheldrestraint period contained in the Share Sale Agreement (the Agreement) and granted an injunction against the employee.

The employee contested the “restricted business” in the Agreement stating Blue Connections did not constitute a restricted business. However, Justice McDonald stated the plain meaning of the phrase was confined to businesses in the IT procurement and management services. He therefore

In our September update we look at:

• RESTRAINT OF TRADE: Is a four

• ENTERPRISE AGREEMENT COVERAGE:

• UNFAIR DISMISSAL: Does a reduction in roster shifts amount to dismissal?

UPCOMING EVENT

Safety Law

edition

EMPLOYMENT, WORKPLACE, HEALTH & SAFETY L

OF TRADE APPROPRIATE

The Victorian Supreme Court has a four year restraint period is

reasonable after taking into account the company stake and

employment at the

Southern Cross Computer

ty Ltd v Palmer (No 2) [2017] VSC

) sold his 40% Southern Cross Computer Systems

for $3.5 million to in June 2016

as part of a Share Sale Agreement between the inued as a key

ompany, and despite a 4 year restraint period, worked one day a week

Blue Connections Pty Ltd (Blue ompany competitor.

The Company sought an injunction to prevent providing services to Blue

other employees and retaining clients of the Company. The Victorian

) upheld the four year ned in the Share Sale

and granted an

mployee contested the definition of in the Agreement stating

did not constitute a restricted Justice McDonald stated

the plain meaning of the phrase was confined to businesses in the IT procurement and

therefore found that

Blue Connections was a “restricted business” for the purposes of the Agreement.

The employee also contested the validity of the four year restraint period in the Agreement. However, Justice McDonald considered the maximum restraint period appropriate in the circumstances because the employee remained employed by the Companyyear term was approved entering into the Agreement and paid substantial considerationincluding the right to restrain.

What does this mean for employers?

• Factors such as monetary consideration, prior agreements relationship between an employer and an employee may be considered by a cconstruing an employment contract.

• The maximum restrainimposed if the court considers it reasonable to do so.

HIGH COURT ALDI COVERAGE CASE

The High Court of Australia has reserved its decision regarding the Aldi Enterprise Agreement, holding the company failed to show that it was genuinely agreed by employees covered by it.

Case Brief: Aldi Foods Pty Limited v. Shop, Distributive & Allied Employees Association & Anor M33/2017.

Aldi Foods Pty Ltd (Aldi)enterprise agreement members that were to be transferred

In our September update we look at:

: Is a four year restraint period reasonable?

ENTERPRISE AGREEMENT COVERAGE: Do Enterprise Agreements cover prospective employees?

Does a reduction in roster shifts amount to dismissal?

UPCOMING EVENT 13 SEPTEMBER – WORKPLACE INVESTIGATIONS

1

E, HEALTH & SAFETY LAW

as a “restricted business” Agreement.

ontested the validity of the four year restraint period in the Agreement.

Justice McDonald considered the restraint period appropriate in the

circumstances because the employee remained by the Company. Further, the four was approved by both parties when

Agreement and Ingenio had paid substantial consideration in the Agreement including the right to restrain.

is mean for employers?

Factors such as monetary consideration, and the existing

relationship between an employer and an mployee may be considered by a court in

construing an employment contract.

estraint period may be ourt considers it reasonable

ALDI COVERAGE CASE

High Court of Australia has reserved its decision regarding the Aldi Enterprise

holding the company failed to show that it was genuinely agreed by employees covered by it.

Aldi Foods Pty Limited v. Shop, Distributive & Allied Employees Association &

) sought to establish an enterprise agreement (EA) for 17 staff members that were to be transferred to the new

Do Enterprise Agreements cover prospective employees?

WORKPLACE INVESTIGATIONS

Employment, Workplace, Health & Safety Law

South Australian distribution centrerequested the staff members to vote on the EA and applied to the Fair Work Commission (FWC) for approval.

The FWC approved the EA. Distributive & Allied Employees Association (SDA) unsuccessfully sought leave to appeal the approval of the FWC. Consequently, tSDA bought an application to the Federal Court on jurisdictional review grounds.

The Federal Court overturned the the 17 managers were not ‘covered’ by the EA as required. The Federal Court found in favour of the SDA concluding that the EA should have been classified as a Greenfields which required a different procedure followed by Aldi and the FWC. consequently overturned

In January, Aldi was granted leave to appeal to the High Court.

Aldi contended the agreement Greenfields EA because it contemplated employees that would be covered in the future rather than just employers currentlyAldi relied on the John Holland caseconfirmed that reference to ‘covered’ in covered ‘employees whose employment would come to be regulated by the agreement.’

The High Court has reserved its decision.

What does this mean for employers?

• Employers need to be aware of who the agreement or award is intended to cover when drafting an Enterprise Award or Agreement.

SIGNIFICANT REDUCTION IN AMOUNTS TO REPUDIATIEMPLOYMENT CONTRACT

The FWC in NSW found that an employer constructively dismissed anwhen the HR manager informed the employee her shifts would be reduced until she completed further training.

Case Brief: Roxana Balgowan v City of Sydney RSL & Community Club Ltd [2017] FWC 3798 (27 July 2017)

Safety Law

n distribution centre. Aldi had requested the staff members to vote on the EA

Fair Work Commission

EA. The Shop, Distributive & Allied Employees Association

leave to appeal Consequently, the

SDA bought an application to the Federal Court

overturned the EA stating were not ‘covered’ by the EA

as required. The Federal Court found in favour of the SDA concluding that the EA should have been classified as a Greenfields (new EA) which required a different procedure to be

by Aldi and the FWC. The EA was

Aldi was granted leave to appeal to

was not a Greenfields EA because it contemplated

would be covered in the future currently working.

case. The case that reference to ‘covered’ in an EA

‘employees whose employment would come to be regulated by the agreement.’

reserved its decision.

What does this mean for employers?

Employers need to be aware of who the agreement or award is intended to cover when drafting an Enterprise Award or

N IN SHIFTS AMOUNTS TO REPUDIATION OF

The FWC in NSW found that an employer an employee

when the HR manager informed the employee her shifts would be reduced until she completed further training.

v City of Sydney [2017] FWC 3798

In April, the HR manager of the employer informed the pregnant ‘change box shifts’ would beof nearly $300 in shortfall, poor performance and cash-handling anomalies. She that she would have to undergo training prior to any more shifts and was consequently only rostered for one shift in April resulting in 75% pay reduction.

The employer argued that the employee had stated she would ‘go’ inmeeting. The HR managerletter confirming her resignation.

The employee denied that she had resigned and said the company had constructively dismissed her when they failed to provide her with her regular shifts.

The Commissioner found that the shift reduction amounted to a 3 months while she retrainthe significant change amounted to of the employment agreement and oemployer to pay $13,566 the employee.

What does this mean for employers?

• Employers should be mindful about reducing hours or shifts of employees until the correct notice and resignation is formalisedinadvertently repudiating thecontract.

OTHER NOTEWORT

• Worker clears high hurdle for late dismissal: The FWCemployee to bring an unfair dismissal claim lodged 164 days late. The FWC recognised that the longer the delay in making an application the higher the hurdle will be for extending the deadline. The FWC commission found in favour of allowingextension after considering the accumulation of the employees mental illness, initial lack of knowledge about her rights, misapprehension about the FWC investigatory powers and her relatively basic English: Yu Duo (Lynda) Lin v Woolworths Limited [2017] FWC 4019 (2 August 2017)

• Bullying colleague for union membership valid reason for dismissalupheld an employer’s decision to terminate

2

In April, the HR manager of the employer pregnant employee that her

would be reduced because of nearly $300 in shortfall, poor performance

andling anomalies. She was advised that she would have to undergo training prior to any more shifts and was consequently only

for one shift in April resulting in 75%

The employer argued that the employee had go’ in the disciplinary

HR manager consequently sent a resignation.

The employee denied that she had resigned and said the company had constructively dismissed her when they failed to provide her

ommissioner found that the shift a significant pay cut for

3 months while she retrained. The FWC found the significant change amounted to repudiation of the employment agreement and ordered the

566 in compensation to

What does this mean for employers?

Employers should be mindful about reducing hours or shifts of employees until the correct notice and resignation is formalised to avoid

tently repudiating the employment

OTHER NOTEWORTHY CASES

Worker clears high hurdle for late FWC has allowed an

employee to bring an unfair dismissal claim lodged 164 days late. The FWC recognised that the longer the delay in making an application the higher the hurdle will be for extending the deadline. The FWC commission found in favour of allowing an

considering the accumulation of the employees mental illness, initial lack of knowledge about her rights, misapprehension about the FWC investigatory powers and her relatively basic

Yu Duo (Lynda) Lin v Woolworths [2017] FWC 4019 (2 August 2017)

Bullying colleague for union membership valid reason for dismissal: The FWC has upheld an employer’s decision to terminate

Employment, Workplace, Health & Safety Law

an employee after external investigations found the actions amounted to workplace bullying. The employee had encouraged his colleagues to join the AMWU before a union meeting to elect a site delegate. Other employees reported the incident including an allegation that the employee threatened to get another employee sacked and isolate them if they did not join the employer contracted an external legal counsel to conduct an investigation into the employee’s conduct which resulted in finding workplace bullying had occurredprocesses and procedures that the employer had relied upon were considered appropriate and the commission found that the termination was lawful: Anthony K

UPCOMING EVENT

Presentation

Masterclass – Workplace Investigations

This session will cover the latest legal developments to assist you in managing the key aspects of workplace investigations

FOR FURTHER INFORMATION, CONTACT:

allionpartners.com Authors of the September edition: Shane Entriken, Andrew Jonklaas and Lauren Baker. These materials have been developed for the purposes of general information only. They do not constitute specific legal advice on particular issues and should nothat purpose. © Allion Partners 2017. No part of this publication may be copied or reproduced without written pr

Shane Entriken D: +61 (8) 9216 7141 M: +61 (0) 434 516 230 sentriken@allionpartners.com

Safety Law

rnal investigations found the actions amounted to workplace bullying. The employee had encouraged his colleagues to join the AMWU before a union meeting to elect a site delegate. Other employees reported the incident including an

ee threatened to get another employee sacked and isolate

the AMWU. The employer contracted an external legal counsel to conduct an investigation into the

s conduct which resulted in finding occurred on site. The

processes and procedures that the employer had relied upon were considered appropriate and the commission found that the

Anthony King v The

Trustee for Bartlett Family Trust T/A Concept Wire Industries(24 July 2017)

• United Voice and NUW in Discussions: In the wake of Turnbull’s pledge to introduce a public interest test for union amalgamations, Voice and NUW Unionform a new organisation of up to 170,000 members. The merger would see United Voices’ hospitality, childcare, health, manufacturing and community health combined with NUW warehousing, distribution, food manufacturinstorage and food

Event details Register

Workplace Investigations

This session will cover the latest legal developments to assist you in managing the

aspects of workplace investigations

Allion Partners – Level 9, 863 Hay Street, Perth

Wednesday, 13 September 2017

12.15pm for a 12.30pm start to 2.00pm

As places areplease RSVP:

by Monday2017

rsvp@allionpartners.com

FOR FURTHER INFORMATION, CONTACT:

Authors of the September edition: Shane Entriken, Andrew Jonklaas and Lauren Baker. for the purposes of general information only. They do not constitute specific legal advice on particular issues and should no

. No part of this publication may be copied or reproduced without written prior consent or as permitted by law.

Andrew Jonklaas D / +61 (8) 9216 7124 ajonklaas@allionpartners.com

Lauren Baker D / +61 (8) 9216 7

lbaker@allionpartners.com

3

Trustee for Bartlett Family Trust T/A Concept Wire Industries [2017] FWC 3867

United Voice and NUW in Union Merger In the wake of Prime Minister

Turnbull’s pledge to introduce a public interest test for union amalgamations, United Voice and NUW Unions are in discussions to form a new organisation of up to 170,000

The merger would see United Voices’ hospitality, childcare, health,

ring and community health combined with NUW warehousing, distribution, food manufacturing, diary, cold storage and food related industries.

Register

As places are limited, please RSVP:

Monday, 11 September 2017

rsvp@allionpartners.com

for the purposes of general information only. They do not constitute specific legal advice on particular issues and should not be relied on for consent or as permitted by law.

Lauren Baker

+61 (8) 9216 7131

lbaker@allionpartners.com