Making sure your staff are paid correctly is one of the most important things a business owner should do.
Yet, it appears to be an area that isn’t given the level of attention that it should.
One of the most popular reasons for this is that the often repeated line of, “it’s all too confusing”.
If you subscribe to that excuse, here are a few ways to make sure you are paying your staff right.
It comes as no surprise that the Fair Work Ombudsman’s Pay And Conditions Tool (P.A.C.T.) is on this list.
The P.A.C.T. helps both employers and employees check their relevant pay and conditions.
It even helps those employers who don’t know which Modern Award applies to them.
This browser-based tool is relatively easy to use, with only basic answers required.Continue reading
There appears to be a lot of confusion among small business owners about the difference between an employee and an independent contractor.
There is a mistaken belief that if the person supplies an ABN and invoice that they are an independent contractor.
Sadly for those employers who have fallen for this, it is incorrect.
There may be instances where a legal determination is required. Though generally speaking, the following tests can be used to work out if they are an employee or not.Continue reading
In this week’s episode of the IR Simplified podcast I talk about the following:
- Inappropriate language in the workplace, and how to deal with it.
- Whats been happening since the last podcast
- A reminder about the LinkedIn and Facebook groups.
- How you can be part of future episodes of the IR Simplified Podcast
Enterprise agreements. There are a lot of rumours and myths surrounding them.
Here is the no BS version of what they are:
What Are They?
With regards to the Fair Work Act 2009, an enterprise agreement is an agreement on certain employment conditions between an employer and their employee(s).
Enterprise Agreements can be between:
a) An employer and group of employees;
b) More than one employer and group of employees;
c) One of more employers and one of more unions for a genuine new enterprise (Greenfields Agreement)
Modern Awards v Enterprise Agreements
A Modern Award covers specific employees within a particular industry.
An Enterprise Agreement covers employees of a particular employer(s).
Enterprise Agreements can bundle a number of different Modern Awards that apply to a workplace into the one document. Once the Enterprise Agreement has been approved, the Modern Award(s) no longer apply.
However, the wages and conditions cannot make an employee ‘worse off’ when compared to the relevant Modern Award.Continue reading
This is part 3 in the series on enterprise agreements.
You can find the lead post in the series here.
In the previous article, Enterprise Agreements – Negotiations, I talked about the process of negotiating an enterprise agreement.
This article goes into a bit more detail on the good faith bargaining part of enterprise agreement negotiations.
This article goes into more detail on what good faith bargaining is.
The Fair Work Act 2009, does specify some requirements that must be met, for the bargaining agents to be bargaining in good faith.
(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:
(a) attending, and participating in, meetings at reasonable times;
(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;
(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
(f) recognising and bargaining with the other bargaining representatives for the agreement.
This is part 3 in a series on enterprise agreements.
You can find the lead post in the series here.
Part 1: Enterprise Agreements Part 1: What Are They? we discussed what enterprise agreements are, how they differ from Modern Awards and talked about what can and cannot be in one.
Part 2: Enterprise Agreements Part 2 – Planning was a discussion around the planning that should happen behind the scenes of the enterprise agreement.
In this episode, we will talk a little more about what happens during the negotiation phase of enterprise agreement negotiations.
So, without further ado, here we go.
Make It Happen
After giving is some serious thought and more than a little bit of prior planning, you have decided that an enterprise agreement will be a good thing for the future growth of your business.
What’s got you confused is how you make it happen.
Do you just give your staff the agreement that you prepared earlier and wait for a yay or nay from them?
Or, do you give them a blank sheet of paper and get them to write down their wish list, picking and choosing what you want to put into it?
Whilst the process of negotiating an enterprise agreement is relatively easy, there are certain things that need to be done, and in the right order, otherwise you may have some explaining to do when you seek approval from the Fair Work Commission.
Notice Of Employee Representational Rights.
Before you can start bargaining for the enterprise agreement, you need to let your staff know that it is happening. This is where the Notice of Employee Representational Rights comes in.
Schedule 2.1 of the Fair Work Regulations 2009 specifies the content that the notice should have.
It is also worth noting that the notice of employee representational rights should be just that, and not have anything else attached to it, either in the email notification or when/if the notice is placed on a notice board.
How often should you meet to negotiate the agreement?
Where should you meet?
The frequency of meetings is entirely up to you, though in the interests of workplace harmony, I would be inclined to say that you should meet as often as you can, for as long as it takes to get a document that all parties are happy with.
Sure, these meetings can be a hassle and pain in the proverbial. Though think of it this way. A little bit of discomfort now will prevent the whole lot of disruptions that come from protected industrial action.
As for the location, well that is entirely up to you. If you have a boardroom not being used, that is a good enough spot.
Though, if you are negotiating with a union, they will request some sort of ‘neutral’ location claiming that negotiating at the workplace gives the company a ‘home ground advantage’.
Bargaining In ‘Good Faith’
Those who are involved in the bargaining for a new enterprise agreement, including bargaining representatives, are required to bargain in good faith.
The following are the requirements that a bargaining representative for a proposed enterprise agreement must meet to be considered as bargaining in good faith:
- Attending, and participating in, meetings
- Disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner
- Responding to proposals made by other bargaining representatives for the agreement in a timely manner
- Giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals
- Refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining
- Recognising and bargaining with the other bargaining representatives for the agreement.
It should be noted that the good faith bargaining requirements do not require a bargaining representative to, a) make concessions during bargaining for the agreement or, b) reach agreement on the terms that are to be included in the agreement.
Once all the bargaining reps have agreed on the content in the agreement, and a draft has been prepared, the following steps need to be taken to ensure that it is valid.
- Explanation of the terms of the agreement, and the impact that those terms will have
The explanation must be in a way that is appropriate for the audience.
- Vote on the agreement
This cannot occur until after 21 days have passed since the notice of employee representational rights was issued.
Those voting also must have been given access to the draft agreement for seven (7) days prior to the vote.
The employer must also notify employees of:
- The time when the vote will take place
- The location where the vote will take place
- The voting method that will be used
For a single enterprise agreement to be made, a successful vote needs to occur. This is achieved when a majority of the employees of the employer who cast a valid vote endorse the agreement.
Fair Work Commission approval
This is the final step in having the draft agreement recognised and registered as an approved agreement.
Once the agreement has been made via a successful vote, a bargaining representative for the agreement must apply to the Commission for approval of the agreement. The application must be lodged with the Commission within 14 days of the agreement being made.
When the Fair Work Commission approves an agreement they take into account the following points.
- the agreement has been made with the genuine agreement of those involved
- the agreement passes the better off overall test
- the agreement does not include any unlawful terms or designated outworker terms
- the group of employees covered by the agreement was fairly chosen
- the agreement specifies a date as its nominal expiry date (not more than 4 years after the date of Commission approval)
- the agreement provides a dispute settlement procedure
- the agreement includes a flexibility clause and a consultation clause.
If there are concerns about any of the above points, the Commission may seek an undertaking from the employer to rectify any issues.
The next article in this series covers protected industrial action. How to minimise the chance of it, how it happens, and why a protected action ballot should be seen as a god thing for businesses.
Once it is published, you will find that article here: Enterprise Agreement – Protected Industrial Action
This is part 2 in a series on enterprise agreements.
You can find the first post in the series here.
In Part 1: Enterprise Agreements Part 1: What Are They? we discussed what enterprise agreements are, how they differ from Modern Awards and talked about what can and cannot be in one.
In this article, we will talk about the planning that should happen behind the scenes of the enterprise agreement.
So, without further ado, let’s get on with it.
Do You Really Need One?
This is probably the most important part of the whole Enterprise Agreement process. If you aren’t 100% sure that your business needs one, then don’t start the process.
Having an enterprise agreement in place will lock you into the terms and conditions that are in that agreement until another one takes its place or it is terminated.
An enterprise agreement is ideal if your business is going to experience growth during the agreement’s lifetime. Having one will simplify the process of paying your staff by taking away the confusion that exists with the Modern Award system.
What Do You Want It To Achieve?
Now that you have decided that your business does need an enterprise agreement, the next step is to decide what you want it to achieve.
A well written enterprise agreement can deliver wage increases along with the ever elusive productivity improvements. They can establish frameworks for dispute resolution and consultation that go beyond the basic clauses in the modern awards.
Enterprise agreements can also provide some stability for your staff by showing them what their wages with any annual increase whilst the agreement is in force, along with any productivity bonuses.
Drafting The Agreement
Ideally, it would make sense to have a draft agreement ready for negotiation as soon as you send out the notice of representational rights.
Keep in mind that the draft you start with could be completely different to the one that is sent out to vote. Though having one pre-prepared will save time and give both sides something to work from.
As with most things that a business does, it needs to be able to afford the proposed pay increases, if any are proposed.
It won’t do anyone any good to propose 6% annual increases for the next four years, if the company will have to downsize to pay for it.
For your first agreement, it might be wise to seek the advice of your accountant or bank manager if annual increases are proposed.
Once you have decided that you want to negotiate an agreement with your staff, you as the employer must notify your employees as soon as practicable and within 14 days of the start of negotiations, of their right to be represented during the negotiations.
This notification should be given to all of the employees who would be covered by the agreement and are employed at notification time.
As per the Fair Work Commission website, the following are bargaining representatives:
- an employer who would be covered by the agreement
- any union who has a member that would be covered by the agreement (unless the member has specified in writing that he or she does not wish to be represented by the union)
- any union that has applied for a low paid authorisation that relates to the agreement
- any person specified in writing as their bargaining representative by either an employer or employee who would be covered by the agreement.
Once a final draft has been agreed upon, there are a few more steps that need to be taken before an application for approval can be lodged with FWC.
As the employer, you must ensure that a) the terms of the agreement, and the effect of those terms, are explained to the employees; and b) the explanation is provided in an appropriate manner (e.g. appropriate for young employees or employees from culturally diverse backgrounds).
The draft agreement must be endorsed by the employees by voting on it.
The vote cannot occur until a minimum of 21 days have passed since the employees were given their notice of representational rights.
During the 7 day period prior to the vote taking place, the employees must be given a copy of the agreement, and any other material incorporated by reference in the agreement. The employer must also notify employees of the time and place at which the vote will occur and the voting method that will be used.
For single-enterprise agreements (excluding greenfields agreements), the agreement is made when a majority of the employees of the employer, or each employer, who cast a valid vote, endorse the agreement.
Once the agreement has been endorsed, an application can be made to the Fair Work Commission for the agreement to be approved.
To do this, a bargaining representative for the agreement must apply to the Fair Work Commission for approval of the agreement. The application must be lodged with the Commission within 14 days of the agreement being made or within such further period as the Commission allows.
The application must be accompanied by; a signed copy of the agreement and any declarations that are required by the Fair Work Australia Rules 2010 or regulations to accompany the application.
There are additional factors that FWC will take into consideration before approving an Enterprise Agreement, such as unlawful content and flexibility and consultation clauses.
The next article in this series covers the negotiation process, what to do, who to talk to, suggestions for conduct, etc.
Once it is published, you will find that article here: Enterprise Agreement – Negotiation