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Company directors protected from bullying under the Fair Work Act

The anti-bullying jurisdiction of the Fair Work Act enables the Fair Work Commission to issue anti-bullying orders where it is satisfied that a “worker” is being bullied at work. The Act defines who is a “worker” very broadly, by drawing upon the definition of that term in the Work Health and Safety Act 2011 (Commonwealth). Accordingly company directors are covered by Australia’s anti-bullying laws in the workplace.

Here is the proof of that extraordinary proposition.

“In general terms, the WHS Act provides that a worker is a person who carries out work in any capacity for a person conducting a business or undertaking, including any of the following:

  • an employee;
    ● a contractor or subcontractor;
    ● an employee of a contractor or subcontractor;
    ● an employee of a labour hire company who has been assigned to work in the person’s business or undertaking;
    ● an outworker;
    ● an apprentice or trainee;
    ● a student gaining work experience; and
    ● a volunteer—except a person volunteering with a wholly ‘volunteer association’, in effect, with no employees.

The concept of “a person conducting a business or undertaking” (PCBU) is provided by s.5 of the WHS Act in the following terms:

“(1) For the purposes of this Act, a person conducts a business or undertaking:

(a) whether the person conducts the business or undertaking alone or with others; and
(b) whether or not the business or undertaking is conducted for profit or gain.

(2)  A business or undertaking conducted by a person includes a business or undertaking conducted by a partnership or an unincorporated association.

(3)  If a business or undertaking is conducted by a partnership (other than an incorporated partnership), a reference in this Act to a person conducting the business or undertaking is to be read as a reference to each partner in the partnership.

(4) A person does not conduct a business or undertaking to the extent that the person is engaged solely as a worker in, or as an officer of, that business or undertaking.

(5) An elected member of a local authority does not in that capacity conduct a business or undertaking.

(6) The regulations may specify the circumstances in which a person may be taken not to be a person who conducts a business or undertaking for the purposes of this Act or any provision of this Act.

(7)  A volunteer association does not conduct a business or undertaking for the purposes of this Act.

(8) In this section, volunteer association means a group of volunteers working together for 1 or more community purposes where none of the volunteers, whether alone or jointly with any other volunteers, employs any person to carry out work for the volunteer association.”

Furthermore, s.4 of the WHS Act includes the following definition of “volunteer”:

““volunteer” means a person who is acting on a voluntary basis (irrespective of whether the person receives out-of-pocket expenses).”

The Workplace Health and Safety Regulations 2011 provide as follows:

“7(3) For subsection 5 (6) of the Act, an incorporated association may be taken not to be a person conducting a business or undertaking if the incorporated association consists of a group of volunteers working together for one or more community purposes where:

(a) the incorporated association, either alone or jointly with any other similar incorporated association, does not employ any person to carry out work for the incorporated association; and
(b) none of the volunteers, whether alone or jointly with any other volunteers, employs any person to carry out work for the incorporated association.”……………………..

The essential question is whether Mr Adamson as Chairperson is a person who carries out work in any capacity for APY Inc. I have for this purpose accepted that APY Inc is a PCBU, and this would appear to be the case. This question requires consideration of the nature of Mr Adamson’s role and activities as Chairperson, and the relationship between Mr Adamson and APY Inc, all in the context of the intended coverage of the definition of “worker” under the FW Act, and by reference, the WHS Act.

It is appropriate to commence with the approach to the construction of the legislation.

As a Full Bench12 relatively recently stated, ascertaining the meaning of the provisions of the FW Act necessarily begins with the ordinary and grammatical meaning of the words used.13 The words must be read in context by reference to the language of the Act as a whole and to the legislative purpose.14 Section 578(a) of the FW Act also directs attention to the objects of the FW Act and s.15AA of the Acts Interpretation Act 1901 requires that a construction that would promote the purpose or object of the FW Act is to be preferred to one that would not promote that purpose or object. The purpose or object of the FW Act is to be taken into account even if the meaning of a provision is clear. When the purpose or object is brought into account an alternative interpretation may become apparent. If one interpretation does not promote the object or purpose of the FW Act, and another does, the latter interpretation is to be preferred. Section 15AA requires the Commission to construe the FW Act, but not to rewrite it, in the light of its purpose.15

The function of a legislative definition, as was pointed out by McHugh J in Kelly v R, 16 is not to enact substantive law, but to provide aid in construing the statute. A definition provision is therefore not to be interpreted in isolation and thereby given a meaning which negates the evident policy or purpose of a substantive enactment. Part 6-4B of the FW Act has the evident purpose of establishing a mechanism by which the bullying of workers at work may be stopped.17

Further, Mason J affirmed in K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd:18

“Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasise the clarity of meaning which words have when viewed in isolation, divorced from their context. The modern approach to interpretation insists that the context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise.”19

There are no specific objects applicable only to Part 6-4B of the FW Act. There are however, objects in s.3 of the FW Act that should be taken into account. Section 3 provides as follows:

“3. Object of this Act
The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:
(a) providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s international labour obligations; and
(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders; and
(c) ensuring that the guaranteed safety net of fair, relevant and enforceable minimum wages and conditions can no longer be undermined by the making of statutory individual employment agreements of any kind given that such agreements can never be part of a fair workplace relations system; and
(d) assisting employees to balance their work and family responsibilities by providing for flexible working arrangements; and
(e) enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented, protecting against unfair treatment and discrimination, providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms; and
(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; and
(g) acknowledging the special circumstances of small and medium-sized businesses.”

I have set out the statements pertaining to the Anti-bullying jurisdiction made within the relevant Explanatory Memorandum20 earlier in this decision.

The objects of WHS Act are stated as follows:

“3 Object
(1) The main object of this Act is to provide for a balanced and nationally consistent framework to secure the health and safety of workers and workplaces by:

(a) protecting workers and other persons against harm to their health, safety and welfare through the elimination or minimisation of risks arising from work; and
(b) providing for fair and effective workplace representation, consultation, co-operation and issue resolution in relation to work health and safety; and
(c) encouraging unions and employer organisations to take a constructive role in promoting improvements in work health and safety practices, and assisting persons conducting businesses or undertakings and workers to achieve a healthier and safer working environment; and
(d) promoting the provision of advice, information, education and training in relation to work health and safety; and
(e) securing compliance with this Act through effective and appropriate compliance and enforcement measures; and
(f) ensuring appropriate scrutiny and review of actions taken by persons exercising powers and performing functions under this Act; and
(g) providing a framework for continuous improvement and progressively higher standards of work health and safety; and
(h) maintaining and strengthening the national harmonisation of laws relating to work health and safety and to facilitate a consistent national approach to work health and safety in this jurisdiction.

(2) In furthering subsection (1)(a), regard must be had to the principle that workers and other persons should be given the highest level of protection against harm to their health, safety and welfare from hazards and risks arising from work as is reasonably practicable.”

The relevant explanatory memorandum 21 to what is now the WHS Act stated as follows in relation to s.7:

“Clause 7 – Meaning of worker

  1. The Bill adopts a broad definition of ‘worker’ instead of ‘employee’ to recognise the changing nature of work relationships and to ensure health and safety protection is extended to all types of workers.
  2. Clause 7 defines the term ‘worker’ as a person who carries out work in any capacity for a PCBU, including work in any of the capacities listed in the provision. The examples of workers in the provision are illustrative only and are not intended to be exhaustive. That means that there will be other kinds of workers covered under the Bill that are not specifically listed in this clause (e.g. students on clinical placement and bailee taxi drivers).
  3. Subclause 7(2) deems the Commissioner of the AFP, a Deputy Commissioner of the AFP, or AFP employee to be employees of the Commonwealth for the purposes of the Act and is necessary because police officers have not traditionally been recognised as employees, but rather as independent office holders.
  4. Subclauses 7(2A), 7(2B), 7(2C), 7(2D), 7(2E) and 7(2F) further extend the definition of ‘worker’ to include other persons who are currently deemed to be employees of the Commonwealth for the purposes of the OHS Act, namely:
  • Members of the ADF;
  • A holder of a Commonwealth statutory office (or acting office holder);
  • A person who constitutes a Commonwealth public authority (eg the Australian Government Solicitor, CEO of Comcare and the Director of National Parks);
  • Members or deputy members of a Commonwealth public authority or a body established by an Act establishing a public authority;
  • Persons that engage in activities or perform acts at the request or direction of, or for the benefit of, the Commonwealth who are declared by the Minister to be workers for the purposes of the Act.

These persons are deemed to be employees of the Commonwealth for the purpose of OHS Regulation, and ‘at work’ when performing their respective functions.

In deeming a person to be a worker, the intention is not to exclude that person from also having duties as another class of duty holder, such as an officer (see clause 15).

  1. Subclauses 7(2F), 7(2G) and 7(2H) provide for the Minister to declare certain classes of people to be workers. This is intended to ensure that people who should be owed duties and in turn owe duties as workers, are covered under the Bill.
  2. Subclause 7(3) clarifies that a self-employed person may simultaneously be both a PCBU and a worker for purposes of the Bill.”

Against that background, I turn now to the terms of s.7 of the WHS Act. APY Inc is not a public authority within the meaning of the WHS Act. That is, the legislation adopts a particular meaning. In that light, it is not appropriate for the Commission to adopt a broad or popularly understood meaning for the term. APY Inc is established under a law of the South Australian Parliament and is not established for a public purpose by or under a law of the Commonwealth or a law of a Territory, is not a Commonwealth company within the meaning of the Commonwealth Authorities and Companies Act 1997, and is not prescribed by the regulations to be a public authority for the purposes of the WHS Act.

The fact that Parliament extended the definition of worker to include the category of public authority workers is a factor to be weighed in ascertaining the intended coverage of the WHS Act. However, the fact that the WHS Act is a Commonwealth Act, designed to operate in the context of State and Territory work health and safety laws that provide coverage for organisations and other businesses in the States and Territories, should also be considered when assessing the import of the definition.

In terms of the nature of Mr Adamson’s role and functions, what emerges from the provisions of the APY Act is as follows:

  • Mr Adamson (and any other Chairperson under the APY Act) involves a person, who has successfully stood for election to the Executive Board, then being appointed by the Board to the role;
    ● The role of Chairperson is to call and chair the meetings of the Executive Board but has no deliberative decision making role, other than as a member of the Board, and cannot give directions to staff or make public statements on behalf of the Board except as specifically authorised by the Board to do so;
    ● Mr Adamson also attends the Board and other APY Inc meetings and participates in the decision making and consultative processes of the Board;
    ● Where authorised by the Board, the Chairperson would be expected to represent it to the APY community and in other forums; and
    ● Mr Adamson is, in addition to his remuneration, allowances and expenses as a member of the Executive Board, entitled to an allowance determined by the Executive Board and approved by the Minister. In the case of Mr Adamson, the allowance determined for the Chairperson position is $920.15 gross per week plus a vehicle allowance of $450 per week.

Of significance in this regard, is that Mr Adamson as Chairperson had a specific role under the terms of the APY Act and was paid significant remuneration for doing so. This remuneration is well beyond the sitting fees for general members of the Executive Board and exceeds cost reimbursement. The fact that PAYG taxation was deducted is of some significance and I note that no superannuation was apparently paid on behalf of Mr Adamson. This later point would not be consistent with an employment relationship; however, it is not contended that Mr Adamson was an employee and such is not required in order to be treated as a worker.

At least in the role of Chairperson, it is not directly suggested that Mr Adamson fits neatly into any of the categories listed in s.7 of the WHS Act. In that regard, I will return to the concept of “volunteer” later in this decision. However, as contended of his behalf, the fact that the role does not directly fit into one of the nominated categories is not decisive. Those categories are non-exhaustive examples of the capacity in which a worker may undertake work for a PCBU, which shed some light on the scope of the definition, but cannot be determinative of that scope. Indeed, as would be clear from the WHS Act and the explanatory memorandum, a very wide approach to the definition of a worker has been adopted given that the essential element to determining who is a worker is the undertaking of work for a PCBU. Further, a broad approach to the definition recognises that WHS hazards and risks do not discriminate based on legal relationships or whether a person is paid.

It seems to me that the activities undertaken by Mr Adamson in attending to the duties of Chairperson of APY Inc represent work. This is true in both a literal and contextual sense.

The more difficult question is whether that work is carried out in any capacity for APY Inc. The need to consider this aspect in determining the application of s.7 of the WHS Act was emphasised by Watson VP in Balthazaar v Department of Human Services (Commonwealth). 22

As a general rule, I doubt that the FW Act and WHS Act intended that members of organisations participating in the activities of those organisations, would, absent other factors be treated as workers, at least for present purposes. There is of course express coverage in s.7 of the WHS Act for some of these activities, which are not directly relevant here. However, I consider that there are particular features of the role of the Chairperson of the APY and the context in which that position exists, which are potentially significant.

Mr Adamson in his capacity as Chairperson is certainly not engaged by APY Inc, rather he is elected to the Executive Board and then nominated as its chair. He does (or did), however, serve the organisation, and the APY community, as the Chairperson of the Executive Board and I have found that he undertakes work in that capacity. The Executive Board can be directed by the AGM of the APY (s.9B(4) of the APY Act) and as Chairperson, he can be directed to act for and on behalf of the Executive Board provided that he is acting in accordance with a resolution of that Board (s.13M of the APY Act as an example). As outlined earlier, without such a resolution, Mr Adamson is unable to give directions to the staff of APY Inc or make or implement any decisions, other than the calling of meetings, and at least arguably, those associated with the conduct of the meetings themselves. Any other work undertaken in his capacity as Chairperson would seem to be undertaken, as required, for the Executive Board of APY Inc.

As outlined earlier, the fact that Mr Adamson receives relatively significant additional remuneration and expense payments as Chairperson, whilst not decisive, is more consistent with the notion that work is being undertaken for APY Inc.

Mr Adamson may not be considered to be a “worker” in the traditional sense of the difference between a manager/employer and a worker. However, the context in which the expression is used here is different. This includes the purpose of the WHS Act and the notion under s.7(3) that a self-employed person may simultaneously be both a PCBU and a worker for the purposes of the WHS Act. I consider, on balance, that in light of the particular role and function of the Chairperson under the APY Act, that Mr Adamson could be said to undertake work in any capacity for APY Inc.

Accordingly, although it is now not necessary to finally determine this issue given later findings, my provisional view would be that at the time of making the application (and for the period that he was the Chairperson).”

Re Adamson [2017] FWC 1976 delivered 19 May 2017 per Hampton C.

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