In this case, an employer contracted a consultancy company to assist in offering AWAs to transferring employees after the employer took over a supermarket business. A transferring employee was interviewed by the consultancy company and was offered an AWA. The employee claimed to have raised a number of concerns in relation the terms and conditions in the AWA, including the absence of penalty rates and the existence of a probation period. Despite these concerns, the employee was told by the consultancy company that she would not be employed if she did not sign the AWA.
The Court held that the consultancy company and the employer had jointly developed a plan to offer standard AWAs with set terms and conditions. There was no room for the employee to negotiate different terms and conditions under the AWA, or a different industrial instrument. The transferring employee had to sign the AWA to keep her position in the company. In addition, if the employee accepted the AWA, she would have been subject to a 3 month probation period for her current role. The Court found that in these circumstances, there was application of duress by the consultancy company and the employer.
Both the employer and the consultancy company were penalised $6,700 each and were jointly and severally liable for $983.40 compensation to the employee. Although the consultancy company was a services company engaged by the employer, the Court ordered the same penalty because the consultancy company had been “integrally involved in the determination of the relevant strategic and operational steps associated with offering the AWA.”
HR Tip:
The ability of an employer to offer AWAs to employees ceased on 28 March 2008. Employers who used AWA’s in their business as at 1 December 2007 can now use Individuals Transitional Employment Agreements (ITEAs). Importantly, the law prohibits the application of duress in connection with the making of an ITEA. The law specifically states that it is not duress for an employer to make the employment of a prospective employee conditional upon the employee entering into an ITEA. However, this protection for employers does not apply in the case of a transferring employee. Employers, IR Consultants and advisers will need to take care to ensure that duress is not applied to employees when offering an ITEA.
Consultancy company penalised for AWA duress - To learn more about this author, visit Jason Donnelly's Website.
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Jason Donnelly
(Visit Jason's Website)
Since commencing with Australian Business
Lawyers in July 2000, Jason has provided
advice to employers in an array of
employment and industrial law matters.
Jason has also regularly represented the
interests of employers in proceedings
before the Federal Court of Australia, the
Industrial Relations Commission of New
South Wales, the Australian Industrial
Relations Commission, Local Courts and the
Chief Industrial Magistrates Court.
In recent years, Jason’s practice has
concentrated on industrial dispute work;
OH&S work; unfair dismissals; drafting and
negotiating industrial instruments; unfair
contract claims and underpayment claims
associated with breaches of industrial
instruments. Jason also has considerable
experience in providing employers with
strategic advice in the post WorkChoices
environment.
Much of Jason’s experience in employment
and industrial law has been gained in the
construction materials, manufacturing,
mining and transport industries.
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