CHAPTER 13
Option 4: Workplace
REVIEW 13.1
1 Describe the social and economic conditions for most people in feudal England.
During the feudal period in England (approximately 800 to 1400 CE), the majority of people worked on the land in farming, or produced clothing, household goods and/or food for their own use. A family could trade their excess production or barter for products that they could not produce.
These people, called villeins, did not receive payment for their labour. They were not employed by the local lord, who instead was the owner of the land that the villein tenant worked. They had few rights and little choice but to work for the landowner in exchange for the right to live on the land.
2 Describe the ways in which wealthy and powerful people used the law to their advantage at the expense of workers, and identify the advantages they obtained.
Some of the points students could raise include:
· the local lord received the benefit of the work, without having to pay for it; however, the local lord would sometimes offer protection from other threats
· laws were designed to prevent people from leaving the agricultural areas, as labour was scarce due to the toll taken by disease; this benefited land owners who would not see their workers flee, but restricted the movement of workers
· statutes in the 14th and 15th Centuries allowed lords to be sued if they paid their workers more than others, preventing higher wages
· they also pressed people into work with penalties if they refused
· they required parents to put their children to work on lords’ estates
· laws favoured the wealthy and influential members of society over the freedoms, needs and working conditions of workers.
3 Outline how the nature of employment changed during the Industrial Revolution.
The Industrial Revolution in Britain during the late 18th and early 19th Centuries changed not only the way goods were produced, but also the nature of the workplace and the structure of society. It also changed where people lived, with people moving toward the factories and cities where they could find paid work, and large sections of the population moving from agriculture to industry.
Machines were used for manufacturing, which meant that workers only needed to become skilled in a few aspects of the production process. Cheaper production meant that hand-made goods became too expensive to produce and sell, and people were instead employed at factories and mills. Employer and employee relations began to change, where employees’ wages were paid out of the sale of the goods produced, and the factory owners received most of the profit.
REVIEW 13.2
1 Define ‘freedom of contract’ and explain the assumption on which this doctrine is based.
Nineteenth-century employment was based on the concept of freedom of contract. This principle was based on the laissez-faire approach, and meant that individuals were considered free to negotiate the terms of the contracts they entered to best suit them both, without government restrictions.
However, this principle did not take into account any inequality in bargaining power between employer and employee, nor did it impose any minimum conditions on the contract, which often lead to the exploitation of workers.
2 Identify some of the circumstances that led to greater workplace regulation by the state in 19th-century Britain.
Some of the circumstances include:
· no minimum wage taking into account living costs
· substandard working conditions, unsafe and unhealthy working environments, with injuries and suffering common
· factories were often poorly ventilated, poorly lit, noisy and dangerous places to work; mines were extremely dangerous places to work
· people worked very long hours for little wage, often up to 16 hours a day, seven days a week
· unions were effectively banned, to prevent workers joining together to push for better conditions
· children were also working under these conditions, starting as young as seven years old, but for even less wages than adults, despite performing the same work
· ‘poor laws’ against vagrants pushed people to work from a very young age
· factory owners were concerned with profit, with no legal incentive to provide better working conditions, and so exploitation of workers continued.
3 Explain why workers might want to form a trade union rather than negotiating their own contracts of employment.
Trade unions are associations of wage earners that aim to maintain and improve the pay and working conditions of their members. As mentioned in the responses above, the principle of freedom of contract and the power of factory, mine and other employers at the time meant that individual workers had no practical means to improve the conditions of their employment. Trade unions enable workers to join together to increase their bargaining power over the wealthy and powerful employers, in order to negotiate with employers, or in some cases force employers and governments to improve employment conditions for all workers.
REVIEW 13.3
1 Distinguish between a contract of service and a contract for services. Provide an example of a type of worker who would enter into a contract for services.
A contract of employment is a contract of service between an employer and employee, which provides specific rights and imposes specific duties on both parties. An example is an office worker who is employed indefinitely on an annual wage to perform tasks as required by the employer.
By contrast, a contract for services is an agreement to do work for an agreed fee, but the worker is not employed by the other party. A contract for services arises when a person agrees to do one or more specific tasks for another person for a price. For example, tradesmen are usually employed under contracts for services, like a plumber agreeing to install plumbing, or a builder contracting to build a person’s house.
2 Define ‘vicarious liability’.
Vicarious liability refers to the legal liability of one person for the wrongful act of another. An employer can be held vicariously liable for the conduct of an employee, as long as the employee was acting ‘in the course of employment’.
3 Discuss whether or not an employer should be held vicariously liable for the actions of an employee. Use examples to illustrate.
Employers can be vicariously liable for acts committed by employees where the employee was carrying out the duties that he or she was contracted to perform.
It can be justified on the basis that the employer gains benefits from the work done by employees, and should also bear the risk of employees’ behaviour at work. The employee would not be doing the act if not for the instructions and employment of the employer, as they are acting on behalf of the employer. A person who suffers from an act committed by an employee will usually also benefit from being able to sue the employer, as the employer will usually be in a better financial position, or have adequate insurance, to be able to pay any damages awarded.
One example could be a young person working at a supermarket on a low wage, who has incorrectly stacked the shelves, which causes them to fall on and injure a customer. The employee was working only within the confines of the job, stacking shelves, and the employer is in the position to provide proper training to staff and ensure adequate procedures are in place regarding shelf stacking. The young employee is also unlikely to have sufficient funds to defend an action, whereas the employer is likely to have insurance to cover the contingency, or at least company assets to cover the customer’s loss.
REVIEW 13.4
1 Define and explain the concepts of express terms and implied terms in a contract of employment.
Express terms are terms that have been specifically stated and agreed by both parties at the time the contract is made, either in writing or orally. In a contract of employment, they cover key elements of employment, for example: position description, ongoing or fixed term, hours of work, pay, location or leave.
Implied terms are not recorded in writing and may not even have been discussed by the parties to the contract. They arise from common law, from current practice or custom, and from specific state or federal legislative requirements, or where it is clear that the parties would have included the term as an express term if they had turned their minds to it.
2 Identify the rights of employers and employees that come from implied terms.
Some of the implied duties of employers include:
· to provide work for the purposes of the employment contract
· to provide a safe working environment
· to pay reasonable wages.
Some of the implied duties of employees include:
· to obey lawful directions given by the employer
· to exercise reasonable care in carrying out the work
· the duty of fidelity to the employer.
REVIEW 13.5
1 Explain why the Harvester decision is significant to Australian workplace law.
The Harvester decision (Ex parte H V McKay (1907) 2 CAR 1) was important because it was the first time an industrial tribunal set wage levels for workers, rather than allowing them to be set by individual employers. The employer was found to be obliged to pay a ‘fair and reasonable wage’, which was defined as an amount sufficient to ‘support the wage earner in reasonable and frugal comfort’.
2 Define ‘industrial awards’ and explain their purpose.
An industrial award is a standard set of wages and working conditions for employees in a particular industry or type of work, or those who are employed by particular employers. It refers to a legally binding document, approved by an industrial commission, which sets out the minimum terms and conditions for employees in that particular industry.
REVIEW 13.6
1 Define and contrast collective agreements and individual agreements.
Collective agreements, or enterprise agreements, are legally binding agreements between the employees of a corporation, non-profit organisation or government body, and their employer, that set the standard terms and conditions of that employment relationship. Enterprise agreements involve the technique of enterprise bargaining, which refers to the collective negotiation by employees (usually represented by a union) with the employer for standard wages and working conditions.
Individual agreements refer to contracts negotiated directly between an employer and an employee, rather than using collective bargaining or awards. Individuals bargaining directly with an employer will usually have a much lower degree of bargaining power, with the risk that conditions will be imposed on a ‘take it or leave it’ basis, or without the employee being aware of their entitlements. For this reason, recent attempts to change to statutory provisions to a system of individual agreements have been very controversial.
2 Explain the difference between agreements and awards.
Awards refer to a standard, minimum set of wages and working conditions for employees in a particular industry or type of work, and are determined by the tribunal or commission with power to establish them. Agreements, on the other hand, can establish more detailed terms and conditions applicable to the employment. They set conditions higher than the applicable industry award, but not below the minimum ‘safety net’ of the National Employment Standards or an applicable industrial award.
REVIEW 13.7
Refer to the following article and answer the following questions:
1 Explain what steps a worker can take if he or she finds that his or her take-home pay is less than it was before the award was modernised.
Under the Fair Work laws, no employee can have his or her take-home pay reduced as a result of the making of a modern award. Employees who believe the introduction of modern awards has led, or will lead, to a reduction in their take-home pay may be able to seek a take-home pay order from Fair Work Australia to preserve their pay. Employees can apply alone for an order or be represented through a union. If an order is made, the employer and the employee will have to comply with its terms.
2 Identify difficulties that might arise from having to go through this procedure, and any factors that could prevent a take-home pay order from being made.
Some of the difficulties include:
· delay until the tribunal makes an order
· difficulties, pressure or conflict at work if an application for an order against the employer is made
· difficulties in the negotiating process, or in the case of a union, the difficulties for individuals in their own circumstances while attempting to negotiate through a union or awaiting the outcome
· the need to prove that a relevant award actually applies
· the need to prove that the modern award actually disadvantages in some way from the previous one.
REVIEW 13.8
1 Discuss the changes made to the industrial statutory framework under the Fair Work Act 2009 (Cth).
Some of the changes include:
· enterprise agreements and modern awards must provide entitlements at least as favourable as the National Employment Standards (NES)
· enterprise agreements must be approved by a majority of employees
· the employer or employees’ bargaining representative submits the agreement to Fair Work Australia for approval
· to be approved, it must be a genuine agreement, have a specified expiry not greater than four years, have a dispute settlement procedure, and pass the BOOT test.
2 Discuss the legislative powers retained by New South Wales after referral of industrial powers to the Commonwealth.
The referral of powers by NSW to the Commonwealth does not include powers regarding state and local government employers, such as public school teachers, police or council workers. Section 9A of the Industrial Relations Act 1996 (NSW) declares those employers not to be national system employers. For employees in the state public sector, state awards and collective agreements continue to apply, and the NSW Industrial Relations Commission, rather than Fair Work Australia, has jurisdiction over these agreements.
3 Explain the aim of BOOT and the ‘no net detriment’ test. Why is it necessary to have these two tests?