Employment Law Update | July 2019

Published 2 July 2019

Award Wages Increase

Any business with employees who are covered by a modern award and are paying at or close to the minimum wage required under the modern award, it is important to review employees’ rates of pay in line with the changes that come into effect from 1 July. The minimum wages under modern awards will increase by 3% from 1 July 2019.

In addition to this, the National Minimum Wage, which applies to employees not covered by a modern award or enterprise agreement, will also increase. From 1 July 2019, the new weekly minimum wage will be $740.80, or $19.19 per hour, which is an increase of 3%.

High-Income Threshold Increase

From 1 July 2019, the high-income threshold for unfair dismissal claims will increase from $145,400 to $148,700. The high-income threshold refers to the highest salary one can earn and still be protected from unfair dismissal. Anyone who earns more than the high-income threshold (and is not covered by a modern award or enterprise agreement) is not protected from unfair dismissal, however they are still protected from other actions relating to unlawful termination.

The compensation cap for unfair dismissal claims will also increase from 1 July 2019 from $72,700 to $74,350. This cap, which is half the high-income threshold, is the maximum compensation available in an unfair dismissal claim.

Porter Announces Major Review of Industrial Relations System

Minister for Industrial Relations Christian Porter has announced a major review into Australia’s industrial relations law. Submissions will be sought over the next six to nine months with Porter declaring that changes will only be made that were evidence based and beneficial to both employees and employers.

One of the key areas of focus of the review is likely to be the definition of casual employee. Currently, the Fair Work Act 2009 (Cth) does not provide a definition for casual employee. There has been some deal of uncertainty regarding what constitutes a casual employee following the decision in WorkPac v Skene [2018] FCAFC 131 last year in which the Federal Court held that a truck driver who had been hired as a casual, was in fact a permanent employee who was owed annual leave and other entitlements. Regarding this current uncertainty, Porter noted that “everyone benefits from having clarity in the system”.

Porter also flagged that the review would look into:

  • Enterprise bargaining and the Better Off Overall Test, and whether changes can be made to speed up approval of enterprise agreements by the Fair Work Commission;
  • The Small Business Dismissal Code, and whether the current way that the Fair Work Commission processes unfair dismissal claims for small businesses could be improved.

Fair Work Ombudsman Investigation Finds Uber Drivers Not Employees

After a two-year review into Uber’s business model, the Fair Work Ombudsman has declared that Uber’s drivers are independent contractors and not employees. The investigation by the Fair Work Ombudsman reached a conclusion that the “weight of evidence” indicated that there was no employment relationship between Uber and its drivers.

One of the key determinants in reaching the conclusion that no employment relationship exists appears to be that Uber drivers are able to work when they want, for how long they want. Fair Work Ombudsman Sandra Parker provided that “for such a relationship to exist, the courts have determined that there must be, at a minimum, an obligation for an employee to perform work when it is demanded by the employer”. She further noted that “Uber Australia drivers have control over whether, when, and for how long they perform work, on any given day or on any given week”.

Parker was keen to emphasise that this conclusion related solely to Uber, rather than the whole gig economy. In contrast to findings of the investigation by the Fair Work Ombudsman, the Fair Work Commission held last year that Foodora rider Josh Klooger was in fact an employee rather than an independent contractor as contended by Foodora.

This content is general in nature and provides a summary of the issues covered. It is not intended to be, nor should it be relied upon, as legal or professional advice for specific employment situations.

Olexo Workplace Law recommends that specialist legal advice should be sought about specific legal issues.