Staying classy – the new trend in employment litigation

WHO SHOULD READ THIS

• Anyone who engages workers either directly or indirectly.

THINGS YOU NEED TO KNOW

• There is an increasing trend in employment-related class action litigation in Australia.

WHAT YOU NEED TO DO

• Ensure that workers engaged directly and indirectly are provided their full legal entitlements for their classification and employment status.

The trend towards employment-related class action litigation is continuing with the recent news that workers at BHP’s Mount Arthur Coal Mine are commencing class action proceedings against BHP subsidiaries and their labour-hire contractors alleging underpayment and misclassification of workers.

The claims are purportedly valued at more than $40 million. There is a strong suggestion that similar proceedings may be commenced against other coal mine operators and their contractors.

The development of plaintiff-friendly class action reforms across a number of Australian jurisdictions has seen an increase in class actions in recent years, particularly with the implementation of Part IVA of the Federal Court of Australia Act 1976 (Cth) and similar reforms in New South Wales, Victoria and Queensland.

Increasing public scrutiny of employment conditions off the back of the 7-Eleven underpayment claims, the rise of the gig economy (e.g. Uber, Deliveroo and Airtasker), and the increased utilisation of labour-hire workers is fuelling a rise in employment-related class action claims, or “representative proceedings” as they are more properly known.

Employment-related class actions are often commenced against multiple parties, including the alleged employer, as, pursuant to section 550 of the Fair Work Act 2009 (Cth), related-bodies corporate, principals and contractors can also be held liable for being “involved in” the alleged contraventions. This adds considerably to the complexity associated with defending proceedings of this nature. Plaintiff-backed media campaigns can further increase the corporate burden.

There are currently four “Employment and Industrial Relations” class actions in the Federal Court of Australia; one in the sales and marketing industry, one against a Commonwealth government employer and two in the mining industry, not including the BHP claim which is expected to be filed shortly. There are others in the state courts.

More are on their way.

The Fair Work Ombudsman, for example, recently commenced proceedings against food delivery and gig economy participant Foodora, alleging sham-contracting (i.e. improperly treating employees as contractors) and underpayment in relation to three workers. If successful, a class-action by other similar workers is on the cards.

We expect to see employment-related class action litigation continue to rise for some time.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.