Closing loopholes – casual employment

Closing loopholes – casual employment

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Closing loopholes – casual employment

example flexible working arrangement

The Courts and Government have been jumping from one definition or interpretation of what casual employment is to another and then another over recent years and that is happening again under the Albanese Government’s Fair Work Legislation Amendment (Closing Loopholes) Act 2023.  Is it just the pendulum swinging back as happens on a change of government or is it more than that?  

S15A(1) of the Fair Work Act 2009 currently provides that an employee is a casual employee if the employer offers employment on the basis that “there is no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person” and the person accepts the offer on that basis and becomes an employee as a result of that.

So the emphasis is on what is in the contract regardless of how the arrangement really works in practice.

Under the changes being introduced, the concept that a casual employee is one who has no firm advance commitment to continuing and indefinite work remains but the emphasis shifts to the practical reality of the relationship rather than just what is written in the contract.

The question of whether there is a firm advance commitment to continuing and indefinite work will be determined by a number of questions:

  • whether the employer can choose to offer (or not offer) work to the employee and whether the employee can choose to accept or reject an offer of work
  • whether continuing work is reasonably likely to be available given the nature of the business
  • whether part-time or full-time employees are undertaking similar roles in the workplace
  • whether the employee has a regular pattern of work.

We know that the vast majority of business owners try to do the right thing and want to be compliant with their obligations. 

Casual conversion

The ability for casual employees who serve a minimum period of engagement with a regular and systematic pattern of hours of work has been a feature of awards for decades and has been legislated for a few years now. So it isn’t a new concept.

Under the new rules, a casual employee of a small business employer (ie one with less than 15 employee) will be able to apply for conversion to full-time or part-time employment after 12 months service if they believe that they no longer fit the definition of a casual employee. For employees of larger employees, that opportunity comes after 6 months’ service.

Prior to these new provisions taking effect, employers with 15 or more employees have to offer casual conversion to casual employees engaged for 12 months or more and on a regular pattern of hours on an ongoing basis for at least the last 6 months provided that the employee could continue to work that regular pattern of hours without significant changes as a permanent employee.

Under the new rules, it is entirely up to the employee as to whether they request casual conversion. The employer has no obligation to offer it but will have to respond to any such request within 21 days.

If the employer refuses the request, the employee can make application to the Fair Work Commission for mediation, conciliation or arbitration of the matter as a dispute.

The employer will have to comply with whatever agreement is reached or decision is made in those proceedings.

Employees are under no obligation to convert – they have the option of remaining a casual employee if that is their preference.

There are transitional arrangements whereby the current rules on casual conversion will continue after 26 August 2024 in respect of existing casual employees for a period of 6 months in the case of employers with 15 or more employees or 12 months for employers with less than 15 employees.

Casual Employment Information Statement

All casual employees must be provided with the revised Casual Employment Information Statement on or before commencement or as soon as possible thereafter.

Additionally, under the new rules, they will also have to be provided with it again:

  •  in the case of a small business, after 12 months of employment
  •  in the case of a large business, after 6 months, 12 months and annually thereafter

When is this all happening?

These changes take effect from 26 August 2024.

What do you need to do?

If you employ casual employees, review your current working arrangements eg how long they have been working with you, what their patterns of hours of work are and whether there is a commitment to ongoing employment on a regular basis (whether or not that commitment is in writing).

Secondly, review your employment contracts or letters of offer to ensure that they are consistent with the new definition and rules on casual employment.

Thirdly, ensure that you obtain the new Casual Employment Information Statement when it becomes available and read it to ensure that you understand it.

Fourthly, get prepared to have conversations with your casual employees about their status against the revised definition and rules and to deal with any likely request for conversion.

We can assist you in all of these areas.

If you would like to learn more about ways that we can do this, please call us on 0438 533 311 or email us at enquiries@ridgelinehr.com.au.

CONTACT US

Ridgeline Human Resources Pty Ltd
ABN : 24 091 644 094

enquiries@ridgelinehr.com.au

0438 533 311

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Annual shutdowns – more unintended consequences?

Annual shutdowns – more unintended consequences?

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Annual shutdowns – more unintended consequences?

example flexible working arrangement

One of the things that consistently pops up after a decision to change or qualify the rules on conditions of employment is that wonderful phrase “unintended consequences” all too frequently because the decision makers have been focused on a specific issue without considering the broader agenda eg does making this rule for some create problems for others or create inconsistencies between different categories of workers?   

Last year, a majority decision of the Fair Work Commission decided to change the rules on annual shutdowns for organisations covered by modern awards which had annual shutdown provisions in them.

As things stood to that point, the pre-exisiting award provisions had a requirement that employers give employees a minimum period of notice of a shutdown (up to 2 months depending on the Award). It was accepted practice that employees took annual leave during the shutdown and, if an employee did not have sufficient annual leave to cover the closedown period, they went onto leave without pay for the period not covered by their annual leave entitlement.

The decision changed all that requiring that:

  • Each employee has to be given specific and individual written direction to take annual leave
  • An employee who doesn’t have sufficient annual leave to cover the shutdown period cannot be assumed or forced to take leave without pay – the employer has to ask them and obtain their agreement to take leave without pay or annual leave in advance of their next year’s accruals
  • If agreement is not reached, the employer has the options of providing work or just paying the employee for the balance of the shutdown period without any deduction from annual leave.

That might seem unfair (and that is what the dissenting member of the FWC panel said) but that is what it is today.

So what complications does that cause otherwise?

To understand that, we have to go back to the Fair Work Act and what it says on the issue.

  • S93(3) of the Act says: “A modern award or enterprise agreement may include terms requiring an employee or allowing for an employee to be required to take annual leave in particular circumstances, but only if the requirement is reasonable”. It makes no mention of what is “reasonable”. This is what applies to award-covered employees.
  • S94(5) of the Act says: “An employer may require an award/agreement free employee to take a period of annual leave but only if the requirement is reasonable. Note: A requirement to take paid annual leave may be reasonable if, for example: (a) the employee has accrued an excessive amount of annual leave; or (b) the employer’s enterprise is being shut down for a period (for example, between Christmas and New Year).”

So there are quite different statutory provisions for award/agreement covered employees v award/agreement free employees.

For the former, there has to be a provision in the relevant award/agreement that allows for the shutdown and the related taking of annual leave. For award/agreement free employees, the direction just has to be reasonable.

How this affects award/agreement provisions?

If the relevant award/agreement does not have a shutdown provision, there is no authority to impose a shutdown under the Fair Work Act.

If the relevant award does have an annual shutdown provision , it is subject to the rules that were imposed last year.

If different awards apply to different categories of employees in a business, different rules can apply for example a construction worker has to be given two months notice, whereas a clerical worker in a construction business has to be given 28 days’ notice of a shutdown.

Conclusion

We now have three different scenarios that can apply depending on the job that someone performs and the industrial instrument (if any) that applies to their employment. Is this another one of those “unintended consequences”?

If you would like to learn more about ways that we can help you in understanding Fair Work and what your obligations asa an employer are, please call us on 0438 533 311 or email us at enquiries@ridgelinehr.com.au.

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How to classify employees under awards

How to classify employees under awards

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How to classify employees under awards

confused employer

The problem

Most employees in Australia are covered by a Modern Award. These set out the rates of pay applying to different occupations or work covered by that award as well as lots of other conditions of employment like allowances, penalty rates and overtime. Not complying with modern awards is a breach of the Fair Work Act and can attract very significant penalties as well as embarrassment with staff and in the broader community.  It is therefore very important that employers understand which Award covers the work their employees perform and what their entitlements are under those Awards.

A common frustration for employers is classifying employees. All Modern Awards have a classification structure that applies to employees based on the work they perform, a qualification they use for their work or a certain level of competency in the industry and via that classification structure the employees’ pay and entitlements are determined.

Generally, the way that you determine how employees are classified would be by doing the following:

Find the correct Modern Award

All Modern Awards have a coverage clause that dictates the type of work or industry that the terms of the Award apply to. While it may seem easy to identify the Award that covers employees based on the work of the employer there can often be stipulations or exemptions that mean certain employees or work are not covered by that Award. There can also be multiple awards applying to one employer.

For example, a civil construction business has a workforce that includes plant operators and labourers, forepersons, managers, engineers, surveyors, estimators, clerical staff, mechanics and truck drivers. That means that the following Awards would apply to various staff:

  • The Building and Construction General On-site Award 2020 
  • The Professional Employees Award 2020
  • The Surveying Award 2020
  • The Manufacturing and Associated Industries and Occupations Award 2020
  • The Clerks – Private Sector Award 2020
  • The Road Transport and Distribution Award 2020 and
  • The forepersons would be award-free.

So what you need to do is look for awards that might cover your particular industry and then awards which might cover particular occupations or capacities that you employ people in.

Classifications

After determining which Award applies to your business you then need to match your employees against the classification structure.

Each Award defines ways that employees are classified against a pay scale. There is no universal classification structure and different Awards do it in different ways.

Some of the different classification structures include:

  • Competency based – Employees are assessed against a competency system and once they prove competent at certain tasks or jobs they would move up the classification structure. i.e. an employee that can perform three tasks competently is more valuable that one who can only perform two.
  • Work based – This system matches employees against the highest value work or task that they perform in the classification structure. For instance, an operator of an excavator would have a higher classification depending on the amount in tonnes that it can hold in its scoop.
  • Qualification based – Employees in fields where a certain level of education is required will be classified based on the highest level of qualification that they are required to use during the course of their work. This is common in fields like IT, accounting, and medical professions among others.

After you have determined which level an employee fits into you can then work out what their pay and entitlements are under the Award.

While we lay it out as simply we can here this can be a daunting task especially when some employers have little knowledge of Awards and how they work.

Need help?

Give us a call on 0438 533 311 or email enquiries@ridgelinehr.com.au to arrange your free first consultation to see how we can help with advice and support on this or any other HR matter

CONTACT US

Ridgeline Human Resources Pty Ltd
ABN : 24 091 644 094

enquiries@ridgelinehr.com.au

0438 533 311

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Using PERMAH for your POSITIVE DUTY

Using PERMAH for your POSITIVE DUTY

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Using PERMAH for your POSITIVE DUTY

example flexible working arrangement

Above image is courtesy of The Wellbeing Lab/Michelle McQuaid Group.

 

Background

Under Workplace Health and Safety laws, a positive duty to eliminate or control psychosocial hazards has been imposed on all persons conducting a business or undertaking.

This means that the traditional compliance approach of issuing a policy and procedures, providing them to workers, requiring their compliance with them and acting on incidents or breaches when they are reported is not adequate any more.

It is necessary to conduct a thorough risk assessment to see whether any risks from each of the 14 psychosocial hazards in the Model code for managing psychosocial hazards published by Safe Work Australia and as set out in legislation enacted by each State or Territory.

There is also a duty to consult workers at each stage of the process and especially in relation to identifying risks and designing and implementing control plans and measures. 

One way to start addressing both the risk assessment and consultation obligations is to survey workers with an appropriate survey instrument. Our choice to do that is the PERMAH Workplace Wellbeing Survey.

Why have we chosen PERMAH?

The PERMAH workplace wellbeing framework is based on the ground-breaking wellbeing theory developed by Professor Martin Seligman as published in his celebrated work “Flourish”.

The PERMAH survey tool has been used by the Australian Human Resources Institute since 2018 as a national workplace wellbeing benchmarking tool and Small Business Victoria as the centrepiece of its small business wellbeing programs.

A unique feature of the PERMAH Survey is that every person who does the survey gets their own individual State of Wellbeing Report plus a template for developing a wellbeing plan plus access to a heap of wellbeing resources….all for free.

Organisations with 30 or more employees can acquire an annual licence and obtain organisational reports which show the aggregated findings on wellbeing in the organisation through the eyes and experiences of its people.

We have a team of people who have undertaken Certificates in Creating Wellbeing and in Leading Psychological Safety and Care and are accredited to debrief people on their PERMAH Survey results.

With the advent of the positive duty to eliminate or control psychosocial hazards, the survey has been augmented with a panel of additional questions specifically related to each of the 14 psychosocial hazards detailed in Safe Work Australia’s model code.

So we believe that the PERMAH Workplace Survey with the Psychosocial Hazard Panel Add-on ticks all of the boxes – it is science-based, it has credibility being used nationally by AHRI, it is affordable, it provides free and practical wellbeing advice and resources to everyone who does it and it addresses the psychosocial hazards in a practical and cost effective way.

How we can we help

Our “Using PERMAH for Positive Duties” service incorporates the following elements:

  • A 12 month licence for the PERMAH Workplace Wellbeing Survey including the add-on psychosocial hazard panel.
  • Ability to undertake the survey as an organisation multiple times during the licence period.
  • Templates and an animated video for communications to employees on the PERMAH Workplace Wellbeing Survey, why your organisation is doing it and how employees can participate.
  • Professional analysis of survey results, provision of a supplementary report and management debrief on the results.

We have the flexibility to package these elements in a variety of ways and to undertake other services such as individual PERMAH debriefings, training programs and facilitated sessions with leadership groups or consultative or safety committees.

Where to now?

If you would like to learn more about the positive duty to eliminate or control psychosocial hazards and your options for addressing it, we’ll be happy to advise you. Just give us a call on 0438 533 311 or email enquiries@ridgelinehr.com.au.

 

 

 

 

CONTACT US

Ridgeline Human Resources Pty Ltd
ABN : 24 091 644 094

enquiries@ridgelinehr.com.au

0438 533 311

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Managing disconnection from work

Managing disconnection from work

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Managing disconnection from work

example flexible working arrangement

The impending legislated right for workers to disconnect from work outside their contracted working hours has the usual subjects again yelling that “the sky is falling” on employers.

The thrust of the proposed changes is to discourage employers from making unreasonable contact with or demands on their employees outside their contracted working hours, to provide for people to be paid for time worked outside their contracted working hours and to have access to the Fair Work Commission to make their employer stop making unreasonable connection with or demands on them outside their contracted working hours if the Commission finds the employer to be doing so.

There will be exceptions such as if the contact is due to an emergency or for welfare purposes. People who have roles that require them to be on call as a normal feature of their job won’t be an issue as long as the connection is reasonable in that context.

It has also been made clear by the Minister that it would be reasonable to contact relevant employees if a worker did not attend work and the employer needed someone to take their place or for normal rostering purposes.

Of course, if the contact is unreasonable, that might well constitute an unreasonable job demand in any case and therefore constitute a risk arising from a psychosocial hazard under Workplace Health and Safety laws.

Do you need to contact your employees outside their contracted working hours?

For the vast majority of workplaces, the answer is probably “no, other than in the case of an emergency or for welfare purposes” – just what the proposed legislative change says.

Sure, there will be times when you are working into the night and want to get an email off to an employee for their  attention when they come in in the morning ….. but you don’t need them to see it tonight so either delay sending it until the morning or use the scheduling facility on your email service for it to automatically go to the employee’s inbox at the start of their day in the morning.

It really is that easy to manage in most cases.

What about if the employee wants a flexible working arrangement?

One of the arguments that the naysayers are putting up is that this right to disconnect will adversely affect employers’ willingness to offer flexible working hours or hybrid working arrangements.

One of the things that should be covered off in the discussions and agreement about a flexible working arrangement is how communications and connection are going to be managed by the employer and the employee.

For example, let’s say a single mum who is an accounts clerk asks for a flexible working arrangement under which she would work from 9.30 am to 2.30 pm each day and from 8.00 pm to 9.30 pm each night so that she could manage her parental responsibilities in the morning up to school drop off time and from school pick up time through to the children’s bedtime. She might come into the office in the day and do the night work from home.

The arrangement with the night work might be that she can perform tasks which do not require interaction with others (eg data entry, accounts processing, etc) but that anything requiring contact with another person is to be done either by a scheduled email issuing the following morning or deferring that item until she came into the office the next day. 

You should Include that communications protocol in the flexible working arrangement agreement to ensure that it is understood and complied with.

And guess what? That pattern of hours of work becomes that employee’s contracted hours of work so there isn’t an issue of a need for that employee to disconnect in any case because they are working.  

Again, it really is that simple to manage in most cases.

Do you really want to be contacting your employees outside their contracted hours?

Because we live in such a digitally connected “look at it now” world, if you send something to an employee outside their contracted working hours, there are many who will not be able to resist having a look.

If, by having a look, that raises something for them that creates some level of anxiety and that in turn interferes with their state of mind and/or their sleep and/or their leisure time/rest and recovery and/or the relationship with their partner……..well, do you really want an anxious, tired, sleep deprived employee coming into work the next day?

The answer should be self-evident.

Other considerations

As noted above, a failure to ensure that there is no unreasonable connection with employees outside their contracted working hours could give rise to risks associated with psychosocial hazards and Workplace Health and Safety laws require employers to exercise a positive duty to eliminate or control such risks. There are a number of psychosocial hazards that could come into play in this regard. We have a blog and explainer video on each of the 14 psychosocial hazards on our website – you can access them here

Additionally, the Fair Work Commission has just begun a review of modern awards with respect to “Work and Care” and the issue of disconnection from work will no doubt be a prominent issue in considerations in that review. See https://ridgelinehr.com.au/award-review-on-work-and-care-underway/

We will keep you informed of further developments as they occur and ensure that we tell you what the real effects of legislative changes are rather than what the scaremongers would have you believe.

If there is anything here that resonates with you and you would like to explore further, give us a call on 0438 533 311 or email enquiries@ridgelinehr.com.au. We would love to have a chat about it.

 

 

 

 

CONTACT US

Ridgeline Human Resources Pty Ltd
ABN : 24 091 644 094

enquiries@ridgelinehr.com.au

0438 533 311

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Pay deductions

Pay deductions

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Pay deductions

deductions

Employers may find themselves in situations where deducting employees’ pay becomes a necessary measure. However, it’s crucial for employers to understand the legal and ethical considerations surrounding pay deductions to maintain a healthy employer-employee relationship. In this blog, we’ll explore the reasons behind pay deductions, the legal framework in Australia, and best practices for implementing deductions responsibly.

Types of deductions

The Fair Work Act 2009 is the primary legislation outlining the rights and responsibilities of both employers and employees. When it comes to pay deductions, it’s important to adhere to the following key principles:

Authorized Deductions: Employers can only deduct amounts from an employee’s pay if it’s authorized by law, an industrial instrument (such as an award or enterprise agreement), or with the employee’s written consent. Common authorized deductions include tax withholdings, voluntary superannuation contributions, and salary sacrifice arrangements.

Unlawful Deductions: Employers must be cautious about making unlawful deductions, such as deducting money for faulty work, cash shortages, or damage to company property. Employers also cannot ask for a deduction that would benefit the employer such as charging more when an employer buys a good or service from the employer. Even with an employees agreement in writing these deductions can be unlawful

Notification and Record-Keeping: Employers are required to provide clear and detailed payslips to employees, outlining all deductions made. Where an employer and employee agree to deduct an employees pay the records must include details regarding the amount of the deduction, the reason for the deduction, whether it is a one off or ongoing, and where the deducted money goes. It’s essential to maintain accurate records of these transactions for compliance and transparency.

Common Reasons for Pay Deductions:

Tax Withholdings: Employers are obligated to withhold income tax from employees’ wages and remit it to the Australian Taxation Office (ATO). This deduction is standard and lawful.

Voluntary Superannuation Contributions: Employers must contribute a percentage of an employee’s earnings to their superannuation fund. Employees can also choose to voluntarily contribute to their superannuation fund. Both are acceptable deductions.

Salary Sacrifice Arrangements: Salary sacrifice arrangements can be made for items such as additional superannuation contributions, laptops, cars, or other work-related benefits. Any salary sacrifices must be agreed in writing between both parties.

Recovery of Overpayments: If an employer accidentally overpays an employee, they can deduct the overpaid amount from future wages, provided the employee is notified and agrees in writing.

Common unlawful deductions

Cash Shortages: Deducting money from an employee’s pay to cover cash shortages is generally considered an unauthorized deduction unless the employee has given explicit written consent. The Hospitality Award is an exception to this however, though that is only in the case of an employee deliberately and wilfully causing the shortage.

Deducting pay when notice of termination is not given: It is commonly thought that employees who fail to give notice when terminating their employment or fail to work the required period by the notice forfeit their entitlements to payment for the notice period. This is not true, under most Modern Awards the most that can be deducted from an employees pay when failing to provide notice or work the required period is 1 weeks’ worth of wages and that is only if the employee is 18 or older.

Other Examples include accidental damage to company property, uniform costs and costs associated with training an employee.

Best Practices for Responsible Pay Deductions:

Communication is Key: Employers should maintain open lines of communication with employees regarding any proposed pay deductions. Clearly explain the reasons behind the deduction, ensuring employees understand the purpose and legality.

Written Consent: Whenever possible, obtain written consent from employees before making deductions. This not only ensures compliance with the law but also serves as documentation in case disputes arise.

Timely and Accurate Records: Keep meticulous records of all pay transactions, including deductions, and provide employees with accurate and detailed payslips. This contributes to transparency and compliance.

While deducting employees’ pay in Australia is a legitimate and sometimes necessary practice, it must be carried out in strict adherence to the legal framework. Employers should prioritize transparent communication, obtain written consent where required, and maintain accurate records to foster a positive and compliant work environment. Finding the right balance between financial responsibility and employee satisfaction is key to navigating the complexities of pay deductions in Australia.

Need help?

Give us a call on 0438 533 311 or email enquiries@ridgelinehr.com.au to arrange your free first consultation to see how we can help with advice and support on this or any other HR matter

CONTACT US

Ridgeline Human Resources Pty Ltd
ABN : 24 091 644 094

enquiries@ridgelinehr.com.au

0438 533 311

PARTNER LINKS

TELL US WHAT YOU NEED HELP WITH