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SAFETY NET WAGE REVIEW 2003 – MINIMUM WAGE INCREASES BY $17.00 PER WEEK A Full Bench of the Australian Industrial Relations Commission delivered its decision in this year’s minimum wage case on 6 May. The ACTU had claimed a $24.60 per week increase in all federal award wage rates with a commensurate increase in wage related allowances. The ACTU argued the increase would have a minimal impact on the nation’s buoyant economy and jobs growth.
Employer bodies largely opposed any increase whilst the states and the Commonwealth government supported some increase. A full bench of the AIRC considered the likely economic effects including the aggregate cost of the claim, the economic outlook and the impact of any rise on the economy. The AIRC Full Bench said that given the average growth in earnings and generally favourable economic outlook, it had decided on a 2-tier increase: The AIRC said the form of the increase gave appropriate emphasis to the needs of the low paid whilst moderating the overall economic impact by providing a lower amount at the higher classification levels. The effect of the decision is to increase the federal minimum wage to $448.40 per week. The federal government said the increase was reasonable and should be absorbed without much disruption if the economy continues to grow. However, the Australian Chamber of Commerce & Industry (ACCI) said small to medium-sized businesses would be hardest hit by the increase. The increase is to take effect early in the new financial year and award employers should check the operative date for their particular awards. The Queensland Council of Unions has asked the Queensland Industrial Relations Commission for a direct flow-on of the increase to state award workers. Their application is to be heard within the next few weeks.
FEDERAL BUDGET ISSUES – NO NEWS ON FEDERAL MATERNITY LEAVE Despite considerable debate over the last 12 months, no announcements have been made in this month’s Federal Budget regarding plans for federal maternity leave. However, the government has denied that plans for paid maternity leave have been dropped. The Prime Minister has said that federal Sex Discrimination Commissioner Pru Goward’s proposal for a minimum three months paid leave is still under consideration. However, it does not appear that the introduction of any form of paid maternity leave is imminent, for at least this year. BUT EXPANDED COVERAGE FOR COMMONWEALTH UNFAIR DISMISSAL SCHEME In this month’s budget, the federal government committed an additional $16.8 million over four years for the increased costs of running the Australian Industrial Relations Commission, including the appointment of additional members. The government has made no secret of its intention to expand the coverage of the Commission’s jurisdiction with a concurrent reduction in the amount of work of the various state industrial commissions. If changes proposed in the federal government’s Workplace Relations Amendment (Termination of Employment) Bill 2002 are passed, the federal scheme is expected to cover about 85% of employees, up from the current 50%.
AIRC STARTS HEARING ACTU REDUNDANCY CLAIM The Australian Industrial Relations Commission this month commenced hearing the ACTU’s claim for increased redundancy entitlements for workers. The ACTU is seeking a doubling of the current maximum severance payment from eight to 16 weeks, removal of the current federal exemption for small business and extension of redundancy payments to long-term casuals. The federal government is concerned about the extra contingent liability for which small employers will particularly be responsible and is arguing for retention of the current minimum standards.
FEDERAL GOVERNMENT CONFIRMS “ENFORCER” ROLE As part of what appears to be a renewed push for micro-economic reform in the labour market, the federal government has confirmed that it will take a more active role in bringing legal proceedings against persons who fail to comply with orders of the Federal Court and AIRC in workplace relations matters. Minister for Workplace Relations, Tony Abbott, has said that legal action will be taken by the Commonwealth where there is evidence of defiance of court orders and where action is in the public interest, even if the Court does not initiate contempt proceedings over the defiance. Reports of breaches of AIRC orders to stop or prevent industrial action will be investigated and Commonwealth inspectors will bring civil penalty proceedings in appropriate cases. The federal government is concerned to address what it sees as a lack of regard by some employee organisations for orders by the court/commission.
EMPLOYEES AND CONTRACTORS IN A NUTSHELL – WELL, NO BUT….. Abraham Abdalla v Viewdaze Pty Ltd t/as Malta Travel, Australian Industrial Relations Commission, Vice President Lawler, Deputy President Hamilton and Commissioner Bacon, Sydney, 14 May 2003 In dismissing an application for relief in respect of unfair dismissal, a Full Bench of the AIRC helpfully summarised the principles to be applied in determining whether a worker is an employee or independent contractor in light of the High Court’s 2001 decision in Hollis v Vabu Pty Ltd (the Bicycle Couriers case). The fact situation here concerned a travel agent who worked under a document called an “Employment agreement” but with several features of a principal-contractor relationship. The AIRC Full Bench said the following approach should be taken in determining whether a worker is an employee or independent contractor: The over arching question is whether the contract between the parties is a contract of service or a contract for the provision of services, i.e. is the worker the servant of another in that person’s business or does the worker carry on a trade or business on their own behalf?; The nature of the work and the manner in which it is performed needs to be considered; The terms and terminology of any written agreement must be considered. However, parties cannot alter the nature of the relationship just by putting labels on the agreement or particular terms which do not truly reflect the relationship. It is only if there is still ambiguity after considering the totality of the relationship that the written agreement might be decisive; Consideration should be given to various indicia developed over the years by the courts such as:
To what extent the “employer” exercises or has the right to exercise control over the manner in which the work is performed, place of work, hours of work etc; Whether the worker performs work for persons other than the “employer”; Whether the worker has a place of work separate to the “employer” and/or advertises their services to the world at large; Whether the worker provides and maintains significant tools or equipment; Whether the work can be delegated or subcontracted; Whether the “employer” has the right to suspend or dismiss the person engaged; Whether the “employer” presents the worker to the world at large as an “emanation” of the business, i.e. as an integral part of the business (although the weight to be given to this factor will vary from case to case); Whether income tax is deducted from remuneration paid to the worker; Whether the worker is remunerated by periodic wage or salary or by reference to the completion of tasks; Whether the worker is provided with paid holidays or sick leave; Whether the work involves a profession, trade or distinct calling by the person engaged; Whether the worker creates goodwill or saleable assets in the course of their work; Whether the worker spends a significant portion of his remuneration on business expenses;
If consideration of the indicia does not give a clear result, then it is a practical matter of whether the worker was running their own independent business rather than as a representative of another business with little or no independence in their conduct; If the result is still uncertain, then the determination should be guided by “matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability” which include but are not confined to the above. In our view, this practically means a consideration of what is fair and just in the circumstances.
This summary highlights the difficulties in distinguishing between the two relationships. With the increasing deregulation of the labour market and consequent flexibility which is occurring in workplaces, the distinction can often be blurred and is not an easy one to make. However, it should be highlighted that the position cannot be changed by artificial labelling. For a copy of any of the above decisions or legislation, or if you have any queries, please phone Rob Stevenson or Cecilia Doyle. |
2003 Bulletin Archive