Major changes to building and construction award

Major changes to building and construction award

Latest News & Events

Major changes to Building and Construction Award  

Over the past few months, there have been a number of decisions made by the Fair Work Commission which have resulted in significant changes to the Building and Construction General On-site Award 2010. 

These are variously associated with the 2019-2020 Annual Wage Review, the modern award review process and temporary arrangements that have been introduced due to the COVID-19 pandemic. 

Details of all of these changes are set out below. 

2019-2020 Annual Wage Review

The Fair Work Commission recently handed down the 2019-2020 Annual Wage Review decision which was to increase the national minimum wage and award minimum wages by 1.75%. 

Unusually this year, in light of the COVID-19 pandemic impact on businesses, they decided to set different operative dates for different industries – in the case of the building and construction and trades awards, that date is 1 November 2020 (rather than the standard date of 1 July that normally applies). 

Employers should check that employees’ wages are at or above award wage level including allowance for any award conditions set off in remuneration. 

The current Fair Work Ombudsman Pay Guide for this Award can be accessed at Building and Construction General On-site Award [MA000020] Pay Guide  

This will be updated from 1 November 2020 when the new rates take effect.  

Modern award review 

The modern award review process which has been going on since 2013 has a resulted in a number of changes to calculation of minimum wages, the treatment and application of allowances, arrangement of ordinary hours of work and RDOs and various other matters – these generally take effect from 1 July 2020. 

Simplification of minimum award wage calculations 

The Building and Construction General On-site Award 2010 has had an extremely complicated method of calculating the award rate for each classification level in the Award. 

This involved firstly identifying the base rate applicable to the relevant classification level and then adding a Special Allowance off $7.70 per week (something that was created years ago to give employees a pay rise when the rules didn’t allow for one) and then adding an industry allowance and, if the employee qualified,  a variety of other allowances could apply. 

The industry allowance was intended to compensate employees for the nature of the industry but additionally there were a number of allowances and special rates that applied on top of this.

From 1 July 2020, the method for calculating ordinary time rates for weekly employees (as per Clause 19.3 (b) of the Award) is by adding the minimum wage specified and the industry allowance for the industry sector and then any of the following that have application to the employee in question: 

  • Tools and protective or other clothing or equipment (Clause 20.1)
  • Underground allowance (Clause 22.2)
  • Air-conditioning and refrigeration industry allowances (Clause 22.7)
  • Electrician’s licence allowance (Clause 22.8)
  • In charge of plant allowance (Clause 22.9) 

Industry Allowance 

The industry allowance has been amended to reflect a single industry allowance that replaces and compensates for the Special Allowance and a number of complex industry, disability and expense related allowances have been removed in the Award.  The rate for the industry allowance is based on the relevant construction sector and has been defined as a percentage of the “weekly standard rate” (standard rate means either the weekly or hourly minimum wage as stated for a Level 3 (CW/ECW 3) employee in clause 19.1). There is one rate for the commercial building industry (6% of the weekly standard rate = $51.75 per week) and a second for the residential building industry (4.8% of the weekly standard rate = $41.40 per week). 

Tool Allowance 

The tool allowance has also been revised to make it clear that employees are entitled to the allowance to cover maintaining their existing tools, not just purchasing new tools. Employees are also now entitled to be reimbursed for steel capped boots they are required to wear. 

Fares and travel pattern allowance

A significant change relates to the fares and travel pattern allowance employees receive. This allowance is normally $17.43 per day. Employees will now only receive this allowance, where they: 

  • start and finish their work day on a construction site; or
  • are required to perform prefabricated work in an open yard and are then required to erect or fix the pre-fabricated materials on-site. 

So employees who start and finish at a depot and are transported in paid time to and from the construction site are generally not eligible for the allowance. 

Additionally, Employees will no longer receive the travel allowance if they are offered free transport to the site or provided with a vehicle. Employees will also no longer get the allowance on days they do not work, like on an RDO or leave day. 

Living away from home allowance 

The Award amendments clarify an employer’s obligations in relation to this allowance. There are now clear options as to how entitlements are to be provided and how meal expenses can be reimbursed as follows: 

(i) pay the employee the greater of $72.02 per day or an amount which fully reimburses the employee for all reasonable accommodation and meal expenses incurred; or 

(ii) provide the worker with accommodation and three adequate meals each day; or

(iii) provide the worker with accommodation and reimburse the employee for all reasonable meal expenses; or 

(iv) where employees are required to live in camp, provide all board and accommodation free of charge. 

Rostered Days Off (RDOs)

The Award now provides greater flexibility in relation to RDOs. This includes allowing for the banking of RDOs and allowing an agreement to be reached between the employee and employer as to how and when an RDO is taken. 

Capping of daily ordinary hours 

Ordinary hours of work for part-time and casual employees have been capped at 8 hours per day. This means that any hours worked in excess of 8 hours per day by a part-time or casual employee are overtime and payable at overtime rates. 

It should be noted that, for full-time employees, the award prescribes that, unless the employer and a majority of employees agree otherwise, an RDO arrangement applies whereby 19 days of 8 hours and 1 RDO make up each 20 days (4 weeks) worked. 

If the employer and employees agree on a variation to that arrangement, no more than 8 ordinary hours can be worked in one day. 

Under any hours of work arrangement, full-time employees may work no more than 38 ordinary hours can be worked in one week (or an average of 38 hours over 4 weeks). 

Time off in lieu of overtime 

The Award now allows an employer and employee to agree to take time off instead of being paid for overtime that has been worked. This ability is limited to weekly full-time and part-time employees and time off is calculated on the basis of the hours of overtime actually worked. Time off must be taken within 6 months. There are a number of other conditions attached to time off in lieu arrangements that must be complied with. 

Payment of annual leave loading 

The Award now simplifies how annual leave loading is to be calculated – on the employee’s ordinary rate of pay rather than the complicated arrangement that existed previously.

Employers should familiarise themselves with the proposed changes to ensure that from the start of the first full pay period on or after 1 July 2020, their employees are being paid correctly and in line with any amendments to the Building Award. 

Please note that the modern award review process has not been completed for the Building and Construction General On-site Award 2010 but that should occur in the next few months – when it has, the “2010” will be replaced with “2020.   

Additional measures during the COVID-19 pandemic 

There is a new Schedule X  in the Award setting out temporary flexibilities with leave during the COVID-19 pandemic – these apply for the period from 11 August 2020 to 30 September 2020. 

These provide that: 

  • employees can take up to 2 weeks if the employee is required by government or medical authorities or on the advice of a medical practitioner to self-isolate and is consequently prevented from working, or is otherwise prevented from working by measures taken by government or medical authorities in response to the COVID-19 pandemic.
  • instead of an employee taking paid annual leave on full pay, the employee and their employer may agree to the employee taking twice as much leave on half pay.
  • A number of conditions are attached to these arrangements. 

Given the current business and civil restrictions applying in Victoria, it could be expected that there will be an extension to the period of operation of these arrangements.

Need some help?

Just give us a call on 0438 533 311 or send us an enquiry through the contact form below and we will be happy to have a conversation about your needs and how we can help. 

CONTACT US

Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094

enquiries@ridgelinehr.com.au

6 Ellesmere Ave, Croydon Victoria 3136

Peter Maguire : 0438 533 311

Monday - Friday 9am - 5pm

TELL US WHAT YOU NEED HELP WITH

High Court delivers sanity in ruling on personal/carer’s leave

High Court delivers sanity in ruling on personal/carer’s leave

Latest News & Events

 

High Court delivers sanity in ruling on personal/carer’s leave

In fantastic news for all businesses, the High Court of Australia has sensibly overturned a Federal Court decision which quite unfairly awarded part-time employees the same number of days of paid personal/carer’s leave as full-time employees, regardless of the number of hours that the part-timer actually worked.

For example, a part-time employee working 2 days per week would also have 10 days personal/carer’s leave per annum – effectively 5 weeks paid leave based on their ordinary hours of work.

That was clearly a ridiculous decision which clearly disregarded the obvious intention of the relevant provisions of the Fair Work Act and decades of custom and practice.

What is also great is that, in its decision, the High Court has set some clear and sensible principles as to how to determine how much personal/carer’s leave employees get:

  • The 10 day entitlement in the National Employment Standards means two standard five day working weeks
  • 1 day is a notional day that represents 1/10th of an employee’s ordinary hours in a fortnight or 1/26th of an employee’s ordinary hours per year

What do you need to do?

You just need to ensure that your administration of personal/carer’s leave and the entitlements that your people receive align with the principles set out above. 

The Fair Work Ombudsman has updated their advice accordingly and this can be accessed here.

If you have any queries, please feel free to contact us at enquiries@ridgelinehr.com.au.

 

CONTACT US

Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094

enquiries@ridgelinehr.com.au

6 Ellesmere Ave, Croydon Victoria 3136

Peter Maguire : 0438 533 311

Monday - Friday 9am - 5pm

TELL US WHAT YOU NEED HELP WITH

1.75% Wage Increase for Modern Awards

1.75% Wage Increase for Modern Awards

On Friday 19 June 2020, the Fair Work Commission announced its decision in the 2019-2020 Annual Wage Review.

That decision was to increase the National Minimum Wage and modern award minimum rates of pay by 1.75% but, unusually this year, with three different operative dates for different industries based on their view on the impact of COVID-19 on different industry sectors.

The National Minimum Wage increases from

The effective dates are:

  • 1 July 2020: National Minimum Wage & Award Group 1 (mainly health and community services, children’s services and aged care, emergency services, cleaning services, non-tertiary education and public service sectors)
  • 1 November 2020: Award Group 2 (most awards including common ones like clerical, building and trades, manufacturing, graphic arts, gardening, farming, transport and distribution, professional services, mining and quarrying, tertiary education)
  • 1 February 2021: Award Group 3: (mainly retail, hospitality, food services, events, recreation and entertainment, personal services such as fitness, hair dressing and dry cleaning)

Here is a detailed listing of each Award group: Modern Award Groups

The new rates are payable from the commencement of the first full pay period occurring on or after the relevant operative date.

For employers, the different scenarios that can apply are:

  1. If you have employees who are covered by a modern award and you otherwise apply all of the terms and conditions of the award, you must ensure that employees are paid at least the award rate for their classification as adjusted for this decision.
  2. If you have employees who are award free and not covered by an enterprise agreement, you must ensure that they are paid at least the National Minimum Wage as adjusted for this decision.
  3. If you have employees who are covered by an award and you pay them on an annualized wage basis or on a salary or all purpose rate which sets off certain monetary employment conditions such as annual leave loading, overtime and shift loadings, penalty payments and allowances, you need to recalculate the rate of pay to ensure that the employee remains better off overall against award entitlements and comply with any award provisions that might apply to annualized wage arrangement.
  4. If you have employees who are covered by an enterprise agreement which provides for annual adjustment of wages in line with Annual wage Review decisions of the Fair Work Commission, you need to adjust wages by 1.75% from the operative date for the relevant award.
  5. If you have employees who are covered by an enterprise agreement but the agreement does not provide for annual adjustment as per 4., you need to ensure that wages paid are at least equal to those applying to the underpinning modern awards or the National Minimum Wage as applicable from the relevant operative date.
  6. You need also to have regard to any provisions in employment contracts which might provide an obligation to pass on any increases separate from or additional to any of the above scenarios.

Please also note that, the ongoing modern award review process has resulted in a number of changes to modern awards (including, in some cases, changes to the calculation of minimum wages and also changes to the calculation of annualized wages) since the last Annual Wage Review.

This likely also means that you will need to review your employment contracts, something that we recommend that you do at least once a year in any case.

The Fair Work Ombudsman has a Pay Calculator Tool on its website and also publishes Pay Guides for each award – these provide detailed advice on ordinary time and overtime and penalty rates for each classification in the relevant award. You can access these resources at https://www.fairwork.gov.au/pay/minimum-wages/pay-guides.

If you need assistance in understanding and applying the effects of this decision in your business, we are happy to assist. We offer a free initial phone consultation if this is of interest to you.

 

Is the new Wage Theft law a worry?

Is the new Wage Theft law a worry?

The Victorian Parliament recently passed the Wage Theft Bill 2020 which is expected to take effect by no later than 1 July 2021 (ie sometime in the next 12 months).

Should you be worried about that?

The odds are that, if you are reading our blogs, you are compliant or you want to ensure that you are compliant with your wage obligations as an employer.

If that is the case, don’t worry about the Wage Theft legislation – celebrate it! Yes, that’s right – PARTY!!!

We all know that there are unscrupulous businesses out there who deliberately rip workers off – they are the ones that this legislation is targeted at and they deserve it.

Don’t forget that they are also unfairly gaining a commercial advantage over the business owners who are doing the right thing……..like you!

We know that there have been quite a few celebrated cases of wage underpayments involving celebrities and household name corporates.

Some of those probably did know that they were not compliant but thought they wouldn’t be caught.

Some probably got adventurous legal advice that sounded good but was really ill advised.

Others may well have had their own HR staff but Fair Work/workplace relations is a very complex field requiring specialist knowledge which is not as common as you might think among HR Practitioners.

Many of those exposed businesses have learned their lessons – the hard way – and many remain under the watchful eye of the Fair Work Ombudsman via undertakings and reporting requirements. So even they are unlikely to be really troubled by this new Wage Theft legislation.

So let’s just be clear on what do you need to do to be doing the right thing (if you are not already doing it) and not have to worry about this legislation:

  1. Ensure that you understand and meet your obligations to your employees under legislation, regulations and modern awards
  2. Have clear and compliant employment agreements that set out clearly what the wages and employment conditions are and which reference any relevant modern award and/or enterprise agreement
  3. Maintain all required employment records accurately and up to date and
  4. Have access to competent professional advice on Fair Work compliance and other workplace relations/HRM matters

You tick those 4 boxes and you are not likely to have any worries about compliance. We can help you with that.

Now, as for the bad guys, this is what the Wage Theft legislation means for them.

The offences (in general terms) are:

  1. Dishonestly withholding at least part of an employee entitlement; or
  2. Falsifying an employee entitlement record to dishonestly obtain or cover up a financial advantage; or
  3. Failing to keep an employee entitlement record to dishonestly obtain or cover up a financial advantage;

Offences can attract penalties of up to $991,320 for bodies corporate and 10 years’ jail for individuals.

A Victorian Wage Inspectorate with wide ranging inspection and enforcement powers is to be established with its own Commissioner.

If you haven’t the benefit of professional advice on your workplace relations compliance situation or you just want to make sure, you might want to take advantage of our Lockdown Special Offer on a Fair Work Compliance Assessment. Check it out.

 

You can’t outsource TRUST!

You can’t outsource TRUST!

The recent report on the National Workplace Wellbeing Survey 2020 by The Wellbeing Lab in conjunction with the Australian Human Resources Institute asked a couple of questions that we want to explore. The first was : “Do your workers feel psychologically safe enough to talk honestly with each other about their wellbeing?” So what does “psychologically safe” mean? According to Wikipedia: “Psychological safety is being able to show and employ one’s self without fear of negative consequences of self-image, status or career (Kahn 1990, p. 708).[1] It is “a condition in which you feel (1) included, (2) safe to learn, (3) safe to contribute, and (4) safe to challenge the status quo- all without fear of being embarrassed, marginalized or punished in some way.”(Timothy R Clark, 2019)[2] It can also be defined as a shared belief that the team is safe for interpersonal risk taking.[3] In psychologically safe teams, team members feel accepted and respected. It is also the most studied enabling condition in group dynamics and team learning research.” Given that definition, it should come as no surprise that, according to the survey results:

  • People who are prepared to talk about their wellbeing challenges first go to someone they trust who is most commonly a friend or family member outside work (ie the people they have the closest relationships with).
  • For those who would raise it with someone at work, it is most commonly a team member or their manager (ie the people they have the closest relationships with at work).
  • Conversely, outsourced support (EAP Programs) and institutional support (HR Departments) are the least likely places that people will go for wellbeing support (each of those was reported as the place people would go to in less than 3.5%  of respondents).

This just reinforces the fact that a key ingredient of psychological safety is trust and you can’t outsource that. When you think of it in those terms, it is easy to understand why the results are what they are. People are most likely to speak with people whom they know and trust. Perhaps that is also why so few people would go to HR or EAP – because they don’t know them well enough to trust them? That leads us to their second question: Do your workers feel psychologically safe enough to talk honestly with each other about their wellbeing?” The challenge for any organisation is to do two things:

  1. Enable a psychologically safe work culture and environment where people will open up about any challenges that they are having with confidence and feeling supported and
  2. Equip and empower line managers and people generally to provide caring and practical wellbeing support to individuals, with teams and across the organisation as a whole.

For larger organisations, the repositioning of HR Departments to be focused on building strong, trusted and valued relationships with people across the organisation should be a priority. For smaller businesses, look for an external HR consultant who brings that wellbeing capability and the trust factor along with the rest of the HR toolkit that you might need for process and compliance. All of this is consistent with another piece of advice from the report: “Caring for workers’ wellbeing requires diverse and sustained support at the levels of ‘me’ (workers), ‘we’ (teams) and ‘us’ (whole workplace) to create a thriving workplace environment.” Of course, all organisations need external specialist supports and networks that can assist in helping employees with their support needs in relation to wellbeing. Having access to professional and community supports with medical and allied services, counselling and psychological support services at a practical level for the organisation and its people is important. Our Better Workplace Projects and our EngageMentality Coaching Programs both have employee voice and trust/integrity as central pillars of the employment relationship. If you would like to explore how we can assist in building a psychologically safe culture based on trust and wellbeing, please do not hesitate to contact us. [contact-form][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Phone’ type=’name’ required=’1’/][contact-field label=’Your enquiry’ type=’textarea’ required=’1’/][/contact-form] [/av_textblock]

The sky is NOT falling on casual employment

The sky is NOT falling on casual employment

The recent decision of the Full Bench of the Federal Court in Workpac v Rossato has seemingly sent shockwaves through industry with many claiming that it is the end of casual employment as we know it. Back in January 2019, we wrote a blog on the subject of managing casual employment in light of a previous decision of the Federal Court (Workpac V Skene) and legislation by the federal government in response to that decision plus the insertion of casual conversion provisions in many modern awards – you can access that blog here. This latest decision adds one new dimension in that it steps around the government’s legislative response on a technicality – the Full Court found that providing a casual loading in lieu of paid leave entitlements did not satisfy a claim for the actual paid leave entitlements (ie in both payment and time off). However, the key issue at the centre of all of this is “what is a casual employee?” In both Workpac cases, the employees were engaged on fixed back to back rosters which had been set up as much as twelve months in advance for total periods of continuous employment of two and a half years or more. The Courts found in each case that those are not the characteristics of casual employment and that you don’t make someone casual just by calling them casual. It is difficult to reasonably argue with that view. We also need to have regard to the particular circumstances of those cases where people had worked on labour hire for the same host on a fixed fly in fly out roster for a couple of years. These decisions have significant ramifications for labour hire firms and their clients but not so much for those employers with true casuals. What it does mean is that employers have to categorise people according to the true nature of the employment relationship. If it is continuing employment with a forward commitment and a regular and systematic pattern of hours of work, it is, according to the court decision, not casual employment. So, what do you do if you have employees who are nominally engaged as casuals but have worked for you for some time and will continue to do so on a regular and systematic pattern of hours of work? #1 Action Ignore all of those legal and other advisors who are telling you to disrupt your people’s lives by regularly varying their hours to avoid a regular and systematic pattern of hours of work that might create an exposure. That is just a sure way to lose good people and not a smart business decision. Instead, consider what the real employment relationship is with each of your people and recognise that contractually – if they are not really a casual, offer them conversion to full-time or part-time. You may well find that some will prefer to keep the casual loading rather than convert in any case. #2 Action Ensure that you understand and apply the casual conversion provisions in the relevant award or enterprise agreement. We encourage you to do that proactively by advising casual employees in writing of their options in relation to conversion to full-time or part-time or remaining as a casual, telling them what each of those options mean for them and giving them the choice. They don’t become eligible until they have been with you for 6 or 12 months depending on the award. If the employee isn’t covered by an instrument that has a casual conversion provision, just apply the same principles so that everyone is treated equally and you can demonstrate that you are ensuring fairness in your employment arrangements. #3 Action Review your casual employment contracts and, if you don’t have any, get some. They should deal properly with the following items:

  • The amount of the casual loading component in the rate of pay should be clearly and separately identified from the ordinary time rate on which it is based.
  • The benefits (eg paid leave entitlements, paid public holidays, notice of termination and redundancy) that are compensated for and set off by the casual loading should be detailed. If the Award is not explicit about that, ensure that the contract is.
  • You might also need to protect against double dipping by having what is called a “claw back clause” so that, in the event that a casual employee should be deemed not to be a casual and to therefore have a valid claim to any of those benefits, that cost can be set off against casual loading already paid during the entitlement period.
  • There should be a provision regarding casual conversion to full-time or part-time employment as reflected in the relevant award and requiring an employee election at the appropriate time as requested by the employer.
  • There shouldn’t be any provision which would be inconsistent with the concept of casual employment eg providing a notice period for termination which is longer than a day.

If you take people on seasonally and normally employ them as casuals, that is OK as long as you comply with the casual conversion provisions in modern awards. Equally, there is nothing to stop you from employing them on a full-time or part-time basis as temporary employees who get paid leave entitlements, paid public holidays and notice of termination rather than a 25% casual loading. If you need any assistance in addressing the issue in your business, please feel free to contact us for assistance below. [contact-form][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Phone ‘ type=’name’ required=’1’/][contact-field label=’Your question’ type=’textarea’ required=’1’/][/contact-form] [/av_textblock]