|
A recent decision in the Federal Court
highlights the importance of the content of company
policy documents provided to employees and the need
to ensure compliance with the processes and standards
set out in such policy documents.
We recommend you carefully consider
whether the terms of any policies or procedures that
provide benefits to employees, or impose obligations
on your business, are intended to be contractually
binding on both you and your employees. It may be
appropriate, for example, to clearly distinguish
between “aspirational” statements and
clear directions you expect employees to follow,
or clear procedures that employees can reasonably
expect your business to follow.
What this Means for Your Business
Employers should
- Conduct a thorough review
of employment policies and contracts to examine
whether the language is promissory
- Take particular care with OH&S
and EEO/Harrassment policies because breach of
contract under these policies could incur claims
for substantial damages.
- Put procedures in place to
ensure any employee complaints are investigated
immediately and ensure the investigators are
clear about their role ie not to attempt informal
resolution.
Please find following a summary of the Federal Court decision:
NIKOLICH WARNING
CONSIDER YOUR POLICIES AND PROCEDURES
The recent decision of the full bench
majority of the Federal Court in Goldman Sachs JB
Were Services Pty Limited v Nikolich, confirms that
employment policies may bind both employers and employees.
On 7 August 2007, the Federal Court
upheld in a majority decision, the ruling by Justice
Murray Wilcox that company, Goldman Sachs JB Were
Services Pty Limited breached the terms of an employee’s
employment contract contained in the company’s
HR policy, that it maintain a safe and healthy workplace.
FACTS
The employee, Mr Nikolich was provided
with a 119 page policy document entitled “Working
With Us” (WWU) when he accepted an offer of
employment with Goldman Sachs JB Were Services Pty
Limited. The document contained policies about behavioural
standards and managing issues. It included grievance
handling procedures, strict policies against bullying
and harassment and a code of conduct dealing with “integrity”.
The WWU policy also included a commitment to take “every
practicable step to provide and maintain a safe and
healthy working environment”.
Following disputes with management
about the allocation of work and clientele, Mr Nikolich
formally complained to the company’s human
resources section. While he alleged that he was subject
to threats and intimidation, no immediate steps were
taken to address his concerns. Goldman Sachs JB Were
Services Pty Limited later wrote to Mr Nikolich advising
that his concerns had been investigated, although
no action had been taken in relation to any of the
issues raised by him.
Mr Nikolich developed a depressive
disorder and went on extended leave. Ultimately,
his employment was terminated.
One of the claims brought by Mr Nikolich
against the company, claimed that the WWU policy
formed a term of his contract of employment. The
company argued that the policy was “aspirational” and
merely indicated its general philosophy and approach
to employee relations. The company contended that
the WWU policy was only intended to bind Mr Nikolich
and not itself. Further, they claimed that the WWU
policy was “simply a manifestation of its right
to issue lawful and reasonable directions to its
employees (including Mr Nikolich), and the corresponding
obligation of employees to comply with such directions”.
DECISION
At first instance, Justice Wilcox found
last year that the company had breached three express
terms of the employment contract – that it
provide a safe and healthy work environment, follow
grievance procedures and prevent harassment.
The majority of the Federal Court have
found that the company had breached one express term
of the contract – that it take every practicable
step to maintain a safe work environment.
A copy of the recent Federal Court
decision can be downloaded via the following link: Goldman
Sachs JB Were Services Pty Limited v Nikolich [2007]
FCAFC 120 (7 August 2007)
To obtain further information about
this decision or discuss how it might impact on your
business, please contact Andrew Bland at abland@blandslaw.com.au.
|
