TOPIC: WHETHER MANAGEMENT POLICIES AND PROCEDURES IN THE

WORKPLACE DEALING WITH EMPLOYMENT MATTERS ARE LEGALLY

ENFORCEABLE AS PART OF THE EMPLOYMENT CONTRACT.

INTRODUCTION:

The case in Goldman Sachs JB Were Services Pty Ltd v Nikolich gives us an example of how

the policies and procedures in an employment contract can make a big difference for both the

employer and the employee. Bigger organisations have policies and procedures in place.

Most of the organisations have various policies like a dress code and appropriate behaviour in

the workplace. Whereas other organisations have policies related to bonus pay and

performance based policies. Some organisations have policies and health and safety

procedures in place. According to Stewart, A (2011) most of these organisations although

have their policies and procedures in place the question lies, Firstly, are their policies and

procedures for the workplace bound by the employment contract (between the employer and

the employee in the organisation) and secondly are these policies and procedures helpful for

both the parties. We all need rules and regulations especially when it comes to working in an

organisation. These regulations have to be legally enforceable. If they are not legally

enforceable they will not be of any value as the employees and/or the employers won’t be

bound to any punitive action and will end up not following these rules. The Howard

government when it came to power in 1996 made some serious changes in the industrial law.

This was when the WORKPLACE RELATIONS ACT 1996 was formed which replaced the

previous Labour Government's INDUSTRIAL RELATIONS ACT 1988. This ACT included

20 allowable award matters like hours of pay, penalty rates, notice of termination and pay and

conditions to name a few (Carvan J, 2010). We shall discuss how these policies help both

employees and employers in an organisation.

ADVANTAGE FOR EMPLOYEES:

Goldman Sachs JB Were Services(GSJBW) Pty Ltd v Nikolich case explains how Nikolich

(who joined as an investment adviser) faced issues when the organisation did not follow its

own policies and procedures. When Nikolich joined GSJBW, he was given a policy

document entitled 'working with us' which explained numerous policies and procedures that

needed to be followed during work. Nikolich was required to sign the document for

acknowledging the same. The facts of the case further mentions that Nikolich had started his

own 3 member team called the 'DKN' partnership as per the team based approach adopted by

the company itself. Later on one of the team members of DKN resigned resulting in the loss

of investment advisers to RSL partnership which was another group. In July 2003 Nikolich

filed a grievance against Mr Sutherland whom NIkolich would report to, in regards to

intimidating him. Later that year the Human Resource department rejected the allegation. In

spite of a request for a review the grievance was not resolved. In august next year NIkolich

went on sick leave and later that year was advised by his solicitors that it would be better if

he did not continue work due to health reasons. In return GSJBW replied saying " Mr

Nikolich did not intend to work and hence regarded his employment to be terminated." The

case concluded in favour of Nikolich as there was a breach of contract under the

WORKPLACE RELATIONS ACT 1996 where the employer terminated the employee

without any procedure as per their own policy manual 'working with us'. The point that needs

to be made here is that why does an organisation need such policies and procedures at the

first place. And furthermore, if these policies and procedures are in place, is there a shift in

power towards any of the two parties namely the employer and/or the employee. Lastly are

these policies and procedures legally enforceable as a part of the employment contract. As

per the WORKPLACE RELATIONS ACT 1996 made by the Howard government, the

agreement made between an employer and the employee at the time of employment is

nothing but a contract between both the parties. This contract can consist of various policies

that are bound to be obeyed by both the employer and the employee under the umbrella of the
WORKPLACE RELATIONS ACT 1996 which after a few changes is now termed as

WORKPLACE RELATION AMENDMENT ACT 2009. The important part is why are these

policies and procedures between an employer and an employee important in a workplace.

This reasoning is given in its best form by the ACT. It mentions that these policies are

required in order to create a co-operative workplace relation by fostering more direct

relationships and agreement making between employers and employees, with a reduced role

for third parties (unions, employer associations and industrial tribunals). It also reasons the

measures to guarantee freedom of association; and clearer rights and responsibilities, with

strengthened remedies to support compliance with obligations under awards and agreements.

(Yate, B. 1998). These policies are to equally distribute power and help both employee and

employer work in harmony. The text book further mentions that laws made are for all. In this

way it ensures the minimal possibility of exploitation by either the employee towards the

employer or the employer towards the employee. However these policies and procedures are

numerous and certainly not possible to mention each and every one of them in the letter of

offer or policy booklet (in the case of Goldman Sachs JB Were Services Pty Ltd v Nikolich).

Keeping this issue in mind Stewart, A (2011) suggests that the employer should make a

reference of the policies in the letter of offer so that those policies will hold contractual force

and thus will be a part of the contract. There are other factors one needs to consider in the

case of Goldman Sachs JB Were Services Pty Ltd v Nikolich viz. firstly in some States,

restrictions on recovery of damages under workers compensation legislation may apply;

secondly if the proceedings had been brought in a different court, and without the Workplace

Relations Act 1996 claims, there would be no restrictions on costs; and lastly if the wording

of the relevant policies was different, the Court may have concluded other parts of the

policies were contractual (Sappey, R et al. 2006). I have got to learn many ways to be safe

through this one case. It has also made things clear through an article that brings to the

attention of all employers of their assumption to be flawless if there is a mention of the

termination provision in the employment contract. Employers should also be careful in

handling grievances of employees. Employers should not only review their policies and

procedures but should also seek legal advice when handing over such policies to employees.

(Department of Industrial Relations I997d ‘APS Update’ in DIR 1997-98, Workplace

Relations Advices 19 DIR, Canberra).

ADVANTAGE FOR EMPLOYERS:

There are many advantages to both the parties when it comes to these numerous policies and

procedures to be followed at work. The advantage for an employer in a case could be where

there will be a clause in the policies and procedure handbook which will state that the

employee must comply with the employer's policies as they exist from time to time.

Different policies will work at different times depending on the circumstances e.g.

downsizing due to market/ economic downfall, pay cut due to global inflation etc. In a classic

case of Reynolds v Southcorp Wines Pty Ltd [2002] FCA 712 (6 June 2002) we can observe

how much of a difference did it make to both the applicant and the respondent due to some

facts that were not mentioned in the employment contract between the employer and the

employee. The applicant was offered and accepted a 3 year project role interstate on the basis

that he would be re-employed by the respondent in an equivalent or higher position upon

expiry of the project. The contract was terminated when the applicant arrived sydney. There

are numbers questions that come up viz. whether there was a breach of contract by

respondent? whether respondent's representation that applicant would be re-employed upon

expiry of the project was made on reasonable grounds? whether representation was a

contractual term? whether new project appointment effected variation of existing

employment contract or no? whether respondent's termination of employment policy became

incorporated in employment contract or no? The case further went on to prove that the

breaches by the respondent of s 52 of the Trade Practices Act 1974 (Cth) ("the TPA") arising
by reason of misrepresentations said to have been made to the applicant in the course of his

employment. As Stewart goes on to say in his book that the policies will hold

weightage/value only if they are mentioned or referred in some way or the other through the

contract, as they are a part of the contract, signed by both parties (Stewart, A 2011). In this

case the judge states that had the respondent (south corp wines) performed its contract, the

applicant would have become entitled to a further period of annual leave reflecting service

between 1 February 2001 and 28 July 2001. On the basis that annual leave entitlements

accrue at 20 days per annum, the applicant would have become entitled to about 10 days

additional annual leave. Due to the unawareness of the employee of the correct procedures

(taking it in writing in this case) has lost 10 days worth pay which could have been retrieved

through the law suit had it been written/mentioned in the contract. This although could have

been an intentional step taken by the employer or just random fortune that worked in favour

of the employer (respondent) which saved it from paying the employee (applicant) 10 days of

annual leave. The applicant also contends that his annual leave entitlement should have been

calculated by reference to his total remuneration package, rather than by reference to his base

salary. The applicant contends that it was an implied term of the contract that his entitlement

would be calculated in that way. It is neither obvious nor necessary that a term to that effect

should be implied into the contract. (Reynolds v Southcorp Wines Pty Ltd [2002] FCA 712 (6

June 2002) (Last Updated: 7 June 2002). However the implied term itself means that it is

those provisions which the parties have not actually agreed or mentioned in writing but are

taken to be a part of the agreement/contract between the two parties (employer and employee)

(Creighton, B and Stewart A, 2010).

CONCLUSION:

On a concluding note it indicates that it is best for both the parties to get its policies and
procedures(for an employer) and the facilities and services(for an employee) to get it in

writing. In this way neither an employer nor an employee can take advantage of each other(in

terms of exploiting one another). This will result in both the parties focusing on business

goals and working without any possible distraction. Reduction of stress and peace at work is

important for a business to get a competitive advantage. Lastly for these policies and

procedures to be of any importance, they(policies and procedures) need to be legally

enforced. This will result in either of the parties not taking such rules for granted.

References:

Carvan J, Understanding the Australian Legal System 6th edition 2010 Thomson Reuters.
Creighton, B and Stewart A, 2010. Labour Law. Federation Press. 5th edition

Department of Industrial Relations I997d ‘APS Update’ in DIR 1997-98, Workplace

Relations Advices 19 DIR, Canberra

Full Court of the Federal Court upholds damages award in Nikolich 8th august 2007
Minterellision lawyers viewed from
(http://www.minterellison.com/public/connect/Internet/Home/Legal
%2BInsights/Newsletters/Previous%2BNewsletters/A-Damages%2Baward%2Bin
%2BNikolich/)

Reynolds v Southcorp Wines Pty Ltd. 2002. FCA 712. Federal Court of Australia. Viewed
from http://www.austlii.edu.au/au/cases/cth/FCA/2002/712.html

Sappey, R., Burgess, J., Lyons, M. and Buultjens, J. (2006), The New Federal Workplace
Relations System, Pearson Education Australia, Sydney.

Stewart, A 2011, Stewart’ s Guide to Employment Law, 2nd ed. The Federation Press

Workplace Policies: are they binding? Thomson Reuters. Viewed from.

http://www.findlaw.com.au/articles/1331/workplace-policies-are-they-binding.aspx

Yate, B. 1998. Work Place Relations and Agreement Making In Australian Public Service.
Australian Journal of Public Administration. Volume 57 Issue 2. pp 82-90