A recent decision of the Federal Court of Australia involving a breach of grievance procedure has highlighted the importance of employers reviewing the terms of industrial instruments when dealing with their employees.
Mr Van Efferen started employment with his employer, CMA, in 2002. In around June 2006, Mr Van Efferen was appointed as a Barge Master for a project CMA was undertaking for John Holland in Western Australia. Shortly afterwards, Mr Van Efferen entered into an Australian Workplace Agreement (AWA) and common law contract of employment with CMA.
One of the terms of the AWA, which was key to Mr Van Efferen's claim, was a grievance procedure that CMA was required to follow if CMA had concerns about the behaviour of its employees.
The contract between CMA and John Holland allowed John Holland to require CMA to remove an employee from the project if John Holland considered an employee to be unsatisfactory. In September 2006, John Holland exercised its right to have the CMA employee who was the marine supervisor removed, and CMA subsequently appointed Mr Van Efferen as the marine supervisor, noting that Mr Van Efferen was an experienced marine supervisor. Shortly afterwards, CMA also appointed a new project manager who did not have experience in maritime work.
Mr Van Efferen had a number of disagreements with the new project manager over safety matters. On a number of occasions, the project manager disagreed with Mr Van Efferen's recommendations, and in most instances Mr Van Efferen's concerns were proven to be justified.
In early October 2006, the project manager approached Mr Van Efferen and advised that Mr Van Efferen's appointment at the project was not working out and that Mr Van Efferen was to be sent back to his home base. Towards the end of October 2006, Mr Van Efferen's employment was terminated for reason of redundancy.
The project manager subsequently argued that the reason for removing Mr Van Efferen from the project was a belief that John Holland would exercise its right to have Mr Van Efferen removed from the project, however the court rejected this, and found that Mr Van Efferen's removal was due to his disagreements with the project manager (where Mr Van Efferen had raised legitimate safety issues). Further, the court found that John Holland was unlikely to have requested the removal of an experienced marine supervisor such as Mr Van Efferen.
The court also found that if CMA had complied with the grievance procedure in Mr Van Efferen's AWA, Mr Van Efferen's employment would not have been terminated. Accordingly, Mr Van Efferen was entitled to damages. The court awarded Mr Van Efferen $274,288 in damages, representing the remuneration Mr Van Efferen would have received to the end of the project that CMA was undertaking for John Holland.
The decision of the court is currently the subject of an appeal.
Implications For Employers
Under the Workplace Relations Act 1996, a court could only award an employee damages for a breach of an industrial instrument if that industrial instrument was an AWA (or an individual transitional employment agreement). With the commencement of the Fair Work Act 2009 (Cth) on 1 July 2009, a court now has the power to award damages for a breach of any industrial instrument (which includes collective enterprise agreements and awards).
As a result, now more than ever, employers need to ensure that they:
- are familiar with the terms of the industrial instruments applicable to an employee's employment
- comply with the terms of those industrial instruments in all of their interactions with employees.
For more information, please contact
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Sydney |
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Michael Cooper |
t (02) 9931 4999 |
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
