Fair Work Ombudsman’s new “Record My Hours” App

The Fair Work Ombudsman has released a new “Record My Hours” app to enable workers to automatically record their hours of work using geofencing technology.

In essence, what happens is the worker enters the location of their workplace and the app will automatically track and record the hours that they spend in that location.

The Fair Work Ombudsman has done this to tackle a problem that they commonly encounter in investigating underpayment of wages complaints and that is the employer’s failure to maintain or produce adequate or accurate records.

Between 1 July 2016 and 31 December 2016:

  • 64% of the court cases initiated by the Fair Work Ombudsman involved an element of alleged record keeping or payslip violations and
  • 347 infringement notices with on the spot fines ranging from $540 to $2,700 were issued for record keeping and payslip contraventions.

Employers should ensure that they are doing the right thing with payslips and record-keeping to ensure legal compliance, minimise risks of fines and, of course, because that is all part of looking after your people.

Information on pay slip and record keeping requirements is available here.

Myths in employing young people a target in 2017

In a recent media release, the Fair Work Ombudsman, Ms Natalie James, announced a 2017 campaign to address widespread underpayment of young workers across Australia. Here is part of what she had to say including commentary on 10 myths that the Fair Work Ombudsman’s officers commonly come across.

Ms James says that in 2017 her Agency will have a particular focus on proactively checking that employers of young workers are doing the right thing.

“Young workers can be vulnerable, so we place high importance on checking and treat cases of their rights being contravened more seriously, which means we are more likely to pursue enforcement action,” Ms James said.

Between July 2011 and June 2016, the Fair Work Ombudsman received more than 27,000 requests for assistance from young workers and recovered over $18 million for young workers who had been short-changed.

Ten common young worker myths the Fair Work Ombudsman encounters are:

MYTH 1: Paying low, flat rates of pay for all hours worked is OK if the worker agrees.
FACT: Minimum lawful pay rates are mandatory. In many jobs, penalty rates must be paid for evening, weekend, public holiday and overtime work.

MYTH 2: Lengthy unpaid work trials are OK.

FACT: Unpaid trials are only OK for as long as needed to demonstrate the skills required for the job. Depending on the nature of the work, this could range from an hour to one shift.

MYTH 3: Employees don’t need to be paid for time spent opening and closing a store or for time spent attending meetings or training outside their paid work hours.

FACT: If a meeting or training is compulsory, then it is work. Employees must be paid for all hours they dedicate to work and this includes time spent opening or closing a store. For example, if an employee is required to be at work at 7.45am to prepare for an 8am store opening, they need to be paid from 7.45am. 

MYTH 4: Employers can make deductions from an employee’s wages to cover losses arising from cash register discrepancies, breakages and customers who don’t pay.

FACT: Unauthorised deductions from an employee’s pay are unlawful. Deductions can be made only in very limited circumstances. 

MYTH 5: Employees are obliged to buy store produce such as clothing or food.

FACT: Employers cannot require staff to purchase store produce. This includes any items for which the worker may receive a staff discount. For example, an employer cannot require workers to purchase the particular clothing stocked in a retail outlet.

MYTH 6: Unpaid internships are OK for all inexperienced young workers looking to get a foot in the door.

FACT: Internships can only be lawfully unpaid when they are a requirement of a course at an authorised educational or training institution, or an approved programme of work under Social Security Legislation.

MYTH 7: Employers can pay young workers as ‘trainees’ or ‘apprentices’ without lodging any formal paperwork.

FACT: Employers must negotiate and lodge a registered training contract for an employee in order to lawfully be able to pay trainee or apprentice rates. An employer cannot pay an employee trainee rates just because they are young or new to the job.

MYTH 8: Paying employees with goods such as food or drink is OK.

FACT: Payment-in-kind is unlawful. Employees must be paid wages for all work performed.

MYTH 9: If a worker has an Australian Business Number (ABN) they are an independent contractor and minimum pay rates don’t apply.

FACT: Having an ABN does not automatically make a worker an independent contractor. Fair Work inspectors apply tests of fact and law to determine whether a worker’s correct classification is as an independent contractor or an employee. Whether an employer has labelled a worker as a contractor and required them to obtain an ABN may not be relevant.

MYTH 10: Pay slips aren’t mandatory – employers only need to give employees pay slips if they ask for them.

FACT: Employers must give all employees a pay slip within one working day of pay-day. Employers can give employees paper or electronic pay slips, such as a link sent via email.

There are no surprises here for us at Ridgeline HR because we also encounter misunderstandings like these in the course of our work.

 

Improve wellbeing for better performance

We have all heard about serious societal problems such as alcohol and drug abuse, domestic violence, the health effects of smoking, mental health issues plus obesity and associated challenges with healthy eating and physical activity and the incidence of diabetes.

You no doubt have people you know including employees and contractors in your business who have these sorts of challenges.

So what can you do about it as a business owner and employer and why should you?

The business case for productivity

When you invest in a car or a new piece of plant, you look after it because it is a valuable asset and you want to get the best return on it, minimise costs by servicing and maintaining it in optimal condition and be able to show it off with pride.

There is a mountain of research that leaves no room for any doubt – investing in your peoples’ wellbeing pays dividends in productivity by:

  • Improving capabilities and performance
  • Reducing absenteeism
  • Getting better attraction and retention of talent
  • Reducing risks of accidents and injuries and WorkCover costs
  • Enhancing employee morale and engagement.

In the publication “Healthy workers, healthy business”, WorkSafe says: “There is a great deal that businesses can do to maintain a healthy workforce and keep talented, productive workers on board. An increasing body of evidence supports the idea that employee health and wellbeing programs can have major benefits for your business, from reductions in sick leave to a boost in morale and productivity.”

I hear many employers say: “Our people are our greatest asset”. So, if that is the case, shouldn’t we be looking after them too? Apart from it being the right thing to do, it is just good business, isn’t it?.

The business case for social responsibility

A wise man once said to me “You spend a third of your life at work so you had better enjoy it.”

Equally, if I spend a third of my time at work, what I do at work and how I am treated at work has a significant impact on my life and how I live it including my health and my relationships.

Results from 300,000 Work Health checks delivered in Victoria show why business leaders should be concerned. More than 66% of participants were found to have a medium to high risk of developing type 2 diabetes and/or cardiovascular disease. In addition, 92.9% of workers tested were not eating enough fruit and vegetables, and 70% weren’t doing enough exercise. (S Radi and M Sim, WorkHealth Program Evaluation (Monash University Melbourne, April 2011).

So clearly, given the scope of the problem, employers can make a significant contribution to the wellbeing of their people and the general community by helping people with education and opportunities to make healthy choices at work.

Introducing the Achievement Program

The Achievement Program is part of the Victorian Government’s vision for a Victoria free of the avoidable burden of disease and injury, so that all Victorians can enjoy the highest attainable standards of health, wellbeing and participation at every age. Launched in 2012, it boasts a membership of more than 3000 early childhood services, schools and workplaces from around Victoria.

Image provided courtesy of Achievement Program, Department of Health and Human Services, Victorian Government, December 2016

When you register with this free program, you get access to guidelines, tools and templates that can assist you in planning, implementing and evaluating initiatives to improve worker wellbeing in any of the following five key areas:

  • Alcohol
  • Healthy eating
  • Mental health and wellbeing
  • Physical activity
  • Smoking

You can implement things at your own pace and in accordance with your peoples’ preferences and you can also apply for recognition for successfully implementing programs in any of the above areas.

That shows job candidates that you are a good employer and helps to retain and motivate the people you have.

Further information is available at http://www.achievementprogram.health.vic.gov.au/workplaces or contact me on 0438 533 311 or at peter@ridgelinehr.com.au.

Protecting against accessorial liability

The Fair Work Ombudsman has been very active in pursuing individuals who it believes have reasonably been a party to contraventions of minimum wages and conditions whether overtly in action or by omission or failure to exercise due diligence.

Investigations into cases involving large businesses such as Coles and Woolworths and Myer who contract work out to other entities which do not meet their compliance obligations have been undertaken from the perspective that the principal in the supply chain should have known and acted to prevent the non-compliance even though it was not the actual employer.

This raises questions about who might be considered an accessory to a contravention and here is what the Fair Work Ombudsman recently had to say about that.

Section 550

Under section 550 of the Fair Work Act; a person who is involved in a contravention of the Act is held responsible for that contravention. A person is involved in a contravention if they:

  • have aided, abetted, counselled or procured the contravention; or
  • have induced the contravention, whether by threats or promises or otherwise; or
  • have been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
  • have conspired with others to effect the contravention.

What does this mean for individuals?

Anyone who is found to be involved in a contravention of the Act can be personally liable for compensating employees and paying penalties imposed by the court. The Fair Work Ombudsman has used this provision to hold company directors personally accountable for the actions of their companies. This effectively means that liquidating a company is no guarantee of avoiding the consequences of non-compliance with the Act.

But section 550 can extend to anyone involved in a contravention. This can include human resources and payroll officers, line managers, accountants and advisors.

What does this mean for companies?

If a company, as the employing entity, contravenes the Act: that company is automatically responsible for that contravention and may have penalties imposed by a court. But under section 550 a company that is not the employing entity, may be found to be involved in a contravention and may also have penalties imposed by a court.

This is important for companies to consider especially in their supply-chain and procurement processes. Effectively it means that companies cannot outsource their non-compliance. For example if one company contracts another company to supply cleaning staff; and those cleaners are underpaid: both companies may be held accountable by a court. 

This has broad implications for businesses that use outsourcing, franchise arrangements or complex supply-chains. The full scope of section 550 in these types of arrangements has not been settled by the courts, however, the Fair Work Ombudsman is determined to take action to ensure a culture of compliance is established and maintained broadly across all businesses.

You should also note that fines of up to $10,800 per offence can be imposed on individuals and up to $54,000 per offence can be imposed on companies.

What you need to do

Firstly, if you are an employer, ensure that you are aware of and comply with your own obligations as an employer and that these are properly documented in employment contracts/letters of offer etc.

Secondly, if you contract work out to another party, verify that that contract enables the other party to be capable of meeting its employment compliance obligations and that that other party actually does so.

Thirdly, if you are an internal HR Manager or other Manager, ensure that you have processes in place that genuinely test whether work contracted out is conducted in accordance with employment obligations (ie people are contracted and paid appropriately). This needs to be more than having the contractor just tick a box

Fourthly, if you are an external business advisor, ensure that the advice that you provide is competent and, if you are not confident of your competency in employment matters, engage a delivery partner to provide that competency.

Ways that we can help

Ridgeline HR has been providing just that sort of advice since we started in 2000. We have done this with hundreds of clients across all sorts of industries throughout Australia. We have serviced the members of an industry association and the clients of accounting firms for many years and we have been recognised by federal government agencies in the past for our expertise.

We now also offer a supply chain education and audit service which in essence involves us auditing supply chain participants’ compliance and advising them on any areas that they need to fix. This proactive approach to assuring downstream compliance provides a simple and practical approach to managing the risk of accessorial liability.

If you are interested in exploring ways in which we might be of assistance in these areas, call Peter Maguire on 0438 533 311 or email peter@ridgelinehr.com.au

Will your termination pass the “3 tents test”?

Having been in the field of human resources management for over 30 years, there have been plenty of occasions where I have had to consider disciplinary action and termination of employment as remedies for misconduct.

In doing so, we need to consider fairness from a couple of angles:

  • Substantive fairness which requires that the action taken would not be harsh, unjust or unreasonable and
  • Procedural fairness which is about ensuring that due process has been followed and the principles of natural justice have been complied with

A process that I use to consider the substantive fairness of an action is to assess them against the “3 tents” namely:

  • Content: what actually happened, ensuring that you are aware of the facts of events that have given rise to consideration of action?
  • Intent: was the action or dereliction of duty or other offence deliberate or was it due to a misunderstanding or a heat of the moment thing and is it in or out of character for the individual concerned?
  • Extent: what was the effect of the action or dereliction of duty or other offence on the business and/or employees and/or other parties?

Of course there are the procedural elements to attend to as well but ensuring that the action that you propose will stand up to the “3 tents test” is a good start.

R-E-S-P-E-C-T: What it means for me

There is a great line in this Aretha Franklin classic which is “R-E-S-P-E-C-T, find out what it means to me”.

A lot of the work that we do at Ridgeline HR has to do with developing and maintaining the right behaviours in workplaces built on respect for people regardless of their station and their personal characteristics.

In 2011, I was privileged to present on the subject of respectful workplaces at Melbourne Law School in conjunction with the Australian Institute of Employment Rights and the Centre for Employment and Labour Relations Law.

The focus of my presentation was on the characteristics of an effective respectful workplace program and, in this context, here is what R-E-S-P-E-C-T means for me:

Responsibility:

Everyone is responsible for their own behaviour and for influencing the behaviour of those with whom they come into contact. Values should be clear and people at all levels from board down to the shopfloor should be held accountable for practising them consistently at all times and performance against values should be measured and used in performance management processes.

Empowerment:

People are educated and trained in why the values are important, how they are applied in practice and what that means in terms of how they and everyone else are expected to behave. People are encouraged and congratulated for doing the right things in the right way and are encouraged and thanked for identifying contradictions and taking appropriate action to stop the wrong behaviours.

Socialisation:

Every workplace is unique and values and behaviours need to be socialised to the nature, culture and structure of the organisation. Due regard must be had to the people demographic (employees and other stakeholders) and the prevailing paradigms of organisational behaviour (the good things to be preserved and celebrated and the contradictions that need to be addressed to ensure a respectful workplace).

Performance:

This is about doing it every day in every way – in the way that board and management make decisions, in the decisions themselves, in policies and procedures and in the way that everyone at every level interacts with each other, in not tolerating contradictions but fixing them and in maintaining the message day in day out, saying “thanks” and saying “sorry” as and when appropriate – really living the values.

Evolution:

This is a journey where we continuously learn about new challenges and opportunities, where business circumstances change, where people come and go (employees, customers, suppliers, etc) and so the respectful workplace is something which continues to evolve and adapt to different needs. There is a need to conduct periodic healthchecks to look for contradictions and opportunities for improvement as well as to recognise and celebrate the successes. Like most things in life, it is about continuous improvement.

Community:

A truly respectful workplace is one where all of the stakeholders are partners in the values and required to demonstrate them – board members, managers and staff but also customers, suppliers, contractors, associations or unions and any others who have an interest and involvement in the workplace, Community also means recognising people as individuals and having respect for the people, relationships, beliefs and activities that are important in each one’s life. Diversity is valued and celebrated.

Trust:

The foundation upon which any respectful workplace is based. For it to work, we must trust in the values of the organisation, the commitment of board and managers to lead by example, the willingness of all stakeholders to engage in the journey and the ability to rely on everyone to do the right thing and to be supported in doing that, Only then, can people genuinely believe they have a respectful workplace.

So that is what R-E-S-P-E-C-T means to me – what does it mean for you?

7 steps to effective policies

One of the most common requests we get at Ridgeline HR is for assistance in developing HRM policies and procedures for our clients.

Many businesses think that simply having a policy is enough to demonstrate compliance but there is actually a lot more to it than that as businesses too often find out the hard way.

It is not much good having a policy if it is not practised in fact and the fact is that, if a business doesn’t follow it’s own policies, it automatically has a compliance problem.

And there is quite a bit of work involved in ensuring that policies are both appropriate and managed in the right way to achieve their objectives.

There are 7 steps to effectively implementing policies:

  1. Be clear about why the policy is necessary(and, if it isn’t, don’t do it).
  2. Ensure that the policy aligns in content and presentation with your vision, values and strategy (don’t create contradictions).
  3. Communicate the policy appropriately to everyone to whom it has application (on launch and progressively through inductions, refreshers etc as necessary).
  4. Train people who have roles to play in application of the policy in how to perform those roles in the right way.
  5. Assess risks (eg people who might have potential to breach the policy or need additional support to comply with it) and implement appropriate risk management strategies.
  6. Consult people and review practice regarding the policy to ensure that it is working as intended.
  7. Review the policy annually to take account of any legislative or best practice developments as well as organisational experiences to continuously improve it and ensure ongoing compliance – return to Step 1.

Perhaps the thing that I find most remarkable about most organisations which focus on risk management is that they don’t actually assess risks that exist in their organisations when they implement a policy. See Step 5 above.

There is too often a mentality that, if the rules are communicated and an individual then doesn’t follow those rules, the risk is transferred from the business to that individual.

For organisations that might be in that space, I suggest that you consider why the policy is needed in the first place – ie what purpose (other than complying with a legal obligation) does it serve in the management of people?

Or, to put it another way, why did it become a legal obligation in the first place?

Do your policies exist for policies’ sake or do they have a positive impact on your people and culture?

Why would I want to work for you?

When advising clients on how to go about recruiting a new employee, I emphasise the importance of writing good position advertisements.

Why is this important? Because you are trying to find the best person that you can for your business in a very competitive labour market and you need to quickly get their attention – like lots of things in business and life, first impressions count.

To do this effectively, you need to be clear about your Employee Value Proposition and communicate that simply and clearly in your ads so that you answer the question:

“Why would I want to work for you?”

If you look at any of the major job boards online, you will undoubtedly find that most job advertisements don’t answer that question – they say little or nothing about what distinguishes the business/employer and the role advertised from the rest.

In a discussion with a CEO of a significant business recently, one that has a lot to offer in the way of an Employee Value Proposition, I showed him one of their job advertisements and asked him why they said nothing about that EVP.

I said: “It is a competitive marketplace – everyone says that it is hard to attract and retain good people so why aren’t you selling your EVP out there.”

His response: “When you say it like that, it just makes business sense and we are obviously missing an opportunity that we need to fix”.

So what is your EVP – is it your culture, your products or services, your brand, your customers, your development opportunities, your location, your swish offices, your life balance, your variety of work or ……..?

Next time you are advertising a job (or looking for one), ask the simple question: “Why would I want to work for you?”

Why does HR struggle to impact organisational performance?

This is a question often asked and, from my perspective, one not often answered well.

That’s because there are a number of factors at play here and here are some that come to mind.

You get what you ask for

The first hypothesis that I want to put to you is that the HR function (it’s focus, responsibilities, purpose, activities, relationships etc) is the product of the business owners and/or board and/or senior executive – their philosophies, priorities and perspectives on what HR is and is there for in the context of the particular business setting.

For example, on my first day as HR Manager in one business, my boss, the Manufacturing Manager, said to me “It is great to have you on board, we have missed having someone to get us out of trouble!” “Ouch!” but clearly the focus for the business and the bulk of my activities were going to be on risk management and conflict resolution. That proved to be the case.

What that means is that the business gets exactly what it asks for in HR and, most of the time, that is not what (or not all of what) the business really needs.

The HR hierarchy

Having worked with hundreds of organisations over many years, I have identified 4 tiers of HR (the 4Cs which underpin our consulting model at Ridgeline HR) and these are:

C1:  Commitment – we do what we need to provide direction and meet legal obligations

C2:  Capability – we have implemented systems to assist in HRM

C3:  Competency – we have trained our managers to manage their people appropriately

C4:  Culture – we have strategies which engage and develop our people to deliver results

This leads me to my second hypothesis – 80% of Australian businesses have not progressed beyond C1/C2. Their focus is on compliance and risk management, on record keeping and avoidance of complaints, unfair dismissal claims etc, rather than on organisational development and employee engagement.

What that means for most HR Departments is that compliance is the focus and HR is therefore seen by the business as a compliance cost and not a value adding performance enabler. It is hard to get excited about cost!

I am a human being!

Now to my third hypothesis – we are human beings (not just human resources) and we want to do a good job. We want to have a sense of purpose, we want to feel that we are contributing to and are part of something worthwhile, we want to have dignity and pride in our work regardless of our station and we want to feel valued and recognized for our contributions.

Bearing this in mind, let’s revisit the 4Cs looking at them from an employee’s perspective:

C1: Commitment – I know what is expected of me.

C2: Capability – I am provided with the tools, equipment and systems I need to do my job.

C3: Competency – I receive the training and support that I need to do my job well.

C4: Culture – I understand how I contribute to our success and I am empowered to do it.

Again, I believe that most Australian employees would see themselves as being at C1-C2 because that is where their employers position them and these are the key HR messages being sent to people – comply, do what is expected and we won’t have any problems with you. Not really inspiring stuff, is it?

What this means is that organisations’ expectations and HR messages to its human resources are far too often at odds with our needs and values as human beings – and that is why we don’t get good employee engagement.

And we are not learning

There is a huge body of research which tells us emphatically that the key to productivity improvement, in generating that discretionary effort on the part of our people, in encouraging innovation and discovering new and better ways to work in all sorts of fields is employee engagement.

Yet our current national debate on productivity is centered firmly on employment laws and costs rather than contemporary thinking on what makes a productive business and a great workplace and the importance of good leadership and employee engagement in this regard.

If our national industry leaders don’t get it, it is no wonder that HR Departments struggle to engage with it, let alone deliver it!

Do we have the will?

It is much safer to stay in the compliance space – after all:

  • It is the law or the customer or the government or someone else who makes the rules, isn’t it, and therefore they (not us) are responsible for the rules, right? and
  • If we have told everyone what the rules are and they haven’t complied with them, that is their fault (not ours), right?

Or are we prepared to take on the realities of what our people really think about our organization and do something constructive about it?

Are we prepared to consult with people to inform them, to obtain their input into decision-making and to get them engaged in conversations as part of the culture or will we continue to just consult them as and when required to under employment and workplace health and safety laws?

Are we prepared to invest in their development and wellbeing in a meaningful way as opposed to just doing what we have to in training and workplace health and safety?

I could go on but you get the picture, I’m sure.

So are you in the 80% who need to change and, if so, do you have the will to make it happen?

Things won’t turn around overnight but they will turnaround if you have the will to persist.

There are plenty of good tools and resources around to help and a couple of my favourites are https://www.investorsinpeople.com/https://www.investorsinpeople.com/ and www.engageforsuccess.org. All free stuff – enjoy.

Engage through the CORE

Why is it that some businesses have people who stay with them and consistently perform well?

How do they keep them motivated?

Here are a few essential elements at the CORE of successful employment relationships:

Clarity

To get the right results, you need to be clear about:

  1. The plan – business goals and values provide the foundation for alignment of people with business needs
  2. Competencies – the skills and behaviours which drive your recruitment, selection and training activities
  3. Roles – the tasks that people are to perform and the results that are expected
  4. Resources – the systems, tools, information and relationships needed to succeed
  5. Communication – ongoing and open dialogue to ensure continuing alignment of people with business needs.

Opportunity

People want to do a good job and generally welcome opportunities to:

  1. Be involved – to be asked for their opinion and to have the opportunity to make a contribution
  2. Grow – to develop skills and experience new opportunities for expanding and applying their knowledge and expertise
  3. Comply – to understand what is expected of them in results and behaviour and do it and
  4. Succeed – to deliver the results expected

Recognition

Recognition of people’s value to the business is critical for ongoing motivation and delivery of results as well as in meeting legal obligations in managing people. These include:

  1. Remuneration and benefits – ensuring that people receive pay, benefits and conditions of employment appropriate to the role that they perform, the contribution that they make and its worth in the marketplace and having regard to obligations under legislation and awards.
  2. Ongoing feedback – investing the time to have regular reviews against personal goals, recognition of achievements and areas for improvement
  3. Rewards – personal incentives (ensuring that statutory obligations re minimum rates and conditions are still met) or other forms (public recognition, gifts or gift vouchers, development opportunities, etc)
  4. Correction – despite best efforts, sometimes a relationship doesn’t work and underperformance needs to be addressed promptly, sensitively and legally.

Equilibrium

People like equilibrium – a sense of balance and assurance in:

  1. Life – balancing our family and personal needs and our working life is as a key driver in attracting and retaining good people
  2. Respect -mutual respect between the employer and the employee and the capacity for open and honest communication
  3. Team – people want to belong and to have a sense of being part of a collective in which they are respected for who they are and what they contribute
  4. Security – the knowledge that the business is successful, my job is safe and I will be able to provide for my needs and those of my family.
  5. Sustainability – people’s confidence in the business commitment to continuous improvement and good corporate citizenship.

Focus on these core elements and you will optimize your prospect of having motivated people in your business and a great return on your investment in people.