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Restraints of trade
Miles v Genesys Wealth Advisers Limited [2009] NSWCA 25
Mr Miles was a managing director of Genesys. Genesys had agreements with financial planning firms who were “member firms” to whom Genesys provided services. Mr Miles dealt with the member firms regularly and fostered new members. Mr Miles was privy to Genesys revenue made from its dealings with member firms and actively participated in Genesys’ planning to enhance its services provided to member firms.
Mr Miles decided to leave Genesys and obtained legal advice on a Deed of Release to give effect to his resignation. In the Deed, Mr Miles promised not to be employed, contact or solicit any Genesys client with whom he had dealt in the previous 12 months of his employment. Within a month of the end of his employment, Mr Miles set up a business to compete with Genesys and intended to entice some member firms away from Genesys.
Genesys was successful in enforcing the term of the Deed of Release which provided Mr Miles could not deal with, contact or solicit a client of Genesys for a period of 30 months. The Court held that the work Mr Miles had done in fostering the member firms and dealing with them was the “property” of Genesys and it was reasonable that he be restrained from seeking to take that property away. Further, Mr Miles had agreed to the 30 month restraint in the Deed for retaining shares in Genesys long term incentive plan and had legal advice on the Deed.
Greedy employer cops big fine
Martin v Fresho Foods Pty Ltd (No 2) [2009] FMCA 191
An employer acquired a food processing business from another owner. In order to increase profitability, the new owner sought to decrease wage payments by introducing a flat hourly wage rate and forcing staff to become independent contractors. These changes were made in contravention of award provisions and without negotiation. The staff were told, ‘take it or leave it’. Consequently, eleven staff did not receive their proper entitlements.
The Federal Magistrates Court held that numerous breaches had taken place, including underpayment of staff and a failure to pay overtime. It was also observed that the employer had ignored the investigation of the Ombudsman and had threatened employees with dismissal if the proceedings continued. Such actions demonstrated that the employer was unrepentant. The FMC ordered that the employer pay $24, 750 for its two most severe breaches and also issued fines of between $1000 to $16500 for other breaches.
The message behind this case is simple. Employers who ignore award provisions are liable to large fines.
Dodgy Donuts
Byrne v KNL Group Pty Ltd T/As Donut King & Anor [2008] FMCA 1440.
A Donut King franchise operated in a Sydney shopping centre and employed a number of casual employees. Following changes to workplace legislation, the business was bound by the Australian Fair Pay and Conditions Standard meaning that certain employees were entitled to overtime. The Office of Workplace Services investigated the business and found that several casual employees had been underpaid in amounts ranging from a few hundred dollars to $2000. Initially Donut King and its director denied these claims before admitting that they were true. The workplace inspector noted that the breaches were compounded by the fact that the employees in question were young and unaware of their industrial rights.
The director argued that the penalty should be mitigated because the Donut King was not particularly profitable and he had no prior record. The Federal Magistrates Court took this into account but held nevertheless that the breaches were serious. The court ordered that Donut King pay $25 000 and the director pay $5000.
Justice for chocolate bar thief
Tony Petrosillo v Coles Group Supply Chain Pty Ltd [2009] AIRC 3.
Coles Supply Chain Group (a subsidiary of the Coles Group) was experiencing losses at one of its centres due to ‘known theft’. In 2007 its losses totaled $110,000. Coles implemented policies to curb this activity and it reduced its losses to $50,000 in 2008.
A worker was loading pallets into a container when a colleague threw him a Snickers bar from a pallet that had ripped open. The worker ate the chocolate bar. The next day he was interviewed about the incident and was subsequently suspended with full pay. Soon after, his employment was terminated. He claimed that his dismissal was ‘harsh, unjust or unreasonable’.
The Australian Industrial Relations Commission rejected this claim. It found that given the nature of its business, Coles had acted reasonably in protecting its stock. The AIRC agreed with Coles that the worker should have suspected that the chocolate bar was stolen. It further found that the employee had not given an accurate account of the event and thus had destroyed the crucial relationship of trust and confidence that exists between an employee and an employer. Thus there was valid reason for the employee being dismissed.
Uni lecturer breaches agreement
Griffith University v Leiminer [2008] FMCA 1045
A university lecturer began employment with Griffith University in February 2007, entering into a collective agreement on commencement. The agreement stated that should the lecturer wish to resign from her position, she was required to give six months notice. She signed a statement saying that she read and understood the terms of the agreement. Shortly after her employment began she received another offer from Southern Cross University with a proposed start date of July 2007. The employee decided to accept the offer of Southern Cross as it better suited her circumstances. She informed Griffith University that she would be taking up a new position in July. Griffith University commenced proceedings in the Federal Magistrates Court for breach of the agreement. During proceedings the employee admitted that she had breached the agreement.
The FMC held that the employer had been naive in dealings with the university but not malicious. Nevertheless, the court held that there was a need for deterrence, as non – compliance with a collective agreement was a serious matter that could have very grave consequences. The employee was fined $500.
Optometrist blind to the rules
Byrne v Australian Ophthalmic Supplies Pty Ltd [2008] FCA 66
The employer, an optometrist, employed a trainee in the capacity of optical dispenser. She was employed as part of a team that covered several stores in Melbourne. The employee completed her traineeship but continued to be paid as a trainee. She complained to Wageline, and the Office of Workplace Services took proceedings against the employer in the Magistrates Court.
Following the employee’s involvement in these proceedings, she was transferred to the employer’s Werribee store. The store was several hours away from her home and no reason was given for the transfer. As a result, she resigned from this position. The OWS bought proceedings against the employer alleging that it had altered the employee’s position for three prohibited reasons: her complaint to Wageline, her participation in the Magistrates Courts proceedings, and her intention to give evidence in proceedings.
The Federal Court ruled that the sum of $ 6688.97 was payable to the employee to cover the outstanding wages that were owed to her. The court further ruled that a penalty of $60,000 should be imposed against the employer as it had injured the employee and had altered her position for three prohibited reasons. The court observed that employees "have the right to be paid the correct pay rate and the right to raise any issue about that pay rate with an appropriate authority without fearing humiliating retaliatory conduct by their employers".
Hairdresser not bubbly enough (unfair dismissal)
Gorman v McCord [2008] NSWIRComm 1038
Having moved from Tasmania to Sydney, a hairdresser began working in a salon. She was dealing with significant stress resulting from a dispute with her ex-husband concerning maintenance. Consequently, the hairdresser was quieter and more irritable than usual at work. The employer spoke to her over the phone regarding these issues, but did not mention any disciplinary action.
Soon after, the hairdresser fell ill with gastroenteritis. She called her employer early one morning and informed her that she could not make it into work. Ten minutes later the employer’s husband called the hairdresser back and told her she was dismissed.
The hairdresser bought an unfair dismissal claim against her employer under the Industrial Relations Act. The employer claimed that there were valid reasons for the dismissal including the employee’s attitude toward customers, and that there were doubts about the employee’s claims of illness. Furthermore, the employer asserted that the hairdresser intended to open a competing salon and had stolen information from the database in order to retain clients.
The NSWIRC rejected the employer’s arguments. Though the employee had set up a salon since being dismissed, there was no evidence that she had stolen any information from the employer’s database. Similarly, there was no evidence that the employee’s illness was not genuine.
Further, the NSWIRC ruled that the hairdresser’s attitude at work in the period prior to her dismissal was understandable given the stress she was experiencing. An experienced and competent employer should have raised any concerns in a face to face meeting rather than over the phone outside of work hours. Similarly, having her husband call the employee to inform her of her dismissal was inappropriate. The NSWIRC awarded the hairdresser $10,000 in damages.
Unions can be consulted (unlawful termination)
Claveria v Pilkington Australia Ltd [2007] FCA 1692
A worker felt that he was being bullied and unnecessarily watched by his manager. He took his concerns to the CFMEU and was soon thereafter terminated by his employer.
The employee bought a claim under the Workplace Relations Act, which states that employees cannot be dismissed for consulting “competent administrative authorities”. The employer claimed that the termination was for work-related reasons. However during cross-examination the employer stated that the employee’s complaint to the CMFEU “was the straw that broke the camel’s back”.
The court agreed with the employee’s argument but noted that whether a union was a ‘competent administrative authority’ would depend on a range of factors including the allegation made by an employee, the relief sought and "whether the union is legally capable of managing, dealing with, or addressing the grievance appropriately". It held that the CFMEU had authority to compel the employee’s grievance to be dealt with through discussion with the employer under the terms of the employee’s industrial agreement. Furthermore, the union had substantial responsibilities under OH&S legislation and could have dealt with the complaint on that basis. The court ordered that the worker be reinstated and that the employer pay a fine of $10,000 for breaching a provision of the Workplace Relations Act.
*Please note that these cases were decided under the Workplace Relations Act 1996.