Inside Employment (Australia) EP7: Employment Class Actions

In this episode of Inside Employment, Natalie Gaspar and Lucy Boyd are joined by HSF Kramer Disputes Partner, Melissa Gladstone to explore the rise of employment class actions in Australia and why they have become one of the fastest-growing litigation risks for employers.
 
Natalie, Lucy and Melissa discuss the factors driving this trend, how employment class actions differ from traditional workplace disputes, and the unique challenges they create for employers. They also share practical steps organisations can take to mitigate risk, including governance, early issue detection and prompt remediation.

Transcript

Welcome And Why This Matters

SPEAKER_00 0:07

Hello and welcome to Inside Employment, a podcast series covering key developments and issues facing employees in Australia. My name is Lucy Boyd. I'm an executive counsel in our employment team here in Melbourne. I'm joined by two colleagues today, Natalie Gasper, partner in our employment teams, and Melissa Gladstone, a partner in our disputes team from Sydney. On today's podcast, we're going to be covering one of the fastest growing areas of litigation risk for employers in Australia, and that's employment class actions. We'll be covering the trends, the mechanics, the economics, and most importantly, what employers can be doing right now.

SPEAKER_02 0:49

I um thanks, Lisa. It's so great to be joined and Mel to have your expertise in this issue. I was completely shocked, but um not so on reflection. Employment-related class actions are the fastest type of growing class actions in Australia. So beyond shareholder class actions, product liability class actions. So it's very topical that the three of us are on the couch today to talk about the emergence of this and why so. Well, I suppose the why so makes sense, doesn't it, Mel? Because traditionally employment-related claims and the activation of those claims on a group level has been the purview exclusively of the union movement in this country, in conjunction with regulators. So if you think about, you know, underpayment claims or any sort of claims of a contravention of a particular clause in an enterprise agreement or a contravention of a clause of a modern award or any of any of those sorts of claims, it's been unions, hasn't it? And have done so really effectively. But now we've got this new-ish entering into the market, and certainly that trend is not uh retreating. In fact, it's increasing. So as it stands today, there's currently 47 employment and IR class actions listed in the Federal Court of Australia website, and those companies range across industries, don't they? So we've got retailers, we've got miners, we've got government uh bodies, uh, and the nature of those claims really range from contravention of an employment instrument, so an industrial award or an enterprise agreement, or in relation to discrimination claims or human rights claims and the like.

SPEAKER_00 2:39

So um, gosh, it's just uh it's super fascinating for us as employment practitioners, isn't it, because we're it brings in all these new players that we're not familiar with. Usually we're used to dealing with unions or employee advocates, but now you know we're dealing with um uh funders and plaintiff law firms. So it's and different, you know, tribunals we're used to dealing with tribunals like the Fairwork Commission

Why Employment Claims Go Class Action

SPEAKER_00 3:05

and the Human Rights Commission, and now we're in a whole different regime in the in the federal court.

SPEAKER_02 3:09

So, Mel, why why we're in this space in employment? Can you give us a bit of an overview and our listeners?

SPEAKER_01 3:16

Um, and so I thought maybe the useful starting point is to just talk about the general class action landscape and why there maybe has been this shift from it being through unions or regulators through to now being an area that's being pursued by um through the courts with plaintiff firms and often with the support of litigation funders. So many of our listeners might know this, but really outside the US, Australia is the next most fertile ground for class actions. And that's not because we're necessarily more litigious by nature, but what we do have here at the moment is a very um what I'll call plaintiff-friendly environment that's probably partly two things are driving that. So the first one is, I suppose, what I'll call the structure of how a class action is commenced, and there's a really low uh threshold for commencement. We can talk a bit more about that, but really you need, you know, seven or more people who have kind of similar or related circumstances and only one common issue, a fact or law before they bring their claim. But there's not a lot of procedural hoops to jump through at the outset. The second part, I suppose, which creates this kind of rich environment for looking for claims, is the fact that there's so many different funding models available, and so the the economics that are behind the scenes driving this kind of boom. And so you've got litigation funders, third-party litigation funding has been part of the Australian class action landscape for many years now. In Victoria, here we've got contingency fees. Um, it's the only jurisdiction currently where you can get this kind of uplift. Um, however, just as recently as a week or two ago, um, the Attorney General said she was open to considering contingency fees at the federal level, which is only going to increase, you know, the um the economics that are driving these class actions.

SPEAKER_02 5:11

I eat the attractiveness of these sorts of claims for lead plaintiffs and litigation funders and plaintiffs.

SPEAKER_01 5:17

That's right. We're looking to pursue it through this kind of contingency fee model where there are costs and a slight uplift on on running on running the case. There's also no win, no fee arrangements. So there's lots of options for how to get these vehicles into the court and how to fund them when they're there. And there's lots that's been said over many years now, including we were talking a bit about various times there's been uh reform discussions and inquiries into the class action framework. There's been lots of ink spilled around, you know, the percentages that return to group members versus the percentages that return to the promoters. And so we might touch on that again later. Um, I think the only other thing I wanted to touch on in terms of why is that there's so many um plaintiff law firms that are in the market at the moment. So many people will be familiar with what I'll call the big household names, so the Morris Blackburns, the Shines, the Slater and Gordons. We're not seeing them so much in what I'll call the employment class action space. But what we do have a lot of smaller or new entrants into the market, and there's many, many of them. Um and so when you look through the list of who is representing those kind of 47 cases on foot, there's a lot of firms that have, you know, three or four, but then lots that have one or two, right? So it's it's there's a lot of activity in the market, and the firms are all looking to find new claims to bring. So it's quite entrepreneurial. Yes. And so I think that as well is perhaps driving into the why we're seeing employment issues suddenly being an issue that's being litigated in this way. And I think it is because of the whole mix of things I've just described. But it's a competitive entrepreneurial environment where, at least, our view is that the the promoters of the class actions are actively looking for new avenues for bringing claims.

SPEAKER_00 7:10

It's it's interesting when you think that you know we'll often come across plaintiff law firms like Morris Blackburn and slators like that who have, you know, well-established employment departments. But it seems like the trend here is for new newcomers to the market, which don't necessarily come with that expertise.

SPEAKER_02 7:25

It's in competition with the union movement. It's rept competition with everything that the union movement stands for, where there's advocating for employees' rights. Um, you pay membership fee, but they don't take a clip of the ticket of whatever compensation flows from that. So um there is competition in the market. And I think what you're describing is this reality that um it's it's business. It's a business as well. It's absolutely a business model.

SPEAKER_00 7:50

And it's bringing in these funders, but you know, it's purely for economic game. It's a it's a business. That's right.

SPEAKER_01 7:56

And I suppose again, if you're looking for where are there new areas to explore, there's been a slight downtick in the shareholder space, and whether that's it's probably a combination of factors, but certainly defendants were having a really good run for a long time defending those cases, whether that perhaps had been putting off some of the promoters into exploring those cases more. Again, we might see a shift there now. We've had a couple of recent decisions through the federal court where the plaintiffs have been successful. But again, if we're looking for new avenues, you think, well, employment issues, this is going to arise for potentially anyone who has an employee, right? Or a number of employees. And so you think, well, that is really any company, any organization, government. And so I suppose the scope or the pool of potential issues that you're dealing with there is a big pool of potential cases where I suppose if you compare the shareholder context, that's limited to the listed organizations. Here we're looking at anyone who has employees. You know, similar to the um, there was a lot of talk about the rise in data and cyber breach type class actions. Similarly, anyone who's holding consumer or employee data is at risk there, but we haven't seen that boom really kick off because there's not really a clear pathway yet to establishing how those issues might attract any actual loss or damage for the group members. Yep. That's not the issue here with employees. So it's not really surprising, as you said at the start, Nat, that this that this has been a bit of a boom area.

SPEAKER_02 9:30

Absolutely, and particularly if, you know, listeners to our Inside IR podcast, and certainly on this, we're in an environment where, you know, there's so much complexity in awards, there's there's, you know, you need an advanced degree in maths and computer science and everything to figure out how to pay people properly, often where there's ambiguity and um, you know, so there's this ripe um area, I suppose, where there is increased awareness by employees. There's um rightly so, I might say, about their rights and entitlements. But just picking up on one point that you made, Mel, now class actions are available for group of employees where there's a common issue of fact or law. Now, that's a relatively low bar in an employment context. So all that is required is, you know, there might be an issue of uh law as to an interpretation of a particular clause in an enterprise agreement or a modern award or a particular fact base in relation to certain things, but that that's it. It does not require the level of specificity required. And all of a sudden, we're in this regime where it is a very different and tightly controlled supervisory role that the court plays in relation to these sorts of proceedings. And um, for those of you that have not been involved in this, there is, and and I invite you Mel to share with us what those sort of avenues are, because it is a highly restrictive and very different

The Plaintiff Friendly Economics Explained

SPEAKER_02 11:10

type of litigation to the traditional types of underpayment litigation, sexual harassment, litigation, discrimination, litigation.

SPEAKER_00 11:18

Yeah, I completely agree, Nat, and there's certainly discussion to be had about if if this is going to be the best vehicle for employees to get the remedies. But perhaps before we get too deep into all that, Mel, maybe you could just um take a step back and give us the one-on-one on class actions.

SPEAKER_01 11:36

So, look, the class action specialists, we like to say that there's a lot of magic to it. Um, but really, if you take a step back, it's large-scale complex litigation that has an additional procedural overlay. We were joking a little bit before about you know the the the federal in the federal court, it's you know, section 33. You know, so there's it's all within one section really. But that's right. So part A, if we're looking at the federal court, is um is what governs the class action framework. As we said, so you're right in that. They only have there's only to be one common issue of fact or law, not end law. There is the additional, so it's it's cumulative, you have to have all three. So you've got seven people, one common issue of fact or law, and you have to have claims that are all group members, have to have claims that arise out of the same similar or related circumstances. So you're right, it's not um, it's not a difficult hurdle. There will be some circumstances, I suppose it's really going to turn on how the claim is drafted, where those may not be met, and there is some case law around that, but um, there's not been many decisions for the exact reasons we've been discussing. You can see that on many cases that are relatively tightly confined, those criteria are not going to be burdensome. Claims are usually defined in a way that is an open class. So it's supposed an interesting thing as well when you're considering that this is a claim that's been brought about your employees. Your employees are brought along regardless of whether they know about it or want to be involved at the at the first, at least at the first pass, there does become a time later for some further engagement. But certainly when they're commenced, it'll be defined as people who shared certain characteristics within a certain time frame. And so long as you meet that definition, you're in, right? So I suppose that's an interesting feature. The other one is once the case commences, it's really kind of off off and running. Um and so there's not many, obviously, there's can be some strikeout type um interlocutory issues at an early stage, but once the case is commenced, um, it can't be resolved without the approval of the court. Um and so settlements must be approved by the court. And the reason for that is because, as you mentioned, that there's this supervisory role that the court is um is expected to play and is is required to play, and so they have to look at whether a proposed settlement is going to be you know just and reasonable, just and fair for the actual group members. Um there's also some, I suppose, um, tensions that may arise in the employee context because you know, probably because of this protective role of the group members and that the court is acting in their best interest at all times. There, and it varies a bit between each court, but there are restrictions on how you can engage with group members once they're once the claim's been commenced and they are a group member. Um, and so you know, courts don't look lightly on those types of engagements with group members. And so um companies have to be really careful and lawyers that they're not overstepping when they've got people who are perhaps still current employees, you know, it can be quite difficult.

SPEAKER_00 14:51

Yeah, that's it's incredibly you can see how that might work if you're dealing with shareholders or where that relationship doesn't have a BAU aspect to it. And I know there's some carve-outs in the practice note, but um it it it it from what I understand, it essentially brings in the the plaintiff law firm to any communications around the issue, which is super complex when it comes to you know remediating underpayments or um you know other individual employee matters, which may touch on this.

SPEAKER_02 15:22

It's incredible, and I just want to punctuate that point because it's such an important one. As you said, Lucy, that BAU relationship is literally the employer and employee turning up to work every day, and the communication prohibition is such that if, for example, uh the claim is in relation to an underpayment matter and you want to just remediate your employees, there's all this rigour now in relation to how you do that. And we haven't spoken about the often reality that there will be parallel proceedings between the regulator, the fair work ombudsman, or an individual employee who's bringing their own claim related but not as part of the group, and how you just practically navigate those things.

SPEAKER_00 16:09

So and and the the funny thing is, is because of what I understand, Mel correct me, about the opt-out system, they could be pursuing an individual claim, but uh they are a part of the group because they're and they haven't opted out.

SPEAKER_01 16:21

Like so and that's that was what I suppose alluded to earlier is that although you're in at the start, if you're caught by that kind of very broad often definition, um there will become a time later in the proceedings, usually around the time of a mediation discussion, which always um happens, um, where there's you know a chance for group members to say, I do want to participate, so they then opt in, um, or they can opt out if they choose not to participate, for example, to pursue their own claim, or they just may not want to be involved at all. Um, but that process is usually quite late. It's there's no, it's not set in stone. It can um with agreement of the parties and obviously the oversight of the court occur at different times. But if I'm looking at our experience and the history of class actions, it's usually quite late in the proceedings.

SPEAKER_00 17:08

That's an interesting and a big contrast for our quick and dirty matters that we do in our team. But um how long do these proceedings usually go? Like, is that years into the process?

SPEAKER_01 17:18

Well, absolutely, it's absolutely years. Um, and so if I'm looking at just generally the data on on class action um, and I'll talk about settlements because it's usually settlements, but let's talk about, I suppose, broadly resolution. Um, it, you know, it's taking three to five years, and if, you know, probably closer to the five-year mark, and that's a whole range of factors. That's um, because there's tensions with multiple or parallel proceedings. It can be that the claim is not in a state yet that's ready to be um, I suppose a defense is ready to be put on, and so there's some questions around the pleadings or other interlocutory um early steps. It can be just waiting your turn in the court. It can be that the evidence is incredibly complex in these cases, so it just takes parties

Class Action Basics And Court Control

SPEAKER_01 18:05

months and months actually to be able to put on their evidence. And so once you just start adding those things together, um it's it's a it's a very it's a very long timeline. Yeah, it is. And and you can understand that um parties are often not wanting to have discussions too early because the the definition of the claim may not be sound, or you know, obviously I'm thinking of it from a defense perspective. Um, but you know, you're giving discovery as a relatively early step in the proceedings. It's not always strategically the best move to sit down once you've just given over your discovery, because what we have seen when that does occur is that there tends to be a cherry picking of certain, you know, offhand statements or what I call the bad documents, and the defendant side doesn't yet have any evidence on to kind of address those issues. So you're not really coming to the mediation with a um with everyone putting their best foot forward, and so that's also why they tend to occur a bit later once everyone's had a chance to formulate, reformulate the claims, have all your evidence on so everyone at least is coming together with a clear picture of the landscape of the risks. Yes. Um, but again, that does mean that we're talking about years and years and years before the claims are being resolved.

SPEAKER_02 19:19

And and Mel, even once the claims have been resolved by the court on those issues of fact andor law, that won't necessarily determine what it means for every single group member.

SPEAKER_00 19:31

Yeah.

SPEAKER_02 19:31

And so then there's this complicated process, which is a matter between the parties, to figure out, okay, well, what does that mean for you, Mel, and you, Lucy, and me, Matt, who has not been paid properly or worked on this day, or um, was expensive.

SPEAKER_01 19:49

The question of loss as well is super individualized. And I suppose that is one difference to the from the class action to, I suppose, other types of litigation, which is really the class action will resolve or aims to resolve issues that are common to the group, and obviously there's a lead plaintiff or applicant, and it will resolve their individual claim. But that's right, we're talking about then well, what's happening with the rest of the class. And so even if you get to the point of a judgment or a settlement, there is then the process of working out, okay, well, what about every everyone else? And in certain cases, that can be easier. We talked a bit about shareholder, that becomes a bit more mathematical. Um, but when we're looking at our products cases or really complex employee situations, some of those calculations can be quite difficult and then therefore take time, so more time before the group members are seeing any kind of redress for the issues that they've been uh litigating.

SPEAKER_02 20:46

Um and perhaps allow me to proselytize a little bit about this, but it it's um it just in a system where there is uh so much activity and there is genuine desire from an employer to do the right thing by its employees. That there's been an error. Let's say there's admittedly an error in relation to the way wages have been administered or breaks have been provided, or whatever it is, there is a disincentive or at the very least, very difficult hurdles that need to be jumped over in order to make that right for its people, um, for employees and sort of move forward. And so it just does make me wonder, and I want to quiz you about settlement and how that works, because there have been certain members of the judiciary, courts have been quite critical of proposed settlement terms because it doesn't provide the class with terms that are fair and just and reasonable in the circumstances. So, again, let's just take the example of an underpayment claim. If an employee has been properly underpaid, let's say $10,000 over a six year period. And the employer wants to make that good. There is, you know, as you've described, this process about being able to communicate with employees. That needs to occur with the approval of certainly the plaintiff lawyers in relation to that. But then there's a clip of the ticket. So the employee ultimately is not getting their full entitlement that they would have been because money goes elsewhere. So tell us about that. And you know.

SPEAKER_00 22:34

And courts have been interventionist in the past that they failed to approve settlements in these circumstances.

SPEAKER_01 22:40

They go back and try again. Look, it's a really, it's a really tricky area. And as I say, there's been so much discussion around what are the right outcomes here for all of the parties involved. If I put my plaintiff's hat on, they would say that, or plaintiffs and funders, so promoters hat on. The argument is, I suppose, falls into an access to justice bucket, which is if not for us, many of these claims would not be brought. People, individual people don't have the resources necessarily to be able to pursue these issues. Let's come back and talk about whether that's right in an employment context. But for example, if I'm a shareholder or if I'm someone who's suffered a personal injury, or you know, um, it may be too difficult to be able to take on a big company or to say, I want, you know, I've lost a dollar per share over this period, you know, can I have can I have that back? Um, and so the argument goes that if not for the class action mechanism, many of those, what I'll call individual non-economic claims, are not going to get off the ground.

SPEAKER_00 23:48

And so, those, sorry to interject. Yeah, that uh that's clearly coming through in the recent changes we've seen in the Human Rights Commission Act, where they specifically brought in a form of representative proceedings.

SPEAKER_01 24:01

And so that's the one side. The other side of that is, well, sure, but there needs to be balance. Um, and so there have been, you know, in the shareholder context, even recently, there's been a few cases where there's been about like a 50-50 split, right, in terms of what goes back to group members versus what goes to promoters. I think the key thing here is there is perhaps a mechanism for some of these claims to be redressed, but also it's a bit different when we're talking about people's employment, right? And then their their wages or part of their wages or their entitlements. Um and again, the argument probably still goes from the promoter's side that you know the employer has done something wrong and they're not addressing it either quickly or um in a fulsome way.

SPEAKER_00 24:51

It seems perverse, doesn't it, where if you you could conceivably have an employer wanting to rectify a payroll issue or or or you know, it'd settle a dispute, but this if if you have one of these class actions intervening, it it can have the practical impact of the regular or the regulator.

SPEAKER_02 25:08

The regulator is prosecuting almost exactly the same case right now.

SPEAKER_01 25:13

You see, well, there's already something on foot. So there is uh a mechanism for employees to have this issue assessed and and redressed if there has been some wrongdoing there. I'm not sure what the current time frames are with the processes through the regulator, but are they that's a question for you, is are they the same kind of time frames as yeah, once you're into the large claims, it's similar. But I mean, this is this is the issue that exists, right? And that's not

Settlements Fees And Court Pushback

SPEAKER_01 25:40

just for employment claims, it's for all types of claims, which is this constant tension between is it better that group members get something back, if otherwise they would have had nothing back? And the firms and the funders are obviously they're they're running a business. They take on many cases for social justice reasons as well. But you know, it's a business, and so they're on risk, and so the argument goes, well, if I'm on risk and I'm funding the proceeding, then I should get a return for that risk. Um, but it's about the balance. So we were talking about potential reforms earlier, and so one reform um that had been proposed many years ago now was that there kind of be a cap at 30% on returns to um to what I call the promoter's side. That received a lot of criticism. Yes. Um, and also a lot of discussion of well, then that is perhaps going to lead to the bigger, more remunerative economic type claims being pursued, and perhaps some of these other smaller types of claims not pursued because it's just not going to stack up in terms of the business and the economics of it. So it is a real tension. Um, and I don't think anyone has the answers. Courts have this role, as you say, there has been a lot of scrutiny. Yes, sometimes they'll knock things back and say, say, you know, try again, or they will adjust, make some adjustments. Um, but it is an it is an imperfect system. It is, yeah. It's a busy space. It's a busy space. It is a busy space. Just this year. I do give let me give you a statistic because I brought some statistics with me. Um, so we were talking about the fastest growing. So of since January 2025, so January last year, there's been 31 just underpayment claims filed. Now, as I mentioned, some of that's a little bit skewed because kind of 19 related to this. Um, talk about the junior doctors underpayments. But this year it has been off to a slower start in terms of um class actions being filed. But I think as of last week or this week, there's been nine that have been filed, but three of those are under underpayments, right? So there's only one of them as a shareholder, but three of them are under payment. And um just looking, it's it's interesting. I don't think this is a trend that's going to change. And as to your point, Nat earlier, we've again we've got some doctors, we've got a lot of retail um in there as well. And so again, we're talking about types of companies that have thousands upon thousands of employees that's very hard to keep records in relation to, you know, it's very challenging. But given what I always I suppose where we started the conversation, is that it's a real, it's a really risk, risky area because if you've got employees, there's potentially a mechanism for an employee-related class action.

SPEAKER_02 28:29

And I just um just want to pick up very briefly and on that settlement point and and the court's supervision in relation to that and approval in relation to that. So it requires a great deal of thought and precision in relation to how settlements are structured and um the preparation for mediation and the lead up to that, um, you know, you you cannot underdo that, I think, because you know, we were talking about the threshold to bringing a claim is just that common, relatively low, common issue of fact or law. Once you're in, you're in. But a settlement needs to deal with the entire group, and that's where we um, you know, start to talk about either those fictions or, you know, how do you apply these to make some assumptions about different groups and different people? So there's a great deal of sort of sophistication and thought required for that, and the court will not and has not approved some cases where that hasn't resulted in a just outcome for class members. So one that um comes to mind for me is Justice Murphy in relation to um the Woolworths underpayment claim, which of course ultimately went all the way through to trial. Now, that was a proceeding where there were four parties effectively or cases being case managed together. So there were a class action proceeding, a regulatory proceeding brought by the Fairwork Ombudsman, and then Colts in relation to similar proceedings where there was commonality of issues. Now, Justice Murphy refused to approve settlement in that case because it resulted in uh costs being paid to the plaintiff law firm, um, relatively modest costs being uh provided to the lead plaintiff and one of the other lead applicants in that proceeding and nothing else to the group members. And part of the discussion was well, okay, this is okay in the circumstances because the regulatory proceeding is going to pick up everyone else, but there was a slightly different time frame and a couple of arguments that were advanced in the class section which weren't advanced in the Fair Work Ombudsman litigation. So I raised this just to make the point about what we were describing for those listening in who kind of want to do the right thing by their people, who want to pay people, want to move things forward, at the very least, just sort of move on, quite frankly, from this. It is a really difficult thing. Now, there is a couple of um things that uh you can sort of know when this is coming. It's not, I know there's a low bar to entry, but a couple of things that I've seen, for example, one, they'll advertise for um group members. So you can literally, some of the plaintiff firms will have a web page, let us know if you've suffered this injustice or you've been employed by this particular employer during this particular time. So that gives you a good heads up in relation to things. One thing I've also seen is um there'll be a request for employee records under the Fair Work Act, and it will have a uniform form and it will be signed by one of the plaintiff firms saying we uh act for these six or seven employees, please provide records to us as you're required to do within a certain date.

SPEAKER_00 31:42

So there's certain things that you can sort of perhaps tell when this is coming, but um that's yeah, that is interesting, that if you and and it seems to be that often these proceedings it's sort of piggyback on regulatory proceedings, which we've talked about, or individual claims, say for an underpayment, then it's then magnified into a class. So they're definitely sort of things to be watching.

Warning Signs Before A Claim Lands

SPEAKER_00 32:05

I am interested to hear um from you, Nat and Mal, about mitigation strategies. So, what can employers be doing to um put themselves in the best position if a claim comes along or to fend them off in the first place? Maybe start with you from your employment perspective, Nat. Call us a call.

SPEAKER_02 32:24

I think it's just yeah. Well, yeah. Uh look, I I mean, I don't want to sound trite in saying this, but there is nothing like making sure that the house is um in order. I think it's also being very mindful in relation to um communication with employees. If you are remediating, do that quite quickly. I think if you if there has been an underpayment and you communicate that, get the get the money into the hands of employees as quickly as possible. So there's probably less motivation for from the business model to pursue it as a claim.

SPEAKER_00 32:59

Um yeah, governance and early detection. So the quicker you can detect and in and that and comes with that is getting reported up to the board oversight, all those factors.

SPEAKER_01 33:09

But yeah, from your perspective now, I totally agree with all of that because the last thing you want to be the prompt for, oh no, we've got an issue is seeing an ad on a plaintiff's website or seeing a discussion on some online forum, right? You want to be the one who detects the issue so that, as you say, you can move quickly to redress it. And the, as we've discussed, I think it has become clear, that the challenges arise once a class action is commenced because you do, for the most part, kind of enter this process, which is quite hard to exit out of. Um, so really the goal is that you don't get there. If you can identify the issue, remediate it, it doesn't remove the risk of a class action. We have seen some instances where a company has remediated the issue, not just in an employment context, in other contexts as well, um, where then there's still a class action investigation that we see pop up and it's um the question is were you compensated fully, or is there still a gap or so, you know, it's insufficient or it's been improperly calculated. So it doesn't remove the risk, but it does certainly mitigate it because as you say, if if if part of the claim value, I suppose, has been eroded or the issues being addressed already by the um employer, there's less work, I suppose, for the class action to do. Um I agree with the getting your house in order. Um importantly, what we often see once we're called in, right? So it's better that you're called in and that then we're not needed. Um because once we're called in, the things that we do tend to see, which are hurdles that need to be overcome, are where we see that some issues have been detected or at least flagged for further investigation, and either they and there's a record of that, and then either they haven't been, or they haven't been quickly enough. Unfortunately, that becomes a roadmap for some kind of you know allegation of of wrongdoing. The other trap we often see um is, and I suppose I encourage everyone to just do a little refresher on is everyone clear about privilege? I suppose this is what the litigators always say when they come in, but um, when it applies, when it absolutely doesn't apply, and so we see more problems on the when it doesn't apply, where um, you know, privilege is not a magic wand. You know, you put it on a document, it doesn't mean it is. And so sometimes we see that there's just communications being created in a um and not a controlled or thought-through way. I'm not saying about over-curating things, I'm just saying, you know, in the heat of the moment, people not thinking about documents that they're creating and they're labelled as privilege, and people might be making hindsight recollections or um, or sorry, I should say like kind of hindsight opinions, not recollections, or um, you know, just talking about things after the fact. Commissioning reports for multiple purposes, you know, that are just unhelpful, right? And that's we see that a lot come up in cases where, including a couple of the cases recently that have favoured the the plaintiffs in a different context, is that those types of documents are always seized upon, right? And there's often much made of them that's beyond what actually passed in the moment. But that can be

Prevention Privilege And Practical Readiness

SPEAKER_01 36:20

one of the most difficult things to defend, is when people are not thinking about the documents they're creating, not thinking about whether something is in fact privileged or not, and just avoiding making um, I suppose, after the fact pronouncements about things.

SPEAKER_00 36:35

And um I do sympathize for our clients though, because often it's in it's in a crisis scenario, they've brought in all the different um disciplines, comms, you and and where it involves your employees that you know they're trying to do the right thing by their employees. That's for uh, you know, the primary objective. But yeah, we do see there's recent case law about this where it sort of unwinds then in in later procedures.

SPEAKER_01 36:58

Yeah, that's right. And it's just, as I say, it's just becomes fodder or noise that you then have to address if you are facing a claim to try and explain away these things. And I think that's what most organizations are grappling with these days, with um, especially teams or if people are using Slack, you know, instant messages are documents that get caught up in a discovery. They are documents. Text messages can be documents. So just a reminder, you know, we call it kind of just careful or sensible communications, right? And just remembering that um the old thing that we were always taught is that you don't put something in writing that you wouldn't be happy to see on the front page of the paper, you know. There's you know, so um the only other, I suppose, practical tip, and it's not a mitigation one, because as I say, when we're called in, it's more about trying to put the best foot forward and kind of litigation readiness. Um, but the only other tip I would have is just also knowing where your documents are. Yeah. Um and because sometimes if you are faced with a claim, you want to be able to move quickly and collate things, and it sounds very straightforward, but in large organizations or where we're dealing with claims that span many years across, you know, with multiple thousands of employees, um, it's it's not as simple as it sounds. So I think doing some of those housekeeping things early, checking your systems and processes, doing regular kind of check-ins and of course following up are kind of really I mean, that's good corporate governance anyway, but those things will then put you, I think, in good stead for any issues that do arise.

SPEAKER_00 38:24

Oh, wow, we could talk all day. It's so fascinating. And thank you so much for joining. We love getting to work. Thank you for having me. With you two, uh, with you guys. Um, and thanks to our listeners for tuning in. As always, we welcome your feedback and any uh suggestions for episodes. You can contact us so you know our details, but or um by their email address um inside employment at hsfkramer.com. Thanks for joining. Thanks, Mel and Max.