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Excerpt from this article first published in Human Resources Magazine, Issue 140 - 30 October 2007
In Smith v Granada Tavern, the Federal Magistrates Court fined Granada Tavern (“the Employer”) $24,750 and also imposed on a part-owner of the business, Mr Hibberd ($4,950) and its manager Ms Berechree of ($1,980) after finding each of the parties guilty of applying duress to an employee in the course of negotiating an AWA.
In 2006 the Employer, through Mr Hibberd became aware that the AWAs previously in place were not valid. Mr Hibberd then went about negotiating new AWAs in order to avoid award obligations. Mr Hibberd and Ms Berechree soon ‘came to the view that Ms Wills was a ringleader of employee resistance to the signing of AWAs’. Ms Wills made it clear that she wished to continue to be paid in accordance with the award.
Subsequently, the shift work on which Ms Wills was regularly engaged was removed from her. In addition Mr Hibberd indicated to Ms Wills and other employees who did not sign the AWA that they would have the issue of poor performance raised - there was no evidence of poor performance. Further threats and acts of intimidation were committed by the respondents such as a reduction in hours and references by Mr Hibberd to running Granada Tavern like a concentration camp.
Federal Magistrate Burchardt held the behaviour of the employer, the owner and the manager “…was intended to and I have no doubt did place a great deal of strain on a young woman in a completely disempowered situation”. Federal Magistrate Burchardt stated it was important to impose a penalty on the employer, the owner and the manager, that not only deterred them from such conduct but would also deter other ‘employers and their directors and managers’.
In determining the appropriate penalty to be imposed on the respondents Federal Magistrate Burchardt considered the following:
When negotiating AWAs, employers should ensure that managers communicating with the employees do not make statements or engage in conduct that amounts to duress or coercion. Managers should be made aware that they can be individually fined.
Sharlene Wellard
Senior Associate
