Employment class action lawsuits are a common cause of action in North America, and while we have traditionally seen fewer in Australia, there has been a recent uptick in occurrences. What does this mean for Australian employers? Without large numbers of cases and their precedents to study, how you plan for and prevent class actions may be an ‘unknown’ for many employers. Given the unique bet-the-company issues for employers arising from class actions – we have outlined some risks and strategies.

The Australian context

Whilst uncommon in Australia, there are high-profile examples of employment class action lawsuits.

Indeed, proceedings brought during the 1998 Waterfront Dispute were brought on behalf of approximately 1,400 employees under the Federal Court of Australia’s class action regime. Another example dating back to the days of Australian Workplace Agreements involved proceedings brought on behalf of over 700 academic and general employees of a university.

More recently, two employment class actions have been commenced targeting companies who provide marketing services for large and well-known brands, alleging contravention of minimum labour standards.

Why is the class action landscape changing now?

There are many reasons for the uptick in claims, and those relevant to employment include:

  • diminishing union membership across the private sector, but an increase in individual rights and prominence of plaintiff law firms organising class actions
  • an increased public awareness of minimum labour standards and broadly applicable laws, such as the general protections provisions, brought into focus as a result of a number of well documented scandals
  • an increase in the activity of litigation funders willing to venture outside their traditional stomping ground of commercial litigation.

We also predict that there will be many more such actions in the future, particularly given the ramped up penalties for franchisors and holdings companies found to have been complicit in the underpayment of employees or failure to keep proper employment records by their franchisees and subsidiaries.

Learnings from the US

At Seyfarth, our team of workplace law experts analyse and breakdown the mosaic of US class actions each year compiling a report that highlights the trends. In 2017 they recognised:

  1. Settlements skyrocket
    The monetary value of settlements rose dramatically, with the top 10 settlements in employment-related categories totalling a record high of US $2.72 billion — nearly US $1 billion more than 2016. In Australia, settlements are already causing an increase in insurance premiums for directors.
  2. A favourable landscape
    Evolving case law precedents and new defence approaches resulted in better statistical outcomes for employers in opposing class certification requests for the second straight year. In one of the most active categories, wage & hour litigation, employers won 63% of decertification rulings, a success rate up almost 20% from 2016.
  3. More enforcement
    With the federal government in transition, 2017 results were heavily influenced by Obama administration holdover policies and personnel as government enforcement litigation increased. This balloon is expected to burst in 2018 as the Trump administration settles in further, pulling back these policies and positions; yet, at the same time, it is expected that the private plaintiffs’ class action bar will step up their lawsuit filings and “fill the void”.
  4. Pivotal rulings
    Several key decisions in 2017 of the Supreme Court were arguably more pro-business and pro-employer than in the past. In May 2018 the Supreme Court profoundly changed the class action playing field with its highly anticipated ruling on the Epic Systems, Murphy Oil, and Ernst & Young trilogy of cases which found workplace arbitration agreements with class action waivers were lawful and enforceable.

To access the full report, and additional commentary visit www.workplaceclassactionreport.com.


For a discussion on the ‘best of breed’ strategies in class action and litigation globally – contact one of our partners.

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More than ever Boards and senior executive teams are held accountable for workplace liability. This combined with the impact of social media, and its capacity to spread tales of woe, makes ‘the workplace’ a key feature of boardroom attention today.

Download the overview of our top 7 for directors and the workplace:

  1. Workplace health and safety: protecting people at work
  2. Culture: the the organisational imperative
  3. Pay: incentivising right
  4. Brand damaging claims: architecture to prevent and manage
  5. Workplace optimisation: balancing strategy with risk
  6. Governance: oversight of executive conduct and supply chains
  7. Diversity: an organisation enhancing asset.

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Much has been made of recent scandals arising from sexual relationships in the workplace and in most cases the relationships are said to have been ‘personal and consensual’. While not a new issue, we have seen changes to the way organisations have responded to the relationships, perhaps as a reflection that our culture is less accepting of the conduct.

Is it ever appropriate for a senior executive to conduct a sexual relationship with a workplace colleague, whether they are an employee, a representative of a client or customer, contractor or consultant to the business? Continue Reading Is a workplace relationship ever consistent with good governance

Working with many of Australia’s leading employers has given us strong insights into the planning and habits of the leaders of high performing organisations.Measuring performance

It is virtually an absolute that these organisations have a clear view of what business success looks like for them – they have a clear but flexible strategy and are relentless about executing it.

Importantly in managing their workforce and its culture – they know what high productivity looks like for their business and workforce. Continue Reading What does business success look like for leading employers?

The NSW work health and safety regulator has brought a successful prosecution against a company director resulting in a criminal conviction and fines against the director and the company. An order was also made requiring the director to pay the costs of the prosecution. It appears that this is the first such successful prosecution under the harmonised Federal safety legislation in NSW. However, the fines imposed in this case ($15,000 against the director and $150,000 against the company) were low given the specific circumstances of the case. Continue Reading Director prosecution and conviction in New South Wales

As this year’s public company reporting season comes to a close, the following trends in executive remuneration across various industries stand out:

  • Modest or nil increases in fixed remuneration for executives with some companies electing not to increase fixed remuneration for the third consecutive year;
  • Increases in short term incentive deferral practices and/or other changes to STI structure;
  • Significant changes to terms of long term incentives. For example, lengthening performance testing periods and mechanisms for rating performance for the purposes of initial LTI allocation or grant.

Unsurprisingly, organisations have also continued to review and monitor their remuneration structures, with several opting to decrease weighting towards STI and increase weighting of LTI.

[In our next Director Dashboard blog we’ll discuss more specific trends in executive remuneration in the superannuation industry.]

Sometimes for boards, no news is bad news.

Improving safety statistics, workplace diversity reporting, industry remuneration statistics and ‘good’ employee turnover levels are ‘people’ matters that board members are usually informed about. But are there matters that Boards don’t hear about because their executives don’t want to trouble them with problems or be the bearers of bad news? Continue Reading Director dashboard – is no news good news?