Legal and compliance news wrap - 2020

Labour hire · Labour hire licensing

Here we wrap some of the key legal and compliance news for recruitment leaders so far in 2020.

The full articles summarised below are accessible with a subscription or free trial of Shortlist.

>>>

As recruitment businesses take steps to reduce their payroll costs without standing people down or sacking them, a lawyer provides a timely reminder on what employers legally can and can't do.

Some recruitment leaders are asking staff to switch to commission-only pay as an alternative to redundancy, for example.

But all employers need to check employees' awards and contracts before taking any action or they risk being in breach of these, says HR Law practice group leader Kristin Ramsey.

"Employers shouldn't be [taking unilateral action], employers should be saying things like, 'we have no work for you, your role is redundant. Rather than terminate you for redundancy, though, here's what we propose as a temporary measure, and then let's reassess'"...

Read more: Standing down, laying off, and reducing recruiters' pay

>>>

The Fair Work Commission has upheld a recruitment company's decision to reduce a senior employee's pay to the JobKeeper minimum, in light of its significant cash flow challenges.

The company specialises in accounting and finance recruitment in Australia and New Zealand, but Commissioner Christopher Platt has opted not to identify it, to avoid "further detriment to the business (and potentially exacerbate impacts on employees)".

The employer issued JobKeeper-enabling directions to the employee (and others) that over time reduced his hours to 12 per week, so his remuneration fell by 71.5% to $3,558 per month (equivalent to the JobKeeper minimum payment).

The employee applied to the FWC arguing the direction was unreasonable, as he was the sole income earner in his household and he would be unable to provide for his family. He also claimed 12 hours per week would be insufficient to meet his role requirements...

Read more: Recruitment director loses dispute over JobKeeper payments

>>>

The likely rise in class actions following the WorkPac double-dipping decision could not come at a worse time for business, says RCSA CEO Charles Cameron.

Commenting on the Rossato ruling, he expressed concerns about class actions rising, and about the Victorian Government's proposal to allow law firms running them to receive a proportion of the spoils rather than be remunerated on an hourly basis.

"That takes us closer to the US system," Cameron warns, and will ultimately make doing business more costly, with flow-on effects that will be felt broadly.

"We will see a scenario where more and more businesses will either not do business, or they will seek some form of insurance against class actions, which will make it more costly to do business," he says.

"We all pay for it, not only in terms of high costs but also in decreased [business] confidence, and we need as much confidence as possible now; we don't need more reasons not to take risks and not to employ people."

Numerous class actions are currently in train against staffing suppliers, including Adero Law's actions against WorkPac, Hays, Skilled, One Key and Stellar. These cases were adjourned pending the Rossato decision...

Read more: WorkPac loses another 'double-dipping' claim; "Perverse" ramifications expected

>>>

A labour hire company has failed to win an injunction preventing its former directors from operating a new business with a similar name.

WA-based Connect Four Labour Solutions sought to restrain Joshua Fowler and Milena Djurasinovic from using the name C4 Labour Solutions, Connect Four Solutions, and any name or logo associated with those.

It also sought to restrain the parties from encouraging its clients to move their business, along with damages it claims were sustained from the new business "passing off" as the original Connect Four operation.

Connect Four director Calvin Cheung alleges the three directors had a falling out, and he agreed to pay $25k for the other two to exit as part of a share sale agreement.

But the former directors then refused to hand over Connect Four's domain name, email accounts, Facebook account and database, and they had "already secretly poached" its clients for their new business, he claims…

Read more: Recruiters in restraint battle

>>>

A labour hire provider has been convicted and fined $120,000 by a Queensland court for operating without a licence in the State, the highest penalty imposed to date.

Yellow Hoa Pty Ltd did not apply for a labour hire licence in Queensland, and illegally provided labour to a farm at Elimbah for a six-month period until 18 June 2019.

Director Thi Hoa Duong was also convicted of aiding, counselling or procuring that offence by the Caboolture Magistrates Court and fined $60k, with six months' jail time in default of payment.

Officers from the Labour Hire Licensing Compliance Unit, Australian Border Force and Workplace Health and Safety Queensland worked together after receiving a tip that workers at the property were being exploited, and investigations found the workers were paid in cash at rates well below the award, and weren't paid superannuation...

Read more: Rogue labour hire operator and director fined $180k

>>>

A recruitment agency has successfully defended a discrimination claim from a consultant who alleged his corporate headshot was digitally lightened.

Ensure Recruitment hired the consultant in 2018 and terminated his employment during his probation period.

The following year, he claimed Ensure had subjected him to derogatory remarks about his appearance, sexual preference and marital status; asked him to remove his beard; used a photograph which digitally lightened his skin tone; and treated him unfavourably in not providing training and work-from-home opportunities. He also said it failed to provide positive references or assist him in his search for work following his dismissal.

The consultant sought lost wages, an apology, damages for embarrassment, humiliation and stress, and costs.

Ensure accepted it had two versions of the employee's headshot, but said the version with slightly lighter skin and a shorter beard came from the consultant, who emailed it to the marketing manager saying, "Can you please update my pic on the website with the below, slightly more enhanced version? This is the version I have on LinkedIn".

The MD denied ever commenting on the consultant's skin tone or beard, and noted the consultant himself had chosen the lighter photo for use on social media profiles other than LinkedIn, even after his dismissal. The consultant claimed this was because substituting the photograph with a replacement might draw more attention to it...

Read more: Recruiter defends discrimination claim over "enhanced" headshot

>>>

Browse more legal and compliance news here.

Read all the latest recruitment news with a subscription or free trial of Shortlist.