Question:
Discuss About The Cooperative Productive Workplace Relations?
The present case is based on unwanted reduction of pay scale by the employer and attracts the provision of Employee Contract Act (Kavanagh and McRae 2017). It has been stated in the case that the board of director of the aviation company of Australia has made a decision to reduce the pay scale of the Pilots and the staff of the aviation company by 25%. It has also been stated that the workers Union of the company has decided to take an action against the board of directors and against the redundancies that the pilot and other stuff of the company has to face. It is a fact that the company AussieAir has taken the step of reducing the salary with a view to reduce its expenditure. It has been stated by the company that the costing of the company for the present year has been increased a lot and with a view to make a balance regarding the costing of the company and its expenditure, the company has decided to reduce the pay scale of the employees and therefore they have to take the decision (Stewart 2013).
The workers Union of the company wanted to sue the company and they can do it as provided by various provisions of the law. The reasons behind the actions made against the company are as follows:
It is a fact that any reduction made from the employee’s remuneration can be made for certain reasons. If the reasons are not being followed up, the reduction regarding the salary will be held as a breach of contract. It is needed that both the employer and employees should have to agree the reduction process. It is a fact that the employees shall have to face serious problem if there is a reduction regarding their salary (Bray and Power 2017). A reduction in the salary may cause harmful effect regarding the business management contract. If there is no provision in the contract regarding the reduction of the pay scale, the employer should have to talk to the Employees regarding the reduction in the pay scale and they should also make certain notice to the Employees regarding the reduction. There should not be any reduction without the consent of the employees and if the reduction has been made without the employee’s consent, the same should be regarded as violation of the contractual entitlements (Stewart et al. 2014).
There is a provision in the law that if a company is facing financial loss and it is become necessary to reduce the costing of the company, the company can reduce the salary of the employees within the coverage of redundancy. It has been observed that the employees under the redundancy plan announced that it is not possible for them to pay the staff for the employees at the same level anymore. The process of redundancy follows certain rules:
It is important to make an agreement with the employees to mitigate the impact of the redundancy process and make sure that the employees want to reduce the pay scale or the shifting time to overcome the problems (Earnshaw, Marchington and Goodman 2013).
Every employee has a right to ask for the reasons from the employers regarding the reduction in the pay scale. It is the upmost duty of the employer to state the reasons behind the reduction and they should have to give the employees fair ground to understand the terms and conditions of the reduction process and to settle down the matter amicably.
It is no doubt to state that if the employer asks an employee regarding the reduction of his salary, it may cause a change regarding the contract of employment. According to the law of contract, the changes in the employment contract should have to agree by both the parties that are the employer and the employees (Fossum 2014). The employees regarding the change of the employment contract can give written details and it must be reviewed by mentioning in that written details. It is a fact that the employee’s contract should not necessarily be written in nature. However, the conditions regarding the contract should be clear.
In the present case, the reduction of pay scale should maintain the national minimum wage standard that is mentioned under the Fair Work Act 2009. It is the duty of the employee to maintain discipline regarding the rules and law that are stated under the Australian Act. An employer has to maintain the minimum wage rate while they are taking the decision regarding the reduction in pay. However, it is a fact that an employer cannot reduce the payment of the employees without taking or obtaining consent from them (Mohamed 2014).
Certain provisions have been provided under the Corporation Act 2001 regarding the duties of the directors. It is clear from the case that the directors of the AussieAir had failed to perform their duties as per the norms mentioned under the Fair work Act and Employment Contract Act. Therefore, they will be held liable for non-performance of the duties and failed to show due diligence and care to the employees. It is mentioned under section 180 of the Corporation Act 2001 that if any director had failed to perform his duties properly, they have to face civil obligation. It has also been mentioned under the Corporation Act 2001 that the directors is needed to discharge their duties in good faith. In this case, the directors of the aviation company had failed to perform their duties in good faith by reducing the salary of the pilots and therefore, provision of section 181 of CA 2001 will attract here (Lawrence 2016).
In the present case, it is observed that the aviation company has prepared for a commercial service regarding the passengers and they wanted to reduce the costumes of the aviation company and decided to reduce the payment of the employees by 25%. It has not been mentioned on that the case that the aviation company or the board of directors of the company has sent any notice to the Employees and it has been mentioned in that case that provision regarding the same has been imposed on the employees (Georgalis et al. 2015). It is a fact under the law that an employer can reduce that pay scale of the employees without obtaining consent from them or without sending them a notice regarding the reduction of the salary only if the employee is an employee at will or there has been a provision regarding the lowering of pay scale mentioned under the employment contract. However, in this case there has not been any Mansion regarding these two Essential elements of redundancy.
Therefore it can be stated that the union can bring an action against the aviation company for the violation of the employment contract. It has also not been mentioned that whether are the Employee’s Association of the company can bring an action regarding the payment reduction or whether there is any provision under the employment contract regarding the reduction of payment available or not (Shields and Brown 2015).
If there is a violation, regarding the employment contract has been followed on if the employer has reduced the salary of the employees without obtaining any concerns from them or giving them any notice the employees have the rights to claim certain things from the employer regarding the breach of contract. The protection data given to the employees in the workplace are as follows:
It is stated under the Fair Work Act that the employees are protected by certain rights that are mentioned under the act and if there is any violation regarding the same has been observed the employees have all the rights to claim damage from the employer regarding the same. If any adverse action has been taken against the employee the fair work act will protect the interest of the employee by mentioning certain rules. It has been stated under the act that an employer cannot fire an employee or shall not offer any answer terms and conditions to the Employees and if there is any violation happens regarding the same the employees can exercise there what place right against employer (McLachlan 2013).
It has been stated under the law that no employee shall be forced against their will and the employees are restricted to do so under the employee Contract Act. The employees of any company are also prohibited to make any pressure upon the employee so that the employee will agree with the employer regarding the reduction of payment. In Australia there is a Commission named Fair Work Commission to deal with the problems regarding the interest of the employees.
Therefore, it can be observed that the certain rules made out by the law regarding the redundancy. It has been stated on that the love that redundancy situation may arise when the company has to face a serious financial loss. In such a situation the employees have the option to reduce the salary of the employees by obtaining consent from them regarding the same. However in the present case it has been observed that the board of members are not actually facing in financial problems as there was an increase happened regarding their salary and therefore the questions of redundancy has not been proved. In this case it has been observed that the reduction regarding the salary of the employees as well as the pirates are not justified and against the employment contract and the workers Union have every right to bring an action against the company before the fair work permission. The employees can make complaint to the workplace relations Commission that attracts the Provision of Industrial Relations Act. If the employees are not given the consent regarding the reduction of the payment and the employer have decided to make the employee redundant the employee have every right to claim and action regarding the unfair dismissal against the employers. In case of any serious breach regarding employment contract the party is specially the affected parties may bring an action against the company in any Civil Court.
It has been observed in Petkoski v Wiredex Pty Ltd AIRC (2006) that an employee can continue work in the company even after sue the employer of the company under the provision of the Workplace Relations Act 1996. It has also been mentioned that if the employer makes any employee as redundant, he must show reasonable cause and in case he has failed to do the same, the law will bar him to reduce the salary of the respective employee.
Reduction of the payment may have certain rules and that should be followed up. According to Richard Lynch, a negotiating officer that there should be a time mentioned regarding the reduction of salary. It means that the employer should have to mention the time limit on how long the employee will get the reduced payment.
The employer has certain rights regarding the redundancy system. The employer may send the respective employees a notice for put him on short time. In this process, the amount of work is reduced and the salary will follow the same generally. However, the Fair Work Act has given certain rights to the employees as well. If the employee does not want to work on short time, he can entitle to be redundant.
It has been observed under the present case that the Board of Directors of AussieAir had made a decision regarding the reduction of payment of the pilots and the staff without serving a notice. The directors of the aviation company had also decided to make some of its staff redundant without obtaining their consent.
Therefore, from the above statement it is clear that the board of directors of the AussieAir had failed to maintain the relevant provisions of law and had not performed their duties as per the provision of Corporation Act 2001. Therefore, it is advised to the Worker’s Union of the AussieAir that they can sue the company for non-maintenance of the duties mentioned here above and ask for necessary damages as required through the case.
Reference:
Bray, A. and Power, C., 2017. The fair work commission’s’ new approach’. Precedent (Sydney, NSW), (141), p.27.
Earnshaw, J., Marchington, M. and Goodman, J., 2000. Unfair to whom? Discipline and dismissal in small establishments. Industrial Relations Journal, 31(1), pp.62-73.
Fossum, J.A., 2014. Labor relations. Mcgraw Hill Higher accounting.
Georgalis, J., Samaratunge, R., Kimberley, N. and Lu, Y., 2015. Change process characteristics and resistance to organisational change: The role of employee perceptions of justice. Australian journal of management, 40(1), pp.89-113.
Kavanagh, M. and McRae, E., 2017. Employment law: Protecting vulnerable workers amendment to fair work act. Governance Directions, 69(4), p.241.
Lawrence, R.J., 2016. Professional social work in Australia. ANU Press.
Marshall, J.F., Tsuji, Y., Matsuda, H., Davies, P.J., Iryu, Y., Honda, N. and Satoh, Y., 1998. Quaternary and Tertiary subtropical carbonate platform development on the continental margin of southern Queensland, Australia. Reefs and carbonate platforms in the Pacific and Indian oceans, pp.163-195.
McLachlan, R., 2013. Deep and Persistent Disadvantage in Australia-Productivity Commission Staff Working Paper.
Mohamed, A.A.A., 2014. Dismissal from management and the Remedies. LexisNexis.
Shields, J. and Brown, M., 2015. 3 15 Employee share ownership. Managing Employee Performance & Reward: Concepts, Practices, Strategies, p.320.
Stewart, A., 2013. Stewart’s guide to employment law (Vol. 3). Sydney: Federation Press.
Stewart, A.J., Bray, M., Macneil, J. and Oxenbridge, S., 2014. ‘Promoting cooperative and productive workplace relations’: exploring the Fair Work Commission’s new role.
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