FWC awards 3% wage increase

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.

Fresh thinking for old challenges

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.

Dealing with family and domestic violence

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.

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!

$1 million in wage underpayments in horticulture

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

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

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.

What might the new casual conversion provisions mean for business?

As part of the 4 yearly review of modern awards, the Fair Work Commission has decided to insert casual conversion provisions into the 85 modern awards that currently do not have provisions of this sort.

These provide a right for casual employees engaged on a regular and systematic basis to apply for conversion to full-time or part-time employment subject to a number of conditions as follows:

  • a qualifying period of 12 calendar months;
  • a qualifying criterion that the casual employee has over the qualifying period worked a pattern of hours on an ongoing basis which, without significant adjustment, could continue to be performed in accordance with the full-time or part-time employment provisions of the relevant award;
  • the employer must provide all casual employees (whether they become eligible for conversion or not) with a copy of the casual conversion clause within the first 12 months after their initial engagement; and
  • a conversion may be refused on the grounds that:
    • it would require a significant adjustment to the casual employee’s hours of work to accommodate them in full-time or part-time employment in accordance with the terms of the applicable modern
      award, or
    • it is known or reasonably foreseeable that the casual employee’s position will cease to exist, or
    • the employee’s hours of work will significantly change or be reduced within the next 12 months, or
    • on other reasonable grounds based on facts which are known or reasonably foreseeable.

Please note that, at this point in time, awards have not been varied and the decision is therefore not operational.

Where this decision differs from  casual conversion provisions that are already in other modern awards is that:

  • the qualifying period is commonly 6 months rather than the 12 month period stated in the new decision
  • the relevant awards have a statement that an employer “must not unreasonably refuse” a request for conversion but there is no reference to the sorts of circumstances that might reasonably justify refusal (as set out in the new decision)
  • there are some variances in procedural requirements between the old and the new
  • existing casual conversion provisions continue to have force.

So what does it all mean?

Regardless of the industry you are in, every employer who has casual employees working regular and systematic hours over a prolonged period of time should review those arrangements and consider whether the past/existing working pattern and foreseeable future working pattern would justify conversion to full-time or part-time employment.

There is also a concern that, while an employee in a small business (less than 15 employees) is not eligible to make a claim of unfair dismissal until they have completed 12 months service (or 6 months in the case of larger businesses), there could be a spike in General Protection/Adverse Action claims where an employee exercises or intends to exercise their right to request casual conversion and perceives that they are disadvantaged because of that request or intention (eg in reduction of hours, variation of shifts to interrupt a regular working pattern or even discontinuation of employment). There is no qualifying period for these types of claims so employers beware.

The final point that we wish to make here is that security of employment is a significant issue in our community today and that is a key factor in attracting and retaining good people who’ll do a good job for you. If you want a great business, trust them and give them that security.

Fair Work changes from 1 July 2017

There are a number of changes that have come into being from 1 July 2017 as a result of the 2016-2017 Annual Wage Review which increased the National Minimum Wage and award rates by 3.3% and other decisions made by the Fair Work Commission.

The Fair Work Ombudsman has produced an up to date set of Pay Guides for all modern awards which can be accessed here.

These guides have also factored in the first phase of reductions in penalty rates that have occurred in a number of retail and hospitality industry awards but please note that unions have appealed that decision and these proceedings commenced in the Federal Court this week.

Additionally, the following flow on increases have occurred.

The High Income Threshold

The new High Income Threshold is $142,000 per annum.

Employees who accept an employer guarantee of annual earnings of greater than this amount do not have access to the unfair dismissal jurisdiction.

This also raises the maximum compensation that can be awarded in an unfair dismissal case to $71,000 (6 months’ wages).

Fair Work Information Statement

Under National Employment Standards, all new employees must be provided with a Fair Work Information Statement which explains a range of workplace rights and where to go for assistance with those.

This has been updated and the new version that must be provided to new employees from 1 July 2017 can be accessed below.

Fair-Work-Information-Statement – 010717

Penalties for Fair Work Breaches

The maximum penalties for breaches of the Fair Work Act 2009 and modern awards have been increased to:

  • For corporate entities, $63,000 per offence
  • For individuals, $12,600 per offence

It should be noted that, in legislation currently before the Parliament (which is now in recess), these penalties are targeted to increase tenfold.

 

Penalty rates decision to be phased in

The Fair Work Commission has announced transitional arrangements for implementing the recent decisions to reduce penalty rates for work on Sundays and Public Holidays across a variety of awards.

Sunday penalty rates

The reductions in Sunday penalty rates are being phased in in annual instalments over 3 to 4 years depending on the award and are timed to occur on 1 July at the same time as any increases in award wages occurring from the Annual Wage Review process. The schedule for each award is as follows.

Fast Food Industry Award 2010

Full-time and part-time employees – Level 1 only

1 July 2017: 150 per cent > 145 per cent

1 July 2018: 145 per cent >135 per cent

1 July 2019: 135 per cent >125 per cent

Casual employees (inclusive of casual loading) – Level 1 only

1 July 2017: 175 per cent > 170 per cent

1 July 2018: 170 per cent > 160 per cent

1 July 2019: 160 per cent > 150 per cent

Hospitality Industry (General) Award 2010

Full-time and part-time employees

1 July 2017: 175 per cent > 170 per cent

1 July 2018: 170 per cent > 160 per cent

1 July 2019: 160 per cent > 150 per cent

Casual employees – unchanged at 175% including casual loading

General Retail Industry Award 2010

Full-time and part-time employees

1 July 2017: 200 per cent > 195 per cent

1 July 2018: 195 per cent > 180 per cent

1 July 2019: 180 per cent > 165 per cent

1 July 2020: 165 per cent > 150 per cent

Casual employees (inclusive of casual loading)

1 July 2017: 200 per cent > 195 per cent

1 July 2018: 195 per cent > 185 per cent

1 July 2019: 185 per cent > 175 per cent

Pharmacy Industry Award 2010

Full-time and part-time employees

1 July 2017: 200 per cent > 195 per cent

1 July 2018: 195 per cent > 180 per cent

1 July 2019: 180 per cent > 165 per cent

1 July 2020: 165 per cent > 150 per cent

Casual employees (inclusive of casual loading)

1 July 2017: 225 per cent > 220 per cent

1 July 2018: 220 per cent > 205 per cent

1 July 2019: 205 per cent > 190 per cent

1 July 2020: 190 per cent > 175 per cent

Public Holiday penalty rates

This decision effects the above 4 awards plus the Restaurant Industry Award 2010.

In all of these awards , the penalty rate for work on a public holiday is changed with effected from 1 July 2017 to

Full-time/part-time:  225%

Casual:  250%

One of the reasons given for phasing in the Sunday penalty rate cuts over such a prolonged period was that “take home pay” orders would not be an available option for workers whose take home pay was reduced as a result of implementation of this decision. The FWC’s rationale is that annual wage increases will significantly, if not totally, offset reductions in penalty rates.

This is likely to be a factor in future Annual Wage Reviews.

It is understood that some unions may seek judicial review of the penalty rates decision and, should that occur, it is possible that implementation could be further delayed.