Workplace surveillance, managing ill and injured workers and preventing bullying - significant issues for employers in 2007

New legislation imposing obligations on employers (for example, in relation to
workplace surveillance) will increase the compliance costs for employers and
the risks of non-compliance. More broadly, workplace surveillance laws also
need to be considered in the context of existing occupational health and safety
legal regulation, the ability of employers to manage ill and injured workers and
the obligation to prevent bullying.

The potential costs in these areas are great. In 2006 an employer was ordered
to pay a total of $1.9 million in damages in respect of bullying in the workplace.
In this edition of LegalTalk we explain the upcoming changes to workplace
surveillance laws and the implications arising from these changes and other
legal regulation in relation to occupational health and safety (OHS) and bullying.
Workplace surveillance - the thin edge of the (workplace privacy) wedge
On 1 July 2007, new laws will commence which regulate surveillance in
Victorian workplaces. The introduction of these laws is a first step towards
broader workplace privacy laws in Victoria. Similar (but more extensive)
laws already exist in New South Wales (NSW). However, employers in all
States and Territories can expect that workplace privacy laws will increase
in the nature and scope of their regulation in the near future. Workplace
privacy is currently a matter being considered by the inter-governmental
Standing Committee of Attorneys-General (SCAG).

The Victorian reforms mean that employers in Victoria must not "install,
use or maintain” an optical surveillance or listening device in a toilet,
washroom, change room or lactation room in the workplace. The laws apply
to all employers. The term "employer” is defined broadly. It includes
corporations, unincorporated bodies and partnerships. The laws also apply
(beyond traditional employees) to volunteers and contractors. Without a
warrant or emergency authorisation, a breach of the Victorian laws can
lead to a fine of up to $128,916.

The current laws in NSW extend beyond the Victorian ban on the use of
optical surveillance or listening device in toilets etc. In NSW the prohibitions
apply to all forms of camera surveillance, computer surveillance and
tracking surveillance. Further, the NSW laws apply in the workplace of the
employer and "any other place while performing work for the employer”.
This could include a company vehicle and home-based work.

In NSW all surveillance is banned unless:
a detailed notice of the intention to engage in surveillance has been provided
to the employee in advance; and
the employer complies with additional requirements prescribed in relation to:
camera surveillance - which requires ensuring the camera is clearly visible
and signs have been erected notifying of the surveillance;
computer surveillance - which requires ensuring that the employer has a
workplace policy which has been provided to employees; and
tracking surveillance - which requires ensuring that the vehicle has
appropriate notification.Additionally in NSW, there are restrictions on
blocking emails and internet access in the workplace (particularly in relation
to emails from the websites of unions).

Outside the current legislated response in NSW and Victoria (which deal with
the workplace privacy issues associated with monitoring employees), additional
privacy issues arise for employers in relation to physical and psychological
testing of workers, drug and alcohol testing, searching workers and their
belongings and the handling of workers’ personal information.
The Victorian Law Reform Commission (VLRC) has identified that "significant
gaps exist in workers’ privacy protection” and suggested comprehensive
legislation to protect employees. It is these further recommendations of the
VLRC which are being considered by the Attorneys-General in each State
and Territory.

It is in this environment of heightened concern about and interest in
workplace privacy that employers are (or well advised to be) implementing
workplace privacy policies (or reviewing existing ones). As an alternative,
employers are using federal workplace agreements (either collective or
Australian Workplace Agreement (AWAs)) to include clauses on the process
of surveillance (including the use of closed circuit television (CCTV)),
monitoring (including the use of Global Positioning Systems (GPS)) and testing.
A recent case in the Australian Industrial Relations Commission (Commission)
has highlighted the usefulness of CCTV in the defence of an unfair dismissal.
In this case, a national retailer terminated the employment of an employee
for serious and wilful misconduct when, despite previous warnings, the
employee failed to stop at the end of an aisle of storage racks while driving a
"pallet mover”. The employee was well aware of the requirement that he had
to stop at a red line marked on the pavement at a right of way. A dispute arose
about whether the employee had stopped as required. That fact was crucial to
whether there was a valid reason for terminating his employment.

The employer sought to rely upon CCTV evidence. The Commission found they
were entitled to do so. It distinguished between "the use of the CCTV system
as a utility for managing work performance of employees and its use for loss
prevention and security purposes.” Further, the Commission went on to hold
that the use of CCTV "as a passive record of events” was permissible.

Consequently, on the balance of probabilities, the Commission found that
the employee had failed to stop and there was a valid reason for the
termination of his employment.

Managing ill and injured workers - Australian Industrial Relations
Commission expands the definition of "temporary illness”
Is an employee’s absence from work for six, nine or twelve months on
workers’ compensation considered "temporary absence” under the
Workplace Relations Act Regulations 2006 (Regs)? A decision of the
Federal Magistrates Court of Australia (FMC) in January this year held
that it is, thus significantly restricting the ability of employers to
respond to long term ill or injured workers.

In this case, the employee, a child care worker, suffered a workplace injury.
After a long period of illness (more than three months in a twelve month
period) and the expiration of her employer-paid sick leave, the employer
terminated the employee’s employment. The employee alleged that her
employment had been terminated unlawfully - because of a "temporary
absence from work because of illness or injury”.

"Temporary absence” is defined in the Regs. It includes a period of time
when an employee "is on paid sick leave for the duration of the absence”.
Therefore, the question for the FMC was whether "paid sick leave” included:
workers’ compensation payments (paid by an insurer); or
only the ordinary concept of sick leave (paid by the employer).After
considering a number of international conventions, the FMC decided
workers’ compensation payments were included.

Although the case above limits the ability of employers to respond
when a long term illness or injury arises at work, it does not apply when
the injury or illness is not work related. In non-work related injury or
illness cases, an employer can take steps to terminate the employee’s
employment. However, they have to be careful to ensure that the act of
termination is not unlawful. Therefore a careful, well considered process
is required to limit the possibility that a disability discrimination or
unlawful termination proceeding is commenced.

At the heart of the inquiry to be undertaken by the employer is whether the
employee can (or is likely to be able to) perform the "inherent requirements”
of their position. Sub-questions include (but are not limited to):
What position is relevant to the inquiry (is it the pre-injury job or some
other return-to-work position)?
What are to be considered the "inherent” requirements of the position?
What is the difference between an "inability to perform” and "difficulty in
performing” inherent requirements?
What accommodations or assistance is an employer required to make?
Another question often asked is whether an employee can be directed to
undergo a medical examination and be further required to release that
information to the employer. A 2006 decision of the Federal Court of
Australia (FCA) suggests that, in appropriate circumstances, such a
direction is lawful.
Preventing bullying - because it’s the right thing to do and otherwise
costly

The December edition of LegalTalk highlighted a recent case (under appeal)
where an employer’s policy and procedure manual gave an employee
a right to bring a claim in the FCA for contractual damages (of $515,000)
arising out of the failure of the employer to follow its grievance policy.
Last year a decision of the NSW Supreme Court (NSW SC) also saw a
significant award of damages ($1.9 million) for a breach of an employee’s
contract (and the employer’s policy) - this time in relation to bullying.

In this case the employee, a security guard, was born in Fiji. He claimed
that the person who was (for all intents and purposes) his supervisor bullied
him through race based insults, sexual harassment, threats and physical
abuse. At trial the supervisor’s actual employer conceded that the supervisor’s
behaviour "was indefensible and outrageous”. However, in fairness to the
supervisor, it should be noted he was not called to give evidence and did not
have an opportunity to defend himself against the allegations made by the
security guard.

The conduct engaged in by the supervisor was found to have resulted "in
injury of a psychological kind, giving rise to perceptible psychiatric illness
(major depression).” One of the issues for the NSW SC was whether the
bullying (which was "deliberate and intended to demean, offend and injure”
the security guard) constituted a breach of his contract of employment and,
if so, what damages flowed from that breach.

The NSW SC found there was a breach. It held that the employer breached
the contractual obligation to provide a safe place of work. It further found
that "the discrimination and harassment policy published by the [employer]
also constituted … a condition of the employment contract.” In the absence
of the policy, the NSW SC said it would have found that the supervisor’s
conduct breached "an implicit term that employees are not to be place in fear
of insult or physical harm…”

As a result it was held that the security guard was entitled to damages for
disappointment and distress (not usually recoverable for breach of an
employment contract). Consequently, this is another example of the importance
of employers not only having policies to deal with issues such as bullying,
but ensuring compliance with them.