21 December: Workplace Relations Update for Executives On-the-Go

In this edition:

  • Australia Post liable after ‘no real follow-up’ on discriminatory behaviour in the workplace;
  • Fair Work Commission publishes Annual Report 2014/2015: 352% rise in anti-bullying applications; and
  • Worker’s dismissal was harsh and unjust despite failing a breathalyser at work.

Australia Post liable after “no real follow-up” on discriminatory behaviour in the workplace

Australia Post has been found vicariously liable for the discriminatory behaviour of one of their employees. The Federal Circuit Court in Murugesu v Australia Postal Corporation & Anor found that the actions of Mr B, a supervisor at Australia Post, violated the Racial Discrimination Act 1975 (Cth) and that Australia Post failed to take reasonable steps to address the racial abuse which occurred in the workplace.

Discriminatory language

The applicant Mr Murugesu worked for Australia Post between 2007 and 2011 as a truck driver. Mr Murugesu was born in Sri Lanka and migrated to Australia in 1983.

During this period, Mr B worked as the afternoon supervisor who organised the loading of the trucks. Mr Murugesu claimed that during this period, Mr B regularly called him or referred to him as a “black bastard”, and suggested that he should do “slave jobs”. On other occasions, he was told to “go back to Sri Lanka” and to “go back by boat”. On a hot day when Mr Murugesu was sitting in an air-conditioned room, it was alleged that Mr B said “why the f*ck are you sitting here? You should be able to stand the heat, get out of this place”.

Mr Murugesu stated that he had complained to a number of senior employees of Australia Post relating to the racial abuse, but that no changes had been made. He claimed that he lost a contract shortly after complaining, and that he was told by senior employee to “shut up and keep working”, and warned that he would lose further contracts if he continued to complain.

Australia Post and Mr B both denied that these events and complaints occurred. Australia Post also submitted that it had taken all reasonable steps to prevent discrimination in the workplace through employee training and the effective communication of its policies.

The Court’s findings

It was held that, although the racial abuse did not occur with the frequency or in the precise terms suggested by Mr Murugesu, he had been subject to racial discrimination by Mr B. There was therefore a breach of the Racial Discrimination Act as the applicant was discriminated against based on his race, colour, national or ethnic origin. Mr Murugesu was also denied equal enjoyment of his right to participate in the workplace without discrimination.

In addition, there was evidence to suggest that Australia Post was aware of a problem with racial discrimination based on emails sent in 2010. Although their training system and discrimination policies were described as “exemplary” by the Court, their failure to enforce these policies in a meaningful way led to a finding of vicarious liability. The judge held that, by failing to look into or address the complaints, Australia Post did not take all reasonable steps to prevent the harm from occurring.

Vicariously liable: when are procedures not enough?

Australia Post’s official position towards racism was held to be excellent and clearly demonstrated that the organisation was opposed to discrimination. The training regime, which involved leaflets being distributed along with pay slips, followed up with ‘toolbox talks’ of around half an hour, was described as exemplary. The reason why Australia Post was held vicariously liable is because it failed to effectively enforce its policies. The Court found that the organisation’s response to the incidents said “all the right things…(when) in fact, the matter withered”. The lack of any follow-up on these complaints meant that Australia Post could not rely on the defence of having taken all reasonable steps to prevent the event from occurring.

‘Banter in the workplace’

The judge, in making his findings relating to the verbal racial abuse, discussed the evidence given by Mr B. It was noted that Mr B appeared to sincerely believe that he did not racially abuse the applicant, and made references to a workplace culture where ‘banter’ occurred. The judge made the point that what Mr B might consider to be harmless banter could be perceived as discriminatory behaviour.

The workplace should be a safe environment which does not facilitate exclusion and harassment. Whilst words and actions can be dismissed by the perpetrator as banter or jokes, they can contribute in a real way to an exclusionary culture. Thoughtless or insensitive comments that make employees feel unsafe should not be tolerated, and appropriate training should occur to help workers understand what is acceptable.


This case should act as a cautionary tale for all organisations that believe that just having excellent policies relating to issues such as discrimination, workplace safety or other sensitive areas is enough to shield themselves from liability. Courts do not just look to the official stance of the organisation, but rather to the extent to which this stance is reflected in the actions of the officers employees of the organisation. If policies are not implemented in an effective way, organisations may find themselves liable for the very incidents that their policies contemplate and are designed to prevent.

Fair Work Commission publishes Annual Report 2014/2015: 352% rise in anti-bullying applications

The Fair Work Commission (FWC) has published its Annual Report (Report) discussing its activity over the financial year ending 30 June 2015. The Report indicates that the FWC has made significant progress in meeting its key performance indicators (KPIs) through increased efficiency in processing applications.

The FWC website acts as a resource for employees and employers regarding their respective rights and obligations and provides information about dispute resolution.  The Report notes the level of interest with webpage views in key areas including:

  • 120,535 unfair dismissal eligibility quiz views;
  • 48,242 anti-bullying eligibility quiz views; and
  • 26,158 general protections eligibility quiz views.

In addition to this, the FWC received 207,729 telephone calls in this period,

Breakdown of the decisions made by the FWC

Overall, the case load for the FWC fell by 7.9% in the 2014/2015 financial year when compared to 2013/2014. The majority of sittings in this period were for unfair dismissal claims, the majority of which were resolved through conciliation. When the matter proceeded to arbitration, 58% of the cases were dismissed because of jurisdictional issues.

Where an unfair dismissal case was decided in favour of the dismissed employee, the most common remedy was compensation, with remedies such as reinstatement used comparatively rarely. Only 14% of cases were resolved through reinstatement of the dismissed employee.

Over the year, a notable trend was individual applications under the general protections of the FWA ( also known as adverse action). 879 applications were made during this period in relation to disputes that did not involve dismissal.

Increased use of the anti-bullying processes

One of the most significant areas of change for the FWC is the anti-bullying dispute resolution process. The anti-bullying provisions of the Fair Work Act (2009) commenced on 1 January 2014. This Report contains the statistics from the first full year these provisions have been in effect. During this period, 694 anti-bullying applications were processed. Even thought this number represents a huge 352% increase from the previous financial year, note that the bullying jurisdiction was only available from January 2014.

Of these applications, 46% were resolved through processes such as mediation. Common outcomes that emerged from these processes included:

  • undertakings about future behaviour;
  • clarification of roles, responsibilities and reporting relationships;
  • employer to establish or review anti-bullying policies;
  • provision of information, additional support and training to workers;
  • worker to return to work on agreed conditions; and
  • agreed relocation of the individual named and/or the applicant worker.

If these earlier processes are unsuccessful in resolving the problem, the matter can proceed to a determinative process like arbitration. The FWC resolved 60 matters in the 2014/2015 year by a decision, with only one resulting in an order. This is partially due to the limited circumstances in which a bullying order can be issued (there must be a risk that the bullying behaviour could continue) but can also be attributed to the uncertainty surrounding this area of law.

There is evidence that, likely due to precedents now established, there is now greater certainty in this area. The statistics for the July-September 2015 quarter demonstrated that, although the number of applications is largely consistent with the 2014/2015 levels, there have already been 3 orders issued. As this area of law matures, applications with a small likelihood of success should theoretically decrease as the limits of the law are tested.

Wage and award reviews

The Annual Wage Review was completed in June 2015 following a consultative process with government, industry and other interest groups. The Review recommended that:

  • all modern award pay rates and most transitional instrument wages be increased by 2.5%;
  • the minimum wage should be $17.29 per hour or $656.90 per week; and
  • special minimum wages should be established for employees with a disability and for award and agreement-free junior employees, trainees and apprentices.

The Award Review is ongoing, having commenced in February 2014, and is anticipated to finish in late 2016. It is split into the common issues stage and the award stage. As part of its work in the 2014/2015 financial year, the Review issued 40 statements or decisions and conducted 107 Full Bench hearings.

Worker’s summary dismissal was harsh and unjust despite failing a breathalyser at work

A maintenance worker in Victoria has successfully claimed that the termination of his employment without notice, following a failed blood alcohol test, was harsh and unjust.

The Fair Work Commission (FWC) found that while he had breached the organisation’s drug and alcohol policy, his termination was based on an unwarranted ‘first and final warning’ for a previous infringement, and that the circumstances of the failed blood alcohol test were insufficient to justify a termination without notice.

The facts

The maintenance worker, who had committed a number of relatively minor health and safety infringements was given a “first and final warning” for failing to isolate faulty machinery in the workplace. The significance of the “first and final warning” was that if there was another breach of company policy, the employee would be terminated. Subsequently, the employee underwent a blood alcohol test at 6:37am at a pre-start meeting at work and the test returned a result of a blood alcohol content (BAC) of 0.013%. The worker was instructed to wait 30 minutes, which was the company’s policy, and then a second test was carried out. The worker’s BAC was 0.006%, a relatively tiny amount, but still in breach of the company policy.

The worker was stood down and sent home for the day as per the organisation’s drug and alcohol policy. His employment was terminated four days later, the company citing serious misconduct as a result of breaching the company’s drug and alcohol policy as the reason for the dismissal without notice or pay in lieu of notice.

The worker applied to the FWC seeking compensation and reinstatement. The FWC found that the decision to terminate the worker’s employment without notice or pay in lieu was harsh and unjust and he was therefore unfairly dismissed.

The FWC considered compensation to be a more appropriate remedy than reinstatement, as requested by the employer. The FWC calculated the compensation based on the period it estimated the worker would have remained in employment at the company. Given the deteriorating state of the employment relationship,  the compensation was therefore based on 12 weeks work.


The employer listed a litany of health and safety breaches committed by the worker as additional justification for the termination without notice. The worker’s raised blood alcohol level on the job was not the only matter that the FWC considered during the hearing. The worker had, on a number of occasions, ignored workplace health and safety directions from supervisors, including that the worker:

  • failed to isolate faulty machinery (the basis of a “first and final warning”)
  • failed to wear the required personal protective equipment when operating machinery;
  • failed to ‘get on board’ with the company’s vision for safety;
  • had ‘unfavourable’ safety interactions with managers in the workplace;
  • as a qualified tradesman, was a poor role model for the company’s other employees, particularly young apprentices;
  • was apathetic and prideful leading to a dangerous work environment; and
  • had a clear tendency for resisting change because he thought his way was best.

The organisation also submitted that it would have been a breach of their duty of care to both the worker himself, and others, to allow him to continue work given his continuous demonstration of an inability to comply with the organisation’s safety standards.

The reasons behind the FWC’s decision

To determine that a person has been unfairly dismissed, section 385 of the Fair Work Act 2009 (Cth) (the Act) states that the FWC must be satisfied that the dismissal was harsh, unjust or unreasonable. Usually there are two essential aspects to consider in determining whether a dismissal was harsh, unjust or unreasonable:

  • whether there was a valid reason for the dismissal relating to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
  • whether the procedural fairness elements were complied with.

However in this case there was an additional matter: even if there was a valid reason for a dismissal with notice, was it of sufficient seriousness to warrant dismissal without notice?

Taking the issues separately, the FWC was satisfied that a breach of the drug and alcohol policy could be a valid reason for the dismissal,  however there were a number of other matters to take into account. The FWC found that the very low level of alcohol detected and absence of putting anyone at risk, as the employee had not yet started work, along with the fact that the policy envisaged that the employee would have been sent home for that shift rather than terminated, meant that it did not by itself justify termination.  However, if the “first and final warning” had been valid, this could justify the subsequent termination based on the low-level drug and alcohol policy infringement.

The FWC reviewed the circumstances of the first incident to determine whether that was sufficiently serious to warrant a “first and final warning”. It found that it was not. This then meant that the termination was harsh and unfair. The FWC noted that having looked at the history of the case “final warning”  meant that while would have been a valid reason for a dismissal, it was not enough to justify a dismissal without notice.

Finally, and because the employer had relied on the “first and final warning” as a precursor to deciding to dismiss for the drug & alcohol policy infringement, the FWC found that the employer should have put this to the employee when notifying him of the reasons for considering termination.

While it could be argued that it did the opposite, the FWC made a point of saying that the decision should not be seen to condone the worker’s conduct, and the employer should be commended for their efforts to safeguard the safety and welfare of others.

A warning for employers

This case study demonstrates that the dismissal without notice of a worker for serious misconduct must be very serious misconduct indeed.  The high jump bar for dismissal with notice is lower. And once again, notwithstanding the validity of the reason for dismissal, the procedural fairness elements must also be met.  While the Commission in this case appeared to be pedantic, the employee should be advised of all of the reasons why termination is being considered.

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