The Law Handbook 2024

1064 Section 11: Rights, activism and fair treatment at work At common law, an employer may dismiss an employee without notice or wages in lieu of notice where the conduct of the employee is serious and justifies instant dismissal. Examples of conduct justifying instant dismissal are serious misconduct, gross incompetence, neglect of duty, and wilful refusal to obey the employer’s lawful and reasonable commands. Misconduct is active conduct of a serious nature that indicates that an employee rejects the contract of employment. For example, by repeated drunkenness, persistent absenteeism or dishonesty. The breaches must usually be substantial or persistent. Case study In Rankin v Marine Power International Pty Ltd [2001] VSC 150 (21 May 2001), Justice Gillard in the Supreme Court of Victoria held that there was no rule that defined the degree of misconduct that would justify dismissal without notice; such an assessment was a question of fact. The courts and the Fair Work Commission have determined that even fighting in the workplace must be looked at in its context before it can be said to justify summary dismissal. 15 Redundancy A redundancy arises where the duties performed by the employee are no longer required to be performed or the employer becomes insolvent or bankrupt. The NES in the FW Act (see ‘National Employment Standards’, above) provide for an employer to make a redundancy severance payment when an employee in the national system is terminated due to redundancy. Consideration should be given to whether a specific redundancy clause should be included in an agreement that provides an employee with a more beneficial entitlement than under the NES. Before the commencement of the NES (on 1 January 2010), there was no general legal requirement that an employer pay a redundancy payment. An employer was only required to make such a payment if a specific obligation existed, usually in an award, collective agreement, policy or contract. If an employee did not have a right to a redundancy severance payment before 1 January 2010, only their service after 1 January 2010 is taken into account. Small businesses (being those that employ fewer than 15 people) do not have to pay redundancy pay (see ss 121, 123 FW Act). In determining how many employees a business has, the employees of all associated entities (as defined in section 50AAA of the Corporations Act 2001 (Cth)) of the business are taken into account. 16 Trade secrets and restraint of trade Sometimes, employers include clauses in an agree- ment to protect trade secrets and confidential information, and to limit the use by an employee of skills and knowledge acquired during the period of employment. The enforceability of such clauses depends on the terms and the circumstances of employment. An employee has a duty of fidelity (i.e. loyalty) and good faith to their employer. An employee would likely breach this duty if they provided vital trade secrets to a competitor, or carried on a business that competed with their employer. Clauses that limit where a person may work, or that impose a time limit during which an ex-employee may not carry on a similar business, or that limit the use to which certain information can be put (restraint of trade clauses) are considered to be void unless they go no further than is reasonably necessary to protect the employer’s legitimate commercial interests. 17 Employer policy An increasingly common term in individual agreements is one that expresses a term of the agreement as subject to the employer’s policies. For example, ‘Employees must take annual leave when [ the employer’s ] business shuts down annually, subject to [ the employer’s ] annual leave policy as amended from time to time.’ 18 Superannuation Under the Superannuation Guarantee (Administration) Act 1992 (Cth) and other related legislation, an employer is required to contribute a percentage of an employee’s earnings into a complying superannuation fund. If an employer fails to contribute to a superannuation fund, the ‘shortfall’ is assessed, and the employer must pay a charge or tax. This charge is more than what the compulsory contribution would have been. There are certain exemptions from the super- annuation scheme. These include employees who are paid to do work of a domestic nature (for