Background of the Case Study

Question:

Assignment Question

Lou, the owner of a tea wholesaling company, decided about a year ago that product quality of some imported sources was too variable. To improve consistency of the product Lou decided he would employ someone to test samples of imported product and grade them. His retired Uncle Jim came to mind.  He was a food scientist and using his skills would also assist him by keeping him busy. 

Lou approached Jim with an agreement titled Contract for Services, devised by the company’s lawyer. It involved Jim agreeing not to be an employee and to have his own incorporated consulting business. The agreement included a clause suggesting he was not permitted to delegate any of his responsibilities at the tea company to another unless he got Lou’s approval. The agreement also stated he would be paid a set fee for each day he came to the warehouse and worked and a monthly pay date. Although not mentioned in the agreement, Jim was to pay his own taxes and make his own superannuation contributions. He was supplied with a warehouse uniform and all the equipment he required to perform his scientific analysis.

Jim worked from 9am to 5pm Monday to Friday for eight months without a day off and then suffered a serious heart attack. His daily routine at work had involved him checking in with Lou for instructions on the day’s work, Lou’s oversight of his progress during the day and an assignment of administrative support to support him at particular times. Toward the end of the financial year Jim was asked to supervise a couple of juniors in stocktaking processes, for about four weeks, but he had otherwise stuck to his scientific analysis.

One of the policies Lou added to the Employee Handbook last year was an anti-bullying policy.  The policy required a particular procedure to be followed if bullying was detected by any member of staff, and indicated management would treat the behaviour, if confirmed on investigation, as serious misconduct and it was likely to result in disciplinary procedures being taken. The policy was not included in staff contracts but they were all alerted to it on commencement of their engagement. Jim had reported the two juniors he had supervised as bullies just before his heart attack.  He made a written complaint stating their language was repeatedly demeaning to him and their regular slapping of him on the back was so aggressive it upset him to the point he was ready to resign. Lou was aware of his issues with the young workers and wonders what he is required to do now that Jim is convalescing and may not return to work.

Advise Lou whether

• Jim could be regarded as an employee, despite their written agreement.
• He is contractually bound to follow the Employee Handbook procedure in relation to the bullying complaint.
• He has breached any common law duty to Jim even if he is not contractually bound to follow the Employee Handbook procedure.

This case study is regarding Lou, a tea wholesaling company owner. The owner of the company decided to hire an individual for the purpose of testing the quality of some important products. By virtue of that Lou goes to his uncle, Mr. Jim, a food scientist. Lou wanted to use the skill of his uncle. A contract titled contract for services, has been drafted by the lawyer of the company, which was presented by Lou to his uncle Jim. Generally a contract with a title of ‘contract for services’ means an agreement by which a person gives his consent to serve the organization as an independent contractor. Because of this, no relationship of employer and employee between them exists. But the employee has not been covered in accordance with the ‘Employment Act’. Therefore Jim has not been recognized as an employee of Lou, as a condition in respect of that was mention about it (Richards, 2007), irrespective of that the company hired Jim at a fixed salary. Due the existence of the contract Jim cannot be considered as an employee of the company, considering him as an employee shall contravene the contract.

Contract for Services and Employment Relationship

Second issue in this case study is regarding the ‘bullying’. To protect the interest of the employees, Australian legislatures has enacted the Workplace Safety and Health Act, it applies in Western Australia (Barling and Frone, 2004). The enactment ensures that no employee shall be exploited by the employer in any means. In order to establish a strong working culture and good habits in the workplace, the statute plays a very important role in Western Australia. The main issue in this case is the ‘Anti bullying issue’. Bullying remains a very critical matter at most of the workplaces. Bullying signifies an organized operation of interpersonal devastation that provides a huge impact on the physical, mental and psychological condition of a person. This has become a common factor in educational institutions, workplaces etc (BaÃŒÂez and Mac Adam, 2008). According to surveys, the main reason behind bullying in workplaces is it is not yet illegal, and if it is illegal in some parts then also it is practicing freely due to non-execution of the rule. Here, Lou is contractually responsible to acknowledge the employee rulebook procedure in respect of the bullying complaint. As the ‘anti bullying policy’ introduced into employee handbook procedure but not in staff contracts. For that reason Lou is not contractually liable to follow that procedure, but it was his responsibility to listen to the complaints of employees regarding any type of bullying. In Employee Handbook Procedure it is mentioned that how employees, irrespective of their job or role in employment should act in the organization. This is provided to each and every employee of the company. If the anti bullying policy is to be followed in accordance with the employment handbook procedure then it will be ambiguous for the authorities for providing remedies in respect of bullying (Gregory and Temperton, 2008).  

Anti-bullying policy has been added by Lou, himself into employment handbook procedure in previous year. But there was no action taken in respect of the complaint launched by Jim. According to the rule introduced by the owner of the company regarding the anti bullying procedure, if there is any detection of bullying or any complaint launched by any employee in respect of bullying then such a complaint should be taken into consideration and necessary steps are to be taken by the management authority of the company, but all the steps that are going to be taken must comply all the condition mentioned in the employment handbook procedure. If during or after completion of investigation it is found that a act of bullying has been done then such a person who will be responsible for the act bullying shall be penalized in accordance to the policy and prescribed rule of the company. But the complaint launched by Jim regarding the act of bullying which was done by two fellow employees are not been inquired or entertained by any means by the management authority of the company.

In accordance to Australian law, compensation should have been awarded to Jim, as no steps has been taken in respect of the complaint launched by Jim in several time. There number cases launched where the management authority has been alleged for incompetency in dealing with the matters concerning bullying factors, the company was also had to face the allegation that the management authority is quite reluctant to discharge their duties regarding bullying issues. In the year 2006, Justice has been given to them in the form of a lump sum amount of compensation in relation to the complaints launched regarding bullying.  Here, the court awarded that the defendant have to pay the salary of 38 weeks at the rate of $627 per week.

Workplace Bullying and Anti-bullying Policy

Thirdly, a common law obligation has been breached towards Jim, has been breached by Lou, though he is not bound to follow the employment handbook procedure. In spite of the fact that he is not contractually liable to follow the employment handbook procedure but as an employer he cannot escape from his responsibility, for that reason listening and taking necessary actions for the complaints in respect of the act constituting bullying, is one of the primary responsibility of Lou as an employer. It is the duty of the employer to point out the main culprits. It could reduce the product ability and work atmosphere among the employees due to the lack of care from the part of Lou. The main object of the Workplace Health and Safety law is to provide adequate protection to the employees in the course of their work, reducing the risk factors among the employees in the workplace are also one of the basic objects of the statute. Risk factors can be reduced by restricting acts of bullying and other kind of accidents in lieu of high penalties (McDougall and Gillam, 2014). The main features of the law governing health and safety at workplace are :

1. Ensuring safety for every employee irrespective of their post and role in the company.
2. No comprise with the safety measures of the employees.
3. Proper remedies must be provided in case of any complaint.
4. Wrong doer shall be strictly penalized (Australia: employment law, 2010).

In Australia, in any statute or in any other way, no apparent definition of bullying has been provided, specially the elements which constitutes bullying is not provided, this is one of the major problem in this sector specially for the employees, as bullying may be created in many ways but no definite  way is specified. More than twenty thousand students have been subjected to bullying severally in various schools across the territory of Australia. Most of the employees have to experience this menace due to not proper implementation of existing statutes as well as lack of enactment of newly framed laws in respect of this menace. Irrespective of caste, creed, gender, religion most of the employees and some students too are subjected to bullying activities. In various surveys it has been revealed that it is quite normal to happen but it could arise dare consequences in various matters (Creighton and Stewart, 2005).   

According to Understanding Employment Law by Van der Waarden, bullying is one of the biggest menaces which may destroy the work environment in any organization. If it is not stopped at time, it may take the life safety of the employees. It also suggests that for enthusiastic work surroundings problems like bullying must be eliminated.

In course of employment and work environment of any organization bullying provides a negative impact upon the employees. Here, Lou’s reluctant behavior in respect to the culprits of the bullying activities gave them pointless advantage in relation to the aggressive behavior towards others, Lou’s this behavior might work as a booster for the mentality of the culprits for the act. In consequence, Jim suffered from a major heart attack. Some of the more destructing effects of bullying are:

1. Decreasing attendance graph because of the dread and fear in the middle of employees, leads to hampering of work: One of the major consequence of bullying at workplace is decreasing attendance. It refers that most of the employees prefer taking leaves due to the panic than coming to work. Hence, it affects the productivity of the company (van der waarden, 2004).

2. Increased anxiety in the middle of junior employees which leads to greater than before errors during work: another impact of bullying is increasing anxiety. This is one of the symptoms which stated in case study that Jim might not have suffered from heart attack if proper action has been taken by the company (Rule, 2002).

3. Drop off performance among employees and less productivity at work: activities relating to bullying, reduces the performance of employees during their course of employment. It may become very devastating, like in the case of Jim. He had to abscond from work due to cardiac attack and there are possibilities that he may not come back (Camardella, 2004).

4. De motivation: Bullying de motivates the employees to their work (Corte and Verschaffel, 2006).

5. Amplified time spent upon complaints: Due to the complaints relating to bullying cases, management had to spend more time for those complaints, without thinking about the growth of the organization. Here also, there might be possibilities that many similar type of cases of bullying may go without necessary action.

Hence, it is common law responsibility from the part of Lou to take necessary actions against the wrong doer though he was not liable contractually. Jim might have not suffered from cardiac attack, if necessary steps would have been taken.

References

Australia: employment law. (2010). Commonwealth Law Bulletin, 36(1), pp.137-163.

BaÃŒÂez, F. and Mac Adam, A. (2008). A universal history of the destruction of books. New York: Atlas & Co.

Barling, J. and Frone, M. (2004). The psychology of workplace safety. Washington, D.C.: American Psychological Association.

Camardella, M. (2004). Employers beware of the broad reach of HIPAA’s privacy rule. Employ. Relat. Today, 30(4), pp.95-102.

Corte, E. and Verschaffel, L. (2006). Instructional psychology. Amsterdam: Elsevier.

Creighton, W. and Stewart, A. (2005). Labour law. Annandale, N.S.W.: Federation Press.

Gregory, S. and Temperton, E. (2008). Tolley’s discrimination in employment handbook. London: LexisNexis Tolley.

McDougall, R. and Gillam, L. (2014). Doctors’ “judgements” and parents’ “wishes”: ethical implications in conflict situations. The Medical Journal of Australia, 200(7), p.372.

Richards, P. (2007). Law of contract. Harlow: Pearson Longman.

Rule, C. (2002). Online dispute resolution for business. San Francisco: Jossey-Bass.

van der waarden, n. (2004) (3rd ed.).