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Effecting workplace policy changes: Do I need to consult my employees?

30 June 2020

#Workplace Relations & Safety

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Effecting workplace policy changes: Do I need to consult my employees?

The decision of Hastings v Toll Transport Pty Ltd (Review and Regulation) [2020] VCAT 135 (Hastings) highlights the importance of employers consulting their employees when effecting organisational change. 

In Hastings, the Victorian Civil and Administrative Tribunal found that transport company Toll Transport Pty Ltd’s (Toll) unilateral decision to change its blood alcohol policy limit to zero for contracted owner-drivers did not meet the applicable industrial agreement’s requirement to consult.

Until May 2018, Toll required its owner-drivers to comply with the general law on driving after consuming alcohol, which is to have a Breath Alcohol Concentration (BAC) of no more than 0.05g/210L (commonly known as “0.05%”). Under the company’s new policy documents (Drug and Alcohol Policy) introduced in May 2018, Toll purported to require owner-drivers to have a BAC of no more than 0.000g/210L – in other words, zero blood alcohol.

Four applicants brought separate proceedings against Toll, which the Tribunal heard together. In each proceeding, the applicant sought orders under the Owner Drivers and Forestry Contractors Act 2005 (Act) to effectively declare the change to their conditions, namely the change in blood alcohol, void and unenforceable.

After finding that the Drug and Alcohol Policy was inconsistent with the requirements under the applicable industrial agreement, the Tribunal went on to consider whether Toll had complied with its obligation to consult.

The Tribunal’s decision was focused predominately on the interpretation of clause 8.15 of the Drug and Alcohol Policy. In considering that clause, Toll submitted that the first sentence was the most important, being: “... operational procedures and standards will change and be updated from time to time as required by the Principal Contractor.” However, the Tribunal found that submission would have the reader ignore the second sentence entirely, being: “This will be discussed and agreed with the relevant parties before trial/implementation.”

The Tribunal noted that there was no rule of construction that the first sentence of a clause in an industrial agreement trumps the second. Indeed, the Tribunal observed that the first sentence was largely just a statement of fact, given that a business operational procedure would have to change as time moves on, and the second sentence was inherently the more important.

The Tribunal went on to conclude that how clause 8.15 operates in any particular situation will be a question of fact, noting at [61] that:

"… A change to an operational procedure such as that in clause 8.12 requiring the owner driver to complete and submit a daily invoice may only require minimal consultation and may not permit the owner driver to choose not to agree. But a change which was more intrusive or, as is the case in relation to the blood alcohol limit, a change which could expose an owner driver to the summary termination of their contract, is a matter which gives the owner driver the right to a discussion/consultation, and the right to decide whether or not to agree."

In defending the claim, Toll also relied on clause 24, which states that an owner driver “… will cooperate with [Toll’s] initiatives to improve safety and follow all required health and safety policies and procedures.” Toll submitted that the new Drug and Alcohol Policy fitted the description of such an initiative.

The Tribunal disagreed with Toll’s submission. The Tribunal noted that first, it would be “… quite artificial to carve out ‘health and safety policies and procedures’ from ‘operational procedures and standards’ so as to say that the former could be amended without regard to clause 8.15.” Secondly, the Tribunal said that if it was incorrect in reaching that conclusion, “… as 0.05% is the legal blood alcohol limit for those who drive with a car licence, it could not be said that changing the limit to 0.00% was ‘required’.”

The Tribunal noted that there was a paucity of evidence showing that Toll actually consulted the owner-drivers. Toll gave evidence that it held “toolbox talks” with employees and contractors to promote the new alcohol limit, and posted copies of the policy on the depot noticeboards. However, the Tribunal said that the minutes from the meeting merely showed that the policy was discussed and that the attendees were present (it did not show consultation or approval, etc). The Tribunal also found that while the policy may have been posted on the noticeboard, it was “unlikely” that the 300-odd employees and owner-drivers based at the depot were each given copies of the new policy.

The Tribunal found that Toll had purported to unilaterally vary the industrial agreement in respect of the four applicants, which was impermissible under ordinary principles of contract law. As a result, the Tribunal found that the purported new zero blood alcohol limit had not been introduced in Toll’s industrial agreement with the four applicants.

The Tribunal declared that, in respect of the four applicants the Drugs and Alcohol Policy did not have the effect of changing the “legal blood alcohol limit” in the industrial agreement from 0.05 per cent, or imposing on the applicants a new Prescribed Limit of Breath Alcohol Concentration of other than 0.05g/210L.

Key takeaway

If workplace policies and procedures are to be amended, employers should consider whether the change is inconsistent with the applicable industrial instruments. If it is, it will then be necessary for the employer to consider the applicable industrial instruments and governing legislation (either the Fair Work Act 2009 (Cth) or Industrial Relations Act 2016) for the existence and extent of any obligation to consult with employees or their representatives about the proposed amendment. 

If the proposed change in policy is significant and could affect employees’ rights in a material way, such as if the change could result in an employee’s termination of employment, then the obligation to consult will be more strict.

Author: Jackie Hamilton

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