Leave Entitlements

Rockpool: The importance of getting your employee wages and entitlements correct

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As a result of a process described by Rockpool Dining Group (Rockpool), in their press release of Sunday 14 October 2018 as a “reconciliation review of annualised salaries for eligible employees”, Rockpool is making what they refer to as “top up payments” to employees in the order of approximately $1.6m and covering only the 2017-2018 financial year.

 

Rockpool includes the Australian Rockpool Bar and Grill venues and other restaurants and bars. Earlier this year, in a separate press release, Neil Perry made a statement denying that Rockpool had any issues with respect to employee wages and entitlements.

In their subsequent 14 October press release, Rockpool cited as contributing to the underpayment, their 2,400 employees with an annual payroll of approximately $100m overall, as well as “disparate payroll systems and the complexity of multiple shifts, sites and rosters” which they described as “pos[ing] an industry-wide challenge”.

This originally started as an anonymous staff claim that overtime was being paid incorrectly.

Generally speaking, any salary for an employee covered by an award must be greater than the entitlement of that employee calculated against the employee wages and entitlements under the award.  Many employers conduct a regular assessment against any salary package against the award to ensure that their employees are at least receiving the minimum wage and entitlements they would receive if they were being paid solely in accordance with the award.

It appears that at least some Rockpool staff were paid such annualised salaries as provided for in the relevant Award.  The “reconciliation review” conducted by Rockpool was noted in their 14 October press release as “required to ensure that award employees who receive an annualised salary are appropriately compensated, taking account of minimum award terms and conditions.  Where, following a reconciliation process, an employer assesses that an employee would have received more on award terms, a “top up” payment is made.”

For many small businesses, rectifying backdated employee wage and entitlements could have grave impacts, particularly if there is a large monetary correction required.  It is clearly imperative to ensure that each business understands and pays employee wages and entitlements correctly right from the start. 

At Coutts we regularly advise clients in relation to their obligations and responsibilities under the relevant Awards.  We also prepare employee agreements that are clear, practical and accurate, to avoid, among other things, any inaccuracies with employee wages and entitlements.

For further information, or a review of your company constitution or agreements, please don’t hesitate to contact:

Alexandra Johnstone
Partner
alexandra@couttslegal.com.au
02 4607 2110

 

Terms and Conditions: a snapshot on fundamental considerations for your business

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Terms and conditions are a risk management tool and an allocation of roles and responsibilities

Terms and conditions are important to protect businesses and to make it clear what a customer is signing up to. The existence of terms and conditions in our daily lives is inescapable, they outline the way goods and services are provided and accepted. For example terms and conditions will describe what is being provided to the consumer, payment details, time frames, return/refund policies, warranties and disclaimers. You may not notice, but terms and conditions are everywhere, on the bottom of online shopping sites, on signs before we enter into car parks, a waiver before go-karting, attached to quotes, or a in the form of a box to be ticked saying ‘I have read and accept the terms’ before we can buy a concert ticket online. Irrespective of the size of your business it is extremely important to have well thought out terms and conditions when conducting transactions and that fit seamlessly with the way you conduct business.  It is also critical that terms and conditions cover off risks to you and your business and are not considered unfair contracts under the new unfair contracts regime.

 

The importance of timing your terms and conditions right

It is crucial to provide your terms and conditions to a customer before you start providing any goods or services to that customer. This has been a fundamental feature of contract law for decades, the case of MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 8 ALR 131 stated that a purchaser must be afforded a ‘reasonable opportunity’ to either accept or reject the terms and conditions of purchase. It is not generally sufficient to provide a client or purchaser with a copy of your terms and conditions after the agreement has been entered into or after you have started providing goods and services to that customer. With this in mind, your business should set out the expectations of the transaction from the beginning in order to be afforded maximum protections.  

Your terms and conditions are essentially an allocation of risk between you and your customer and a risk protection tool.

 

Tip: ensure that your customers read and understand your terms and conditions

A business should make their terms and conditions easily accessible and obvious. It is wise to include the terms and conditions at the start of the document, with the signing section to follow – this helps ensure the customer has the opportunity to read and consider the terms and conditions before signing.

Ideally, the way you structure your terms and conditions should make it difficult for a customer to argue that they were unaware of the terms because they didn’t read them. This happened in the case of Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 where a party attempted to argue they could not be bound to the terms and conditions of the contract as they did not read them. The provisions were on the reverse page of the agreement and despite being on the reverse, the party was held to have accepted them upon signing the document.

However, be careful that the terms and conditions are not underemphasised on purpose. The case of Director of Consumer Affairs Victoria v Domain Register Pty Ltd [2007] FCA 1603 held that the small and difficult font outlining where the terms and conditions were to be viewed was a direct attempt to give important information no prominence for commercial gain.

 

How might I incorporate terms and conditions to online purchases or online services?

Generally, there are two ways in which you can include your terms and conditions online.

1. “Click Wrap Agreement”

This technique of acceptance requires a consumer to click on a button to the effect of “I agree” or tick a box saying something similar. The terms and conditions will usually be accessible through another link. In eBay International AG v Creative Festival Entertainment Pty Ltd [2006] FCA 1768 it was agreed that “click wrap” was an effective way to convey terms and conditions. However, this method of agreement has been a controversial one in Australia and overseas as the judgments have considered all the relevant facts in making a determination as to whether the agreement to the terms and conditions was validated by the click.

2. “Browse Wrap Agreement”

On a website there may be a link to the terms and conditions displayed somewhere on the website, often the bottom of the page, and require clicking a hyperlink to view them. In these situations, there is no requirement to click on an “I agree” type button but contrastingly, the consumer may not even be aware of the terms and conditions. The courts have typically been less likely to enforce agreements made through the “browse wrap” display technique as the notice to consumers has not been made obvious. 

 

What are the essential inclusions for my terms and conditions?

Your specific individual terms and conditions will vary depending on the services offered and the nature of the transactions. It is important to tailor your terms and conditions to the way you supply the service or product and not to copy and paste from a competitor, particularly given you do not have ownership or any rights to use or change the terms and conditions of a competitor. 

Some essential inclusions for your business might include:

  • The goods or services: What is the customer receiving? What is its purpose, function or use?

  • Payment terms: It should be clear when you will be paid. Is it before or after the product or service is provided? How many days do they have to pay? Is there a deposit required?

  • Additional costs, fees or disbursements: In what circumstances will the customer incur an additional fee, cost or disbursements?

  • Time frames: When will the product/service be provided to the customer? What happens if the deadline is missed?

  • Intellectual property: If applicable, it is crucial to state who owns what intellectual property to avoid transferring any rights to it.

  • Warranties: What are you warranting? How long is the product or service good for its purpose? What if the product or service is defective or faulty?

  • Returns and refunds: What is the process for returning a product or obtaining a refund? Your process will need to comply with Australian Consumer Law.

  • Termination: How can the agreement be ended? Is there a time frame or expiry date? Who can end the agreement and when? What are the consequences of termination?

  • Dispute resolution: What is the process for dealing with a dispute if it arises?

  • Indemnities and liability: If something goes wrong, who is liable for what? Which party is on the hook for certain acts, claims, consequences, damages and costs?

  • Confidentiality: What elements of the agreement are confidential and cannot be disclosed to other people?

It is also important to know what you cannot include. The Australian Consumer Law provides a set of consumer guarantees, which cannot be altered or excluded by any terms or conditions. Some of the guarantees include:

  • Guarantee as to acceptable quality;

  • Guarantee as to fitness for a particular purpose;

  • Guarantee as to due care and skill;

  • Guarantee as to reasonable time for supply;

Any terms and conditions which attempt to alter any of the guarantees found in the Australian Consumer Law will not be valid.

The unfair contracts regime which was extended on and from November 2016 has also impacted on the types of terms that cannot be included. For example, many terms and conditions would state that the party supplying the goods or services could unilaterally change the terms of the agreement without giving the other party notice or the opportunity to terminate the agreement. This is now unacceptable and could result in the terms and conditions being determined an unfair contract.

The use and inclusion of terms and conditions in your transactions and agreements are essential to safeguard your business and make it clear what the consumer can expect. At Coutts we are able to prepare tailored terms and conditions, which will take into account the individuality of your particular business. We can ensure you are complying with the law but ensuring the terms and conditions have the look and feel of your business and are plain language and friendly. Please do not hesitate to contact our experienced team to enquire about amending or obtaining terms and conditions for your business.

 

For further information contact:

Rebecca Watts
Lawyer
rebecca@couttslegal.com.au
02 4607 2148

 

 

 

Gardening Leave - what it is and why it's relevant.

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What is gardening leave?

Gardening leave is a concept where the employer does not require the employee to come to work and perform their usual duties, but the employee still receives their usual remuneration despite not actively working.

 

Gardening leave usually arises in the following situations:

  1. Where the employee has resigned, and the employer does not want the employee engaging with clients during the relevant notice period; 

  2. Where the employee has been suspended while awaiting disciplinary action;

  3. Where the employer is considering terminating the employee; or

  4. Where the employer has provided the employee with time to find alternative employment.

 

Does an employer have a duty to provide work?

Gardening leave has raised many questions around whether the employer has a duty to provide an employee with work or whether the employer can enforce a right to gardening leave.

 

There is no automatic implied term in an employment relationship that an employer must provide an employee work. The duty to provide work must be expressly stated in the contract. The primary obligation of the employer is to pay the employee’s wage.

 

However, if the job requires a particular special skill or talent for example if the employee is a singer, then there may be an obligation on the employer to provide the work.

 

From a practical perspective, the right of an employer to place an employee on gardening leave must typically be first set out in that employee’s contract.

 

Does an employer have a right to place an employee on gardening leave?

The issue of whether the employer has the right to place an employee on gardening leave in the first place has been an area of debate. In the case of Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 the employee resigned, and the employer placed the employee on gardening leave and ordered the employee not to attend work during the notice period. The employee was under a fixed term contract and had resigned before the end of the fixed term. As such the employer refused to accept this and sought an order to prevent the employee from working with a competitor whilst the contract was still on foot. The court upheld that the employer had an express right to direct the employee not to attend work whilst the contract was ongoing.

 

Similar, in the matter of Actrol Parts Pty Ltd v Coppi (No 2) [2015] VSC 694 the parties were arguing about whether the employer had the right to place the employee on gardening leave under the employment contract. Following the employee’s resignation, the employer placed the employee on gardening leave and during the gardening leave the employee joined a competitor. This normally would have been a breach of the employment contract however, the employee tried argued that the employer did not have an express right under the employment contract to place him on gardening leave in the first place and therefore, the contract was repudiated by the employer and the employee was free to work with the competitor.  

 

The employee in this case was a sales representative with access to clients and confidential information. Therefore, the court said that it was an implied term that the employer could place the employee on gardening leave.

 

In conclusion, the court deemed the employer could place the court on gardening leave. However, the employer made the mistake of removing the employee’s motor vehicle and mobile phone during the gardening leave which were part of the employee’s salary package. This meant the employee was not receiving his usual remuneration and the employer was found to have repudiated the employment contract and the employee was able to work for a competitor.

 

Key practical tips 

  • Check employment contracts for clear provisions which enable employers to place employees on gardening leave;

  • Consider whether an employee is receiving the usual remuneration and employment benefits the employee ordinarily receives during any gardening leave and ensure you understand the legal implications of this;

  • Seek legal advice if there is no express right for an employee to be placed on gardening leave but you would like to take this course of action;

  • Seek legal advice about actions taken during the gardening leave by an employee, including searching or obtaining new employment with a competitor. 

 

At Coutts we have experience in drafting employment agreements, reviewing and providing advice on employment agreements and employment disputes. Coutts understands the importance of providing clear and accurate advice to try and prevent disputes in the first place and to resolve them when they do occur as soon as possible. Please contact our Commercial Law department today if you have any questions.

 

For further information contact:

Rebecca Watts
Lawyer
rebecca@couttslegal.com.au
02 4607 2148