Late last week, the federal government announced that it has made some important changes to the Small Business Fair Dismissal Code Checklist.

And yes, these changes will affect you.

Why? Because from now on, before you dismiss an employee, you will need to follow the new version of the checklist to make sure you haven’t dismissed them unfairly.

The changes to the checklist include the addition of two new questions, which will prompt you to:

1. Check if a redundancy is genuine (if you are dismissing an employee for reasons of redundancy). It will ask you to make sure you have complied with any applicable redundancy consultation requirements and considered whether the employee could be redeployed within your business or a related business.
2. Check whether you have complied with any employee requests for a support person to be present.

You can access a copy of the updated Small Business Fair Dismissal Code Checklist here.

For more information on the dismissal process, check out the Dismissal and Unfair Dismissal chapters in your Employment Law Practical Handbook.

Not yet a subscriber to the handbook? Click here for more information on how it could help you.

Until next time…

Claire Berry
Workplace Bulletin

And now over to our Editor-in-Chief Charles Power…

Continues below…

2 ways to make sure employees on annual salaries don’t dispute additional hours
By Charles Power
Editor-in-Chief, Employment Law Practical Handbook

If you have employees on annual salaries, you no doubt expect that salary to cover all hours that they work. The last thing you want is for your employees on annual salaries to try and claim payment for additional hours of work!

Well here are two ways you can ensure this won’t happen to you:

1. Make sure you specify in your employees’ contracts that their salary is paid for all ordinary hours worked as well as any other hours that are required to complete the requirements of their position.
2. If the role will require the employee to work more than 38 a week on a regular basis, make this clear in their employment contract.

Make sure you’re careful though – if an employment contract does not set out an averaging period for ordinary hours of work, it may be difficult for you to request the employee to work additional hours.

Why? Because if you direct an employee to work additional hours, they are well within their rights to refuse on the grounds that it is an unreasonable request.

For more information on reasonable additional hours, check out chapter M3 Minimum Conditions of Employment – Hours of Work in your Employment Law Practical Handbook.

Not a subscriber? Click here for more information.

Regards,

Charles Power
Editor-in-Chief
Employment Law Practical Handbook

Last Wednesday, Fair Work Australia’s minimum wage panel passed its first ever decision.

They chose to increase modern award minimum weekly wage rates by $26 – that’s up an extra 69c an hour.

And you haven’t got long to adjust either…

The new minimum wage rates take effect from the first pay period on or after 1 July 2010 – that’s less than a month away!

To make sure you calculate your new obligations correctly, check out Charles’ article below.

Until next time…

Claire Berry
Workplace Bulletin

And now over to our Editor-in-Chief Charles Power…

Continues below…

How to calculate your new minimum wage obligations
By Charles Power
Editor-in-Chief, Employment Law Practical Handbook

Last week, Fair Work Australia handed down its first minimum wage decision. It awarded an increase of $26 to all modern award minimum weekly wages (with proportionate increases in hourly minimum wages and annual salaries).

This means you can now work out precisely what your new minimum wage obligations will be under any applicable modern award. These obligations will apply from the first pay period after 1 July 2010.

Currently, your minimum wage obligations are set by old State awards or other instruments. If that minimum wage obligation for a particular employee is less than the current modern award rates, then your minimum wage obligation after 1 July 2010 may be less than the new modern award rates.

However, if that minimum wage obligation for a particular employee is more than the current modern award rates, then your minimum wage obligation after 1 July 2010 will not be less than the new modern award rates.

For example:

You employ a Level 1 clerical employee with at least 3 years’ experience under the Clerks Private Sector modern award. The modern award weekly wage for that employee is $630 or $16.58 an hour.

From the first pay period after 1 July 2010, the modern award weekly wage for that employee will increase to $656 or $17.26 an hour.

If you are currently paying the employee above the new modern award pay rates, then read no further!

If you are in NSW, your current minimum wage obligation for that employee is the old NSW Clerical Award rate of $679.30. Because that is more than the current modern award rate, your minimum wage obligation after 1 July 2010 will not be less than $656.

However, in Queensland, your current minimum wage obligation for that employee is the old QLD Award rate of $602.20. Because that is less than the current modern award rate, your minimum wage obligation after 1 July 2010 will be less than $656.

To calculate how much less, take the following steps:

Step 1: Calculate the transitional amount (this is the difference between the modern award rate (before the national wage increase) and the current minimum wage):

$630 minus $602.20 = $27.80

Step 2: Calculate 80% of the transitional amount:

0.8 x 27.80 = $22.24

Step 3: Deduct the amount calculated in Step 2 from the modern award rate after the national wage increase:

$656 minus $22.24 = $633.76

Therefore, on the first pay period after 1 July 2010, your new minimum wage obligation in QLD for this employee is $633.76 or $16.68 an hour.

Remember, this process applies to you even if you have an operative enterprise agreement in place. While the agreement means that the modern award does not apply, the rates in the agreement cannot be less than the minimum wage rate provided for in the modern award.

Regards,

Charles Power
Editor-in-Chief
Employment Law Practical Handbook

But you need to be sure that you never discriminate against anyone in your workplace in any way.

So I thought today would be good chance to recap exactly what is meant by discrimination.

In short, discrimination occurs when you treat a person or group with an identified attribute or personal characteristic less favourably than others.

But sometimes discrimination is not as cut and dried as you might think. For example, you can discriminate against an employee directly or indirectly.

Direct discrimination occurs when you treat an employee or group of employees differently because of a particular personal characteristic. For example, if you do not hire women on the basis that they may have children at some stage in the future, you would be directly discriminating against them.

Indirect discrimination happens when a policy, work requirement or company practice that appears neutral actually results in a particular person or group of people being unfairly disadvantaged.

For example, if you specify that fluent English is a requirement for a job, but only basic English is actually necessary to successfully perform the role, you would be indirectly discriminating against people who do not speak fluent English.

For more information about discrimination in the workplace, check out the Discrimination chapter in your copy of the Employment Law Practical Handbook.

Not yet a subscriber to the handbook? Click here for more information.

Regards,

Charles Power
Editor-in-Chief
Employment Law Practical Handbook

Even though I haven’t spoken about it much in the Bulletin lately, you will probably remember that the Federal Government’s paid parental leave scheme is due to kick off from 1 January 2011.

And there’s no doubt about it…

It will be a huge change!

You will need to be aware of exactly how paid parental leave will affect your business. For example, you will need to know how to make payments to employees… who is eligible for the scheme, and much more.

Nothing has been set in stone just yet, but earlier this month, the Government released draft legislation that is due to be finalised soon.

In his article today, Charles will go through what this draft legislation contains and what it will mean for your and your business.

Stay tuned to future Bulletins for more information on paid parental leave as it becomes available.

In the meantime, to find out more about parental leave in general, check out the Parental Leave chapter in your Employment Law Practical Handbook.

Not yet a subscriber to the handbook? Click here for more information.

Until next time…

Claire Berry
Workplace Bulletin

Just last week, the Federal government announced that breastfeeding will soon be established as a separate ground for discrimination.

Even though breastfeeding already falls within the current definition of sex discrimination, the Government plans to make breastfeeding a whole new ground to emphasise the fact that it is a protected attribute.

It also plans to introduce legislation that will prevent employees being discriminated against on the grounds of their family responsibilities.

The government have yet to announce exactly when these new measures (along with a number of other changes I will discuss in future Bulletins) will be introduced.

But they are coming…

How to make sure new changes to discrimination legislation won’t affect you

Before these changes are brought in, you should review your current policies and practices.

This will help you determine if the new legislation will impact the way you do business and will also help you avoid liability down the track.

You should ask yourself the following questions:

• What is your approach to dealing with employees who have family responsibilities?
• What is your approach to breastfeeding in the workplace?
• Are your approaches to these matters lawful?
• Do you have policies in place that outline your approach to these matters?

If you don’t already have sound, lawful policies in place, now would be a good time to introduce them.

That way you can get in before the legislation is officially brought in and minimise your chances of breaching it!

Check out Charles’ article below for a recap of the things you can never discriminate against an employee for.

Until next time…

Claire Berry
Workplace Bulletin

A recent decision of the Administrative Appeals Tribunal, Associated Translators & Linguists Pty Ltd v Federal Commissioner of Taxation, showed how this distinction can affect a businesses liability to pay workers’ superannuation guarantee charges.

The case showed that when deciding whether workers are employees or contractors, the courts will look at a number of factors (we have called these ‘control factors’ in the Employment Law Practical Handbook’s chapter on Independent Contractors).

They will look at the structure of your organisation and how the worker fits into that structure. In other words, they will pay close attention to whether the work the worker performs constitutes the service of your business, or whether you use the worker’s work as an ‘input’ in order to provide your usual service.

In Associated Translators & Linguists Pty Ltd v Federal Commissioner of Taxation, the work relationship in question was quite ambiguous. There were a number of factors that suggested the relationship was one of an independent contractor. For example:

• the employment contract referred to the worker as an ‘independent contractor’;
• the worker was able to carry on the business of a translator on their own account; and
• the worker was providing a skilled service.

Nevertheless, the tribunal classified these workers as employees. In coming to this decision, the tribunal took into account the fact that the work performed by the workers constituted the entire service of the business and that the business could not be carried on in a reasonably efficient way without the workers.

In addition, the company:

• imposed strict reporting obligations on the workers;
• restricted their right to delegate work; and
• paid the workers for hours worked (as opposed to paying for a result).

As a result, the tribunal found the company was liable to pay the superannuation guarantee charges of its workers.

So when you are classifying the workers in your business, make sure that you have examined the totality of the relationship and are aware of your rights and responsibilities toward them.

For more information about independent contractors, check out the Independent Contractors chapter in your Employment Law Practical Handbook.

Not yet a subscriber to the handbook? Click here to find out more.

Regards,

Charles Power
Editor-in-Chief
Employment Law Practical Handbook

This week, I’ll show you a few more…

Consultation

If you decide to introduce any changes in your business that might have significant effects on employees, you have to give advance notice of the change to affected employees and discuss how any adverse impact on them can be avoided. It is particularly important to follow this when you are implementing multiple redundancies, because if you don’t it will count against you in any unfair dismissal claim that results from the retrenchments.

Resignation

If an employee fails to give the required notice of resignation, you can deduct an amount from any monies due to them on termination under the award or the NES. This amount must be equal to the amount the employee would have been paid if they had served the notice. For example, if the award requires an employee to give 4 weeks’ notice of resignation and they walk out with no notice, you can deduct 4 weeks’ pay from their annual leave payments.

Superannuation Guarantee

Non-payment of SGC used to only be an issue between the ATO and you. Now, however, modern awards reinforce this obligation. Therefore if you fail to pay SGC you will be breaching the award and might attract the interest of the Fair Work Ombudsman.

These are some common award provisions that may affect you, but remember, not all awards are the same. You should check the terms of the award/s that apply to you.

Regards,

Charles Power
Editor-in-Chief
Employment Law Practical Handbook

Because not all awards are the same, you should check the terms of the award that applies to you.

Some common provisions that may require you to change your current practices are outlined below.

1. Classifying your employees

Many awards require you to state the award classification for each employee in writing. For new employees this can be in their letter of engagement. For existing employees this can be done in the memo you issue at the next salary review.

But first you need to work out what the classification is – and this is not necessarily straightforward!

2. Leave loading

When an employee leaves your employment, you have to pay them out their accrued leave. Do you have to pay leave loading on the accrued leave? Yes, unless the award provides otherwise – and most are silent on the issue. This is because the awards incorporate the NES, which in turn provides that annual leave payments on terminations must equal the amount that would have been payable to the employee if they had actually taken that period of leave.

3. Part-time employees

Most awards provide that when you engage part-time employees you have to stipulate (in writing) which hours they will work each day, which days of the week they will work and their specific starting and finishing times each day. Any agreed variation to the hours of work will be recorded in writing.

You could achieve a variation by requesting it by e-mail. The employee can accept the variation by responding to the e-mail, phoning you to indicate agreement or even just simply turning up. If they don’t agree then you can require them to work the hours anyway – but you will have to pay them overtime!

Some awards provide that you can change rostered hours for part-timers or call them in on rostered days off at short notice if the employee consents. Some awards also provide that you can replace employees who do not work their rostered shifts because of sickness or some other cause over which you have no control (eg the Hospitality Award).

However, if the hours depart from the agreed hours worked each day of the week, you will need to record the agreed variation to the hours of work in writing to avoid attracting liability for overtime.

Stay tuned for next weeks’ article – I’ll show you more common award provisions that may mean you have to adjust your current practices.

Regards,

Charles Power
Editor-in-Chief
Employment Law Practical Handbook

So this week, I thought I would give you two questions you can ask yourself if you are still unsure about whether a worker is an independent contractor or an employee.

They should help you to decide once and for all!

1. Is the worker running their own business or enterprise with independence in the conduct of their own operation?

If so, the worker is a contractor.

2. Is the worker operating as a representative of your business with little or no independence in the conduct of their operation?

If so, the worker is an employee.

If you still need clarification, or more information about independent contractors, please refer to the Independent Contractors chapter in your copy of the Employment Law Practical Handbook.

Not yet a subscriber to the handbook? Click here for more information.

Regards,

Charles Power
Editor-in-Chief
Employment Law Practical Handbook

Lately in the Bulletin, I’ve been reminding you about all the changes the Fair Work Act has introduced and how to make sure you comply with them.

You know the ones I mean – Modern Awards, the National Employment Standards, Enterprise Agreements, the changes to dismissal and redundancy laws, etc…

But today I thought I’d focus on a change you may not know about – your obligation not to make “sham” independent contractor arrangements.

How to make sure you don’t discriminate against independent contractors

You’ve no doubt heard that the Fair Work Act has introduced new legislation known as “general protections”. In a nutshell, it means that your employees are protected by law in a heap of new ways.

But you need to remember that general protections legislation doesn’t just protect your employees – it also protects your independent contractors.

Under general protections legislation, it is unlawful for you to make what is known as a “sham” independent contractor arrangement.

A “sham” independent contractor arrangement is made when you misrepresent an employment arrangement as an independent contractor arrangement. In other words, if you employ someone as an independent contractor, but they are actually an employee, you will breach general protections legislation and leave yourself open to prosecution.

So how do you tell the difference between an independent contractor and an employee?

Telling the difference can be a difficult task, but there are a number of things that can help you distinguish between them.

Charles’ article below has some great tips on how to tell the difference between an independent contractor and an employee.

You can also check out the General Protections chapter in your Employment Law Practical Handbook for more information on how to make sure you don’t enter into any “sham” independent contractor arrangements.

Not yet a subscriber to the handbook? Click here for more information.

Until next time…

Claire Berry
Workplace Bulletin