Corporate Accountability in Australia: Workplace Breaches and Law

This report critically analyzes the issue of corporate accountability for workplace breaches in Australia, arguing that responsible authorities are not doing enough to protect employees. It examines two case summaries: McDonald vs State of South Australia and University of Western Australia v Gray, highlighting instances where employers have allegedly violated employee rights. The analysis explores the limitations of Australian domestic law and suggests that international law may offer a solution. The report covers topics such as intellectual property, torts, employment environment, and privacy, emphasizing the need for government regulation and the potential for international treaties to influence legislation. It concludes that, despite the challenges, international law may be a crucial tool in protecting employees' rights and holding companies accountable for their actions. This document is available on Desklib, providing students with valuable insights into employment and industrial relations law.

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Responsible Authorities are not Doing Enough towards Achieving Corporate
Accountability for Workplace Breaches in Australia; Why International Law May be the
Answer for Suffering Employees.
Student’s Name
Institutional Affiliation.

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Introduction
For all sectors, public or private, accountability is such a fundamental ingredient in the
soundness of any organizational environment.1 Employers in Australia are increasingly getting
away with breaches of contracts of employment. Instinctively, this is not just a domestic
challenge but one that affects even Australian companies operating internationally. In recent
years Australian companies have found themselves in trouble over abuse of human rights; for
instance the issue of land grabbing in South East Asia (Human Rights Law Centre, 2019)2. There
is focus also on the authorities that have a responsibility of ensuring that this should not happen.
Are international laws the answer for the Australian corporate problems, even the domestic ones?
This paper will critically analyze and prove the veracity of this emerging issue through an
analysis of two cases, and further a discussion of the same.
Case summary 1;
McDonald vs State of South Australia [2008] SASC 134; 172 IR 256
a) Facts of the case
The plaintiff was employed by the Department of Education and Children’s services as a
permanent teacher and as occurred later, as a coordinator. His appointment did coincide with
expansion in computer technology and as such there was increased demand for the plaintiff’s
time. He now was also in charge of management and administration of computers, a situation
which forced him to work overtime. His complaints over the new workload were overlooked
by the employer. The plaintiff further claimed that he was bullied; for instance the position of
employment he held was advertised as vacant while he was still at work.
He therefore sued for breach of express and implied terms of the contract and breach of the
duty of care by the employer’s failure in providing a proper system of work and a safe
workplace to enable him perform his duties. The plaintiff also claimed estoppel in order to
1 McMahon Lance, “Corporate Accountability in Australia: Managing the Information Environment for Corporate
Accountability.” (1995) 14(8) 673-681 Journal of Business Ethics
2“Human Rights Law Centre,” Australian Government Called out for its lack of action on corporate accountability
(Webpage, 2019) < https://www.hrlc.org.au/news/2018/3/13/australian-government-called-out-for-its-lack-of-
action-on-corporate-accountability>

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receive payment for the additional work done overtime. He also claimed deceit as in the
nature of work that was supposed to be performed.
The defendant countered these claims by submitting that the plaintiff undertook extra duties
by his own free will; that there was no requirement for him to perform the said new duty.
Whilst denying all the plaintiff’s claims, the defendant incredibly alleged that the plaintiff
ignored instructions not to undertake extra work and went ahead to do so with malicious
intentions. Notwithstanding all the above, the defendant further claimed that the plaintiff
failed to mitigate the loss.
b) Issues before the court.
The following were the issues which the court had to decide;
 What were the terms of the contract?
 Was the plaintiff constructively dismissed?
 Whether the plaintiff was entitled to damages generally.
 The court had to determine whether the implied term of mutual trust and confidence
actually existed in contracts of employment.
 There was a question of whether the plaintiff was entitled to damages for non-
economic loss arising from personal injury under a contract of employment.
 Finally, the court had to determine whether aggravated and/or exemplary damages
were available for the plaintiff.
Held; the judgement of the Honourable Justice Anderson was that the plaintiff had an entitlement
to treat the contract as repudiated and therefore constructively dismiss himself. As such, the
plaintiff was entitled to past and future loss of earning capacity and incidental losses. The
defendant’s claim of contributory negligence by the plaintiff was rejected.
c) Reason for Decision
The court opined that the defendant breached the implied term of mutual trust and confidence.
The defendant had a duty to prevent the plaintiff from those duties that the latter was not
supposed to partake of but chose not to and watched as the situation played to his benefit. The
court was also of the opinion that the defendant failed to follow up the plaintiff’s complaints

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relating to the situation and condition of the workplace and the amount of workload; the
plaintiff’s grievances were left unresolved. Furthermore, the defendant was unfairly excluded
from the interview of the coordinator’s position.
Case Summary 2
University of Western Australia v Gray
[2009] FCAFC 116; 179 FCR 346; 259 ALR 224; 82 IPR 206
a) Facts of the case
The plaintiff appointed the defendant as a professor of surgery in 1985. This appointment
required the defendant to research. Incorporated in his appointment was the university’s
regulations, which also provided the guide for the institution’s intellectual property
regulations. In 1997 the defendant terminated his employment. Following this resignation the
university sought to claim rights over inventions initiated by Dr. Gray based on an implied
term of law. The institution then initiated proceedings in the Federal Court of Australia
seeking intellectual property rights and proceeded to a trial which was heard by –then Justice
French. As a general rule, in the absence of express terms of contract in an employment, the
employer can only claim ownership of intellectual property originating from an employee if
the invention in question is achieved in the course of employment. Alternatively, they can do
so if the seniority of the employee had created a fiduciary duty to the extent that the
inventions relate to the business of the employer. It is the latter case that the plaintiffs relied
upon, and they went ahead to cite English law in support of the principle that fiduciary duty
could be implicated owing to the seniority of an employee. The English case of Fine
Industrial Commodities v Prowling was relied upon by the plaintiffs in their submission.
b) Issues before the court.
The court was faced with one major issue to decide, the question of “When does an employer
own an employee’s inventions?”
Also, did any implied terms as that claimed by plaintiff exist? And if so, to what extent did it
apply to the ownership of the inventions?

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c) Reasons for the decision
The court decided that Dr. Gray was legally correct in treating his contract as breached and
as such he was entitled to discharge himself from his contractual duties at his option.
In his decision Justice French distinguished between a university employee who was
engaged in producing an invention, and another one such as Dr. Gray who was busy with
research. The court asserted that the defendant was more than just an employee of the
university, but a member of a large community of scholars and working with a public
interest. Essentially, he was not advancing a commercial interest of the University of
Western Australia.
Concerning the issue of the implied term, the court found that there were many issues that
outweighed the existence of an implied term in the contract of employment. Dr. Gray’s
seniority alongside the above factors could have served to quash the claim of an existence of
a fiduciary duty.
The decision made by the court was heavily reliant, however, on the fact that the defendant
was employed to further research in the university and not to further its commercial interests.
Analysis
The two cases are instances of court struggles where employers-especially companies and
organizations- have attempted blatantly to violate the rights of employees in Australia. These are
just but very few of numerous struggles going on against the lack of corporate accountability for
breaches of contracts at workplaces in Australia. As it is, this problem with the Australian
companies is not just a domestic one because Australian companies and organizations have come
under fire internationally for violation of contracts and open disregard of human rights.
While some can attribute this situation to the lack of a single document of bill of rights in
Australia, this is an easily disputable view because companies are a creation of law which and as
such they can be regulated by law.3 This paper acknowledges the loopholes left by the lack of a
single document of bill of rights and will demonstrate that the corporate employees have indeed
3 Fitzgerald Sarala, “Corporate Accountability for Human Rights Violations in Australian Domestic Law.” (2005)
Australian Journal of Human Rights

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been left at the mercy of their employers by this situation. This research also intends to
substantively look at employment areas relating to intellectual property, torts, employment
environment and privacy.
It is about time that the government regulates the operations of the companies. As it is now, the
companies do perform many duties that formerly were the responsibility of government and one
of the things that have been put at stake is human rights. 4 Although it is critical that the violation
of human rights extends to the society, it is the violation of the rights of employees that this
paper is majorly concerned with. There is need to hold these companies accountable for both
criminal and civil wrongs they have done, something which is yet to be achieved considering the
meager number of cases that have been concluded successfully. The legislative arm of
government ought to do more.5 There is evidently a need to ignore the traditional claim by
companies that they should not be given human rights obligations because, allegedly, it interferes
with their priorities and responsibilities. Isn’t this a blatant prioritization of their ‘responsibilities
at the expense of employee and human rights?
Evidently, there are rapid changes in international law and as a result companies are now being
directly affected by international law.6 This paper is of the view that in the wake of reluctance by
the Australian authorities to regulate the companies and protect the rights of employees,
international law may actually come to the rescue of the downtrodden employees. This
research’s only concern over this issue is that the international law, constituted to protect human
rights may cater for the community affected by actions of these companies but employee rights
could remain at stake. However, international treaties can come in handy in ‘forcing’ the
government and other authorities to enact legislation to protect employees.
Limited liability has always enabled owners of the corporate entities, who are the main
beneficiaries of a company’s activities, to escape legal responsibility of actions of breach of
employee contracts.7 Furthermore, companies are separate legal entities with separation of their
4 Joanna Kyriakakis, “Australian Prosecution of Corporations for International Crimes: the Potential of the
Commonwealth Criminal Code.” (2007) 809-826 Journal of International Criminal Justice
5 Muhammad Islam, “Workplace Human Rights Reporting: A Study of Australian Garment and Retail Companies.”
(2013) 23(2) 102-116 Australian Accounting Review
6 Wulf-Henning Roth, “From Centros to Ueberseering: Free Movement of Companies, Private, International Law,
and Community.” (2003) 177-208 International & Comperative Law Quarterly
7 Halina Ward, “Securing Transnational Corporate Accountability through National Courts: Implications and Policy
Options.” (2000)24 Hastings Int’l & Comp. L.

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ownership from management. Although they can rightfully be sued under law, as Lord
Chancellor Thurlow affirmed, companies can be difficult to control due to the fact that they have
no conscience, soul or body to be imprisoned. Australian courts have – perhaps in recognition of
this factor, turned a deaf ear on the separate legal personality of companies and in so doing
sacrificed human rights whilst protecting the corporate veil that companies and many
organizations hide behind.
Furthermore, there exists a vanishing barrier between social and business issues in Australia,
vanishing because the idea of ethics is fast gaining momentum and recognition in this country.
According to writer Fitzgerald, the ‘ethical investment’ market is rapidly gaining mainstream
acceptance in Australia with companies such as Westpac and Rothschild now offering ‘ethical’
products.
There are some human rights recognized in international law which deal with relationships
including the following;
 The International Covenant on Economic Social and Cultural Rights (ICESCR) of 1966.
This covenant enshrines the ‘right to enjoy just and favourable working conditions
(article 7)’ and the ‘right to form and join trade unions’. The treaty expressly implies
that these rights should be performed without discrimination.
 International Covenant on Civil and Political Rights (ICCPR) OF 1966.
 Universal Declaration of Human Rights (UDHR) of 1948.
 Convention on the Elimination of All Forms of Discrimination against Women
(CEDAW) of 1979.
 International Convention on Elimination of All Forms of Racial Discrimination (CERD)
of 1966.
Although there is some Australian domestic brought about by these international agreements, the
corporate world is yet to achieve protection for the rights of employees at workplaces.8 The
Workplace Relations Act 1996 (WRA), Sex Discrimination Act 1975 (SDA), and the
Affirmative Action (Equal Employment Opportunity for Women) Act of 1986, are but just some
of the Australian laws that were enacted to the effect of the mentioned international treaties, but
8 Surya Deva, “Acting Extraterritorially to Tame Multinational Corporations for Human Rights Violations: Who
Should Bell the Cat?” (2004) Melb. J. Int’l L.

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are yet to achieve their purpose due to the frustration by legislation defending corporate laws.
For example, section 170CK of the Workplace Relations Act defends an employee from being
dismissed from employment over religion, age, sex, disability, pregnancy, political opinion,
family responsibility or even trade union membership/responsibility. However, the employee is
still left at the mercy of the company because the dismissal can be legal ‘if the reason (for
dismissal) is based on the inherent requirements of the particular position concerned’9, or if due
to the employee’s doctrines, tenets, beliefs or teachings the employer deems it fit to dismiss such
an employee to protect his/her said religions or beliefs. This last aspect privatizes religion and
beliefs and as such leaves a loophole for the employer to violate the contract of an employee
under the pretense of helping them protect their beliefs.
Finally, companies in Australia are also on the wrong in terms of ensuring an ample working
environment for their employees. This is also a major area of oppression of the employee, and
one that particularly goes unnoticed because it is not very easy for anyone to sue over such
‘minor’ issues.10 Though employees can always sue for breach of their working environment
rights under law of torts, their employers are not usually held accountable because as stated
earlier most of those issues are ‘small’ ones that even though they affect the productivity or even
personal life of the employee, one would rather not risk their job for it.
Conclusion
In conclusion, the lack of corporate accountability for workplace breaches in Australia is indeed
a challenge for many employees. As much as there is a lot of international and domestic law to
regulate the conduct of employers, many employees suffer at the hands of these companies and
organizations because the mere presence of law is not enough to help. The various authorities
ought to perform their duties in order to ensure that employers are held accountable for breaches
of employment contracts of their employees.
It occurs that international law now has a bigger role play as opposed to the past. Now
international law is getting more directly involved in the activities of the companies and
organizations. If the Australian authorities cannot work towards the realization of favourable
working conditions for employees then international law should come in handy and help trade
9 According to the Work Relations Act of 1966
10 Lynn Meuleners et al, “Determinants of the Occupational Environment and Heavy Vehicle Crashes in Western
Australia: a Case Control Study.” (2017) 452-458 Accident Analysis and Prevention

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unions protect their employees. Fortunately, this could well be happening, albeit at an
unfortunately slow rate.

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Bibliography
A. Articles/ Books/ Reports
Lance, McMahon, “Corporate Accountability in Australia: Managing the Information
Environment for Corporate Accountability.” (1995) 14(8) Journal of Business Ethics.
Human Rights Law Centre,” Australian Government Called out for its lack of action on
corporate accountability (Webpage, 2019)
<https://www.hrlc.org.au/news/2018/3/13/australian-government-called-out-for-its-lack-of-
action-on-corporate-accountability>
Sarala, Fitzgerald, “Corporate Accountability for Human Rights Violations in Australian
Domestic Law.” (2005) Australian Journal of Human Rights
Kyriakakis, Joanna, “Australian Prosecution of Corporations for International Crimes: the
Potential of the Commonwealth Criminal Code.” (2007) Journal of International Criminal
Justice
Islam, Muhammad, “Workplace Human Rights Reporting: A Study of Australian Garment and
Retail Companies.” (2013) 23(2) Australian Accounting Review
Roth, Wulf-Henning, “From Centros to Ueberseering: Free Movement of Companies, Private,
International Law, and Community.” (2003) International & Comperative Law Quarterly
Ward, Halina, “Securing Transnational Corporate Accountability through National Courts:
Implications and Policy Options.” (2000) Hastings Int’l & Comp. L.
Deva, Surya, “Acting Extraterritorially to Tame Multinational Corporations for Human Rights
Violations: Who Should Bell the Cat?” (2004) Melb. J. Int’l L

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Meuleners, Lynn, and others, “Determinants of the Occupational Environment and Heavy
Vehicle Crashes in Western Australia: a Case Control Study.” Accident Analysis and Prevention
[2017] 99
B. Case Law
University of Western Australia v Gray [2009] FCAFC 116; 179 FCR 346; 259 ALR 224; 82
IPR 206
McDonald v State of South Australia [2008] SASC 134; 172 IR 256
C. Legislation
The Work Relations Act of Australia 1966 (WA)

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