RecentHighCourtdecisions
Construction,Forestry,Maritime,Miningand EnergyUnionvPersonnelContractingPtyLtd [2022]HCA1
ZGOperationsAustraliaPtyLtdvJamsek [2022]HCA2
Legalrightsandobligationsprovidedinthe contract.
Postformationconduct(withnolegalimpact) notrelevant.
Labelsnotgenerallydeterminative.
Majority:
characterisationofrelationshipmustproceedbyreferencetothelegal rightsandobligationsoftheparties widerangingreviewofsubsequentconductinappropriate,unless suggestionrevariation,orconductgivingrisetoestoppelorwaiver rightsandobligationsunderthecontractinthismatterconstituted employment
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MrMcCourt-PersonnelContractingwithahostcompanypursuanttoalabourhire agreement.
CFMMEUvPersonnelContractingPtyLtd[2022]HCA1 9 10
Wherethepartieshavecomprehensively committedthetermsoftheirrelationshipto awrittencontractthevalidityofwhichis notindispute,thecharacterisationoftheir relationshipasoneofemploymentor otherwiseproceedsbyreferencetothe rightsandobligationsofthepartiesunder thatcontract.
contractorsandpurchasetheirowntrucks.
DriversenteredintopartnershipsandcontractedtoZGthroughthose partnerships.
Majority:
ConsistentwithPersonnelContracting Rightsandobligationsunderthecontractinthismatterdidnot constituteemployment
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KiefelCJ,KeaneandEdelmanJJat[59]
ZGOperationsAustraliaPtyLtdvJamsek[2022]HCA2 11 12
Tips
a)Comprehensiveandcarefuldraftingofwrittentermsof agreement.
b)Accuratecharacterisationofintendedrelationship.
c)Termstoproviderightsanddutiesconsistentwithintended relationship.
d)ConsiderifSGAapplieswherecontractorfallswithin extendeddefinitionofemployee.
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Remunerationinclusions,bonusesand reviews
Remuneration
Remunerationpackageshouldbeinemploymentcontract. Includesalary,superannuationandotherbenefits.
Remunerationtermsthatshouldbeclearlystatedinthecontract: KPIs.
Whethersalaryincludesstatutorysuperannuation. Howoftenpaymentwillbemade.
Whetherbenefitsarediscretionaryormandatory.
Frequencyandmannerofperformancereviews. Fixedorvariablebasesalary.
Benefitsbonusesandincentives
Consider:
Discretionaryormandatory?
Ongoingorofferedannually?
Circumstanceswhenbenefitswillnotbepaid.
EffectofKPIsonquantum.
Formofincentivesshareschemesoroptionschemes?
Optionschemes=longtermincentive
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Benefits
Clausesthatconsiderimplicationsof terminationofemployment
Doesincentivelapseorisprorata benefitpaid?
Goodleaverorbadleaverprovisions?
Lapsingofunvestedequityrights.
Discretionaryormandatory?
Discretionmust:
Notallowcapricious,arbitraryorunreasonablewithholdingofbenefit.
Bereasonablyapplied.
SubasicvHewlett-PackardAustraliaPtyLtd[2020]ACTSC2
Salesexecutivepaidwithbasesalary+commissionfromsales.
Employercappedincentivepayable,reducingtotalamount. Heldinfavourofemployee.
Employersmustbecarefulwhenofferingdiscretionarybenefits.
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Withdrawalofbenefits
e.g.companycarormobilephone
Withdrawalmayamounttorepudiationandunfairdismissal.
MrDarrenBradleyvSolarigAustraliaPtyLtd(2021)FWC2805
Employeehadcontractualrighttousecompanyvehicle.
Employerhadnorighttowithdrawthatbenefit.
Notreplacingvehiclemeantrepudiationandhenceunfairdismissal.
PerezvNorthernTerritoryDepartmentofCorrectionalServices[2016] FCA476
Performancereviewofcorrectionsofficer.
Employeeclaimedperformancereviewwasanadverseaction. Foundinfavourofemployer.
Employerjustifiedincallingperformancereviewmeeting.
Construction,Forestry,Mining&EnergyUnionvPilbaraIronCompany (Services)PtyLtd(No3)[2012]FCA697
Performanceappraisalamountedtoadverseaction
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Review 19 20
Recordperformanceexpectationsandtargets.
Statethatemployeeisexpectedtomeetexpectationsandtargets.
Consequencesfornon-compliance,suchasdisciplinaryaction.
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Usefultipsforreviewclauses Reportinglinesandresponsibilities 21 22
Review
Reportinglinesandresponsibilities
Restructuringofbusiness.
Employeemaderedundantbutofferedalternativerole.
Employeerefusednewroleasitrequiredhimtoreporttooneofhis formerpeers.
FWCsidedwithemployer.
Changeinreportinglinedoesnotmeanalternativerolenotacceptable.
Tips:allowflexibilityinvaryingreportinglineswhendraftingcontracts
ManheimPtyLtdvCordiner[2019]FWC534 Effectiveincorporationofawardsand
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enterpriseagreements 23 24
Enterpriseagreement
=termsofcontract?
GregoryvPhilipMorrisLtd(1988)80ALR455
Termsofenterpriseagreementaretermsofcontract,cangiverightto contractualdamages.
ByrnevAustralianAirlines(1995)185CLR410
Gregoryoverturned.
Industrialinstrumentsoperateindependently,willonlyincorporatea termifnecessaryforoperationofcontract.
Enterpriseagreement
Referencetoindustrialinstrumentsinemploymentcontract
GramotnevvQueenslandUniversityofTechnology[2015]QCA127
WordingincontractreferringtorelevantEBAsufficienttoincorporate certainEBAtermsandmakethemcontractuallybinding.
-OrePtyLtd[2001]FCA3
didnotinferintentiontoincorporate termsofAwardintoemploymentcontract.
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Whyconfidentialityneedstobespelledout
Confidentialityobligations
Benefitsofhavingconfidentialityobligationsinanemploymentcontract
Notlimitedtoequitabledutyofconfidence.
Accesstocontractualcovenant.
Extendedprotectionofconfidentialinformation.
Operativeafteremploymentterminated.
Accesstoreliefifinformationismisused.
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LuvalotClothingPtyLtdvDong[2022]FCA1411
Ex-employeestoredalistofcustomerdetailsonpersonalmobile. Heldnobreachofcontractualdutiesofconfidence.
Nocontractualobligationofconfidenceimposedonstorageofcustomer namesandnumbers.
Noprotectionunderequity.
DelCasale&OrsvArtedomusPtyLtd[2007]NSWCA172
Formeremployeeswerenotrestrictedfromusinginformationobtained duringcourseofemploymentintheabsenceofexpresscontractual restraint.
Keypoints
Beneficialtoincludeclearcontractualobligationsofconfidence. Termsshouldspecifyownership.
Mandateemployeenottomisuseconfidentialinformation. Shouldmakeexpressreferencetothetypeofconfidentialinformation.
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Whenwillarestraintornon-completeclause beessential?
Restraintornon-competeclause
Restraintornon-competeclauseislikelytobeessentialforsenioremployees.
Presumptionthatrestraintoftradetermsareinvalid,unlesstheemployercanshowthat: Termisreasonabletoprotectlegitimatebusinessinterest;and Scopeofrestraintisnotwiderthannecessarytoprotectinterests.
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ModifiedsituationinNSW
RestraintofTradeAct1976(NSW)
S4(1):restraintoftradeisvalidtotheextentthatitisnotagainstpublicpolicy.
McMurchyvEmploysurePtyLtd;KumaranvEmploysurePtyLtd[2022]NSWCA201
Restraintclausespreventedemployeesfromworkingforacompetingcompanyfor12 months.
Attrial,restraintperiodreaddownto9months.
OnAppeal,restraintperiodforKumaranheldtobeunreasonableduetolowlevelposition.
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Keytermsforintellectualpropertycreation& protection 33 34
Statutoryprotection
CopyrightAct1968(Cth)
S35(6):workmadepursuanttotermsofemploymentownedby employer.
RedrockHoldingsPtyLtd&HotlineCommunicationsLtdvHinkley[2001] VSC91
Employerheldcopyrightownershipofsoftwaretooldevelopedby employee.
PatentsAct1990(Cth)&TradeMarksAct1995(Cth)
Industrialinstruments
Modernawardsandenterpriseagreementscan operatetoregulateownershipoveremployee creation.
Enterpriseagreementsincreativeindustries tendtoaddressownership,butnotmodern awards.
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Impliedterms
Ownershipcanbeestablishedbasedonimpliedtermsofemployment Ifcreationiswithinscopeanddutiesofemployment.
VictoriaUniversityofTechnologyvWilson[2004]VSC33 necessarilyindicateemployerowntheinvention.
UniversityofWesternAustraliavGray[2009]FCAFC116
Expressterms
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Clearstatementofownership Broaderprotection Canpreventdisputesandpossibletheft 37 38
Benefits
Terminationclauseshoulddealwithnoticeperiod.
Expressnoticeterm
Reduceuncertaintycomingwithemployeebeingentitledtoreasonablenotice.
Terminationwithoutnotice
Providerighttoterminatewithoutnoticeforseriousmisconduct.
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Thesafety-netofclearterminationprocesses
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Proceduralfairnessincontractornot?
Clearterminationprocess(e.g.,usingdisciplinaryproceedings)can ensurecompliancewithproceduralfairness?
FairWorkAct2009(Cth)s387criteriaforconsideringharshness:
Notificationofreasonfordismissal.
Opportunitytorespondtoreasonrelatedtocapacityorconduct.
Unreasonablerefusalofsupportperson.
Warningaboutunsatisfactoryperformance.
Incontractornot,orinnon-contractualpolicy?
Tipsfordraftingcontractualamendmentsand templatereviews
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Contractualamendments
Employersarerecommendedto:
Considerifvariationislawfulunderindustrialinstrumentorlegislation.
Setoutamendmentsinwrittendocument.
Consultwithemployeeandseekconsentforamendments.
Ensureamendmentscomplywithindustrialinstrumentorlegislation.
Ensureclarityovertermsremainingineffect.
Regularreviewsofemploymentcontracttemplatesareimportantforemployerstoensure termsare:
Uptodate.
Specifictotheposition.
Alignedwithindustrialinstrumentsorlegislation.
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Templatereviews
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