Knowledge Centre

By James Hart
3 min read

In Lacson v Australia Post Corporation [2019] FCA 51, an employee, Mr Lacson held two part-time jobs with the same employer, Australia Post. The first job was as a Postal Delivery Officer at Collingwood Post Office, and the second was as a Postal Sorting Officer at the Melbourne Parcel Facility.

His positions, with different working hours, rates of pay, and responsibilities, sparked a legal debate over entitlements under separate enterprise agreements.

Examining the Federal Circuit Court’s initial ruling and the subsequent Federal Court of Australia appeal decision sheds light on the complexities employers face when managing multiple roles within a single contract and the potential repercussions concerning overtime payments and award provisions.

The Issue in Brief

The pivotal issue was whether these roles should be considered separately or cumulatively for overtime calculations. The employer argued that the enterprise agreements applied separately to each job and, therefore, overtime calculations should be separate.

Federal Circuit Court Decision – Round 1
In the first instance, the judge ruled in favour of Australia Post.

The Court held that the enterprise agreements could apply to each job separately. This decision was reached based on the Court’s interpretation of section 52(2) of the Fair Work Act 2009 (Cth) (the Act) which referred to ‘particular employment’.

Federal Court of Australia Appeal – Round 2
The case was later appealed to the Federal Court, where the justice upheld the previous decision based on various factors, including different contracts, working hours, locations, and pay rates. The Court stated that “particular employment” referred to a specific job or position and confirmed that the enterprise agreements could apply separately to each job.

Important Insights for Employers:

• Employer Caution: Exercise caution when hiring individuals for multiple roles under one contract to prevent potential violations regarding overtime payment. Such arrangements might be viewed as an attempt to bypass overtime and award regulations. Note that negotiations on these arrangements might be permissible at the workplace level in certain cases.
• Intentional Distinction: The Lacson case highlights a key difference from instances where employers deliberately evade paying overtime. In Lacson, the dual employment stemmed from the employee’s choices, not a deliberate strategy by the employer. Diverse circumstances might apply if an employer consciously evades overtime payments or misleads employees into assuming that multiple roles equate to a single job.
• Restructuring Clarification: Instances involving restructuring, offering separate contracts for distinct roles within the same organisation, are less likely to be construed as attempts to avoid overtime payments. Such scenarios commonly emerge from restructuring efforts, maintaining the separation and distinction of roles.
• How Enterprise Legal Can Assist

Navigating employment law and ensuring compliance with legal requirements can be complex, especially in cases involving dual employment. At Enterprise Legal, our specialised expertise in employment law ensures that your business remains compliant while addressing the intricacies of dual roles within a single contract.

Key Assistance Areas:

• Employment Agreement Review: Enterprise Legal specialises in employment law, providing full-spectrum support from crafting and reviewing agreements to resolving disputes. We can assist in evaluating and refining existing employment agreements or craft new ones to guarantee full compliance with prevailing legislation.
• Guidance on Compliance: Our team provides tailored legal advice on integrating legislative requirements into your business practices, ensuring adherence to overtime regulations and award provisions.
• Unfair Dismissal and General Protections Applications: Our team assists employers and employees resolve disputes that occur in relation to an employee’s employment and workplace rights. We can provide tailored advice and, if necessary, assist in brining Applications before the Fair Work Commission.

For comprehensive legal support and guidance in managing dual employment scenarios within your business, contact our dedicated Business and Disputes teams today. Enterprise Legal is here to provide the legal expertise and support you need to navigate employment-related challenges confidently.

By James Hart
4 min read

Increase to fixed term building contract held to be void

Yesterday the Queensland District Court released the decision of Perera v Bold Properties (QLD) Pty Ltd [2023] QDC 99.

The applicants, Mr and Mrs Perera, entered into a New Home Contract with the respondent, Bold Properties (QLD) Pty Ltd for the respondent to construct a new house for the applicants for a fixed sum of $645,370. The respondent sent the applicants a message in which it said that due to increased costs of building materials, it intended to increase the contract price by $51,342.

The applicants commenced proceedings seeking a declaration that the contract provision on which the respondent relied to increase the contract price was void (special condition 7).

The Court decided in favour of the applicant in finding that special condition 7 is void and unenforceable and the applicant was not subject to the increase in the contract price.

The Court made a number of observations which we have summarised here.

Uncertain contract clauses

The Court summarised the law relating to uncertain contract clauses.

In determining whether a contract or term of a contract is void for uncertainty, three relevant principles have been identified:

1. The first is that if parties to a contract do not agree on a fundamental term there will be no contract at all.
2. The second is that there is no contract if its effect is that one party is left to choose whether or not it will perform it, since the obligation is illusory.
3. The third is that there can be no concluded bargain if a vital matter has been left to the determination of one of the parties.

In relation to the third principle, it has been noted that:

[The] cases establish that while a determination of a price or payment under a contract may be left to the party entitled to receive the price or payment, that will only be so where there are criteria – either express, or such implied criteria as “fair and reasonable”.

The Court found that special condition 7 was void and unenforceable because special condition 7, in purporting to allow the respondent to increase the price based on unstated objective criteria, effectively purported to enable the respondent to change an essential term – the price –without any reference to any such criteria. That makes the clause and its potential effect uncertain. It is therefore unenforceable.

Required Warnings

The contract included a warning on the first page of the contract. However, the warning was modified by special condition 7, the effect of which was not explained. The warning was therefore contrary to the QBCC Act and was void to the extent of that insufficiency. The contract remained on foot and enforceable, without that condition.

Unfair contract term

Special condition 7 was also held to be an unfair term under the Australian Consumer Law because:

1. It results in a significant imbalance of power between the parties. It provides the respondent with a unilateral right to vary the upfront price of the contract, which has purportedly been locked in by a separate agreement between the parties for which consideration was provided, without providing any right to the applicants to terminate or otherwise to negotiate the increase.
2. It would result in a detriment to the applicants. Were the respondent entitled to rely on special condition 7 to increase the contract price, the applicants would have to choose between repudiating the contract and opening themselves up to damages or paying the higher price, notwithstanding that, on its face, the contract purports to be a fixed price contract.
3. The respondent failed to show that special condition 7 was reasonably necessary to protect its legitimate interests.

Key takeaways

Perera outlines the power dynamics present in domestic building contracts, and the unfair circumstances owners may find themselves in. Fortunately, in this case the owners sought recourse and were able to obtain a good outcome.

We recommend that owners obtain legal advice before signing domestic building contracts, to avoid circumstances such as these, and the associated cost and delay of bringing proceedings.

Owners ought to be aware that domestic building contracts, even those in a standard form from QBCC or the Housing Institute of Australia (as was the case here), may contain special conditions that favour builders rather than owners. Often these special conditions must be tailed to your circumstances to protect your interests.

Please don’t hesitate to contact us if you have any questions about this article.