Category: Articles

How To Make Sure You Are Paying Your Staff Right?

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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.

Fair Work Ombudsman – Pay And Conditions Tool

FWO P.A.C.T. screenshot
Screenshot of Fair Work Ombudsman’s Pay And Conditions Tool

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

Are They An Employee Or Contractor?

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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

Episode 50: IR Simplified Podcast – Inappropriate Language

Episode 49: IR Simplified Podcast - No business should escape unfair dismissal laws
Episode 50: IR Simplified Podcast – Inappropriate Language

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

Continue reading

Enterprise Agreements

Enterprise Agreements - IR Simplified
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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?

Planning

Negotiation

Good Faith Bargaining

Protected Industrial Action

Voting

Fair Work Commission

After Approval

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

Enterprise Agreements Part 4: Good Faith Bargaining

Good Faith Bargaining - IR Simplified
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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.

Legislation

The Fair Work Act 2009, does specify some requirements that must be met, for the bargaining agents to be bargaining in good faith.

228 Bargaining representatives must meet the good faith bargaining requirements

(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.

Continue reading

Enterprise Agreements Part 3: Negotiation

Enterprise Agreement Negotiation - IR Simplified
Enterprise Agreement Negotiation - IR Simplified
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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.

Bargaining

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.

Approval

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

Enterprise Agreements Part 2 – Planning

Your First Enterprise Agreement | IRSimplified.com.auThis 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.

Costings

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.

Bargaining

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.

Bargaining Reps.

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.

Endorsement

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.

Approval

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

Enterprise Agreements Part 1: What Are They?

Enterprise Agreements. What Are They? | IRSimplified.com.auThis is part 1 in a series on enterprise agreements.

You can find the first post in the series here.

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.

BOOT

For an Enterprise Agreement to be approved by the Fair Work Commission, it must pass the Better Off Overall Test (BOOT).

Let’s say you want to avoid the confusion of when to pay penalty rates, you could roll those rates into the standard hourly or annualised salary.

For example, your staff have a standard rate of $27.00 per hour for a 38 hr week Monday to Friday, working an additional Saturday a month for 6 hrs.

Their normal weekly wage would be $1026.00 rising to $1323.00 when working the additional Saturday.

The new agreed wage could be $27.86 per hour flat rate, which would bring their weekly wage up to $1100.50.

To pass BOOT, the employee would need to get a wage over the 4 week period which is equal to or better than $4401.00 ($1026.00 x 3 + $1323). Over a 4 week period on the new rate, the employee would earn $4402.00.

This means that they are better off, and the rolled up rate would be acceptable.

Unlawful Content

An Enterprise Agreement cannot include unlawful content.

Some examples are:

  • A discriminatory term
  • An objectionable term
  • A term that would enable an employee or employer to ‘opt out’ of coverage of the agreement
  • A term that confers an entitlement or remedy in relation to unfair dismissal before the employee has completed the minimum employment period
  • A term that excludes, or modifies, the application of unfair dismissal provisions in a way that is detrimental to, or in relation to, a person
  • A term that is inconsistent with the industrial action provisions
  • A term that provides for an entitlement to right of entry that is not in accordance with Part 3-4 of theFair Work Act 2009, or,
  • A term that provides for the exercise of a State or Territory OHS right other than in accordance with Part 3-4 (which deals with right of entry).

From 01 January 2014, an enterprise agreement cannot include a term that requires superannuation contributions for default fund employees to be made to a superannuation fund, unless that fund:

  • Offers a MySuper product
  • Is an exempt public sector scheme, or
  • Is a fund of which a relevant employee is a defined benefit member.

Expiration

While the Fair Work Act says that an enterprise agreement cannot have a nominal expiry date of more than 4 years from the day it was approved by the Fair Work Commission. The enterprise agreement will remain in force until it is superseded by a new enterprise agreement, or an application for it’s termination has been approved.

Approval

For an Enterprise Agreement to be approved the FWC must be satisfied that:

  • the agreement has been made with the genuine agreement of those involved
  • the agreement passes the better off overall test and 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 four years after the date of Commission approval)
  • the agreement provides a dispute settlement procedure
  • the agreement includes a flexibility clause and a consultation clause.

Undertakings

The Fair Work Commission may approve an Enterprise Agreement that does not meet the requirements of the Fair Work Act 2009, if the employer agrees to enter into certain undertakings that will alleviate the concerns.

The views of each bargaining representative will be sought, and once the FWC is satisfied that the effect of accepting the undertaking is not likely to cause financial detriment to any employee and result in substantial changes to the agreement, it may be approved.

How Do I Prevent Protected Industrial Action?

Preventing Protected Industrial Action
Preventing Protected Industrial Action
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Protected Industrial Action.

One of those areas of industrial relations that receives more than it’s fair share of negative publicity.

Some say that employees should be prohibited from taking protected industrial action. Their claim is that it holds the employer to ransom.

Personally, I believe that it is only poorly managed businesses that should be fearful of it.

Clarification First

Before we get too far in, I’ll clarify a few misconceptions around industrial action.

From here on in, industrial action only refers to industrial action that relates to the Fair Work Act. Industrial action under relevant health and safety legislation is something different.

Protected Industrial Action.

This is where the employees have applied to the Fair Work Commission to ballot. Held a ballot, which has been successful, and then notified the employer.

It can only happen during the period of enterprise agreement negotiations.

And, in the following circumstances.

  • Application is made by one or more bargaining representatives of an employee, who will be covered by a proposed enterprise agreement which is not a greenfields or multi-enterprise agreement
  • Application is made no more than 30 days before the nominal expiry date of any existing agreement

Unprotected Industrial Action

This is when employees take industrial action without prior approval of the FWC.

In these situations, the employees are breaking the law.

It is then up to you to decide what action you take next.

Can It Be Prevented?

In a nutshell, protected industrial action cannot be prevented. Though you can apply to have protected industrial action stopped under certain circumstances.

My view is that a ballot for industrial action serves as a good litmus test on the level of employee engagement.

If the ballot is successful, then you haven’t adequately engaged your employees, or you aren’t listening to what they are saying.

Remember, it is the employees who decide whether the ballot will be successful.

Not the bargaining reps, or union officials.

How Can You Mitigate Your Risk?

Below are some steps that you can take to help reduce the chance of a successful ballot.

  • Don’t leave enterprise agreement negotiation until the last minute
  • Have your draft agreement voted on and agreed to, well before the current one is due to expire
  • When in the ‘bargaining period’, keep employees updated on meeting outcomes
  • Outside of the bargaining period, don’t treat your employees like mushrooms

The above give you a brief list of things that you can do to mitigate your risk.

That being said, there are additional things that can be done to reduce the chance of a successful ballot, and they will vary from business to business.

If you would like to know more on how to reduce the chance of a successful protected industrial action ballot, please contact us via the contact form or schedule a time for an free phone/skype consultation.

If you have any questions about protected industrial action, feel free to ask it on the IRSimplified Forum, Simplifying Industrial Relations Facebook group, or on LinkedIn.

Unfair Dismissal Realities

11637754_sUnfair dismissal.

Two words that are claimed to send chills down the spine of small business owners everywhere.

Making things worse for business owners are the various experts who have different views.

Time to throw agendas and fantasy out the window and share the realities of unfair dismissal.

You Can’t Prevent Unfair Dismissal

There are some unscrupulous businesses claiming that they can prevent an unfair dismissal application.

This is not true.

Any former or current employee can submit an unfair dismissal application.

If the former employee worked for you for one day they can lodge an application.

If they worked for you a six or 12 months ago, they can lodge an application.

They can even lodge one if they are still employed.

Whether that application is successful is what matters and a different story altogether.

You Won’t Be Pressured To Pay “Go Away” Money

A frequent complaint that I see in the media is that the FWC conciliators are only interested in go away money.

Based on my experience, this is also something that is not true.

Yes. The conciliator’s role is to is to reach a mutual agreement to the application. Though there is no obligation on either party to accept it.

You don’t even have to take part in the conciliation conference if you don’t want to.

It is up to the business to make a commercial decision about their part in the process.

If it is more cost effective to settle as opposed to attending a hearing, then that is what happens.

Only Employer Groups Can Represent Businesses

Lawyers and paid agents have to apply for permission to appear on behalf of their client. Unless, the lawyer or paid agent is part of a union or employer association.

There have been instances where the Commissioner has refused permission.

Though that doesn’t mean that you are left on your own, or you should join an industry group.

You can still have the lawyer or paid agent beside you during the hearing. And refer or consult with them during proceedings.

There Is No Such Thing As A “Probation Period”

To be protected from unfair dismissal, a minimum qualifying period to all applications.

For businesses with 14 or fewer employees, it is 12 months.

For businesses with 15 or more, it is 6 months.

You Have To Give Three Warnings Before Termination

There is no need to give an employee three warnings before termination.

If the reason for termination is gross misconduct, they can receive an “instant termination”. Though the safest thing to do is exclude, investigate, then terminate.

Small businesses are given extra consideration due to the Small Business Fair Dismissal Code.

You MUST Offer A Support Person

There is nothing in the Fair Work Act that says a support person must be offered.

What it does say is that one cannot be reasonably refused.

When you can refuse a support person depends on the circumstances, and the reason.

When In Doubt, Ask For Help

I was always taught to be cautious. As a business owner, I suggest that you do the same. Don’t take an “expert’s” word as gospel, and get a second opinion.

This includes everything that I have written here.

Check out the group Australian Industrial Relations on LinkedIn, or the facebook group Simplifying Industrial Relations.

You can also ask your question in the comments below.

The one thing to remember is that when it comes to industrial relations, you are never on your own.