ERA sides with student who refused to sign casual contract inconsistent with work history
The Employment Relations Authority (ERA) recently dealt with a case involving a school student working at a local business. The worker claimed she was a permanent part-time employee who wasn't initially given an employment agreement and was later unjustifiably dismissed for refusing to sign a casual agreement that didn't reflect her actual working arrangement.
The employer argued the worker was a casual employee who refused to sign an appropriate agreement, claiming they couldn't offer further work until she signed.
The dispute raised questions about whether the worker's consistent Friday and Saturday shifts constituted permanent part-time employment, and whether the employer's ultimatum - sign a casual agreement or don't work - amounted to constructive dismissal.
The worker began her first job as a kitchenhand at a restaurant called Amore Italiano Ristorante in November 2022. The restaurant was operated by Buci Limited, a company owned by a married couple who served as co-directors and shareholders.
According to the ERA's findings, no employment agreement identifying the worker's status was received by her when she started. The worker was given a New Employee Form with boxes for different employment types, but the ERA was "not satisfied that the casual box was ticked when [the worker] signed it."
The owners claimed they distinguished between job roles, considering front-of-house staff as permanent part-time and kitchen staff as casual. However, the ERA found there was "no readily understandable explanation provided for the distinction."
The ERA examined payroll records and timesheets and found that the worker's work was regular and predictable. From early March 2023, she worked two nights per week, almost exclusively on Friday and Saturday evenings.
Significantly, the worker wasn't paid "pay as you go" holiday pay as is common for casual employees. Instead, she received paid annual leave in January 2023 and later received paid sick leave.
The ERA applied the legal test for determining employment status, asking whether there was "a consistent and predictable pattern of work with an obligation on the employer to offer and employee to accept work."
Based on these facts, the ERA determined: "I conclude [the worker] had a permanent role with [the employer] for at least two days a week and was not casual."
The first major disagreement arose when the restaurant owners took a holiday to Macedonia, closing the restaurant for dining from June 13 to July 27, 2023. The owners advised staff to expect reduced hours during their absence, with mention of wages being calculated using an average of hours worked.
The owners later claimed this averaging arrangement was only meant for front-of-house staff, not kitchen hands. However, the ERA found "it was not made clear at the meeting that the averaging arrangement only applied to front of house staff, not kitchen staff."
During the owners' absence, pay records showed the worker was paid for only five hours a week of actual takeaway work. When she received a significantly reduced payment, she messaged the owner about the "pay drop" despite his promise to "give her extra like the waitresses were getting."
The ERA determined that the employer had breached good faith obligations: "Good faith obligations require communications which are not misleading. [The owner] did not make it clear that a different arrangement applied to kitchen hands than other staff."
The ERA found there was "no basis a part time staff member could have her hours reduced below the minimum two days without either her agreement or payment in lieu. There was no consultation here, with the decision being announced."
The ERA concluded that the employer "was not able to pay out for annual leave and thus still owes [the worker] for her holiday hours."
When the owners returned, the worker and her stepfather visited the restaurant to request money they believed was owed. The owner then offered the worker a permanent part-time agreement, oddly backdated to November 2022.
The worker didn't sign the agreement because "it looked like it was being backdated and there were out of date clauses." On August 3, 2023, after confusing text exchanges, the owner abruptly told the worker: "that agreement anyway is not for you, for you need a casual agreement."
That evening, when the worker arrived to collect payslips, the owner presented her with a casual agreement but wouldn't let her take it away, telling her she couldn't work until she signed it.
A tense confrontation followed, with the owner described as being agitated, "waving his arms, moving around back and forward, side to side." The worker described feeling "terrified about what had happened."
In the days that followed, the owner repeatedly messaged the worker that she couldn't work unless she signed the casual agreement, eventually stating "Come sign and you can work, remember this is your final warning!"
The ERA determined these actions constituted a constructive dismissal: "[The employer] breached its obligations to [the worker] by refusing to offer her work unless she signed a casual agreement which it did not provide her a copy of and then purporting to give her a final warning to sign. This was repudiatory conduct."
The ERA found the dismissal was unjustified. While acknowledging the employer's legitimate desire to have a signed employment agreement, the approach taken was deemed unreasonable.
The ERA detailed the significant personal impact on the young worker: "[The worker's] self-confidence has been seriously impacted as has her trust in employers, particularly in the hospitality sector... [She] sought medical assistance related to the impact of her dismissal and received treatment over an extended period."
The ERA ordered the employer to pay the worker $964.75 gross in lost wages, $17,000 in compensation for humiliation, loss of dignity and injury to feelings, and $363.20 gross in holiday pay that had been improperly treated as cashed out.
