Home - The work-wage bargain

UpdatesNov 04, 2021

The work-wage bargain

A fundamental aspect of the work-wages bargain is that the employee is ready, willing and able to provide the service required by the contract of employment. To earn wages, an employee is required to perform the service they have been contracted to perform.

Loss of licence resulting in inability to perform work

If an employment contract requires the employee to have the ability to operate vehicles and mobile plant and equipment, they must hold a driver’s licence. If the employee’s driver’s licence is suspended, the employee is not ready and able to perform the service required by his contract of employment for the period of the suspension. Therefore, the employee does not have a contractual entitlement to the payment of wages, since actual service is required for wages to be earned.

In BHP Coal Pty Ltd v CFMMEU (2018), a mine worker whose duties primarily involved the on-site operation of vehicles and mobile equipment was not permitted to attend work and was not paid because his driver’s licence was suspended. Legislation required all operators of vehicles and mobile equipment to hold a current Australian driver’s licence.

The Fair Work Commission (FWC) ruled the employee was required to hold a driving licence so that he could perform this work in compliance with his legal obligations. The employer had not excused the employee from this obligation simply because his licence was suspended. Having a licence was a necessary incident of the performance of those duties a term of his contract of employment.

The employee was not ready and able to perform the service required by his contract of employment for the period of the suspension of his driver’s licence, and did not do so. Therefore, the employee did not have a contractual entitlement to the payment of wages.

This was the case although neither the employment contract nor the enterprise agreement authorised the employer to direct the employee not to attend work and to not pay the employee. The applicable enterprise agreement gave the employer discretion to suspend an employee “without loss of pay” while it investigated conduct that might lead to disciplinary action. A separate right existed for the employer to stand down employees without pay. None of those were applicable in this case.

In some cases, an enterprise agreement may alter the contractual position. However, the FWC ruled in this case the enterprise agreement did not confer upon the employee any entitlement to payment of wages beyond that provided by his contract of employment.

Incapacity resulting in inability to perform work

Where an employee cannot perform the inherent requirements of their job and there is no reasonable scope for the employee to be redeployed into another role, it is likely that there will be a valid reason for dismissal based on the employee’s capacity.

In DA v Baptist Care SA (2020), a casual child and youth support employee was dismissed for failing psychometric testing required by legislation to detect propensity for child abuse. The FWC ruled that it was a valid reason for dismissal related to the employee’s capacity, where employees do not have or maintain the necessary licence, certification, qualification, approval or accreditation to lawfully perform the inherent requirements of their job.

While the laws may operate unfairly because it detects a propensity that might not in fact exists, the FWC observed that this doesn’t render a dismissal caused by the laws to be unfair. The legislative scheme reflects a policy choice by the South Australian legislature to prioritise a precautionary and preventative approach to the care and safety of children over the interests of employees working with children. Unfair dismissal proceedings do not provide an avenue to revisit that policy choice or to assign responsibility for the inevitable consequences of the legislative scheme to employers who are bound by it.

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