7 March 2018

Consultation Versus Litigation – We Know Which One We’d Prefer

Michael Coates, Lachlan Thorburn
Michael Coates
Lachlan Thorburn

Thinking about making a change to an employee’s working hours? A little bit of consultation might go a long way to avoiding some considerable pain down the track!

When it comes to choosing between consultation and litigation it is generally no contest. Consultations with the employee are always worthwhile and may well lead to a mutually beneficial result.

You only need to look to the recent unfair dismissal case of Knutson v Chesson Pty Ltd T/A Pay Per Click [2018] FWC 2080 whereby a Sydney based digital marketing agency was ordered to pay a former employee over $20,000 after she refused to sign a new contract which stipulated different working hours.

The changes to her working hours may have seemed insignificant to the employer, but after sending her the contract, she made them aware of prior commitments she had entered into based on her existing hours (pre-paid Pilates sessions on two days during the week).

She refused to sign based on the new working hours but did offer a compromise, taking a shorter lunch break and finishing a little bit earlier in order that she could make her Pilates classes. It is even suggested in the Fair Work Commission decision that this compromise arrangement would be temporary – being only until the employee had attended the prepaid Pilates classes.

Based on her refusal, she received a dismissal notice. It’s important to note that the dismissal was only based on her decision not to sign the new contract; there were apparently no performance or misconduct issues.

This raises a critical issue when dealing with your employees – consultation. If you are planning on making changes to your team’s conditions, even if some changes appear insignificant (in this example what might appear to be relatively minor changes to working hours), talk to them first, understand their circumstances and if you need to, work together on a solution which is mutually beneficial.”

Indeed, with most employees covered by Modern Awards, there is an obligation on employers to consult with employees on proposed changes to regular rostered hours or ordinary hours of work or proposed significant changes in the workplace.

If the changes are required for operational needs, it may be they don’t need to be enforced immediately! Always consider the impacts that any proposed changes may have and allow for a period of consultation and trial and transition so that your employees can adapt to these changes. Changing working hours is always going to have an effect on an employee. This is why having the conversation is so important.

In this case, the agency could have saved themselves a significant amount of hassle. Not only has it been ordered to pay over $20,000, they’ve now suffered negative press and also lost an employee of three years with no performance issues.

The take-home then for employees is to be prepared to talk with employees about changes in the workplace. Be transparent and, importantly, be consultative and collaborative. That will go a long way in protecting you from facing a similar situation to the agency in question.

If you’re looking at making some changes to your employee contracts, get in touch!

We’d love to assist you in understanding the implications of these changes from a legal perspective.

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