FWC awards 3% wage increase

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Today, the Fair Work Commission handed down the Annual Wage Review 2018-2019 decision.

That is to increase the national minimum wage and award wages by 3% effective from 1 July 2019.

The new National Minimum Wage will be $740.80 per week, or $19.49 per hour.

The increase is fully absorbable against overaward payments ie if you are paying employees base rates of more than 3% above award and you are also paying other entitlements under the relevant award and National Employment Standards, you can fully absorb the increase.

If you have an enterprise agreement or contract of employment that stipulates that wages will be adjusted in line with annual wage review or variations in award rates, you will need to pass these increases on.

If you are paying award-covered employees on an annualised salary basis or on an overaward payment that is intended to set off any monetary award provisions, you should review the arrangement to ensure that it remains above award once the new rates take effect.

Anyone requiring assistance in dealing with the issue is welcome to contact us for support.

Time to review that contract?

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Over the past couple of years, there have been lots of changes in employment conditions and related legislation, regulations and modern awards.

Do you have a regular review of your employment documentation to ensure that your employment contracts and HRM policies and procedures are consistent with current workplace relations requirements?

Can you demonstrate as an employer that you are responsibly exercising your duty to provide your people with compliant wages and conditions of employment?

Here are just some of the things that have come in over the past year and you need to cover off:

  • New leave to deal with family and domestic violence provisions in modern awards and National Employment Standards
  • New casual conversion provisions in modern awards
  • Variations to flexible working arrangement obligations in modern awards
  • Variations to penalty rates for evening and weekend work in modern awards in some industries
  • Variations to termination of employment provisions in many modern awards
  • A new Victorian Long Service Leave Act 2018 in November 2018 (and a new Long service Leave Benefits Portability Act 2018 taking effect for some industries in 2019)
  • Federal regulation on employment contract content required in casual employment to avoid double dipping on casual loadings and leave entitlements
  • Every year, there is an adjustment to the national minimum wage, award rates and various other benchmarks and a new Fair Work Information Statement is published.

In this area, we are “Helping PEOPLE in BUSINESS” by keeping abreast of these changes and reviewing employment contracts and HRM policies and procedures to address them.

If you need a hand, please feel free to give us a call on 0438 533 311 or email enquiries@ridgelinehr.com.au

Fresh thinking for old challenges

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We recently launched our new Better Workplace Projects and we are getting terrific feedback on the impact like:

“The session was excellent – great buy in from everyone and really positive feedback afterwards.”

“The team and I loved the session and felt very positive and inspired”.

Why are they having this impact?

It’s fresh thinking for old challenges!

We look at what drives people engagement and high performance through a positive psychology lens where the focus is on how we use our strengths to improve rather than just how we fix the problems.

We also reinvent the performance management process to provide a positive and continuous development experience that gets people engaged, aligned and accountable.

In our interactive Better Workplace Project Introductory Workshops, we introduce you to the best practice models that underpin the methodology and have an open conversation with you about how these might be used to address the people and culture challenges and opportunities and deliver high performance in your organisation.

For a small investment of $800 plus GST and a couple of hours of your time, we can help you to get started or step up on that journey to a Better Workplace.

Our Better Workplace Project Introductory Workshops are delivered by our Practice Leader, Peter Maguire, who has consulted to hundreds of organisations on people and culture strategy and practice. Peter has an extraordinary breadth of experience with clients in public, private and NFP sectors and in a wide range of industry and people culture settings. He is also a former Investors in People Assessor and has presented internationally on HRM best practices.

Getting the balance right with casual employment

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There has been a lot of activity around casual employment over the past year or so – in the courts, in the Fair Work Commission and in regulation by the Federal Government.

What we aim to do in this article is to dispel some of the myths that create confusion and concern and to offer advice on practical tips for “getting the balance right with casual employment”. In doing that, we do have regard to the recent developments in:

  • The Workpac v Skene case wherein the Court awarded annual leave payments to a nominally casual employee
  • Casual conversion provisions introduced to modern awards
  • Regulation by the federal government to limit the ability for a nominally casual employee to be awarded annual leave payments

Is this really a casual employee?

The classic casual is someone who is required to work on an irregular or limited tenure basis.

It might be as a shop assistant in the lead up to Christmas or in hospitality or security at events like the Australian Open or the Melbourne Grand Prix ie the job only exists for a limited time.

It might be someone who is on a relief roster and is called in as needed or someone whose work hours vary in line with their availability while they are still at school or university.

Or it could be someone who is called upon as projects come online and they come in and perform certain tasks on the project and then stop being employed when they finish the tasks.

All of those are true casuals.

If the role is really a continuing one with reasonably consistent and predictable hours of work and it continues that way month after month, that creates an expectation for the employee that they will have continuing employment. So it isn’t really casual, is it?

That is essentially what the judgement in Workpac v Skene said.  The employee concerned was on back to back contracts and fly in fly out rosters with pre booked accommodation for two and a half years and had no indication that that pattern would not continue indefinitely.

The pros and cons of hiring continuing workers as casuals

The first point here is that, in a competitive labour market, limiting engagement options to casual distinctly limits your ability to find the best staff for your business. People are generally unlikely to leave secure employment to take on a casual job.

There are those who believe that engaging workers as casuals is safer and cheaper when, in reality:

  • the 25% casual loading applying under modern awards is a lot more expensive than the paid leave entitlements a full-time or part-time employee gets
  • you still have to pay the superannuation guarantee
  • casuals accrue long service leave and, where they work in an industry with a portable long service leave fund, are entitled to employer contributions into that fund just as full-time and part-time employees are
  • casuals have the same access to the unfair dismissal, adverse action, industrial dispute, bullying and discrimination and WorkSafe and WorkCover jurisdictions as continuing employees do

Where it is really (or potentially) a continuing employment arrangement, one advantage of engaging someone as casual is that you don’t technically have to provide notice of termination because that is notionally compensated for by the casual loading.

Another might be that, if there is some fluctuation in hours of work, that can be more easily managed if the employee is engaged as a casual.

The question is, when you look at all of the elements set out above, what’s the best option having regard to your overall business needs?

How you hire a casual

One of the main reasons that the judgement in the Workpac v Skene case was to award annual leave entitlements was because the employment contract did not specify the amount of the casual loading ie it didn’t specify how the entitlement to annual leave that a continuing employee would have was set off by the casual loading.

In response, the Federal Government’s regulatory change provides some relief from so called “double dipping” of casual loading and annual leave payments but stipulates that there must be an employment contract that includes that specification.

There is  an obligation to provide a Fair Work Information Statement on first engagement as a casual…..and there is the obligation to provide a casual with a copy of the Casual Conversion clause in any award that was varied last year to provide that right.

So ensure that you do all of this in writing before the employee starts and get professional advice if you aren’t sure on what to include or writing isn’t your strength.

Dealing with casual conversion

Last year, a casual conversion clause was included in most modern awards which did not already have one.

This provides the right for an employee who is engaged regularly and systematically as a casual for 12 months to request conversion to full-time or part-time employment.

The employer has to provide casuals with a copy of the casual conversion clause and, if a request is made, has to respond within 21 days in writing.

If the employer refuses the request which can only be done in quite limited circumstances, the employee has the option of taking the matter to the Fair Work Commission. for conciliation and arbitration. 

Our advice is to be proactive in satisfying the obligation to offer casual conversion by:

  1. Providing any new casual employee with a copy of the casual conversion clause from the relevant award on engagement or in the onboarding process.
  2. When it becomes clear that the employee is going to continue in employment on a regular and systematic basis for a period of at least 12 months, remind them in writing of the opportunity to convert to full-time or part-time, spelling out the options and what they each mean for the employee (eg if I stay casual, this is what I get, and, if I convert to full-time, this is what I get).
  3. Require the employee to nominate in writing which of the options they want to take up.
  4. Confirm in writing the agreed arrangement going forward and implement it in practice.

One other option you could consider is to tell casuals when you engage them that, if they get through their probation period or at some point up to reaching twelve months’ employment, they will be offered full-time or part-time employment as applicable. You would do this if you wanted to secure employees who had proven themselves to be productive and a good fit during their initial period of engagement. 

Note: there are a number of awards which already had casual conversion clauses requiring the employer to offer conversion after six months regular and systematic employment. These include building and construction, manufacturing, quarrying and trades industries among others. Check the clauses in the modern awards applying in your business to be sure.

Dealing with family and domestic violence

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Over the past few months, there has been a succession of changes in provisions of modern awards and the Fair Work Act relative to family and domestic violence. In this article, our aim is to provide you with a sense of how they come together and what that means in terms of your legal obligations and how to manage those.

Early this year, the Australian Institute of Health and Welfare (AIHW) released a report “Family, domestic and sexual violence in Australia 2018” which told us that:

 

Family and domestic violence is the most significant social and welfare issue that we have in Australia and we can all do something about that.

Introduction of “Leave to deal with family and domestic violence” in modern awards 

The significance of this issue is such that the Fair Work Commission deemed it necessary to insert “Leave to deal with family and domestic violence” provisions in all modern awards. In essence, this provides an entitlement of up to 5 days of unpaid leave per annum for employees regardless of their employment status ie whether they are full-time, part-time or casual, they are entitled to the full 5 days each year.

An employee may take unpaid leave to deal with family and domestic violence if the employee:

(a) is experiencing family and domestic violence; and

(b) needs to do something to deal with the impact of the family and domestic violence and it is impractical for the employee to do that thing outside their ordinary hours of work.

That leave entitlement for award-covered employees came into effect on 1 August 2018.

Extension of entitlement to non-award employees

On 12 December 2018, the Fair Work Amendment (Family and Domestic Violence Leave) Act 2018 took effect and essentially extended the modern award entitlement effective from that date.

So effectively that means that all employees now have access to this entitlement as follows:

 Entitlement to unpaid leave

An employee is entitled to 5 days’ unpaid leave to deal with family and domestic violence, as follows:

(a) the leave is available in full at the start of each 12 month period of the employee’s employment; and

(b) the leave does not accumulate from year to year; and

(c) is available in full to part-time and casual employees.

So our take on that in implementation is:
  1. For existing award-covered employees and those who are subject to an agreement that incorporates the award, the entitlement takes effect from 1 August 2018
  2. For award-covered employees and those who are subject to an agreement that incorporates the award and who commenced employment after 1 August 2018, the entitlement takes effect from their date of commencement.
  3. For existing non-award employees and those who are subject to an enterprise agreement that doesn’t incorporate an award, the entitlement takes effect from 1 December 2018.
  4. For  non-award employees and those who are subject to an enterprise agreement that doesn’t incorporate an award and who commenced employment after 1 December 2018, the entitlement takes effect from  their date of commencement.
  5. All employee have the entitlement to 5 days per annum regardless of their employment status ie whether full-time, part-time or casual.

Interaction with new rules on Flexible Working Arrangements

We recently reported on these new rules.

New rules on flexible working arrangements are here

Two of the categories of workers who have entitlements under these rules are:

  • employees experiencing family or domestic violence; and
  • employees caring for family members experiencing family or domestic violence.

Accordingly, we can expect that eligible employees like these might well seek both leave to deal with family and domestic violence and flexible working arrangements. Alternatively, because the leave is unpaid, people might be more likely to seek flexibility in working arrangements that allow them to maintain their income while varying their hours of work to meet their personal or family needs.

If these matters cannot be resolved at workplace level, they may well end up in the Fair Work Commission via the disputes resolution clause in a modern award or enterprise agreement.

Additionally, while these rules on flexible working arrangements technically apply only to award covered employees, it should be expected that they would be regarded as a procedural and fairness benchmark for dealing with requests from non-award employees.

Care should be taken to ensure that any workplace policies on any of the above are reviewed to reflect current minimum standards and benchmarks.

We will publish an article soon on what employers can do to genuinely and positively influence the incidence and impact of family and domestic violence and why you should be doing that. Stay tuned!

Oddities in our workplace relations system – #2 classification structures

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Do you find that the classification structures in the modern awards  that apply to your business don’t make sense or don’t fit your business operations very well or, in some cases, are just not easy to understand?

In many cases, you would be absolutely right to think so because they are, in the main, flawed in design.

Back in the late 1980’s and early 1990’s, unions and employer organisations went through prolonged negotiations on what was then called development of skills-based classification structures.

In reality, in most industries, it was nothing of the sort – it was an industrial relations exercise which really amounted to little more than a negotiation of wage rates for different jobs and each industry did it differently.

Some awards just have AQF qualification levels as the basis for classifying people with little or no detail on job functions to be performed at each level. That is not very helpful especially when most of the workers in a business don’t have any of those qualifications but perform distinctly different jobs with greater or lesser skill requirements.

Others have classifications increasing on the basis of the size of the plant being operated without any reference to the complexity of or skills involved in performance of particular tasks.

Few modern awards consider the benefits and value of multi-skilling.

None take account of some fairly significant developments that have occurred since the structures were first established – like the world wide web, social media and GPS technologies. Some still refer to “typing” as distinct from “word processing” as a competency.

In 2010, we saw the introduction of so called “modern awards” which consolidated thousands of awards down to 122 modern awards but did little to improve the classification structures and clearly failed to recognise the technological changes that have affected the way we work.

Currently, we are nearing the end of the fifth year of our first four yearly review of modern awards and classification structures appear not to be even on the agenda.

What is clear is that we don’t have “modern awards” – and we are unlikely to in the foreseeable future.

If you want a classification structure that works for your business, you can have one provided you are paying sufficiently above award and your people are better off overall than they would be if you strictly applied award conditions.

If you would like to explore how to do that, give us a call on 0438 533 311 or email enquiries@ridgelinehr.com.au.

 

New rules on flexible working arrangements are here

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A full bench of the Fair Work Commission has ordered the variation of all modern awards to include a “Requests for flexible working arrangements” clause with effect from 1 December 2018.

These requests have to date been regulated under National Employment Standards which essentially provide the ability for eligible employees with 12 months’ continuous service to apply to vary their working arrangements to meet various carer responsibilities. This includes casual employees who have been engaged regularly and systematically for 12 months or more and have a reasonable expectation of continuing employment.

Eligible employees are defined in s 65(1A) of the Fair Work Act 2009 as:

  • employees who are parents and carers of children;
  • employees who are carers;
  • employees with disabilities;
  • employees aged 55 or older;
  • employees experiencing family or domestic violence; and
  • employees caring for family members experiencing family or domestic violence.

Employers may only refuse such requests on reasonable business grounds which include the likes of:

  • the new working arrangements requested by the employee would be too costly for the employer
  • there is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested by the employee
  • it would be impractical to change the working arrangements of other employees, or recruit new
    employees, to accommodate the new working arrangements requested by the employee
  • the new working arrangements requested by the employee would be likely to result in significant loss of efficiency or productivity
  • the new working arrangements requested by the employee would be likely to have a significant negative impact on customer service.

Full details of the existing NES provisions can be accessed in this fact sheet from the Fair Work Onbudsman: Requests-for-flexible-working-arrangements

The changes being implemented under the new decision by the FWC are essentially aimed at fleshing out the obligations of employers in dealing with requests for flexible working arrangement and providing an avenue for resolving disputes under the dispute resolution provisions in all modern awards.

Here is the model clause as it now appears in the Clerks – Private Sector Award 2010:

28A. Requests for flexible working arrangements

[28A inserted by PR701393 ppc 01Dec18]

28A.1 Employee may request change in working arrangements

Clause 28A applies where an employee has made a request for a change in working arrangements under s.65 of the Act.

Note 1: Section 65 of the Act provides for certain employees to request a change in their working arrangements because of their circumstances, as set out in s.65(1A).

Note 2: An employer may only refuse a s.65 request for a change in working arrangements on ‘reasonable business grounds’ (see s.65(5) and (5A)).

Note 3: Clause 28A is an addition to s.65.

28A.2 Responding to the request

Before responding to a request made under s.65, the employer must discuss the request with the employee and genuinely try to reach agreement on a change in working arrangements that will reasonably accommodate the employee’s circumstances having regard to:

(a) the needs of the employee arising from their circumstances;

(b) the consequences for the employee if changes in working arrangements are not made; and

(c) any reasonable business grounds for refusing the request.

Note 1: The employer must give the employee a written response to an employee’s s.65 request within 21 days, stating whether the employer grants or refuses the request (s.65(4)).

Note 2: If the employer refuses the request, the written response must include details of the reasons for the refusal (s.65(6)).

28A.3 What the written response must include if the employer refuses the request

Clause 28A.3 applies if the employer refuses the request and has not reached an agreement with the employee under clause 28A.2.

(a) The written response under s.65(4) must include details of the reasons for the refusal, including the business ground or grounds for the refusal and how the ground or grounds apply.

(b) If the employer and employee could not agree on a change in working arrangements under clause 28A.2, the written response under s.65(4) must:

(i) state whether or not there are any changes in working arrangements that the employer can offer the employee so as to better accommodate the employee’s circumstances; and

(ii) if the employer can offer the employee such changes in working arrangements, set out those changes in working arrangements.

28A.4 What the written response must include if a different change in working arrangements is agreed

If the employer and the employee reached an agreement under clause 28A.2 on a change in working arrangements that differs from that initially requested by the employee, the employer must provide the employee with a written response to their request setting out the agreed change(s) in working arrangements.

28A.5 Dispute resolution

Disputes about whether the employer has discussed the request with the employee and responded to the request in the way required by clause 28A, can be dealt with under clause 9—Dispute resolution.

If you need assistance in dealing with a request for flexible working arrangements or in setting up processes for dealing with them, contact us at enquiries@ridgelinehr.com.au or on 0438 533 311.

 

$1 million in wage underpayments in horticulture

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The Fair Work Ombudsman has just released a report into investigations that it has been conducting into workplace relations compliance in the “Harvest Trail” or horticulture industry. The particulars are:

  • 836 investigations, involving 444 growers and 194 labour hire contractors across all states in Australia and the Northern Territory.
  • $1,022,698 in underpaid wages and entitlements was recovered for 2,503 employees
  • More than 50% of the businesses investigated were found to have breached workplace laws
  • 150 formal cautions to employers were issued along with 132 infringement notices and 13 compliance notices and 7 Enforceable Undertakings were entered into.
  • 8 employers have been prosecuted for serious alleged breaches with four actions involving labour hire contractors. Of these, 6 matters have now been finalised resulting in over $500,000 in penalties.
  • 70% of employers employed people working in  Australia on visas.

One of the questions that the Fair Work Ombudsman is now considering is that of the effect of consumer buying behaviour on compliance levels in the industry. Further research and consultation with stakeholders is planned on this subject.

This is another area where the procurement behaviour and practices of major retailers of fresh produce must come under review if such initiatives are to have any meaningful impact on producer compliance and fair payment of horticultural workers.

FWC increases casual penalty rates in retail award

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The Fair Work Commission has varied the penalty rates payable to casual employees in the retail industry for work performed on Saturdays and after 6.00 pm on weekdays.

The variations are being introduced in phases with the first increases taking effect from 1 November 2018.

The increases for weekdays after 6.00 pm are:

(i) From 1 November 2018 to 30 September 2019

A penalty payment of an additional 30% loading will apply for ordinary hours worked by a casual employee after 6.00 pm (inclusive of the casual loading).

(ii) From 1 October 2019 to 29 February 2020

A penalty payment of an additional 35% loading will apply for ordinary hours worked by a casual employee after 6.00 pm (inclusive of the casual loading).

(iii) From 1 March 2020 to 30 September 2020

A penalty payment of an additional 40% loading will apply for ordinary hours worked by a casual employee after 6.00 pm (inclusive of the casual loading).

(iv) From 1 October 2020 to 28 February 2021

A penalty payment of an additional 45% loading will apply for ordinary hours worked by a casual employee after 6.00 pm (inclusive of the casual loading).

(v) From 1 March 2021

A penalty payment of an additional 50% loading will apply for ordinary hours worked by a casual employee after 6.00 pm (inclusive of the casual loading).

The increases for Saturdays are:

(i) From 1 November 2018 to 30 September 2019

A penalty payment of an additional 40% loading will apply for ordinary hours worked by a casual employee on a Saturday (inclusive of the casual loading).

(ii) From 1 October 2019 to 29 February 2020

A penalty payment of an additional 45% loading will apply for ordinary hours worked by a casual employee on a Saturday (inclusive of the casual loading).

(iii) From 1 March 2020

A penalty payment of an additional 50% loading will apply for ordinary hours worked by a casual employee on a Saturday (inclusive of the casual loading).

For further information, go to the General Retail Industry Award 2010 and see Clause 29.4 Penalty Payments.

Or, if you need a hand, give us a call on 0438 533 311.

New termination of employment provisions in awards

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The Fair Work Commission has varied the majority of modern awards (89 of them) in respect of their termination of employment provisions.

Under these awards, from 1 November 2018:

  • If an employee who is at least 18 years old does not give the period of notice required, then the employer may deduct from wages due to the employee under this award an amount that is no more than one week’s wages for the employee. By extension, that means that no deduction can be made for an employee who is less than 18 years of age.
  • The employer must pay an employee their final entitlements no later than 7 days after the day on which the employee’s employment terminates.

Please note that many other awards do not have these provisions.

A number of awards provide that “If an employee fails to give the required notice the employer may withhold from any monies due to the employee on termination under this award or the NES, an amount not exceeding the amount the employee would have been paid under this award in respect of the period of notice required by this clause less any period of notice actually given by the employee.” That is the amount that can be deducted is not limited to one week’s wages.

Then there are some awards that have their own peculiar provisions such as the Real Estate Industry Award 2010 under which an employee is required to give just one week’s notice of termination of employment and the employer can make a deduction from final pay in relation to any part of that week not provided or worked.

If you are not sure of which award covers your employee(s) or what the termination of employment provisions are for your people, check out the list of modern awards here or give us a call on 0438 533 311.