Recent developments in employment law

The latest issues, decisions and proposed changes impacting business and workplace risk 11 min read

Possible changes to retail, clerks and banking awards on the horizon

By Tarsha Gavin, Bella Busby, Cleo Gamlin

Current modern award variation applications at a glance

The Fair Work Commission (FWC) is considering a number of applications that propose key amendments to several modern awards, including the:

• General Retail Industry Award 2020 (Retail Award)
• Clerks – Private Sector Award 2020 (Clerks Award)
• Banking, Finance and Insurance Award 2020 (BFI Award).

Key takeaways

• Employers with employees covered by these awards should be aware of the proposed changes and potential implications for the payment and rostering of certain cohorts of employees who are the subject of these applications.
• The FWC is currently hearing the application to vary the Retail Award in respect of the proposed rostering and annualised salary amendments. The FWC is currently receiving submissions for the other applications with hearing dates listed for June 2025 and September 2025 for the application to vary junior rates in the Retail Award and the application to vary the Clerks and BFI Award respectively.

Applications to vary the Clerks Award and BFI Award to reduce administrative burden

The FWC is considering applications brought by several Australian business advocacy bodies to add a new provision into the Clerks and BFI Awards that would allow employers and certain employees at prescribed levels to enter into an arrangement to receive a single weekly rate of at least 55% of their award base rate of pay to cover:

• payment for 50 hours of work, including four hours overtime paid at 150% and eight hours at 200%
• payment for leave loading
• individual allowance payments
• breaks
• penalty rates.

Employees would continue to receive overtime payments after working 50 hours per week, paid at 200% of their ordinary hourly rate, and would also receive additional remuneration for work on public holidays.

The proposed amendments are intended to simplify the burden on employers to understand and comply with their obligations in respect of full-time salaried employees. Research relied on in the applicants' submissions indicated that even sophisticated employers have struggled to keep track of individual monetary entitlements under the awards, and this is also apparent in circumstances where employees are being paid above award entitlements.

Proposed amendments to Retail Award regarding annual salaries, rostering and junior rates

The Australian Retailers' Association has proposed several amendments to the Retail Award, including:

• an option for senior employees to receive an annualised salary that exceeds award rates, to ensure consistency and certainty of their remuneration.
• clarifying the language of certain award clauses, including annual leave loading, first aid allowance, employees who regularly work on Sundays, entities to which extended trading hours apply and documents that constitute written records. The proposal also seeks to rectify some unintended changes that occurred during the 'plain English' drafting amendments that were previously made to the award.
• changes to provide greater flexibility by enabling employees to opt into arrangements such as:
  • working a compressed work week while retaining the benefits that attach to hours being treated as 'ordinary hours' (such as superannuation and leave accrual);
  • working a greater number of hours per day;
  • averaging the hours of work over longer periods than four weeks;
  • removing the requirement for consecutive days off by agreement;
  • utilising split shifts so they can choose their preferred working arrangements, particularly for those employees with caring or family responsibilities; and
  • waiving a meal break and allowing employees to go home early.

The Shop, Distributive and Allied Employees' Association has also applied to vary rates for junior employees under the Retail Award (as well as the Fast Food Industry Award 2020 and the Pharmacy Industry Award 2020). Their proposal would see rates become:

• for workers 16 years of age and under—50% of the applicable rate of pay (where current rates are 40-50%);
• for workers 17 years of age—75% of the applicable rate of pay (where the current rates are 60%); and
• for workers who are 18 years of age and over—100% of the applicable rate of pay.

If successful, the application would mean a pay increase of between 5% and 30% depending on the age of the worker, with employees aged between 17 and 19 years receiving the largest pay increase.

New model terms on flexibility, consultation and dealing with disputes

By Chloe Wilton, Anouscha Green

Key model terms for enterprise agreement have recently been amended

The FWC has published new model terms for enterprise agreements regarding flexibility, consultation and dealing with disputes. The new model terms commenced operation on 26 February 2025.

Key takeaways

• An enterprise agreement must include terms about flexibility, consultation and dealing with disputes that satisfy the requirements of the Fair Work Act 2009 (Cth). If an enterprise agreement does not include a compliant flexibility term or consultation term, the relevant model term will be taken to be a term of the agreement. The model term for dealing with disputes will not be automatically incorporated into an enterprise agreement, even if it does not include a compliant term about dealing with disputes.
• Employers are not required to amend their current enterprise agreements to reflect the new model terms.

New model term for consultation

The key changes to the model consultation term are:

• in respect of consultation about a major workplace change, the employer must discuss with the relevant employees and their representatives (if any) the reasons or justification for the change; and
• in respect of consultation about a major workplace change or a change to an employee's regular roster or ordinary hours of work, the employer must take reasonable steps to communicate the outcome of the consultation process and consideration of matters raised during consultation.

New model term for flexibility

The key changes to the model flexibility term are:

• an individual flexibility arrangement (IFA) may only be made after the employee has commenced employment with the employer.
• the employer must give the employee a written proposal regarding the IFA and meet with the employee to discuss the proposal, if requested by the employee.
• the employer or employee may use the dispute settlement procedure in the enterprise agreement to deal with disputes concerning the IFA.

New model term for dealing with disputes

The key changes to the model term for dealing with disputes are:

• an employee organisation may be a party to a dispute.
• the FWC may deal with a dispute even if the parties have not tried to resolve the dispute at the workplace level if the FWC is satisfied it is appropriate to do so.

Whistleblowing in focus: whistleblower disclosures and dismissal under the Corporations Act

By Veronica Siow, Katherine Dommerson, Olivia Mueller, Samuel Jackson

Guidance from Federal Court on managing whistleblower disclosures

The Federal Court of Australia has provided helpful guidance for employers on how to manage whistleblower disclosures under the Corporations Act 2001 (Cth)

Key takeaways

• Employers should be careful when disclosing the contents of whistleblower reports to ensure they do not disclose the identity of the whistleblower or information that may lead to the whistleblower's identification. The fact that a person is informed about a whistleblowing report does not necessarily involve a disclosure of the identity of the author of the report or information that could lead to the identification of the author.
• If a whistleblower is able to prove they suffered detriment under sections 1317AD or 1317AE of the Corporations Act (eg that they were dismissed), the employer will carry the onus of proving that the whistleblower did not suffer a detriment due to a belief or suspicion that the whistleblower had made a disclosure that qualifies for protection.
• Only the Australian Securities and Investments Commission is eligible to apply to the court for compensation or pecuniary penalty orders in respect of any contravention of the whistleblower protections (relevantly, the protection of confidentiality of the whistleblower's identity and the protection against victimisation) under the Corporations Act.

Background

On 18 March 2021, Mr Mount was appointed Acting Chief Executive Officer of Dover Castle Metals Pty Ltd (DCM) on a 12-month contract. Shortly after commencing in his role, Mr Mount made two reports alleging safety issues based on observations he had allegedly made during an inspection of a DCM-operated mine, and setting out his belief that the company was being mismanaged and that two of its four directors had been improper in their conduct.

Mr Mount also engaged lawyers to assist with preparing and lodging a whistleblower report to ASIC.

DCM summarily terminated Mr Mount's employment less than three weeks into his 12-month contract term, on the basis that:

• he had colluded with one of the directors to oust two other directors
• he had a conflict of interest
• his conduct during a particular board meeting was inappropriate.

Mr Mount brought a claim seeking damages for breach of contract, asserting that DCM had wrongfully dismissed him.

Mr Mount also sought orders from the court to declare that DCM and its directors had contravened the whistleblower protections in the Corporations Act by dismissing him, and to require them to compensate him for those contraventions.

The decision

The Federal Court decided that although Mr Mount had suffered a detriment (as his employment had been terminated), DCM and the relevant directors (as the decision-makers) had discharged their burden of proving (on the balance of probabilities) that Mr Mount was not dismissed because they knew or had suspected that Mr Mount had made a whistleblower report.

No visa, no job: dismissal due to expired visa not unfair

By Tegan Ayling, Jared Simonis

Unfair dismissal application arising from expiry of visa

The Fair Work Commission (FWC) agreed with the decision of wholesale giant, Costco, to dismiss one of its employees after they were unable to work following the expiry of their visa.

Key takeaways

• Employers with visa workers should consider including in employment contracts a condition that employees have valid working rights, an ability to terminate the employment if that condition is breached and an obligation on employees to notify of any change in the status of their working rights.
• Although in this case the contract provided a right to terminate with immediate effect and the FWC accepted that notice was not required since the employee could not work without a valid visa, employers should always exercise caution when dismissing an employee, especially without notice.

Background

After conducting a verification check, Costco Wholesale Australia Pty Ltd (Costco) notified its employee, Mr Muza, that his visa would expire shortly and asked him to provide a new visa. Mr Muza worked for two days after his visa expired and took paid leave, only informing Costo that his visa had not yet been renewed when it asked for a copy of his new one.

Costco issued a show cause letter, giving Mr Muza seven days to explain why his employment should not be terminated. Following two responses to the letter and a meeting, Costco terminated Mr Muza's employment via email because he did not have a legal right to work in Australia. Costco relied on the employment contract that required Mr Muza to provide evidence of his right to work and gave Costco a right to terminate his employment if he failed to do so. Mr Muza's visa was granted three days later.

Mr Muza lodged an unfair dismissal application with the FWC, arguing his dismissal was unfair because:

• his ability to work was outside of his control;
• it was 'cruel and harsh' to deliver the dismissal via email and he had not received a written warning; and
• he was indirectly denied a support person to assist him.

Mr Muza also claimed that Costco should have paid him in lieu of his notice period.

The decision

The FWC decided Mr Muza's dismissal was not unfair, including because:

• Costco had a valid reason for the dismissal since Mr Muza could not lawfully work in Australia. Mr Muza also knew his visa had expired when he continued to work and take leave, and he failed to inform Costco of his expired visa, which was in breach of his statutory and contractual obligations.
• Mr Muza had been given ample opportunity to respond to the intention to terminate his employment.
• Mr Muza was not prevented from having access to a support person.
• not having a valid visa frustrated the employment contract in any event and continuing to employ Mr Muza without valid working rights would have put Costco at serious risk of breaching Australia's migration laws.

Mr Muza's contract provided a right to terminate with immediate effect if he did not provide evidence of his right to work in Australia. The FWC also accepted that a payment in lieu of notice of termination was not required because, at the time of his dismissal, Mr Muza could not work since he did not have a valid visa.

Lack of consultation with employee on parental leave leads to unfair dismissal

By Sarah Lunny, Reuben Gregg-McQueen

Importance of 'keeping in touch' with employees during parental leave

The Fair Work Commission (FWC) has decided that an employee who was told that her role was redundant via email without any prior consultation was unfairly dismissed.

Key takeaways

• Under the National Employment Standards (NES), employers are required to take all reasonable steps to give employees who are on unpaid parental leave information about, and an opportunity to discuss, decisions that will have a significant effect on the status, pay or location of the employee's pre-parental leave position.
• Having a process for keeping in touch with employees while they are on parental leave is important for fulfilling these obligations and ensuring effective communication with employees while they are on such periods of leave

Background

In August 2022, Ms Stien commenced employment with Hire a Hubby Pakenham (HAHP) as an office administrator. Ms Stien's position was covered by the Clerks – Private Sector Award 2020 (Clerks Award).

In October 2023, the employee commenced a 12-month period of unpaid parental leave. While the employee was absent on parental leave, HAHP began experiencing financial difficulties. In or around October 2024, the owner of HAHP determined that the role of office administrator was redundant, although he did not inform Ms Stien at that time.

In October 2024, Ms Stien requested to extend her unpaid parental leave. In December 2024, after declining the employee's extension request, HAHP informed Ms Stien via email that it no longer had a position for an office administrator and that the role was redundant. Prior to the email, there had been no discussions between Ms Stien and HAHP regarding any changes to the employee's role.

Decision

Although the FWC accepted that HAHP no longer required the role of office administrator to be performed by anyone due to operational changes, the FWC decided it was not a genuine redundancy because HAHP had failed to consult with the employee about the redundancy, as required by the Clerks Award.

The FWC also determined that HAHP had failed to comply with its obligation under the NES to consult with the employee about a decision that would have a significant effect on her pre-parental leave position.

Remarking upon the lack of communication between HAHP and the employee during the period of parental leave, the FWC commented that this was a case that 'exemplifies' the benefits of employers and employees having some form of 'keeping in touch' system while an employee is absent from work during parental leave, to avoid instances of potential miscommunication and misapprehension.

The FWC found that Ms Stien had been unfairly dismissed and awarded her two weeks' pay in compensation (the equivalent of the employee's notice period), taking into account that the employee was not seeking reinstatement and that there was no role available for her to continue her employment with HAHP.