Most employers understand that personal situations or emergencies may occur during work hours that an employee may be required to deal with. However, outside of ad hoc personal emergencies, employers expect that during work hours their employees dedicate their full time and attention to their work responsibilities. When an employee’s personal circumstances start becoming prioritised over work responsibilities issues will undoubtedly arise.
The Fair Work Commission (FWC) has recently upheld an employer’s decision to dismiss an employee due to excessive personal phone use, during work hours.
Background
In Lynda Murphy v Clear Day Pty Ltd [2022] FWC 373, Ms Murphy was employed full-time by Clear Day Pty Ltd as a Health, Safety, Environment & Training Manager. Outside of this, Ms Murphy also ran a farm stay business on her property and was consistently using her phone and other electronic devices during her working day to deal with the farm stay business.
Prior to her dismissal, management had spoken with Ms Murphy about attending to personal matters during work hours, however no changes in Ms Murphy’s conduct had occurred.
Clear Day Pty Ltd claimed that despite being directed to turn off her mobile phone whilst in the office, Ms Murphy continued to neglect her professional duties and spend her work hours attending to personal matters including:
As a result of her failure to comply with Clear Day Pty Ltd’s direction, Ms Murphy’s employment was terminated.
Decision
Commissioner Hunt found that the number of text messages sent by Ms Murphy were “extraordinary and unacceptable”. Further Commissioner Hunt stated that Ms Murphy’s conduct not only exhibited a failure to perform her work to a reasonable standard but that she deliberately failed to follow a lawful and reasonable direction given by Clear Day Pty Ltd to turn her mobile phone off at work. In this regard, the Commissioner stated that it was “impossible to believe that Ms Murphy did any work at all”.
Although the Commissioner highlighted that Ms Murphy was only given verbal warnings and absent a written warning it could be said Ms Murphy was not afforded the opportunity to respond to the reasons for dismissal, given the extent and seriousness of the basis of dismissal, the Commissioner held it was not unfair. In this regard, the Commissioner also found that when presented with the issue of excessive personal texting Ms Murphy had no response or explanation to provide the FWC and therefore it was unlikely she would have provided a sufficient explanation to Clear Day Pty Ltd had a show cause process been carried out in any event.
Key Take Aways
Procedural deficiencies will not always be overlooked by the FWC. Employers should ensure they:
Contact the Workplace Law Team at Chamberlains Law Firm for any questions and concerns.
In a recent decision the Fair Work Commission has reminded employers that whilst they may have a valid reason for terminating an employee, the termination process undertaken by the employer must follow procedural fairness.
In Mr Simon Ronchi v Johns Lyng Group [2022] FWC 326, Mr Ronchi was dismissed from his employment for sending inappropriate messages, making inappropriate social media posts, promoting his own business and neglecting his duties during work hours.
Among other unprofessional conduct which included sending anonymous text messages to his manager, Mr Ronchi sent an email from his Johns Lyng Group work email address to three business partners, promoting a demolition company registered in his name stating that John Lyng Group had partnered with his company as its preferred contractor.
The Commission found that Mr Ronchi’s conduct was serious and intended to cause harm rendering it highly likely to cause damage to the employee and employer relationship. As such, the Commission deemed that the dismissal of Mr Ronchi’s was a proportionate response to his disregard for his express contractual duties.
However, although Mr Ronchi’s conduct was found to be ‘wilful and inconsistent with obligations to his employer’, the Commission simultaneously noted that the dismissal was procedurally unfair due to John Lyng Group’s failure to afford Mr Ronchi an opportunity to consider the allegations and evidence before a decision was made to terminate his employment. In this regard, Commissioner Yilmaz stated:
“Given the serious nature of the allegations and the breadth of evidence against Mr Ronchi, an opportunity to digest the allegations and show cause why he should not be dismissed would have been a more appropriate and fair dismissal process.”
In light of this, Mr Ronchi was awarded an amount of $1,635 being 1 weeks’ compensation.
Key Take Aways
Contact the Workplace Law Team at Chamberlains Law Firm for any questions and concerns.
Chamberlains Law Firm are currently acting for a number of clients who were subjected to sexual abuse and severe physical abuse during their time in Juvenile Justice Centres.
We are looking for witnesses to come forward who may assist with our investigations of the following centres:
Across the abovementioned institutions, there are countless allegations of sexual abuse and severe physical abuse. The abuses included, grooming, illegal strip searches, digital penetration, forced masturbation and rape. From guards to superintendents, these atrocities were inflicted upon children by those responsible for their care and welfare. Further to the abuse often came threats of longer sentences for non-compliance with their abusers’ demands.
The Royal Commission into Institutional Responses to Child Sexual Abuse stressed the unfortunate prevalence of sexual abuse in these centres. The report stated, “our inquiry indicated that detention environments may present higher levels of risk of child sexual abuse, as compared to many other institutional contexts”. The Commission revealed that of those who came forward, a staggering 515 children in detention have been abused since 1990. Unfortunately, we are aware that the number of unreported cases is much higher.
Sadly, these misuses of power have left victims with psychological injuries that last a lifetime. At Chamberlains Law Firm, our lawyers who are experts in abuse compensation claims focus on restorative justice by seeking financial compensation against the institutions for the abuse suffered by our clients.
A domestic violence victim (the Complainant) lodged a complaint with the Australian Financial Complaints Authority (AFCA) against her former insurer, RAA Insurance Limited (RAA), for removing her from a comprehensive motor policy jointly held with her former partner (Mr A).
In July 2020, Mr A had contacted RAA without the knowledge or consent of the Complainant and sought to cancel the policy. Mr A then took out a new policy for the vehicle under his own name.
The Complainant submitted to AFCA that:
RAA’s insurance policy provided the following:
If more than one person is named as the insured on the Certificate of Insurance, each person is a joint policyholder and is able to make any changes to the policy other than remove another insured
RAA to issue an apology and pay compensation for non-financial loss
RAA did not dispute that its carriage of the matter had a significant impact on the Complainant and its failure to comply with its own policies had caused the Complainant a great degree of “physical inconvenience and stress”. On this basis AFCA submitted that the Complainant was ultimately entitled to compensation for non-financial loss. In these circumstances, AFCA awarded the Complainant the maximum sum of $5,400.00 as allowed under the AFCA Rules where an insured suffers any inconvenience, delays or loss of enjoyment of life.
The Complainant also sought that the insurer pay her the sum of $25,000.00 being half the value of the insured vehicle.
Although AFCA accepted that the Complainant was a vulnerable person, to the extent that the dispute related to the financial interest of Mr A and the complainant in property jointly held by them, this was a civil dispute and should be handled by the Courts. This was not something that could be dealt with by way of insurance policies.
This decision is an important reminder for insurer’s to act fairly and openly in circumstances where a co-insured’s interest are at risk, particularly where they have knowledge of a relationship breakdown.
In Count Financial Limited v Pillay [2021] NSWSC 99, the Court considered an application for leave to proceed against a professional indemnity insurer under the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) (‘the Act’).
Facts
Mr Inderasan Pillay provided accounting services and taxation advice to clients of Count Financial Limited. In reliance on Mr Pillay’s advice, those clients acquired financial products which resulted in them suffering financial losses. Count Financial Limited were found responsible for their clients’ losses pursuant to ss 917A and 917B of the Corporations Act 2002 (Cth) and paid the clients a total of $15.3 million.
Count Financial Limited commenced proceedings to to recover its losses from Mr Pillay and sought to join Mr Pillay’s professional indemnity insurer to the proceedings pursuant to s 5(1) of the Act.
Issue
Should Count Financial Limited be granted leave to join Mr Pillay’s insurers to the proceedings?
Judgment
In order to join the professional indemnity insurer to the proceedings, Count Financial Limited was required to satisfy the Court that:
The professional indemnity insurer did not dispute that Count Financial Limited had an arguable case against Mr Pillay and that Mr Pillay would likely be unable to pay a judgment entered against him.
However, the insurer argued that the policy would not respond to Count Financial Limited’s claim against Mr Pillay because it contained an exclusion clause stating that the it would not be liable to indemnify Mr Pillay “where [Mr Pillay] has given advice in respect of any investment”.
The Court held that Mr Pillay had given advice to clients to investment in products for the purpose of tax minimisation and, therefore, that the exclusion clause applied such that the insurer was not required to indemnity Mr Pillay under the policy. Accordingly, the Court refused to grant leave to join the insurers to the proceedings.
The Full Court of the Federal Court of Australia have handed down their decision in the appeal of the second COVID-19 business interruption test case with findings largely in favour of insurers.
Background
The case considered the application and operation of various insurance policies in the context of COVID-19 and its effect on businesses. The case involved ten separate policyholders with insurance policies each containing business interruption protection.
The four main types of clauses considered by the Court were:
Federal Court Judgment
At first instance, the Court found that nine out of the ten claims considered were not covered by the relevant insurance policy in the context of COVID-19 business interruption.
Justice Jagot’s findings in relation to the above clauses was as follows.
Infectious disease clauses
Infectious disease clauses were held to be the only clause capable of providing cover in relation to COVID-19 claims. This is because, the Federal and State Government orders requiring the closure of premises were not made as a result of any circumstances at the premises or within the specified radius of the premises. Rather, the orders merely applied to the premises. These clauses can respond because the causal requirement is the outbreak of an infectious disease occurring within a specified radius of the premises which causes business to be interrupted and losses to arise.
However, the Court noted that these clauses would only respond in limited circumstances, as business losses must be as a direct result of the proximate outbreak. A business which receives revenue from online or telephone sales, for example, may not meet the causal requirement to enliven the clause.
Prevention of access clauses and hybrid clauses
Prevention of access clauses and hybrid clauses require a causal link between the order requiring closure of the premises, and the presence or outbreak of COVID-19 at or within the radius of the premises. As the relevant government orders were made in response to the existence and risk of COVID-19 generally, it was held that they were no causal links that enlivened such clauses.
Catastrophe clauses
Catastrophe clauses were found not apply to diseases or a pandemic, but rather, to physical events.
Full Court of Federal Court Judgment (Appeal)
Appeals were filed in respect of five of the ten test case matters by the policyholders.
The Full Court dismissed the appeal, largely upholding the findings of the primary judge. Out of the five matters considered on appeal, four policyholders were held to not be entitled to any insurance coverage for their business interruption claim.
The Full Court overturned the following findings of the primary judge:
Government support payments
Justice Jagot held that government support payments could be deducted from the payout of any valid business interruption claim. The Full Court overturned this conclusion, holding that government support payments such as JobKeeper would not reduce the indemnity amount to be paid to an insured in the case of a valid claim.
Section 57 of the Insurance Contracts Act
The Full Court held that where an insurer has denied a claim, but the insured is ultimately found to be entitled to payment, this does not give rise to a necessary inference that it became unreasonable from that date for the insurer to withhold payment. Each case is to be determined on its specific facts and circumstances on a case-by-case basis.
Key takeaways
The Courts have determined that prevention of access, hybrid, and catastrophe extension clauses in business interruption insurance policies are not enlivened by the effects and government restrictions related to COVID-19. Infectious disease extension clauses may be enlivened in relation to COVID-19 impacts, but it will be determined on a case-by-case basis and will depend on the specific circumstances and facts of each matter.
If you hold an insurance policy which may respond to losses suffered as a result of the COVID-19 pandemic, or your claim with respect to COVID-19 business interruption has been denied, contact us for advice on your options.
Last year, we wrote about the Federal Court’s decision in Star Entertainment Group Limited v Chubb Insurance Pty Ltd [2021] FCA 907 on business interruption insurance claims resulting from COVID-19 lockdowns. The decision was appealed by Star Entertainment Group Limited and on 21 February 2022, the Full Court of the Federal Court of Australia handed down its decision in Star Entertainment Group Limited v Chubb Insurance Australia Ltd [2022] FCAFC 16.
Background
The Star Entertainment Group (the Star) and its subsidiaries held an insurance policy with Chubb Insurance Australia (Chubb) and various other Australian and international insurers. The Star made a claim with Chubb for business interruption losses as a result of the COVID-19 related government restrictions across Australia. Chubb denied the Star’s claim on the basis that the policy did not cover for the losses claimed. In response, the Star sued Chubb and the other insurers for breach of contract.
The primary judge, Chief Justice Allsop, found in favour of the insurers, holding that the policy did not extend to indemnifying the Star to loss of use, or custom or financial loss resulting from the government restrictions related to the pandemic.
Issues on appeal
The Star appealed this decision on the following grounds:
As a reminder, memorandum 7 of the policy essentially states that for the purpose of the policy, ‘damage’ extends to losses resulting from or caused by an authority for the purpose of preventing or restricting any catastrophe.
Judgment
The Court held that read in context, the reference to ‘catastrophe’ in the policy does not apply to loss resulting from the actions of an authority to prevent or restrict the spread of human disease. Rather, ‘catastrophe’ refers to a physical phenomenon.
The Court also held that memorandum 9 dealt with matters related to human infectious and contagious diseases, and that memorandum 7 is to be read as to as avoid inconsistency with this.
The Full Court dismissed the Star’s appeal, agreeing with the primary judge’s decision in favour of the insurers.
Key takeaways
It is important to remember that the Court has emphasised that each case will be determined on its own circumstances and merits. The operative insuring clause of the policy and applicable exclusions should be carefully considered when determining how a policy may respond to COVID-19 business interruption losses.
If you believe you hold an insurance policy which may respond to losses arising from the COVID-19 pandemic and/or government restrictions, get in touch with our team today.
***Assisted by Madeline Furchtmann***
A homeowner took out a home and contents insurance policy with Hollards on 17 March 2021.
On 19 March 2021, the insured’s home was flooded by a river.
The insured lodged a claim with Hollards.
Why was the claim denied by the insurer?
Hollards denied the claim on the basis that the policy contained an exclusion clause that operated to enable Hollards to avoid liability for cover for flooding damage that occurred within 72 hours of the policy commencing.
Once the claim was lodged, Hollards provided emergency accommodation and assisted with the removal of damaged items from the property.
The insurer advised the insured that it was considering whether it would provide indemnity for property damage under the home and contents insurance policy.
The insured submitted that he spoke with a Hollards’ representative on 12 April 2021 and was advised that the 72 hour exclusion clause only applied to newly purchased houses.
Hollards eventually relied on the exclusion clause to deny indemnity for property damage.
The insured lodged a complaint with Australian Financial Complaints Authority (AFCA) arguing that Hollards did not inform him of the exclusion clause and had been misled into believing that the exclusion clause did not apply in his circumstances.
AFCA upheld Hollards’ decision to deny the claim. AFCA’s decision was based on the fact that the 72-hour exclusion clause was specifically referred to in the Product Disclosure Statement (PDS), which the insured had confirmed he had read and understood.
On this basis AFCA found that Hollards “was entitled to rely on the policy terms.”
What about exceptions to the 72-hour exclusion?
AFCA noted that the 72-hour exclusion did not apply in circumstances where an insured transferred an equal policy from another insurer with no interruptions on coverage of the policy.
In this instance, the insured’s property was uninsured for a week from purchase, from 10 March 2021 to 17 March 2021 and therefore could not rely on any exceptions to the exclusion clause.
Did the insurer engage in unfair or unreasonable conduct while the claim was under review?
AFCA noted that the insurer did not at any point inform the complainant that it would accept the claim despite the exclusion. With respect to the discussion with an employee of the insurer the exclusion didn’t apply to newly purchased properties, AFCA considered that this was an error and was corrected by the insurer within days and therefore did not constitute unfair conduct by the insurer.
This is an important reminder for those affected by floods to consider the terms of their policies. If you have any queries regarding an insurer’s decision on property damage, contact our insurance law experts today.
The Small Claims Division of the Local Court of New South Wales has jurisdiction to deal with claims up to $20,000.
The person making the claim is called the plaintiff. The person defending the claim made against them is called the defendant.
If you are served with a statement of claim, you should obtain legal advice from a solicitor at a law firm, community legal centre and/or legal aid office.
What do I need to defend a matter?
The plaintiff commences proceedings by lodging and serving a document titled ‘Statement of Claim’. The statement of claim sets out the allegations made by the plaintiff against you.
If you do not agree with the allegations made by the plaintiff against you, you should file a defence within 28 days of being served with the statement of claim.
What happens at pre-trial review?
The first time the matter is listed for directions in the Small Claims Division is for a pre-trial review.
Pre-trial reviews are usually dealt with by the Registrar. You should address him or her as “Registrar”. In the event that the matter is before a Magistrate, you should address him or her as “Your Honour”.
At the first pre-trial review, the Court will attempt to see whether the parties are able to reach a resolution of the matter. If this is not possible, the Court will enquire as to whether the parties are able to agree on any allegations made by the plaintiff in the statement of claim. If this is not possible, the Registrar may either seek to prepare the matter for hearing, set a date for hearing, or relist the matter for another pre-trial review.
If you would like a witness to give evidence at the hearing, you should ask the Registrar/Magistrate at the pre-trial review to grant permission for the witness to give evidence at the hearing. Also, you will need permission from the Registrar/Magistrate to issue subpoenas on parties’ outside the proceedings.
What is a subpoena?
A subpoena is a court order requiring a third party to produce documents specified in the schedule to the Court. There is a filing fee incurred for filing a subpoena with the Court. Also, you will need to provide a cheque to the third party for disbursements incurred in producing the documents requested in the subpoena. The third party can request for their reasonable costs of producing the requested documents from you.
What do I need to defendant the matter?
In order to defend your matter at hearing, you will need to file evidence to support your defence. Your evidence can include material like:
You should also consider preparing a witness statement setting out events and circumstances relevant to the matters in dispute between the parties. Your statement should consider setting out what your saw, heard and felt at the relevant time in dispute.
You will need to send your evidence and witness statement to the Court, by the date set by the Court.
What happens at a hearing?
At a Small Claims hearing, a Magistrate or Assessor will hear each sides case and determine an outcome. The hearings are usually informal and do not follow strict rules of evidence.
Usually, witnesses do not give evidence in person and are not cross-examined about their evidence. The Court will only rely on written statements from witnesses.
If I lose, do I pay costs?
If you lose your case, the Court has the discretion to award costs in favour of the winning party. However, there is a cap on the legal costs that may be awarded in the Small Claims Division depending on the amount claimed.
What is a Statement of Claim?
A statement of claim is a document that sets out the facts on which one party (the plaintiff) relies on as the basis for an entitlement to a legal relief/remedy from the party they say has wronged them (the defendant).
What is a Defence?
A defence is a document that responds to the allegations of fact contained in the statement of claim. The defence can deny, admit or not admit the allegations of fact contained in the statement of claim. It can also set out additional facts that the defendant relies on to refute the plaintiff’s claim.
What is a cross-claim?
It is not uncommon for a defendant to consider that they have a claim against the plaintiff arising out of the facts raised in the statement of claim and/or defence.
If this occurs, the defendant can file a document known as a cross-claim. The cross-claim sets out the facts on which the defendant relies as the basis for an entitlement to a legal relief/remedy from the plaintiff.
If a cross-claim is filed by a defendant against a plaintiff, the plaintiff must then file a defence to the cross-claim.
What is a reply?
In some instances, a defence will raise new allegations of fact that a plaintiff may need to respond to.
When this occurs, the plaintiff can file a document called a reply, which contains responses to the new allegations of fact raised in the defence.