Judge and FWO create confusion in car rental industry

A decision by a Federal Circuit Court Judge has thrown the car rental industry into confusion about the award coverage of its workers.

For over a decade, the Fair Work Ombudsman and its predecessor government agencies have held that customer service staff are covered by clerical awards and car cleaners are covered by vehicle industry awards. Where a staff member might perform both customer service and car cleaning duties, they were paid according to whichever award/classification attracted the higher rate.

Now, because of the decision made in this case, (SURACE v PEOPLESMOVE PTY LTD), the Fair Work Ombudsman has changed its mind and, on their website, is advising:

Retail Award

The Retail Award covers employees of car rental businesses who:

  • perform administrative work at the business retail premises, for example the shop front where you hire the vehicle
  • organise bookings, receive payments and sell extra products or services to customers
  • work as car washers and detailers.

Clerks Award

The Clerks Award covers employees of car rental businesses who perform administrative work away from the business retail premises, for example in the head office.

Why is it a problem?

Sure there are new legal precedents that come along but the problems here are threefold:

  1. The decision appears to be flawed (and I’m not a lawyer but I don’t need to be to reach that conclusion in this case based on the evidence)
  2. The Fair Work Ombudsman’s interpretation of the decision also appears to be flawed
  3. The effect of the decision (if applied as the Fair Work Ombudsman has determined it should be) is to really complicate award designation in the industry unnecessarily.

What was this case about?

Mr Surace brought an underpayment of wages claim against his former employer  Peoplesmove Pty Ltd (trading as Carhood). He performed a mix of customer service, car cleaning and supervisory/team leader duties and claimed that he was covered by the Clerks – Private Sector Award 2010. That was opposed by the former employer who argued that he was award-free or, alternatively, covered by the Miscellaneous Employees Award 2010.

So the Judge had to first determine the question of award coverage for this worker.

What is the basis for the decision?

There appears to have been conflicting evidence about just how much time this worker spent on supervisory duties versus customer service versus car cleaning functions.

The Clerks – Private Sector Award 2010 was ruled out as it technically covers employees “wholly or principally engaged in clerical/administrative duties” and the Judge felt that this was not the case with Mr Surace, notwithstanding the long history of clerical award coverage of customer service functions in the industry.

Then the Judge considered the question of the “Retail Award” :

  1. The Respondent submits that the Retail Award is not applicable to the Respondent’s business, because cl.3.1 of the Retail Award “defines explicitly and with limitation the establishment must be one of the below definitions”.[3] This submission misconceives the ordinary meaning of cl.3.1 of the Retail Award. The list of businesses specified in cl.3.1 of the Retail Award under the definition “general retail industry” are clearly not an exhaustive list of businesses that fall within the scope of the Retail Award. This is made clear by the opening words in the definition of general retail industry: “general retail means the sale or hire of goods or services to final consumers for personal, household or business consumption including…” (emphasis added). Clearly, by the use of the word “including”, the identified retail businesses do not exhaust the type of retail business which may fall within the meaning of “general retail industry”.
  2. The ordinary meaning of the definition of “general retail industry” can be read as meaning “the sale or hire… of services to final consumers for personal… or business consumption”. I am satisfied that the Respondent’s business involves the hire of a service (car-sharing) to final consumers (traveling to and from the airport) for their personal or business consumption. The fact that the business of the Respondent is novel does not preclude its service from falling within the definition of “general retail industry.”
  3. Accordingly, I find that the Respondent operates a business within the meaning of “general retail industry” of cl.3.1 of the Retail Award.

What is wrong with that decision?

The decision correctly notes that  “general retail means the sale or hire of goods or services to final consumers for personal, household or business consumption”.

However, that clause in the General Retail Industry Award 2010 also lists a number of exclusions (not mentioned in the decision) and one of those exclusions is: “motor vehicle retailing and motor vehicle fuel and parts retailing”.

So, if retailing includes “hire of goods or services” and “motor vehicle retailing” is specifically excluded from coverage of this award, how can car rental be covered by the General Retail Industry Award 2010?

The simple answer is that logically it can’t, notwithstanding this judicial decision.

Why the Judge ignored that very explicit exclusion in the Award is a mystery.

What then is wrong with the FWO interpretation of this decision?

  1. The Judge made a decision in an individual case based on a particular mix of duties – it was about that worker, not the entire industry and it should be viewed as such.
  2. If there is a concern about whether that decision affects traditional award coverage of the industry, perhaps that question should be referred to the Fair Work Commission whose role it is to determine award matters. That would provide greater clarity for the industry.
  3. The decision did not consider award coverage of car cleaning functions at all – there is no mention of that and it specifically did not address coverage under the Vehicle Manufacturing, Repair, Services and Retail Award 2010 which has car cleaner classifications and includes in its coverage “the repair and servicing of motor vehicles in the establishment of an employer ……who is engaged in the motor vehicle rental business”.
  4. As the decision did not in any way comment on award coverage of car cleaning activity let alone make any decision on that, how could the FWO reasonably determine that the current award provisions are not applicable and that car cleaning at a retail site now falls under the General Retail Industry Award 2010?

Are there deeper problems?

Unfortunately, yes there are.

Our Award system remains ridiculously complicated and difficult to navigate for the average business owner or employee. That was a significant contributing factor in the decision in question – the Judge had to make a determination of award coverage for an employee whose duties spanned multiple awards (according to traditional award coverage determinations) and seemingly looked for an easy solution to this, even if it was technically the wrong answer.

The irony in this case is that the Judge could have made an alternate decision that would have made much more sense and actually simplified the Award coverage issues for the industry.

The Vehicle Manufacturing, Repair, Services and Retail Award 2010 has Salesperson classifications but the authorities have traditionally held the view that Sales did not include rental sales. If the Judge had applied the retailing definition in the General Retail Industry Award 2010 (ie including hire of goods and services) to the Vehicle Award which otherwise covers car rental and so designated the Vehicle Award as the industrial instrument in this case, the industry would have one award to cover most activities.

An opportunity missed.

By Peter Maguire

 

 

 

 

New Fair Work Information Statement

The Fair Work Ombudsman has published a modified version of the Fair Work Information Statement effective from 1 July 2018.

Under National Employment Standards, employers must provide any new employee with a copy of the current Fair Work Information Statement. The document provides basic information on employee entitlements and rights and the roles of the Fair Work Ombudsman and the Fair Work Commission.

Download the current FWIS here.  Fair-Work-Information-Statement-2

 

7 ways to build trust

In the backwash of the banking royal commission, the investigations into paedophilia in religious institutions, ongoing domestic violence and gender inequality, much publicised cases of underpayment of wages by rogue employers and gig businesses and rorts by members of parliament and government officials, there is a lot of talk about “trust” and Australia having a “crisis of trust”.

Interestingly, one of the primary qualities that great employers have is trust and there is a great opportunity for businesses to make a difference in our community by leading change through the practice of trust.

Are there things that you as an employer can do differently to be more trusting in your people and to be more trusted by your people?

Here are a few suggestions for any leader.

 

Respect my views

Seek my opinions and ideas, listen to any concerns I have and always ensure that you understand what I am saying and why. Respond to me in a timely, polite and constructive way. Never leave me wondering where I sit with you and any issues of concern.

Believe in me

I want to do a good job and want you to help me do that. Accept that sometimes I might make mistakes but that, with your help, I will learn from them. See me as someone worthy of investment and optimism rather than through the lens of risk and micro management.

Let me be myself

All of us have our own styles and strengths and that diversity is powerful. Give me opportunities to use my strengths so that I can enjoy and succeed in my work, grow in my own way and enhance my value to the business.

Let’s get to know each other (appropriately)

If we understand who each other is, what each other’s strengths are and what we rely on each other for, we have the foundation for building a positive and constructive relationship. I may be able to help you with something that you are struggling with just as I expect you as my employer to support me.

Give me clarity

I want to know where we are going and what it is that you need me to do to help you get there. Put a plan in place and help me to do my part by having clear goals and responsibilities and a plan of action. Catch up with me regularly to coach me and support me to deliver on the plan. Celebrate successes and capture the improvement opportunities.

Give me a sense of belonging

Have clear statements of purpose and values that tell me what the organisation stands for (ie why it exists and how it behaves). Engage me by living that purpose and values every day in every way so that I am inspired to perform for you and go the extra yard.

Believe me

If I tell you something, believe that I am telling you my truth. If I tell you I can’t come in today, believe that I have a good reason for that. If I tell you that I am unwell, don’t make me go to the doctor to prove I am unwell – let me get better. If I am struggling to get the desired outcome with something, accept that I am trying my best and look at how you can help me to deliver what you want.

Our EngageMentality coaching and organisational development model focuses on peoples’ strengths and building respectful and productive relationships in the workplace. Building trust is a central element of the process. To find out more, call Peter Maguire on 0438 533 311.

New leave to deal with family and domestic violence

All modern awards have been varied with effect from 1 August 2018 to provide all employees including casuals with an entitlement of up to 5 days unpaid leave per annum to deal with family and domestic violence.

Read more

More changes for employers

The changes keep coming in the field of workplace relations:

Annual Wage Review

There are a number of changes taking effect from 1 July 2018 as a result of the decision in the 2017-2018 Annual Wage Review as follows:

  1. The national minimum wage and award rates have been increased by 3.5%.
  2. The filing fee for dismissals, general protections and anti-bullying applications made to the Fair Work Commission increased to $71.90.
  3. The high income threshold in unfair dismissal cases increased to $145,400 and the compensation cap to $72,700.

Penalty Rates

The next wave of Sunday penalty rate reductions flowing from last year’s penalty rates decision also take effect from 1 July 2018 as follows:

Fast Food Industry Award 2010

  • Level 1, full-time and part-time employees: 145% > 135%
  • Level 1, casual employees (including casual loading): 170% > 160%
  • Other levels: no change

Hospitality Industry (General) Award 2010

  • Full-time and part-time employees: 170% > 160%
  • Casual employees stay at 175% including casual loading

General Retail Industry Award 2010

  • Full-time and part-time employees: 195% > 180%
  • Casual employees (inclusive of casual loading): 195% > 185%

Pharmacy Industry Award 2010

  • Full-time and part-time employees: 195% > 180%
  • Casual employees (inclusive of casual loading): 220% > 205%

Extension of ATO’s contractor reportable payments scheme 

On 9 May 2017 the Government announced that from 1 July 2018 businesses that supply courier or cleaning services will need to report payments made to contractors if the payments are for courier or cleaning services.

These payments must be reported to the ATO each year using the Taxable payments annual report.

Businesses in the building and construction industry have been subject to this requirement for a number of years.

Labour hire licensing

The Victorian Labour Hire Licensing Act has been passed by Parliament and is expected to come into effect by no later than 1 November 2018.

This means that labour hire firms will not be able to legally operate in Victoria unless they have a licence having passed a fit and proper person test and satisfied a number of other requirements.

Similar legislation is already operating in Queensland and in the process of implementation in South Australia.

Long service leave

The Long Service Leave Act 2018 makes a number of changes to long service leave entitlements in Victoria. These include:

  • Employee access to long service leave after 7 years of eligible service (down from 10 years).
  • The existing entitlement to payment in lieu on termination of employment after 7 years’ eligible service remains.
  • Unpaid parental leave will count as service (whereas currently it does not count but doesn’t break service).
  • If an employee resigns and is reemployed within 12 weeks, service will be deemed to be continuous (currently that only happens if the employee is dismissed and reengaged within 12 weeks).
  • Long service leave service will transfer from one employer to another where there is a transfer of tangible and/or intangible assets and the employee performs duties in connection with those assets (currently only tangible assets matter).
  • The method of calculating entitlements where there have been changes in an employee’s working hours is changing.
  • The ability of an employer to apply for an exemption will be abolished.
  • Penalties for non-compliance will go from being civil penalties to being criminal penalties.

This legislation is expected to come into operation on or about 1 November 2018.

Portable long service leave in some industries

There is already a statutory portable long service leave scheme in the construction industry – see Coinvest.

The Victorian Long Service Benefits Portability Bill 2018 (Bill) will, if passed, extend portable long service leave benefits to employees in the the community services, contract cleaning and security industries.

In essence, this means that a worker in those industries will be eligible for long service leave once they have 7 years’ industry service regardless of how many employers that might be with.

Employers will have to contribute to a fund run by a statutory authority which will manage workers’ entitlements.

Domestic Violence Leave

The Fair Work Commission has approved an award entitlement to unpaid domestic violence leave of up to 5 days per annum as part of the 4 year review of modern awards. More to come on this regarding when it will take effect but it should be some time soon.

Casual Conversion

The Fair Work Commission also made a decision on a model clause for conversion of casuals to full-time or part-time employees in 2017 but it is yet to be flowed on to awards. Again that is something that should happen soon.

Conclusion

There is a lot that has changed and a lot more coming employers’ way. We will be issuing regular updates on new developments so please subscribe if you want to be kept informed. Scroll down to the right bottom of the page to do that.

Special event – An evening with Libby Gorr

When: 6.30 pm for 7.00 pm, Tuesday 17 July 2018

Where: Karralyka Centre, Mines Road, Ringwood East

Cost: $85 per head or $800 for a table of 10

Two course dinner plus drinks at bar prices 

Bookings at: www.footmen.org.au 

This is a family event full of fun and inspiration delivered by a trio of wonderful women.

Libbi Gorr is one of Australia’s finest live hosts and broadcasters. Warm, witty and smart, she has an exceptional ability to entertain, inspire, challenge and motivate, bringing a unique blend of journalism and humorous observation to all her work.

Sandi Givens is MC for the event, as we know her warm and genuine nature is evident in all her work as an MC, Conference Speaker and Workshop Facilitator.

You will also hear about the inspiring journey that Mel Spencer has undertaken with “Different Journeys”. This is a charitable endeavour to socially support young people on the autism spectrum and it is making a real difference.

Note: The Footmen Foundation is Ridgeline HR’s designated charity.

Significant non-compliance in local government security supply chain

The Fair Work Ombudsman has reported on an Australia-wide audit of the security service supply chains of 23 local councils with key findings as follows:

  • non-compliance with workplace laws in the supply chains of 14 (61 per cent) of the 23 councils, with breaches primarily relating to underpayment of minimum award rates as well as under- or non-payment of applicable penalty rates and overtime;
  • 63 per cent of subcontractors were found to be non-compliant compared to 42 per cent of principal contractors, who had a direct relationship with the council.
  • the Fair Work Ombudsman issued 26 formal cautions, 15 compliance notices and four infringement notices to non-compliant contractors and subcontractors.
  • A total of $72,250 was recovered for underpaid workers.

The full media release can be accessed here.

The Fair Work Ombudsman, Ms Natalie James also stated:

“While it is the primary responsibility of the employer to ensure compliance with workplace laws, it is clear that councils could – and should – be doing more to keep tabs on what is going on in their security contracting networks.”

“We’re recommending that local councils amend their security services tender documents to reflect best practice on contracting labour and ensure that the amounts paid in their contracts are sufficient for contractors and subcontractors to cover employee entitlements.

“We also expect that councils are proactive in monitoring their security supply chains, including by requiring contractors to regularly report on their compliance with their workplace obligations.

“Beyond such measures being in line with community expectations, councils should note that it is not just employers who can be held liable for breaches such as underpayments occurring in a supply chain – in certain circumstances councils themselves may be held legally responsible when their contractors or subcontractors are not complying with the law.”

With penalties of up to $630,000 per offence for a corporation and up to $126,000 per offence for an individual, there are also strong commercial grounds for local councils and their officers to follow the Fair Work Ombudsman’s advice.

Ridgeline HR provides tailored, thorough and affordable workplace relations compliance and audit programs for franchise groups and supply chains. 

“Ridgeline HR has  recently completed a very thorough confidential assessment within our wider franchise network to check understanding of workplace laws and minimum standards.    This has also involved the provision of a comprehensive compliance kit.   Peter Maguire (Practice Leader) has a very thorough knowledge of workplace relations within Australia, provides an excellent service and brings a very practical approach.   I would warmly recommend them.”

Leida Meijers, HR Director, Europcar

Ditch the bus and get a boat

One of the most repeated lines about developing high performing teams is the often misquoted Jim Collins line about “getting the right people on the bus”.

I attended a workshop the other day where this line was used and then one of the participants in the workshop told a story that said so much more about teamwork and high performance than the bus analogy ever could.

So what’s wrong with “the bus”? Whenever I hear this, the image I see is one of one person in charge (the driver) and everyone else just sitting there doing nothing other than being there. To me, it arguably depicts presenteeism (being there but not productively).

The counterpoint in this workshop was a story of a rowing crew where they were all in tune on the team strategy. They were all aligned with what tactics they would deploy in different scenarios that might arise in the race and they trusted each other to do their bit as and when the particular scenario presented.

An approach that I prefer is to replace the bus with a rowing rig where everyone has to stroke in time and the cox (ie our business leader) is calling out the stroke keeping people informed on what is required at each stage of the race. Everyone is making a contribution here.

So, do yourself a favour – ditch the bus and get a boat if you want to give your people the right picture about what good leadership and teamwork looks like.

 

Is good financial advice better for morale than a pay rise?

Smart employers understand that anything that they are able to do affordably to help their employees handle all of the pressures which go with living in a modern world has spin off benefits in employee wellbeing and productivity. One of those significant pressures is financial insecurity.

This article provided courtesy of our friends at FMD Financial tells us why and what you can do about it. 

Research shows 46% of employees worry about their finances and that worry can stop them achieving at work and feeling positive about their job. It’s a statistic that is motivating employers to take action. Improving financial wellbeing among staff was the top employer initiative for just 30% of companies in 2014. That figure has now jumped to 56% according to AON Hewitt’s 2016 Hot Topics in Retirement and Financial Wellbeing research.

Companies like RAA in South Australia are leading the charge. Senior Manager, Pay and Benefits, Tatjana Bergen, says providing employees with access to qualified financial advisers who build an ongoing relationship with the organisation and its employees is an important part of their commitment to supporting the financial wellbeing of staff. “FMD adviser, Dan Arcadiou, is regularly on site to meet with employees and FMD have developed a dedicated online survey our staff can access via the Intranet to get a better understanding of their financial situation at any time.”

It seems there is both a bottom line benefit and a moral imperative to boost financial wellbeing among employees. Eighty-five per cent of Australian employers say they’re focused on financial wellbeing because it’s the right thing to do, but almost as many (80%) are motivated by the desire to improve employee engagement.  Yet barriers to seeking financial advice remain. Employers may not know a good financial adviser or how to evaluate one. And recent scandals among big bank advisers have understandably put many business and HR leaders off taking that first step.  Experts agree people need to be empowered to take control of their financial wellbeing just as they do with maintaining a healthy lifestyle through a good diet and exercise. Fitness programs, fruit boxes and gym passes have long been a part of Australian workplaces, so why not high quality financial advice tools and qualified financial advisers?

As professional work continues to become more flexible but also more uncertain, good financial planning is becoming crucial to the growing contract workforce. Contingent workforce specialists Entity Solutionshave partnered with FMD to offer their workforce access to quality advice to help them plan for the future. CEO Neil Merola says “It’s key to ensure every independent professional has the opportunity to protect their lifestyle and where possible, maximise their income.”  With evidence suggesting many professionals are unprepared for maintaining their lifestyle in an uncertain job market, now is the  time to help employees take greater control of thier financial futures.

Talk to us about running an advice clinic at your workplace to give employees access to a reputable financial health check. Or if you have questions about your financial wellbeing, complete our quick and easy online financial health checkor book a free 1 hour consultationwith a qualified adviser.

Check them out at https://www.fmd.com.au

 

Fair Work Commission awards 3.5% wage increase

The Fair Work Commission (FWC) has handed down its decision on the 2017/18 Annual Wage Review, increasing the National Minimum Wage and award rates by 3.5% with effect from 1 July 2018.

This is about half what the ACTU claimed and twice what AiG offered so it was pretty well what we expected to be the outcome.

In last year’s decision, the FWC flagged the likelihood of a significant increase this year because of the fact that the lowest paid workers on award rates were still at risk of poverty. That is one of the reasons why the ACTU continues to press for a “living wage” which would be significantly higher than the National Minimum Wage and will remain on the ACTU agenda for some time to come.

The FWC has some empathy for the ACTU’s position in this regard but has to balance that with the ability of employers to manage a larger wage increase than that which it has awarded in each of the last two Annual Wage Reviews (3.3% and 3.5% respectively). We don’t expect that trend to change much in the foreseeable future.

The new national minimum wage for an adult employee will be $719.20 per week or $18.93 per hour from 1 July 2018.

The FWC will now embark on variations to award rates and allowances, all of which should be updated on their website (www.fwc.gov.au) over the next few weeks.

Employers need to apply this decision in one of the following ways:

  1. If the employee is covered by an award or an enterprise agreement and is being paid at award rates, increase the employee’s wage to the new award rate (ie by 3.5%);
  2. If the employee is covered by an award or an enterprise agreement and is being paid at above award rates, the employer can absorb the increase in award rates against that over award payment unless there is an enterprise agreement or contract of employment which provides for increases in wages in line with Annual Wage Reviews (in which case, wages would be increased by 3.5%);
  3. If the employee is paid on a salaried basis (whether expressed weekly, fortnightly, monthly, annually or otherwise), review the salary to ensure that it remains above award, having regard to all of the monetary benefits payable under the relevant award in respect of all hours worked under the contract of employment;
  4. If the employee is not covered by an award or enterprise agreement and is therefore subject to the national minimum wage, ensure that the employee’s remuneration provides at least that national minimum wage for all hours worked regardless of how it is structured.

Failure to provide employees with compliant levels of remuneration can result in severe penalties of up to $630,000 per offence for a corporation and $126,000 per offence for an individual. Claims for underpayment can be made retrospectively for up to 6 years.

If you need assistance with understanding what this decision means for your business, contact us using the form below for a free first consultation from us.