School pays record amount in penalties and legal costs after fixed-term fight

2 August 2016
A major Melbourne independent school has paid more than $440,000 in penalties and costs after it was found to have contravened the Fair Work Act by hindering and obstructing a union investigation into teachers’ employment arrangements.

The Australian International Academy of Education has paid the Independent Education Union $440,000 ($150,000 in penalties and $290,000 in legal costs) after it lost a landmark case in the Federal Court about the school’s unlawful employment practices and attempts to block a union investigation.  The school’s Director-General and member of the Order of Australia, Mr Salah Salman, was also penalised for his conduct and ordered to pay the penalty to the union. The school and Mr Salman have withdrawn their appeal of the decision. The trial judge described their actions as “a calculated deception.”

The case went to trial in September and October 2015 with the Federal Court finding that the school had breached the Award and the Fair Work Act by:

  1. Hiring too many teachers on a fixed-term basis at the beginning of the 2012 school year and failing to notify the teachers of the reason they were fixed-term;
  2. Hindering and obstructing the union investigation by altering the front pages of teachers’ contracts when it was known the union wanted to inspect them; and,
  3. Refusing the union access to the schools’ computers to ascertain how the documents were altered.

The union alleged that after the Court made Orders permitting the union to inspect the school’s computers the school destroyed the computers, bought new ones and fabricated receipts to cover up the deceit.

General Secretary of the Independent Education Union Victoria Tasmania, Deb James, said the outcome was a win for education staff who found themselves on unlawful and unfair fixed-term contracts. She said the result would send a shock through the industry where many employers continued to take advantage of education staff, many of whom would felt scared to speak up.

“The result will send many employers to their books to make sure they are not contravening the Fair Work Act. I remind employers there are very limited circumstances in which an employee can engage staff legally on fixed-term contracts,” she said.

“This is a win for our members against the misuse of fixed-term contracts. We have invited all schools to work with us to get their staff contracts in order.  If schools continue to contravene the Act, we will exercise our rights to enter and inspect records and, if necessary, prosecute. Teachers and education staff deserve the right to ongoing, secure employment that affords them a quality of life.”

Daniel Victory, Senior Associate from Maurice Blackburn who represented the union, said that the case highlighted a number of important issues.

“This case demonstrates that the Courts will take a dim view of employers who breach industrial laws and then try to cover their tracks,” he said. “It serves as a lesson for employers who think it might be cheaper to break the law and risk getting caught rather than comply with the law in the first place.

“Amongst the falsification of documents and serious allegations of wrongdoing it would be easy to forget what this case was really about - job security for teachers. Insecure work is a plague on our society that isn’t limited to delivery drivers and warehouse workers.  It’s even affecting the professionals who teach our children.  Teachers should be free concentrate on providing the best education for kids, and not have to worry about whether they have a job next week,” he said.

“The union’s unrelenting pursuit of the truth and the courage of the teachers who gave evidence in this case is nothing short of remarkable.  Their efforts have been vindicated by this result.”

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