Category: Articles

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.

Writing A Position Description

IR Simplified - Position Description
IR Simplified - Position Description
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A common complaint the media jumps on is that the Fair Work Act and Modern Awards are too hard to understand.

There are even ‘experts’ like David Bates, who make up stories to fit with that claim.

As I wrote in the previous article, if you want to find a way to understand the Fair Work Act, don’t listen to the experts.

To further expand on that, I will be using the example that Mr Bates created, of Steve and his business.

While this article and other related ones will use Steve as the example, they can apply to any business.

What Does Steve Do?

Mr Bates’ example has Steve being the owner of a business that is a cafe/library/online hub.

It is safe to say that at a minimum, the employees would need to have barista skills. They will also need to be tech savvy, and have a deep understanding of the books stocked.

How this would actually work in the real world would be interesting to see.

While I am sure that the scenario is there to reinforce Mr Bates’ agenda, we will play along nonetheless.

Problems Started Earlier

Mr Bates would have you believe that the problems started when Steve contacted the Fair Work Ombudsman.

Except in Steve’s case, they started long before then.

Steve, like a majority of business owners, was of the belief that he could manage industrial relations himself.

While this is true of most businesses, in Steve’s case due to the complexity of his business, it wasn’t a good idea.

All the imaginary stress and trouble that Steve went through in David’s article could have been avoided if, he built the industrial relations side of his business on a good foundation.

And that starts with having a clear and concise position description

Using The Position Description

Having a position description will help Steve to understand which Modern Award applies to his business.

They will also help him by setting a standard that his employees are to follow, if their performance starts to drop, and disciplinary action is needed.

They will also help by setting a minimum qualification and/or experience that is required for employees to achieve a particular pay increment.

While it is easy to blame someone else when things go wrong, there comes a point when we have to own up to things.

If you are paying your staff wrong or don’t know which award applies then the buck must stop with you.

Time to learn how to use the legislation we have to our advantage, and not whinge about something we can’t change.

Small Business Fair Dismissal Code Webinar

Photo Credit: Nico Kaiser via Compfight cc
Photo Credit: Nico Kaiser via Compfight cc

As a small business owner, are you intimidated by the Fair Work Act?

Do you believe that it is virtually impossible to sack under-performing employees?

If so, then the webinar “Understanding the Small Business Fair Dismissal Code” is for you.

During the webinar, you will learn how you can use the Fair Work to your advantage.

You will also be shown how you can fire an under-performing employee without it resulting in a successful unfair dismissal application.

This is one webinar you won’t want to miss, and there is no sales pitch at the end.

You will get plain language ways to help you understand the Fair Work Act, and how it applies to small business in Australia

 

Understanding the Small Business Fair Dismissal Code

Wednesday 25 May 2016 at 10:00am(Qld Time)

Register for webinar

Top 7 Myths Relating To Industrial Relations

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Every industry or area of expertise has it’s fair share of myths and misconceptions. For better or worse, industrial relations is no different.

As with most myths, they have some foundation in truth. Then end up getting blown out of proportion or distorted by time.

In no particular order are some of the most common myths about industrial relations

Myth #1 – You need to have a degree in Law or Human Resources to understand Industrial Relations.

Continue reading

Do You Need More Policies or Better Managers?

IRSimplified: Company Policies
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Aren’t company policies wonderful and divisive things?

Some organisations swear by them. Believing that it isn’t possible to have too many of them.

Yet, there are as many who have had enough of them. Considering company policies to be the bane of a competent managers existence.

Does an excess of company policies show poor management or employees?

Once the plethora of policies are in place, are they there for good, or can you get rid of them?

Excessive Company Policies = Poor Management/Recruitment

I do not believe that having a large number of policies is good for anyone.

What it does tend to show is that a) the wrong type of people are being employed, or b) management has lost the ability to manage their staff members.

If the wrong type of people are employed, then that process MUST change.Continue reading

2016 And The Changes To IRSimplified.com.au

Tomorrow brings us into 2016, and for the past few days, the internet has been abuzz with talk of the changes that 2016 will bring.

That being said, and without it sounding cliched, or overdone, 2016 is bringing some changes to IR Simplified.

For the past few weeks, the team at IRSimplified.com.au have been busy putting things in place for the launch and re-launch of some new products and services.Continue reading

It’s Time For A Bribe

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Can I bribe you to subscribe to my email list?

There are some great things happening at IR Simplified in 2016.

  • Podcast re-launched
  • More informative articles on how to simplify your industrial relations challenges
  • Online training programs updated and relaunched
  • Introduction of two membership levels (details coming soon)
  • More webinars with practical advice
  • Hands-on training sessions

To be involved in these you need to be a subscriber to the IR Simplified newsletter or enrol in one of the membership plans.

While the only cost to you to subscribe to the email newsletter is the 5 or 10 minutes it takes you to read the weekly email, the benefit could be beyond measure.

Over the course of the year, you will find ways to simplify your industrial relations challenges, by improving employee engagement, minimising unfair dismissal claims, negotiating enterprise agreements and so on.

What About The Bribe?

The bribe, is available to new subscribers who subscribe before 31 Dec 2015, and will be the chance to win one of the following.

  • $100 Woolworths gift cards (2 available)
  • Their choice of online training program at no cost (2 available, worth $497)
  • A complimentary ticket to one full day training session in Qld (valued at $997)

To be in it to win it, add your details to the form below or follow this link

Workplace Investigation Webinar

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IR Simplified: Workplace Investigation Webinar
Workplace Investigation Webinar
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Conducting a procedurally fair workplace investigation is one of those things that a business cannot afford to get wrong.

Workplace investigations done incorrectly not only have the potential to expose the business to an unfair dismissal application, a workplace bullying or discrimination complaint could also be lodged.

Read through any of the recent successful unfair dismissal applications heard by the Fair Work Commission, and you will see how much they can cost a business.

The last workplace investigation webinar for the year will be held on Wednesday 16 December 2015, at 10:00 am QLD time.

The webinar is provided at no cost to you, and will go for approx 60 mins.

There may be a replay provided, though only to those who have registered.

You can register for the webinar by following this link.

I look forward to seeing you there.

Small Business Fair Dismissal Code. What Is It, And Does It Apply To Me?

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When the Fair Work Act 2009 (cwth) come into operation on 01 July 2009, it brought with it s388(1) the Small Business Fair Dismissal Code.

The Code gives small businesses some extra ‘protections’ from unfair dismissal applications when terminating an employee.

Though what is it exactly, and does it apply to your business?

Based On Number Of Employees

If your business is lucky enough to have less than 15 employees, per headcount, then you are classified as a small business, and the Small Business Fair Dismissal Code applies to you.

This means that any new employee needs to serve a minimum qualifying period of being employed for 12 months before they can access the unfair dismissal provisions of the Fair Work Act.

Unfortunately, this also means that if your business has 15 or more employees, then you aren’t classed as a small business. For those businesses, it means that employees only need to serve a qualifying period of six months before they can access the unfair dismissal provisions of the Fair Work Act.

Following The Code

As small businesses don’t have their own HR Departments, nor are they likely to access specialist advice, the Small Business Fair Dismissal Code was created to give small businesses a checklist that they can follow to ensure that the termination of an employee is legal and fair.

The theory is, that if a business follows The Code, they will be protected from a successful unfair dismissal application.

To do this, the business owner/manager answers the questions on the checklist, providing additional information where required.

The checklist is then added to the personnel file of the employee to be used/referred to if an unfair dismissal application is lodged.Continue reading