The Fair Work Commissions in Australia has recently ordered Virgin Australia to reinstate an aircrew employee after he had been dismissed earlier this year after being accused of being on duty in breach of Virgin Australia’s drug and alcohol policies and using a Dating App to have casual sex after asking for a roster change due to fatigue. The case raises serious questions about workplace surveillance and whether employees have a right to a private life while in their work provided hotel room during a work-related trip.

Dylan Macnish was dismissed after two separate incidents in 2023. It was not disputed that Mr Macnish’s performance at work was of a high standard. He had “glowing” feedback from Cabin Crew Managers.

One incident involved Mr Macnish drinking a glass of sparkling wine at a work Christmas party seven and a half hours before he was due to work. This was said to be in breach of the airline’s polices that provide that cabin crew members are not allowed to consume alcohol within eight hours of being on duty.

The Fair Work Commission’s decision found that Mr Macnish had breached the Virgin Australia policy as he had drunk the glass of prosecco 7.5 hours prior to his sign-on but it noted that just because an employee is in breach of a policy, it does not automatically mean that there is a valid reason for the dismissal. The circumstances must be considered.

Mr Macnish was concerned that he could be in breach of the airline’s policy. He asked a Manager at the party for his views on whether he should turn up for duty. The Manager said that if in doubt he should look at the policies. Mr Macnish did and came to the view that he could go on duty. He also took the precaution of self-testing with a personal breathalyser, which returned a zero reading. The Commission concluded that the policies on drinking before duty were confusing. The sections on layover and duty travel are worded in such a way that it contemplates situations where a Virgin employee could be permitted to drink alcohol within eight hours of a duty.

The other incident involved Mr Macnish’s request to be moved to an afternoon flight rather than returning to Perth on a rostered earlier flight. Mr Macnish relied on the airline’s fatigue policy; saying that he had not been able to sleep after his previous flight as he had assisted with a medical incident with a passenger who had become unwell and had accidentally wet himself and Mr Macnish as he tried to assist the passenger. During Mr Macnish’s extended “layover” at the Brisbane hotel he arranged a hookup on the gay dating app Grindr in the early hours of the morning.

In the course of the investigation the airline requested CCTV footage of Mr Macnish’s hotel hallway and his room swipecard records. The footage showed him leaving his room at 5.13am and returning with a guest five minutes later. The guest then left at 9.00am. Virgin argued that Macnish had requested the roster change to engage in “social activities”.

The Fair Work Commission’s decision said that Virgin Australia’s conduct when investigating the hotel incident was “mystifying.” The Commission noted that it was not unusual for friends or family to stay with staff in hotels. In fact it had been acknowledged by a Manager that it was common practice for employees staying in Virgin-provided accommodation on layovers to use dating apps. The Manager had also conceded that if a straight, married man were to have sex with his wife after accessing the fatigue policy then it would ‘probably not’ be any of the airline’s business to comment on it.

The issue of how Virgin Australia accessed the CCTV footage and room swipecard information from the hotel was not addressed in the Commission’s decision. Australia has similar privacy laws to New Zealand. Unless there has been some informed consent by Mr Macnish to disclosure it is likely that his privacy has been breached by the hotel. Virgin Australia would also require a very explicit “workplace surveillance” policy that effectively provides that employees can be monitored in their “temporary residence” while being required to work away from home.

There may be occasions when an employee’s privacy in relation to their personal off-duty activities could be outweighed by the employer’s health and safety obligations. While it could be argued that airlines have a greater interest in a worker’s off-duty conduct in safety-sensitive positions than other employers, the information should be used legitimately for workplace safety and in a non-discriminatory way. It should not make any difference if Mr Macnish was a “straight, married man.” Read more.....

Changes to employment law in Australia came into effect last week that would enable the Fair Work Commission to provide platform or gig economy drivers, food delivery riders and parcel couriers with minimum employment standards for the first time; including superannuation, personal injury insurance and a safety net on pay.

Last week in New Zealand our Court of Appeal unanimously rejected an appeal by Uber and upheld, with some criticism, the decision of the Chief Judge in the Employment Court that four Uber drivers are employees.

Essentially, the Uber business works as follows: riders/eaters download the Uber App; they advise Uber (via the App) of where they want to travel to/what they want to eat; Uber (via the App) offers the trip/food to available drivers; an available driver accepts the offer, collects the rider/food and drives to their chosen location. Riders and eaters make payment to Uber; Uber makes payment to the drivers.

The Court of Appeal criticised the Employment Court’s approach to the test provided in the Employment Relations Act. In deciding whether or not a worker is an employee or a contractor the Court “must determine the real nature of the relationship”. In doing so, the Court must consider “all relevant matters, including any matters that indicate the intention of the persons” and “not to treat as a determining matter any statement by the persons that describes the nature of their relationship”.

The Court of Appeal confirmed that the first step should be to look at the parties’ agreement and that the focus should be on the substance of the parties’ mutual rights and obligations. But the Court said that when dealing with contracts which are offered on a “take it or leave it” basis, it will be much less likely that labels and similar terms genuinely reflect the parties’ intentions about the real nature of the relationship. 

There are multiple different contractual documents between Uber and their drivers. While the Court of Appeal determined that on their face the contracts did not appear to give rise to an employment relationship, but in practice aspects of the agreements were found to be ‘window-dressing’.

The Court of Appeal then went on to consider the three common law tests often used to determine whether an employment relationship is established; the control, the integration and the fundamental tests.

It examined the level of control Uber exercises while a driver is logged into the App and found that this was more consistent with an employment relationship. Drivers are logged out for repeatedly ignoring requests; if drivers repeatedly decline requests they are given warnings, suspensions, and ultimately termination of the relationship.

Interestingly, while the Court noted that Uber drivers do not wear uniforms and their vehicles have no Uber signage, nevertheless the Court found that the drivers are the public face of the Uber brand and are integrated into its business. 

Considering these factors, the Court of Appeal then considered whether the drivers were really in business on their own account (the fundamental test). It said that when logged into the App, the driver has no opportunity to establish any business goodwill of their own, or to influence the quantity or quality of the work they receive, or the revenue from that work (except to the extent that Uber agrees to give them some preference in relation to access to ride requests, information about rides, or supplementary payments – as part of the control Uber exerts). The Court concluded that the drivers were supporting Uber’s business rather than running their own.

The ruling provides the drivers with access to minimum employment standards such leave entitlements, holiday pay and the minimum wage. Immediately, and unsurprisingly, Uber confirmed that it would appeal the decision and apply for leave to appeal to the Supreme Court. Uber has deep pockets and operates in a global market. It can certainly afford to litigate this issue as far as it can. 

To date our most notable court decision on the employee/contractor issue is Bryson v Three Foot Six; where the Employment Relations Authority declared Mr Bryson to be a contractor, the Employment Court an employee, the Court of Appeal a contractor, before the case reached the Supreme Court and it finally concluded that Mr Bryson was an employee. Famously, the John Key lead National Government then changed the outcome of the Bryson decision for the film industry by enacting the so-called Hobbit law effectively making workers in that industry contractors.

In June this year the Workplace Relations and Safety Minister, Brooke van Velden, began work on law changes that could prevent workers from challenging their employment status in the courts. It also seems unlikely that the current government is considering any protections for a significant number of workers that are in effect vulnerable and “dependent contractors”. Read more....

Human Resources Magazine

EMPLOYMENT RELATIONS  David Burton

Flexibility at work comes with risk?

While we await the Court of Appeal’s ruling on the recent Uber cases, David Burton, an employment law barrister, looks at the implications for employers. Achieving flexibility by accessing the so-called “gig economy” may bring some risk.

Generally, the Uber cases reflect a testing of employment status in light of fast-moving changes to the way in which work is done. Most recently, the Chief Judge of the Employment Court in E Tū Inc v Rasier Operations BV issued a declaration that four Uber drivers were employees.

The business model and the law

The Court explained that the Uber operation works as follows: riders/eaters download the Uber App; they advise Uber (via the App) of where they want to travel to/what they want to eat; Uber (via the App) offers the trip/food to available drivers; an available driver accepts the offer, collects the rider/food and drives to their chosen location. Riders and eaters make payment to Uber; Uber makes payment to the drivers.

The starting point is the Employment Relations Act. In deciding whether or not a worker is an employee or a contractor, the Court “must determine the real nature of the relationship”. In doing so, the Court must consider “all relevant matters, including any matters that indicate the intention of the persons” and “not to treat as a determining matter any statement by the persons that describes the nature of their relationship”.

The Employment Court highlighted the need to adopt an approach to determining the status of the drivers with regard to legislation and its role in protecting vulnerable workers and ensuring that minimum standards are maintained. It said that the broader social purpose of the legislative framework must be kept in mind when considering whether a worker is an employee. The Chief Judge said that her task was to ascertain whether the individual is within the range of workers to which Parliament intended to extend minimum worker protections.

The Court’s findings

The Court accepted that some of the usual indicators of a traditional employment relationship were missing. However, it found that significant control was exerted on drivers in other ways. These included incentive schemes that reward consistency and quality. Other controls included withdrawal of rewards for breaches of Uber’s standards, such as slips in quality levels, measured by user ratings.

The Court observed that, on one level, being an Uber driver provides flexibility and choice. Drivers could juggle driving with their other jobs, businesses or family and community responsibilities. None of the drivers were required to log onto the App at any particular time and could work as long or as little as they liked.

The Judge thought that concepts of “flexibility” and “choice” were not particularly helpful in determining employment status. She observed that flexibility is a feature of modern employment relationships. Casual employees, for example, can exercise flexibility and choice about when they work (there being no legal obligation to accept work offered). The fact that they can choose to work at times that suit their personal commitments does not mean their worker status changes. She observed that in New Zealand any employee, casual or otherwise, is entitled to request flexible working hours and such requests can only be denied on a limited number of grounds.

Importantly, the Court said Uber had sole discretion to control prices, service requirements and standards as well as other aspects of the business such as marketing. Drivers were restricted from forming their own relationships with riders or organising substitute drivers to perform services on their behalf.

The cost of defending

In coming to its decision that the drivers were employees, the Employment Court was not deterred by the complex commercial operation that Uber uses in New Zealand. Interestingly, the Court found that an employee may have more than one employer and that an employer may be more than one corporate entity.

When considering flexible work arrangements, employers may need to consider the cost of defending the arrangement. Uber has deep pockets and operates in a global market. It can certainly afford to litigate this issue as far as it needs to (or can). The appeal of the decision has now been heard in the Court of Appeal and the decision will be released in due course. Whatever the outcome, it will be a significant decision.  Read more....

It all seems rather “Trumpian” in New Zealand politics at present. Do we need to do a factcheck before even contemplating the accuracy of statements being made by Ministers?

Recently, the Prime Minister made announcements regarding changes to maths to be taught in schools. His speech at the National Party Conference included references to what he labelled the "shocking" state of maths achievement after "years of drift and decay". At Year 8, he said, only 22 percent of students were at the expected standard for maths which he called "deeply concerning" and a result of "total system failure".

In support of his analysis he said "this is the first time we have assessed our kids showing where they are at compared to the year they are actually in. Essentially, that means many parents were being told that their children are doing just fine when the reality is they could be years behind." The failure to use assessment properly was "abhorrent" and the necessary interventions had not occurred.

Former Education Minister Jan Tinetti did not deny that New Zealand has a long-standing maths achievement issue but was very critical of the Prime Minister’s analysis.

“The big thing here that I’m very angry about is that this Government has manipulated data to justify their own crisis at the moment.” She explained “They’ve bandied round that figure of 22% now that is measured against the curriculum that was released last year, has not been taught so effectively you’re measuring kids against something that they’ve never ever been taught. That is manipulation”.

Likewise, Labour's leader Chris Hipkins called out the government for not using accurate data. He explained that "it's a bit like moving the goalposts after the kids have already kicked the ball" and said "I think the government should use data and information that's accurate. I think assessing kids against a curriculum that they have not been taught isn't a fair reflection of what kids are capable of”.

Maybe the Prime Minister was not aware of the irony when trying to justify his use of the data; “whether it’s 45% or 22%, we’ve got a problem in maths” he said.

Remaining in the education field, earlier this month the mega polytech, Te Pūkenga, tabled its 2023 Annual Report in Parliament, which showed that it had made more than $50 million in cost savings. The report showed it still had an operating deficit of $37.9 million at the end of 2023, but that was a significant reduction on the forecast deficit of $93.4 million.

Yet, as recently as June this year the Tertiary Education Minister Penny Simmonds told Parliament’s Education and Workforce Select Committee that the polytechnics were facing a $189 million financial hole.

Who knows what the actual position in the health system is. Doctors and nurses continue to raise the alarm about staff shortages and burnout. All too often patients are sharing stories of long wait times and delayed diagnoses. The Minister and Health New Zealand are adamant frontline roles are safe from cuts. Yet a copy of a presentation to senior leadership last week about "potential cost savings in hospital and specialist services" suggested a total reduction of 4492 staff, including 470 doctors, 1491 nurses, 338 allied staff and more than 2000 managers and admin workers. The newly appointed Health Commissioner denies he was aware of this and staff have been told to dismiss the presentation.

Contrast this to the obligation of good faith that is at the heart of employment relationships. Under common law it was an implied duty, but the Employment Relations Act introduced a statutory duty of good faith. It provides that parties to an employment relationship must deal with each other in good faith; and must not, whether directly or indirectly, do anything to mislead or deceive each other (or do anything that is likely to mislead or deceive each other). It confirmed that the duty of good faith is wider in scope than the implied mutual obligations of trust and confidence. The Act also provides for remedies, including possible penalties, if the duty of good faith is breached.

Data from Covid times, pre-high inflation times, and the cost of living crisis continues to be used to obfuscate the true position. New Zealand has gone and continues to go through some hard times. By treating us in good faith the journey and the measures that the present government wants us to take would be more palatable – with no wearisome point scoring and manipulation of the actual position. Trust and confidence makes strong governance. And Government? Read more....