Quick links

Which companies need a whistleblower policy?
What is the new law?
Corporations Act regime
How does the regime operate?
What protections are available to whistleblowers?
Why does this matter?
What does the regime mean for employers?
Further information

 
Which companies need a whistleblower policy?
While a clear policy to encourage the reporting of misconduct for the protection of a company’s business and reputation is a sound governance tool for any company, from 1 January 2020 it will be a requirement for public companies, large proprietary companies and corporate trustees of registrable superannuation entities to have a whistleblower policy available to all employees and officers.

A public company is one incorporated as or converted to a public company (denoted as a “Limited" company)
A large proprietary company is a concept defined by the Corporations Act 2001 (Cth) by reference to various financial metrics. These metrics were recently increased for application to financial years commencing on or after 1 July 2019 (that is, to be assessed for the year 1 July 2019 to 30 June 2020). Accordingly, you will be a large proprietary company if you and the entities you control (if any) meet at least two of new thresholds, namely:
For the 1 July 2018 to 30 June 2019 financial year:

$25 million or more in consolidated revenue
$12.5 million or more in consolidated gross assets
50 or more employees

For the 1 July 2019 to 30 June 2020 financial year and thereafter:

$50 million or more in consolidated revenue
$25 million or more in consolidated gross assets
100 or more employees

A corporate trustee of a registrable superannuation entity means a corporate trustee of a:

regulated superannuation fund;
approved deposit fund; or
pooled superannuation trust (but not self-managed superannuation funds).  

What is the new law?
The Act:

amends the Corporations Act 2001 to expand and consolidate the whistleblower protection regime;
amends the Taxation Administration Act 1953 to introduce a whistleblower protection regime for disclosures of information about misconduct in relation to the tax affairs of a company; and
repeals existing financial sector whistleblower regimes so that banks, general and life insurers and superannuation entities and trusts now fall within the whistleblower regime of the Corporations Act.

Key changes include:

an expanded scope of disclosures that will qualify for protection;
protection of ‘public interest disclosures’ made to parliamentarians and journalists where the whistleblower has made a previous disclosure to ASIC or APRA and after 90 days has reasonable grounds to believe that inadequate action is being taken;
protection of ’emergency disclosures’ made to parliamentarians and journalists where the whistleblower has made a previous disclosure to ASIC or APRA and has reasonable grounds to believe that the information concerns a substantial and imminent danger to health and safety or the environment;
a broader range of protections for whistleblowers;
making it easier for whistleblowers to claim compensation where detriment is suffered; and
more significant penalties for individuals and companies. 

Corporations Act regime
The Corporations Act regime aims to protect whistleblowers and facilitate the early detection of misconduct by extending protections to a broader class of people and range of disclosures. 
How does the regime operate? 
The Act establishes a protection regime for disclosures of disclosable matters made by eligible whistleblowers to eligible recipients.

A disclosable matter is any information concerning misconduct or an improper state of affairs in relation to the entity or one of its related bodies corporate. This compares with the previously narrow position, where a protected disclosure could only be made in respect of a contravention of the Corporations Act or of certain industry-specific legislation.2
An eligible whistleblower now includes current and past employees and officers of the entity as well as service providers, their employees and relatives of any of these. For superannuation entities, the net widens to include a natural person who is a trustee, custodian or investment manager of the superannuation entity or any officer, employee of a trustee, custodian or investment manager, and relatives of any of these.
An eligible recipient of disclosures includes officers, senior managers and auditors of a regulated entity, as well as third party providers who have been authorised by the entity to receive disclosures.

What protections are available to whistleblowers?
When the eligibility requirements above are satisfied, a whistleblower will be entitled to a range of protections, including:

Confidentiality: The Act makes it a criminal offence (and may lead to civil penalties) to disclose the identity of a whistleblower without their consent, or to disclose information that is likely to lead to the identification of the whistleblower, except in limited circumstances.
Detriment and victimisation: The Act makes it an offence to threaten to, or engage in conduct that, causes detriment to a person due to a belief or suspicion that any person made, or proposes to make, a qualifying disclosure.

The definition of ‘detriment’ is broad and includes:

dismissal;
injury of an employee in their employment;
alteration of an employee’s position or duties to their disadvantage;
discrimination;
harassment or intimidation;
harm or injury, including psychological harm; and
damage to the whistleblower, their property, reputation, business or financial position.

A person who engages in detrimental conduct in breach of the Act may be subject to court orders, including orders for compensation, reinstatement, injunctions, apologies and exemplary damages. In proceedings for such court orders, there is a reverse onus of proof so that, in effect, the person accused of causing the detriment must prove the claim is not made out.

Immunities: A whistleblower will not be subject to civil, criminal or administrative liability and no contractual right or remedy may be enforced on the basis of the disclosure (eg. secrecy provisions in an employment contract cannot be enforced). Information included in the disclosure will generally not be admissible in evidence against the whistleblower in criminal or civil proceedings, although the discloser can be pursued for fraud committed in connection with making of a disclosure and for their own conduct in the reported matter provided there is other evidence of it.

Why does this matter?
Significant penalties apply for breaches of the new law. For example, the maximum penalties for unlawfully disclosing a whistleblower’s identity or victimising a whistleblower are:

$200,000 for an individual; and
$1,000,000 for a body corporate.

If civil penalties apply, these may include:

For unlawful disclosure of whistleblower’s identity – $6,300 or 6 months in prison or both;
For victimising a whistleblower – $25,200 or 2 years in prison or both; and
For failure to have a whistleblower policy in place – $12,600.

What does the regime mean for employers?
Where a disclosure satisfying the eligibility requirements is made, the regime extends protections to the individual and can make employers liable for any detriment suffered by the discloser, even at the hands of its other employees.These significant reforms will require organisations to:

reassess their corporate governance frameworks and take steps to implement compliant whistleblower policies (where required by the Act or as a good governance measure) and internal procedures; and
consider the development of appropriate internal procedures and education for management and staff, to ensure that whistleblowing disclosures are managed appropriately.

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Quick Links 

Introduction
Background
The University’s position
The Decision
Intellectual and academic freedom in Australia – where to from here? 

Introduction
There’s been a lot of publicity recently over Israel Folau and his problems with Rugby Australia over some controversial views about homosexuals and others he posted on social media.
Some commentators have characterised that dispute as a contest between, on the one hand an employee’s right to religious freedom and freedom of speech, and an employer’s right to require its employees not to damage its business or to bring it into disrepute by publishing controversial views.  While the rugby field might seem a long way from the cloistered corridors of academia, a recent decision of the Federal Circuit Court of Australia (Ridd v James Cook University) makes clear the questions of intellectual freedom and free speech in Australia are significant issues for employers across the higher education sector.  
The Court found that James Cook University took unlawful action by censuring, making adverse findings against and ultimately dismissing Professor Ridd.  The University’s actions were held to be inconsistent with the guarantee of intellectual freedom provided in the University’s Enterprise Agreement. 
Background
Professor Peter Ridd was the head of physics at the University from 2009 until 2016. At the time of his dismissal, Professor Ridd had managed the University’s marine geographical laboratory for 15 years. Professor Ridd was subject to the terms of the University’s Enterprise Agreement and Code of Conduct.
The Enterprise Agreement provided that the University was committed to acting in a manner consistent with the protection and promotion of intellectual freedom, which included the right to participate in public debate and express unpopular or controversial views. 
The Enterprise Agreement also contemplated the existence of a Code of Conduct,  provided that any such Code was not intended to detract from the intellectual freedom otherwise afforded. The University’s Code of Conduct went further than this, including a requirement that any exercise of freedom of expression had to be lawful and respectful of the rights of others. 
Historically, Professor Ridd had expressed concern with the quality of scientific research published regarding the state of the Great Barrier Reef. From December 2015, Professor Ridd took a number of steps to publicly voice those concerns, including by:

contacting and providing commentary to a News Limited journalist;
publishing essays on the topic; and
participating in a television interview with prominent broadcaster Alan Jones on Sky News.

Professor Ridd’s criticisms were not limited to the research itself, but, in the University’s view, extended to a direct attack of the University and its associated entity, the Australian Research Council Centre of Excellence for Coral Reef Studies (CoE). In his interview with Sky News, Professor Ridd went so far as to suggest that scientific institutions including CoE could ‘no longer be trusted’ to publish reliable, objective research into the health of the Great Barrier Reef. 
In response to Professor Ridd’s actions, the University instigated a disciplinary process for alleged misconduct. Professor Ridd was notified of his obligation to maintain confidentiality throughout this disciplinary process.  
In October 2017, a further allegation was made by the University that Professor Ridd had failed to maintain confidentiality throughout the disciplinary process. Professor Ridd subsequently started a “Go Fund Me" page asking for donations for legal expenses and published material regarding the University’s disciplinary process. The University also became aware of a number of news articles in which it was clear that Professor Ridd had provided comment as well as a group email chain with other academics in which Professor Ridd suggested that he had "offended some powerful organisations who don’t like being challenged, and rather than debate the case, they just resort to threats and complaints".
The University’s ultimate response to Professor Ridd’s actions was expansive and included:

17 findings of misconduct starting with Professor Ridd’s conduct from December 2015. The findings of misconduct were primarily based on alleged breaches of the Code of Conduct, in particular Professor Ridd’s failure to exercise freedom of expression with a "respect for the rights of others";
multiple censures of Professor Ridd, including:

a direction that any public comment be expressed in a "collegial manner that upholds the University and respects individuals";
a direction that Professor Ridd "not make any comment or engage in any conduct that directly or indirectly trivialises, that arises or parodies the University taking disciplinary action"; and
multiple confidentiality directions in response to Professor Ridd publishing material regarding the University’s disciplinary process. 

On 2 May 2018, the University terminated Professor Ridd’s employment in light of the substantiated findings of misconduct.
The University’s position
On application by Professor Ridd, the Court was asked to determine whether or not the University’s findings and numerous directions censuring him were unlawful, in light of the broad "guarantee" of intellectual freedom afforded under clause 14 of the Enterprise Agreement. 
The University maintained that its decision to terminate Professor Ridd’s employment was consistent with its findings that his conduct constituted a breach of the Code of Conduct. 
The University submitted that any exercise of intellectual freedom as provided by the Enterprise Agreement, in the absence of any fundamental constitutional right to such freedom in Australia, must be exercised in accordance with the Code of Conduct and, in particular the requirement to "respect the rights of others". Regarding the interrelationship of the Enterprise Agreement and the Code of Conduct, the University submitted:

clause 14 was not a statement as to the commitment of the University, but a direction that intellectual freedom, permitted by clause 14, would be exercised in accordance with the Code of Conduct; and
a staff member could still breach the Code of Conduct if they exercised intellectual freedom in a manner which went beyond that expressly permitted by clause 14.

The Decision
The Court ultimately found in favour of Professor Ridd, determining that all findings of misconduct and attempts at censure were unlawful, on the basis that they were contrary to Professor Ridd’s rights pursuant to clause 14 of the Enterprise Agreement. The Court stepped carefully through the relationship between the Enterprise Agreement and the Code of Conduct in analysing Professor Ridd’s conduct,finding that:

the Enterprise Agreement, in contemplating the existing of a Code of Conduct, made plain that any such Code was not to detract from the intellectual freedom afforded by clause 14;
it was incongruous to suggest that the Code of Conduct, which could be altered by the University, could override a clause in the Enterprise Agreement;
the University’s submission that a breach of the Code of Conduct meant the exercise of intellectual freedom was not covered by clause 14 was "around the wrong way". Rather, the correct interpretation was that, if any exercise of intellectual freedom went beyond clause 14, then it would not, by definition, be an exercise of freedom contemplated by the provisions of that clause. However, if a person were objectively to breach the Code of Conduct but the action was one that was done in the proper exercise of the rights under clause 14, then there could be no breach of the Code of Conduct;
in respect of confidentiality directions, there was no power at common law or in the EA which overrode the specific rights given to staff members pursuant to clause 14; and
the direct attempts to censure and limit Professor Ridd’s public comment and "satire" were also contrary to the rights afforded under clause 14.

Intellectual and academic freedom in Australia – where to from here?
The Court went to great pains in Ridd to clarify that the decision was reached based on construction of the University’s Enterprise Agreement, and that it was not a case concerning freedom of speech or the exercise of intellectual freedom generally. It is significant that, while approaching the matter as an interpretation issue, the Court nevertheless made significant comment as to the breadth of intellectual freedom in higher education institutions stating:
"In the search for truth, it is an unfortunate consequence that some people may feel denigrated, offended, hurt or upset. It may not always be possible to act collegiately when diametrically opposed views clash in the search for truth". 
It is not difficult to see how other higher education institutions throughout Australia that have similarly codified the right of employees to "speak their mind" may now be carefully examining the implications of that right. 
Like that of James Cook University, each enterprise agreement for Australia’s "Group of 8" universities contains similar provisions guaranteeing the practice of intellectual freedom for its academics. While, in light of the decision in Ridd, employers must approach such clauses with renewed care, the case itself does not support the proposition that employees are "untouchable" where they characterise their comments as exercises of intellectual freedom. 
Deciding what to do when an employee has made concerning comments requires an objective consideration of the comments themselves in the context of the freedom afforded.  Particular consideration should be given to the following questions: 

does your intellectual freedom clause or broader enterprise agreement contain any limitation on the freedom granted? Respecting the court’s finding in Ridd regarding the primacy of an enterprise agreement over a code of conduct, first recourse should always be to the wording of the agreement to determine if an employee’s conduct or comments may have contravened any relevant limitations. It is interesting to note that a sub-clause to this effect existed in the University’s Enterprise Agreement, which required Mr Ridd to "respect the rights of others"; and
does the nature of the employee’s actions or comments otherwise take them beyond the scope  of the freedom afforded? If this is the case, it will likely cease to be a question or whether or not the employee has breached the provisions of the enterprise agreement, as the agreement itself will not apply to such behaviour, leaving the employee open to standard investigation and disciplinary processes. 

Another case currently before the Federal Court involving the University of Sydney and the NTEU about the dismissal of a lecturer who superimposed an image of a swastika on an Israeli flag in teaching materials and social media posts is also likely to raise the "academic freedom" defence.  (NTEU & Anor v The University of Sydney & Anor NSD553/2019).  
Identifying just where the fine line exists between exercising academic freedom and misconduct warranting disciplinary action such as dismissal, is likely to continue to be a challenging exercise for Australian higher education institutions for some time.

Summary
The Brief is your monthly financial services update. To help you save time, each month we’ll give you a quick run-down of what happened in financial services from experts across our firm.

 
Winners and losers in election month
Did you notice there was a Federal election last month? With the Government returning to office, many of the more dramatic reforms proposed during the campaign have been shelved. But while our legislators have been enjoying some R&R, our financial services regulators have been busy.  Here’s your monthly run-down of what they’ve been up to and what they have planned for our industry — it looks like there’s no rest for the wicked.
In this edition:

Are you good at losing money?
Winning at regtech?
I appear to have lost my authorisation
Losing control of personal information
Losing track of time
A win for smashed avo on toast
Reputations won or lost through IDR
Losing the ability to drive change from within
Other results from around the grounds
Further information

Are you good at losing money?
Not as good as underwriters of individual disability income (aka income protection) insurance, it seems. APRA has waved its stick at the life insurance industry, which it says collectively lost $2.5b over the past five years on this product alone. While these policies are often seen by insurers as a ‘loss leader’, APRA is requiring the life industry to lift its game (and its premiums, presumably) if it wants to keep offering this product outside of superannuation. If not, they risk being whacked with APRA’s capital stick.
Winning at regtech?
Then sign up for one of three events that ASIC has launched, where you can showcase how your regulatory technology product can:

improve the compliance of financial advertising promotions (2 August);
detect problematic financial advice in data (22 August); or
apply voice analytics and voice-to-text to regulatory activities (September).

ASIC will choose around 10 lucky innovators to demonstrate their products at each event. To win a chance to shine, sign up through ASIC’s Innovation Hub.
I appear to have lost my authorisation
Before appointing an authorised representative, check that they are not already an AFS licensee. Unless you authorised the other licensee under a general insurance binder, the authorisation will be void, as 58 licensees recently discovered. ASIC cancelled their authorisations and found them to be in breach of the law. Although such authorisation attempts are an offence under the law, no penalties were reported, so we’re calling this a minor win for those affected.
Losing control of personal information
While simultaneously releasing its latest quarterly data, the OAIC published its insights on the first 12 months of the Notifiable Data Breaches scheme, which revealed:

the finance sector had an above-average rate of data breaches due to human error;
the finance sector notified the second-most number of data breaches (but there have been many more notifications in the health sector); and
more than half of the data breaches in the finance sector were caused by malicious or criminal attacks.

The OAIC report notes that APRA-regulated institutions will need to comply with a new prudential standard on information security, CPS 234, when it commences on 1 July. This will require some breaches to be reported to APRA as well as to the OAIC.
Losing track of time
To avoid or reduce their industry funding levy, some financial services and credit licensees may seek to cancel or vary their licences. ASIC has reminded us that licence cancellation or variation takes time and that levies will be calculated based on licence authorisations as at 1 July. ASIC’s service charter aims to assess 70% of complete applications within 150 days of lodgement and 90% after 240 days so, if you haven’t already lodged your complete application, we suggest not banking your saving just yet.
A win for smashed avo on toast
APRA sought comment from all ADIs in relation to the possible relaxation of its residential mortgage lending requirements. Four and a half years after introducing a serviceability buffer of 2 per cent and a floor rate of 7 per cent, APRA is proposing to allow lenders to increase their serviceability buffer to 2.5 per cent and proposes not to set a specific floor rate. This would enable lenders to set their own floor rates based on the interest rate outlook and may enable borrowers to obtain home loans larger than currently possible. Comments on the proposals are due by 18 June.
Reputations won or lost through IDR
ASIC commenced consultation on reforms to its internal dispute resolution requirements.
Some of the proposed changes to RG 165 Licensing: Internal and external dispute resolution, which will become enforceable, include:

applying IDR to complaints made on a firm’s social media platforms;
defining what a ‘complaint’ is (ASIC says there is little consensus on this);
extending IDR to small businesses with up to 99 employees;
recording all complaints (currently not required for those resolved within a week);
reporting all complaints to ASIC every six months;
publishing industry-wide complaints data, including at firm level;
prescribing minimum content for IDR responses;
reducing the time required for IDR responses (by half in some cases); and
requiring board papers to include metrics and analysis of consumer complaints.

Consultation is open until 9 August.
Losing the ability to drive change from within
APRA has shared an information paper, summarising the self-assessments that it asked 36 boards of regulated institutions to undertake in the aftermath of APRA’s 2018 Prudential Inquiry into the Commonwealth Bank of Australia. APRA asked these boards to consider whether similar issues might exist in their own institutions. Having considered their responses, APRA observed that the CBA’s issues were certainly not unique to that organisation and concluded that four key themes emerged:

inadequate management of non-financial risks;
lack of clarity and enforcement in the accountability of those below senior executive level;
awareness yet inaction in relation to long-standing weaknesses, with priority only given after regulator scrutiny or adverse events; and
poor understanding of risk culture, making it hard to know whether the desired behaviours were being reinforced.

Over the next year, APRA will be increasing its supervision of governance, accountability and culture for all regulated institutions, not only the 36 targeted in this exercise.
Other results from around the grounds
Do you know what a securitisation SPV is? If not, carry on. But, if so, you should also know that APRA, the RBA and the ABS recently decided to expand their data collection by consolidating the financial reporting of securitisation SPVs that are not related to authorised banks, credit unions and the like. The changes take effect for the reporting period ending 31 July.
In Issue #2 of The Brief, we reported the passage of the Protecting Your Superannuation Package laws. One of the new laws means that many members with inactive superannuation accounts will lose the benefit of the insurance it provides. APRA has now released FAQs for RSE licensees that answer questions such as ‘If a member with an inactive account elects to continue their insurance, can the trustee rely on that election forever?’ Spoiler: yes, they can.
FASEA welcomed its first intake of applicants for the exam that all financial advisers will need to pass in order to provide personal financial product advice to retail clients.
ASIC has updated its guidance on initial coin offerings and crypto-assets. In particular, issuers are encouraged to consider whether their tokens or other crypto-assets are financial products and therefore trigger a licence obligation. The updated information sheet reminds crypto-asset issuers and intermediaries that their products may be novel but the financial services laws, including those prohibiting misleading and deceptive conduct, are not.
Want to know more about how these issues affect your business? Reach out to a member of our team.
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Quick Links

An employee’s duty
A right to refuse?
Dismissed for no fingerprints
Sensitive but not lawful 
An employee’s right to privacy 
What does it mean for employers

Is it lawful and reasonable for your employer to ask you for your fingerprint? And if you don’t want to give it to them, can they dismiss you?
As with many directions to employees, what’s considered reasonable or not depends. However, if compliance with a request for your fingerprint leads to a breach of privacy legislation, it’s likely that you can tell your employee (politely, of course) to keep their hands off your biometric data, without losing your job.
An employee’s duty
Employees have a general duty to obey lawful and reasonable directions from their employer. What constitutes a “reasonable direction” will depend on the circumstances of each case. This includes, among other things, the nature of the employment relationship, the terms of the employment agreement, the method by which the direction is given, and the usual or customary practices in the workplace.
The reasonableness of an employer’s direction may also be impacted by the consequences to the employee of responding to the direction. Relevantly, a direction may be unreasonable or unlawful if it requires the employee to provide personal information in circumstances that would constitute a breach of privacy (or other) legislation.
A right to refuse?
In February, we discussed whether employees have a right to remain silent, in circumstances where an employer directs an employee to answer specific questions. A recent decision handed down by the Full Bench of the Fair Work Commission has provided some additional guidance on what is a lawful and reasonable employer direction (HRM initially wrote about the decision here). The decision arose in circumstances where the relevant employee refused to consent to the collection of and provide the requested information to his employer. The information was his fingerprint.
In the first instance, the employee refused to use biometric scanners. The scanners were introduced for registering employee attendance and tracking shift times. The question before the Commission was whether this constituted a failure to follow a lawful and reasonable direction, justifying dismissal. On appeal, the Full Bench called into question the lawfulness and reasonableness of the employer’s direction.
Dismissed for no fingerprints
The employee (Lee) was employed by Superior Wood, which operates two sawmills in Queensland. At first instance (see Lee v Superior Wood Pty Ltd [2018] FWC 4762), it was held that the dismissal of  Lee, who repeatedly refused to use biometric scanners that were introduced for registering attendance and tracking shift times at his worksite, was not unfair.  
In refusing to use the biometric scanners, Lee raised concerns with Superior Wood about using the scanner, including that he believed that using the scanner could result in his fingerprint being used by “unknown individuals and groups, indefinitely“. Despite extensive discussions between Lee and Superior Wood, the issue could not be resolved. At question was whether the method of collection of Lee’s fingerprint was in breach of the Privacy Act 1988 (Cth).
Superior Wood directed Lee to consent to the workplace policy requiring collection of the biometric data, and consequentially to having his data collected. Superior Wood informed Lee that if he did not consent to the policy, and he failed to comply with the policy, he would likely be dismissed.
In assessing whether Superior Wood’s direction was reasonable, it was observed that the relevant policy requiring Lee to consent to having his fingerprint collected may not have complied with the Privacy Act (because Superior Wood did not issue collection notices before introducing the biometric scanners, or have a suitable privacy policy in place, among other things).  
Sensitive but not unlawful
The Commissioner at first instance noted that biometric data was sensitive information under the Privacy Act, which applied to Superior Wood, and required it not to collect Lee’s information unless he consented to its collection. The Commission also observed that it was reasonably necessary for Superior Wood to collect the biometric data for its functions or activities. Superior Wood did not inform its employees that the scanners collected their sensitive information, or discuss with them its obligations in handling their sensitive information. It merely informed them that the scanners were being introduced and that they would be required to use them.
While it was observed that there may have been a breach of the Privacy Act, the Commission at first instance did not render the policy unlawful — simply the manner in which Superior Wood went about trying to obtain consent may have constituted a breach of the Privacy Act. The Commission said that any such breach may be a matter that could be referred to the Australian Information Commissioner and Privacy Commissioner.
Lee was entitled to withhold his consent, which he did, but doing so meant that he had failed to meet a reasonable direction from Superior Wood to implement a fair and reasonable workplace policy. Superior Wood dismissed him as a consequence of failing to follow a lawful and reasonable direction. Because Lee failed to follow a lawful and reasonable direction, his dismissal was not unfair.
An employee’s right to privacy
Lee appealed the first instance decision (see Lee v Superior Wood Pty Ltd [2019] FWCFB 2946). In the appeal, the Full Bench of the Fair Work Commission found that the direction given to Lee to consent to the solicitation and collection of his biometric datawas unlawful because it was inconsistent with the Privacy Act — Lee was entitled to refuse to follow the direction because it was unlawful and unreasonable. The Full Bench also determined that the introduction of the scanners was not reasonably necessary for Superior Wood’s functions or activities.
Accordingly, there was no valid reason for Lee’s dismissal. The Full Bench determined that Superior Wood’s dismissal of Lee was unjust, and that he had been unfairly dismissed. Lee’s remedy, if any, will be determined by the Commission at a later time.
What does this mean for employers?
The Full Bench decision is a reminder to employers that directions to employees must be lawful and reasonable. If not, dismissal of an employee for failing to follow an unlawful or unreasonable direction will likely be unfair. A direction will also be unlawful if its fulfilment violates a law or an employee’s legal right.
Before issuing a direction to an employee, employers should consider whether the direction is within the scope of the employment, having regard to the business and employee’s usual duties.
However, even if a direction falls within the scope of the employer’s business and employee’s duties, it will still be unreasonable if it is unlawful. In an increasingly digital world, employers should be careful in collecting and storing their employees’ sensitive information.
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This article is part of a regular employment law column series for HRM Online by Workplace Relations & Safety Partner Aaron Goonrey and Lawyer Isabel Hewitt.  It was first published in HRM Online on 31 May 2019. The HRM Online version of this article is available here. 

 
 

Quick links:

What is a warranty against defects?
Who do the new requirements apply to?
What is the mandatory text?
What other information must be included?
What should you do?
Further information

What is a warranty against defects?
A warranty against defects is a statement made by a business to its customers that if the goods or services are defective, the business will:

repair or replace the goods;
resupply or rectify an issue with the services (or part of them); or
refund or compensate the consumer.

Who do the new requirements apply to?
The ACL provisions regulating warranties against defects are limited to where the warranty is given to a consumer in connection with the supply of goods, services, or goods and services together.

A person acquires goods or services as a ‘consumer’ if:
the price of the goods or services is $40,000 or less; or
the goods or services are of a kind ordinarily acquired for personal, domestic, or household use or consumption; or
the goods comprise a vehicle or trailer for use principally in the transport of goods on public roads.

Some services do not require the mandatory text to be included in warranty documents, including:

services supplied under a contract of insurance;
certain gas, electricity, or telecommunications services; or
services for transporting or storing goods where the goods are used for business, trade, professional, or occupational purposes.

What is the mandatory text?
From 9 June 2019, the following mandatory text must be included in warranty documentation for the supply of services:
“Our services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled:

to cancel your service contract with us; and
to a refund for the unused portion, or to compensation for its reduced value.

You are also entitled to be compensated for any other reasonably foreseeable loss or damage.
If the failure does not amount to a major failure you are entitled to have problems with the service rectified in a reasonable time and, if this is not done, to cancel your contract and obtain a refund for the unused portion of the contract."
From 9 June 2019, the mandatory text for the supply of goods and services together is:

"Our goods and services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled:

to cancel your service contract with us; and
to a refund for the unused portion, or to compensation for its reduced value

You are also entitled to choose a refund or replacement for major failures with goods. If a failure with the goods or a service does not amount to a major failure, you are entitled to have the failure rectified in a reasonable time. If this is not done you are entitled to a refund for the goods and to cancel the contract for the service and obtain a refund of any unused portion. You are also entitled to be compensated for any other reasonably foreseeable loss or damage from a failure in the goods or service."

What other information must be included?
In addition to the mandatory text, the document which evidences a warranty against defects must:

outline what the business must do if goods are faulty or defective;
outline what the customer must do to entitle them to claim the warranty — for example, cease using the goods when a fault arises or contact the supplier or manufacturer and point to the defect;
provide certain information about the business giving the warranty (name, business address, telephone number, email address (if any);
state the warranty period;
set out the procedure for the consumer to claim under the warranty, including the address where a claim must be sent;
set out who will be responsible for expenses associated with a warranty claim and how the consumer can claim back any expenses incurred; and
state that the benefits provided to the consumer by the warranty are in addition to other rights and remedies available to the consumer under the law.

What should you do?
Businesses who provide a warranty against defects in connection with the supply of services (or goods and services together) must update their warranty documentation to include the mandatory text by no later than 9 June 2019.
If you require clarification or assistance in complying with the new requirements, please contact Helen Scott.
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Quick Links

An employee’s duty
A right to refuse?
Dismissed for no fingerprints
Sensitive but not lawful 
An employee’s right to privacy 
What does it mean for employers

Is it lawful and reasonable for your employer to ask you for your fingerprint? And if you don’t want to give it to them, can they dismiss you?
As with many directions to employees, what’s considered reasonable or not depends. However, if compliance with a request for your fingerprint leads to a breach of privacy legislation, it’s likely that you can tell your employee (politely, of course) to keep their hands off your biometric data, without losing your job.
An employee’s duty
Employees have a general duty to obey lawful and reasonable directions from their employer. What constitutes a “reasonable direction” will depend on the circumstances of each case. This includes, among other things, the nature of the employment relationship, the terms of the employment agreement, the method by which the direction is given, and the usual or customary practices in the workplace.
The reasonableness of an employer’s direction may also be impacted by the consequences to the employee of responding to the direction. Relevantly, a direction may be unreasonable or unlawful if it requires the employee to provide personal information in circumstances that would constitute a breach of privacy (or other) legislation.
A right to refuse?
In February, we discussed whether employees have a right to remain silent, in circumstances where an employer directs an employee to answer specific questions. A recent decision handed down by the Full Bench of the Fair Work Commission has provided some additional guidance on what is a lawful and reasonable employer direction (HRM initially wrote about the decision here). The decision arose in circumstances where the relevant employee refused to consent to the collection of and provide the requested information to his employer. The information was his fingerprint.
In the first instance, the employee refused to use biometric scanners. The scanners were introduced for registering employee attendance and tracking shift times. The question before the Commission was whether this constituted a failure to follow a lawful and reasonable direction, justifying dismissal. On appeal, the Full Bench called into question the lawfulness and reasonableness of the employer’s direction.
Dismissed for no fingerprints
The employee (Lee) was employed by Superior Wood, which operates two sawmills in Queensland. At first instance (see Lee v Superior Wood Pty Ltd [2018] FWC 4762), it was held that the dismissal of  Lee, who repeatedly refused to use biometric scanners that were introduced for registering attendance and tracking shift times at his worksite, was not unfair.  
In refusing to use the biometric scanners, Lee raised concerns with Superior Wood about using the scanner, including that he believed that using the scanner could result in his fingerprint being used by “unknown individuals and groups, indefinitely“. Despite extensive discussions between Lee and Superior Wood, the issue could not be resolved. At question was whether the method of collection of Lee’s fingerprint was in breach of the Privacy Act 1988 (Cth).
Superior Wood directed Lee to consent to the workplace policy requiring collection of the biometric data, and consequentially to having his data collected. Superior Wood informed Lee that if he did not consent to the policy, and he failed to comply with the policy, he would likely be dismissed.
In assessing whether Superior Wood’s direction was reasonable, it was observed that the relevant policy requiring Lee to consent to having his fingerprint collected may not have complied with the Privacy Act (because Superior Wood did not issue collection notices before introducing the biometric scanners, or have a suitable privacy policy in place, among other things).  
Sensitive but not unlawful
The Commissioner at first instance noted that biometric data was sensitive information under the Privacy Act, which applied to Superior Wood, and required it not to collect Lee’s information unless he consented to its collection. The Commission also observed that it was reasonably necessary for Superior Wood to collect the biometric data for its functions or activities. Superior Wood did not inform its employees that the scanners collected their sensitive information, or discuss with them its obligations in handling their sensitive information. It merely informed them that the scanners were being introduced and that they would be required to use them.
While it was observed that there may have been a breach of the Privacy Act, the Commission at first instance did not render the policy unlawful — simply the manner in which Superior Wood went about trying to obtain consent may have constituted a breach of the Privacy Act. The Commission said that any such breach may be a matter that could be referred to the Australian Information Commissioner and Privacy Commissioner.
Lee was entitled to withhold his consent, which he did, but doing so meant that he had failed to meet a reasonable direction from Superior Wood to implement a fair and reasonable workplace policy. Superior Wood dismissed him as a consequence of failing to follow a lawful and reasonable direction. Because Lee failed to follow a lawful and reasonable direction, his dismissal was not unfair.
An employee’s right to privacy
Lee appealed the first instance decision (see Lee v Superior Wood Pty Ltd [2019] FWCFB 2946). In the appeal, the Full Bench of the Fair Work Commission found that the direction given to Lee to consent to the solicitation and collection of his biometric datawas unlawful because it was inconsistent with the Privacy Act — Lee was entitled to refuse to follow the direction because it was unlawful and unreasonable. The Full Bench also determined that the introduction of the scanners was not reasonably necessary for Superior Wood’s functions or activities.
Accordingly, there was no valid reason for Lee’s dismissal. The Full Bench determined that Superior Wood’s dismissal of Lee was unjust, and that he had been unfairly dismissed. Lee’s remedy, if any, will be determined by the Commission at a later time.
What does this mean for employers?
The Full Bench decision is a reminder to employers that directions to employees must be lawful and reasonable. If not, dismissal of an employee for failing to follow an unlawful or unreasonable direction will likely be unfair. A direction will also be unlawful if its fulfilment violates a law or an employee’s legal right.
Before issuing a direction to an employee, employers should consider whether the direction is within the scope of the employment, having regard to the business and employee’s usual duties.
However, even if a direction falls within the scope of the employer’s business and employee’s duties, it will still be unreasonable if it is unlawful. In an increasingly digital world, employers should be careful in collecting and storing their employees’ sensitive information.
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This article is part of a regular employment law column series for HRM Online by Workplace Relations & Safety Partner Aaron Goonrey and Lawyer Isabel Hewitt.  It was first published in HRM Online on 31 May 2019. The HRM Online version of this article is available here. 

 
 

 
Quick links 

What did the Fair Work Commission say?
What does the decision mean for employers?
Further information

We have all been there; struggling to make it to work following a big night of Netflix – having no choice but to either call in sick or reach for the pain killers to cure the insufferable headache from excess screen time. In fear of getting sacked for “chucking a sickie", we take the pain killers – but is there a risk that you could get sacked anyway?
A recent appeal decision of the Fair Work Commission confirmed it was not appropriate to reinstate an employee who tested positive for Nurofen Plus after failing to declare he was taking it as required by the applicable Drug and Alcohol policy (D&A Policy).
What happened in Guorgi v Transdev Queensland Pty Ltd?
Mr Guorgi, a Compliance Officer at Transdev (a public transport business), was sacked after he tested positive for Nurofen Plus. Consequently, Mr Guorgi initiated unfair dismissal proceedings, arguing, among other things, that the lower strength pain killer did not impair his ability to perform his job and that was the reason why he didn’t submit the Medical Declaration Form as required by the D&A Policy. Mr Guorgi was of the view that in these circumstances, Transdev’s D&A Policy did not apply to him.
What did the Fair Work Commission say?
At first instance, Commissioner Booth found that Mr Guorgi breached the D&A Policy because he failed to report that he was taking Nurofen Plus and he failed to submit the required declaration form. This, along with his lack of contrition and insight that led the Commissioner to conclude that there was a valid reason for dismissal.
However, ultimately, Mr Guorgi was awarded $17,795 in compensation, as the Commission found the dismissal was harsh, unjust and unreasonable for a number of reasons, including:

procedural errors by Transdev in considering previous unrelated allegations against Mr Guorgi (most of which were unsubstantiated) that the Commissioner found "troubling"; and
the impact of the dismissal on Mr Guorgi including that he could no longer pay rent and had to relinquish his home, his car was repossessed, he had not worked since his dismissal due to a combination of health reasons and the difficulties of obtaining employment given that his role was a specialist one.

Mr Guorgi appealed the decision because he wanted his job back. He argued, amongst other things, that the Commissioner made an error in finding that the D&A Policy applied to him.
The Full Bench held that the D&A Policy, read as a whole, imposed an obligation on its employees to notify Transdev if they intended on taking non-prescription medication and to submit the Medical Declaration Form whether or not the medication impaired the employee’s ability to safely perform their role. Mr Guorgi did neither. The Full Bench considered that there was no error in the conclusion in the first instance decision that this was a valid reason for dismissal.
The Full Bench agreed with other reasoning in the first instance decision including that Mr Guorgi should be paid compensation instead of being reinstated. It held the evidence as a whole, weighed heavily against reinstatement because Mr Guorgi was in a safety critical role as a Compliance Officer, and Transdev were not confident he would correctly administer the D&A Policy given his attitude towards it.

Non-compliance with a D&A policy can be a valid reason for dismissal. Employers must also closely consider mitigating circumstances prior to making a decision to dismiss an employee.
Review your D&A policies to make sure they are up to scratch – it could mean the difference between an employee being reinstated following a purported breach of the policy or not.
Check your D&A policies are clear and include the following:
the steps required by employees in relation to their obligations;
the means by which employees can discharge their duties; and
the stipulated time frames for each step.

Avoid diluting workplace investigations with historical and unsubstantiated allegations. Focus on the key issues.

 
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All Australian States and Territories contain provisions in their respective wills and succession legislation to revoke a Will made prior to marriage.¹

Although inheritance laws do vary across states, the general rule is that Wills entered into in contemplation of marriage remain valid. However, given the previous uncertainty about the legal position of same-sex marriage in Australia, it is likely that many Wills of same-sex couples will not contain this provision.

If you are in a same-sex relationship and were deemed married (in Australia) on 9 December 2017, it is important to be aware that in most cases, the effect of the marriage will revoke your pre-existing Will. You should seek legal advice to ensure that your Estate is distributed in accordance with your wishes in the event of death.

Marriage may affect your Superannuation Binding Death Benefit Nomination

Marriage may also revoke a Binding Death Benefit Nomination.

This differs significantly from fund to fund and we recommend that you seek legal advice to ensure that your superannuation entitlements are divided on death in accordance with your wishes.

It is also important to be aware that separation in and of itself, does not affect a superannuation Binding Death Benefit Nomination. The law only recognises such changes on divorce. In Australia, separated parties are not eligible for divorce until they have been separated for 12 months.

This means that following your separation, your nominated binding death benefit should be changed to ensure your Binding Death Benefit Nomination is in favour of your chosen person,  and not necessarily your separated spouse.

 

Can I continue family law proceedings if my spouse dies?

Under the Family Law Act (1975) (Cth) (Family Law Act), separated couples may apply to the Family Law Court of Australia (or the Federal Circuit Court of Australia) for orders with respect of the division of matrimonial assets

However, if one member of the couple has died, this will impact significantly on the ability of the surviving party to bring family law property proceedings for a property settlement.

The Family Law Act permits a surviving spouse to continue family law proceedings that were instituted prior to the death of a deceased spouse, provided that the Court is satisfied that certain requirements have been established.

For married couples, section 79(8) of the Family Law Act provides that property settlement proceedings may be continued by the deceased person’s legal representative if the court is of the opinion that it would have made an order with respect to the property if the deceased had not died, and that it is still appropriate to make an order.

For de facto couples, section 90SM(8) effectively sets out a mirror provision including one important difference — de facto couples are required to establish that the relationship has broken down prior to initiating family law proceedings, in addition to providing the existence of the de facto relationship.

How do I know if the Court would have made an order with respect to property?

The law in this area is complex and you should always seek legal advice.

In 2012, the High Court decision of Stanford v Stanford¹ refined the traditional “four step” process adopted by the Court in determining property cases.

The courts must now first consider whether it is “just and equitable” in all the circumstances of a case to alter the parties’ existing legal and/or equitable interests at all. This means that the Court must consider whether it would have made a property order had the deceased not actually died, and whether it is fair to alter those rights.

The question as to whether it is “just and equitable” to alter the property interests of a separated couple can be demonstrated through the example of Peter and Prudence:

• Peter and Prudence were married in 1980. They have two adult children who both suffer from significant health issues. Peter and Prudence also suffer from very poor health.
• Peter and Prudence decide to separate under the same roof in 2000 and Peter moves out of the former matrimonial home which is registered in the joint names of the parties in 2004.
• In 2011, Peter is diagnosed with cancer and commences property proceedings in the Family Court of Australia seeking that the home be sold and the net proceeds distributed between the parties by way of property settlement.
• Given that Peter and Prudence have separated but are not yet divorced, Peter is entitled to commence property proceedings under the Family Law Act. However, if Peter and Prudence were divorced, a one-year time limitation to commence proceedings will apply (and two years in the case of separating de facto couples).
• Peter dies in late 2015 during the family law proceedings and his brother is granted permission by the Court to continue the family law proceedings on behalf of Peter’s Estate.
• Prudence and the two adult children continue to suffer from health problems and seek that there be no alteration as to property interests given that they are living in the home and have significant future needs.

The above scenario was seen in the case of Paxton & Paxton (2016) FCCA 1689. Ultimately, the Court declined to make the orders sought by the husband’s Estate.

One of the factors that the Court considered was the fact that had the proceedings not been commenced, then the former matrimonial home is likely to have been transferred to the wife under the rights of survivorship.

The Court held that it was not just and equitable, that is, fair to make any orders altering the property interests of the parties in circumstances where the wife and children had significant future needs, and the future needs of the husband were non- existent given his passing.

If family law proceedings are ongoing, what happens to the deceased party’s Will?

Where property proceedings in the Family Court are ongoing, and an application for family provision under the State legislation has been made, the Family Court proceedings must be dealt with first. This is because the outcome of the family law proceedings will determine what remains in the estate available for division between the beneficiaries of the deceased’s estate.

It is important to remember that usually the “family law asset pool” is likely to be bigger than the assets of the Estate. This is because a number of assets are simply not caught in the wills and estates area of law, for example, superannuation. This is dealt with separately.

Therefore, it may be advantageous to make an application for property division under the Family Law Act to ensure that these assets are included in the pool available for division.

What happens if my spouse dies before family law proceedings are commenced?

Where family law proceedings under the Family Law Act have not been instituted prior to the death of a person, their surviving spouse is limited to bringing a claim under the relevant State legislation. In Victoria, this is the Administration and Probate Act 1958 (Vic). In NSW, this is the probate and Administration Act 1898 (NSW).

If you are seeking an alteration of property interests in the event of the breakdown of your relationship (or in a situation of “involuntary separation” such as one person becoming legally incapacitated) and it is a case where death is imminent, we recommend seeking legal advice as soon as possible in the event that an urgent application in the family law courts is necessary.

 

 
Quick links

• What is spousal maintenance?
• How do courts decide on an appropriate amount of spousal maintenance?
• How long can a spousal maintenance order last for?
• Can I apply for maintenance overseas and register the order or agreement in Australia?
• Which forum is best for me?

What is spousal maintenance?

Spousal maintenance is a type of financial support. Countries such as Australia, Singapore, the UK, and Hong Kong all recognise that, in some circumstances, it may be necessary for a person to pay maintenance (also known as alimony) to their former partner.

It is common for courts in Singapore and Australia to order that maintenance be paid in monthly installments or by way of a single lump sum.

How do courts decide on an appropriate amount of spousal maintenance?

When making an order for maintenance, Singaporean courts will have regard to the financial needs of the parties, any physical or mental disabilities, the age of the parties, the length of the marriage, the parties’ contributions, and the standard of living enjoyed during the marriage.

Australian courts consider a similar range of factors, as well as each person’s ability to work.

A significant difference between the two jurisdictions is that both men and women can claim spousal maintenance in Australia. However, in Singapore men can only claim spousal maintenance if they have been incapacitated by illness or a physical/intellectual disability.

How long can a spousal maintenance order last for?

In Australia, spousal maintenance orders are generally a short-term solution for a person with little or no access to funds. A spousal maintenance order will typically last for a few years.

Courts in other jurisdictions (including Singapore) are more likely to make ongoing spousal maintenance orders that do not have a certain expiry date.

A recent case in the UK made headlines when a wife returned to court, 15 years after final orders were made, seeking an increase in her annual maintenance sum. The wife had received sufficient funds to purchase a property, but had subsequently entered into what the court deemed “a series of unwise transactions” resulting in a need to pay rent.

The Court of Appeal agreed to increase her husband’s annual spousal maintenance payments by more than £4,000 before the Supreme Court overturned the decision. Nonetheless, the original maintenance order will remain until the wife remarries or a further court order is made.

Can I apply for maintenance overseas and register the order or agreement in Australia?

The Australian Government allows the registration of spousal maintenance agreements in reciprocating jurisdictions, which include Singapore, Hong Kong, the USA, the UK, and Malaysia.

Which forum is best for me?

The most appropriate jurisdiction for any matter will depend on a number of factors. As outlined above, different countries have significantly different approaches to the payment of spousal maintenance. It is important to seek legal advice as soon as you separate because limitation periods apply in some jurisdictions.

About Lander & Rogers

The Lander & Rogers Family & Relationship Law group is Australia’s largest team of Family Law Accredited Specialists. We offer discreet and practical advice to suit your specific relationship needs and circumstances.

If this scenario resonates with you, please contact us on +61 3 2969 9000. With Lander & Rogers, you gain access to a leading provider of family law services in Australasia and internationally. We provide expertise in international relationship and family law matters, including international property, alimony, child support, and relocation regulations. Our lawyers are Accredited Specialists and qualified mediators, and we have strong alliances with international firms throughout Singapore, Hong Kong and the rest of Asia, the USA, and Europe.

This article was first published in ANZA Singapore on 17 January 2019. The ANZA Singapore version of this article is available here.

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By 29 March 2019, building owners in Queensland will need to complete the online combustible cladding checklist.
As a result of amendments to the Building Regulation 2006 (Qld) on 1 October 2018, building owners may now be required to register their buildings and complete the online combustible cladding checklist (https://www.saferbuildings.qld.gov.au/).  This process is intended to identify buildings in Queensland that may contain combustible cladding.
The Queensland Building and Construction Commission (QBCC) is contacting the owners of buildings in Queensland that may be required to register.  Regardless of whether an owner receives a letter from the QBCC or not — if they own a building within the categories of buildings noted below, an owner must register and complete the checklist online.  
The regulations apply to buildings that are:

Class 2 – 9;
of a type A or B construction; and
were built or had the cladding altered after 1 January 1994 but before 1 October 2018.

To view the classification of building, click through to the BCA website here.
Owners of these buildings must register online and complete part 1 of the checklist by 29 March 2019 —penalties apply for failing to complete the checklist in time.  Owners may apply to QBCC for an extension of time to complete part 1.
Further assessment (if required) must be completed by 29 May 2019.  
For further information or to get started, register here. 
In NSW, building owners were required to register by 22 February 2019.  Visit this NSW Government website for further information on the NSW registration requirements. 
Consultants who are assisting clients to navigate this process should ensure that they have appropriate terms of engagement in place, as well an ensuring that their insurance will cover them if they provide these services.
Key dates

1 October 2018 — The regulation comes into effect.
29 March 2019 — Owners to register buildings and complete the combustible cladding checklist (part 1).
29 May 2019 — (If required) Owners to complete the building industry professional statement and complete the combustible cladding checklist (part 2).
27 August 2019 — (If required) Owners to engage fire engineer and register their details on the combustible cladding checklist (part 3).
3 May 2021 — (If required) Complete the building fire safety risk assessment, fire engineer statement and the combustible cladding checklist (part 3).  

Authors
Micheal Loterzo | Partner Dean Balassis | Lawyer
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Quick links

The allegations
Coles decision upheld
Key takeaways
Further information

Background
52-year-old Peter Angelakos was employed by Coles as the Duty Manager at its supermarket in Moranbah, Queensland. 
Two junior female employees made complaints about Mr Angelakos’s inappropriate behaviour, including claims of sexual harassment. Due to the nature of the alleged conduct, Mr Angelakos was immediately stood down with pay.
An investigation commenced into Mr Angelakos’s conduct. An additional six employees came forward and made complaints about inappropriate behaviour by Mr Angelakos. Three of the complainants were under the age of 18, and a number were in their early twenties.
The allegations
A total of 39 allegations were put to Mr Angelakos. Broadly, they involved the following conduct:

standing inappropriately close to junior female staff members and following them around the store;
touching female employees inappropriately, such as on the lower back, arm, and shoulder;
making comments to female staff members such as “you have a very beautiful face", "you stand out from everybody", and "you are very pretty";
repeatedly asking two junior female employees to become friends with him on Facebook;
acting in an aggressive and bullying manner towards employees under his supervision; and
making threatening comments towards employees who raised concerns about his conduct, such as "be careful the next time you think to complain about me", and insinuating that he could have the employee fired.

In addition to the eight complainants, there were a number of other employees who witnessed Mr Angelakos’s conduct.
Mr Angelakos denied all of the allegations
In total, 33 of the 39 allegations were found to be substantiated or partially substantiated by the internal investigator, including sexual harassment against a female employee under the age of 18. Mr Angelakos’s conduct was found to be in breach of the Coles Code of Conduct and Equal Opportunity Policy.
Mr Angelakos was provided with the outcome of the investigation on 8 March 2018. A meeting was held with him on 9 March 2018, at which he was asked to show cause why his employment should not be terminated. Mr Angelakos provided a short, written response in that meeting and, following a break, his employment was terminated for serious misconduct that day. 
Mr Angelakos commenced unfair dismissal proceedings in the Fair Work Commission. He sought reinstatement to his position or the maximum compensation of 26 weeks.
Coles decision upheld
The Commissioner upheld the majority of the internal investigator’s findings. Importantly, all of the findings about inappropriate conduct towards female employees were upheld.
The Commissioner noted that the #metoo movement commenced and gained traction in late 2017, and was likely to have encouraged the initial complainant and other complainants to report Mr Angelakos’s conduct.
The Commissioner found that:

the internal investigator did a good job and acted professionally in conducting the investigation;
the sexual harassment of an underage employee, together with the victimisation of another female employee, provided a valid reason for Coles to terminate Mr Angelakos’s employment, and that it was not necessary for her to consider each substantiated allegation; and
Coles followed a fair process in carrying out the termination of Mr Angelakos’s employment, including notifying him of the reason for the termination and providing him with an opportunity to respond.

While there were a few matters that could be improved upon by Coles (see "Key takeaways" below), the Commissioner was satisfied that the dismissal was not unfair.
Key takeaways
The Commissioner found that Coles followed a proper process prior to the termination of Mr Angelakos’s employment. However, the decision nevertheless contains some useful guidance for employers in managing inappropriate workplace behaviour and unfair dismissal risks.

For large employers, there should be more than one avenue for employees to make a complaint or raise concerns about inappropriate workplace conduct. For example, in the retail sector, a store manager should not be the only avenue for an employee to make a complaint.
In the case of termination for misconduct, it is good practice for an employer to include the conduct that has led to the termination in any letter of termination. It is generally not sufficient to simply say that the employment is being terminated for misconduct.
Where an employee is asked to show cause why his or her employment should not be terminated, employers should ensure the employee is provided with sufficient time to provide a response. Best practice is likely to involve holding show cause and termination meetings on different days, rather than dealing with both matters in the one meeting.

 

Quick links:

Competition priorities
Consumer Law priorities
Advocacy and market studies
Key takeaways

Competition priorities
Renewed focus on anti-competitive conduct: The ACCC will renew their focus on key competition issues and utilise their ‘SLC Unit’ (i.e. the Substantial Lessening of Competition Unit) to investigate and prosecute potential breaches of the new misuse of power and concerted practices provisions, whilst also continuing their previous focus on anti-competitive practices in the commercial construction sector.
Cartels in sight: Cartel conduct will also remain a focus area, with at least three significant cartel investigations expected to be referred to the Commonwealth Director of Public Prosecutions.
Impact of the Financial Services Royal Commission: The findings of the Financial Services Royal Commission highlighted that competition is not vigorous among the major banks or in some parts of the financial sector. The ACCC has established a Financial Services Competition Branch, which includes a permanent competition investigation team to complement the market studies team.
Consumer Law priorities
Significant maximum penalties: The ACCC will have a strong consumer law focus in 2019. Mr Sims lauded a number of key cases in 2018 that brought significant penalties, including:

consumer guarantees penalties of $9 million (Apple) and $10 million (Ford Australia);
misleading conduct in telecommunication billing penalties of $10 million (Telstra and Optus); and
false or misleading representations penalties of a record $18 million (We Buy Houses Pty Ltd and Mr Otton).

We expect these substantial penalties to continue. New maximum penalties for contraventions of the Australian Consumer Law (ACL) were introduced in 2018, bringing the penalties in line with penalties for anti-competitive conduct, being the greater of:

$10 million per contravention;
three times the benefit obtained from the conduct; or
where the benefit cannot be calculated, 10% of annual Australian sales turnover of the offending company.

Mr Sims stated that he ‘[believes] Parliament intended that in particular cases there should be penalties of over $100 million for breaches of consumer law to improve deterrence’.
New target areas: Mr Sims announced a number of new areas of focus for 2019, including:

Customer Loyalty Schemes, where questions arise of whether consumers are properly informed and receive the benefits of these programs;
Consumer guarantee rights in the context of large retailers and manufacturers that supply high value consumer goods (e.g. whitegoods and electrical goods);
Advertising practices on social media platforms and ‘subscription traps’;
Opacity of pricing of essential services, such as energy retailing and telecommunications. In this regard, the ACCC will continue to advance its work on the Consumer Data Right, in order to produce draft rules to give consumers access to their data to facilitate greater consumer choice in the banking, energy and telecommunications sectors.

Continuing priorities: A number of other priorities will continue from 2018, including a focus on the franchising sector, enforcing unfair contract terms in small business contracts, and new car retailing.
Advocacy and market studies
Unfair contract term penalties: Mr Sims will continue to advocate for the introduction of penalties to the unfair contract term regime. Currently, the law only permits an unfair contract term in standard-form contracts to be declared void; there is no penalty for including unfair contract terms in standard-form contracts with consumers or small businesses.
Market studies will continue: The ACCC will also continue its market studies in a number of areas, including gas supply and pricing, financial services, agriculture, wine grape production, and electricity affordability.
Additional advocacy priorities: The ACCC will also advocate for changes to the law to:

include a general safety provision that would prohibit the sale of unsafe goods; and
consider the adequacy of laws against companies that engage in ‘harsh and unfair conduct’ towards consumers, which may not currently be caught by the misleading or deceptive conduct or unconscionable conduct provisions.

Key takeaways
2019 is set to be a big year for the ACCC, and all businesses should take care to ensure that their practices are reviewed in light of the key legislative changes in 2018 to the misuse of market power and concerted practices provisions.
The ACCC’s lengthy list of ACL priorities should also put all consumer-facing businesses on notice that it intends to vigorously enforce the new substantial maximum penalties introduced in 2018.
Financial services providers and major retailers should be particularly wary of ACCC action in 2019 in light of the comments made by Mr Sims.
The ACCC’s enforcement priorities can be found on its website at this link: here.
For further information or to see how this may impact you and your business, contact our Commercial Disputes team.
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