15 June 2022
A new Financial Year is often a time when people will launch a new business. From an accounting perspective it makes sense. Starting the year off fresh. Ready and eager to seize opportunities. It’s also a time whereby many businesses start to explore the possibility of having a new hire on board. We know that this comes with a fair bit of decision making. So what better opportunity then now to remind you or provide some tips on Employer Obligations.
First and foremost, it goes without saying that Australia has one of the most complex Employment Landscapes in the world. It’s cascading and ever evolving. If you’re not staying on top of it, then there is potential for non-compliance. We know that sometimes this is unintentional. Nonetheless, it doesn’t take away from the serious nature when breaches occur.
So, if we take a step back for a minute, what exactly is the Employment Landscape in Australia? There is the Fair Work Act 2009 (Cth) (FW Act) that applies to every single employee in Australia. Then there are 121 Modern Awards that are based on certain industries and roles that cover a majority proportion of businesses. Then we have Enterprise Bargain Agreements that are based on the Modern Awards and then again on top of that, we have Employer best practice. How as a business owner are you meant to manage through that?!
Luckily, due to the cascading nature of the relationship, each different level has to be an improvement on the level before. This means an Employee cannot be worse off than they were before. But that’s more from a contract perspective. It’s how businesses maintain their commitment to some of the Employer obligations.
That might be something like record keeping. Given that record keeping makes up a part of the FW Act, all Employers have an onus of responsibility to abide by this rule. For example, pay slips must be issued within one working day of paying an Employee. All Employees must receive the Fair Work Information Statement when they join the business. As well, Employees must be paid no less than the minimum wage if they are not classified as an Award Employee.
In terms of the Modern Awards, these are a little more detailed and specific to industry and certain roles within them. This might be minimum and maximum amount of hours worked. It might be certain financial penalty rates and allowances payable for doing overtime, high risk roles, use of personal equipment etc. It might be around specific redundancy provisions like in some of the Awards that cover Trades. None the less, failing to comply with the Awards automatically deems the Employer to be in breach of the FW Act.
As for Enterprise Bargaining Agreements (EBAs), these are more lucrative than the Modern Awards. The majority of EBA’s have additional requirements or benefits for the Employees that are covered by them. Some examples include additional maternity leave, additional RDO’s and automatic pay increases to name a few. Again, ensuring that you adhere to these terms and conditions is necessary as failure to do so also constitutes a breach of the FW Act.
While an Employment Contract is not legally required, it is recommended as best practice from the onset of the employment relationship. An employment contract establishes the foundations on which the relationship is built. Ideally it is there as a safeguard to prevent disputes and minimize business exposure. Risk might come in the form of pay disputes, job role and responsibility, notice periods or certain entitlements. A contract doesn’t eliminate all workplace issues, but it does help long term by providing both parties with something that is reliable, consistent, and based on mutual understanding.
In addition to contracts, Workplace Policies and Employee Handbooks are also useful to assist in the management of risk. It is without a doubt that workplaces have certain excepted behaviors and unwritten rules about how things are done. That’s all well and good but what happens if there is change within the workplace or as an Employer you want to enforce some of these rules? That’s where these documents come in handy.
To be able to enforce a policy or procedure, it first needs to be in place so that it can be abided by. That means something in writing that is clear and concise that outlines what the expected behavior is or should be, who the policy covers and what the consequences are for breaching the policy. Again, this provides transparency for both parties.
While all of the above might seem paperwork heavy and create an administrative burden, we know that’s not the case. Having document processes and procedures to support your Employees is a no-brainer. Not only does it help you manage them, but it offers you protection. Maintaining your Employer obligations is not something you should ignore. Who wants to pay a fine when that money could be used elsewhere?
If you don’t have contracts, policies or a handbook let us help you. We can develop a customised suite of documents to suit your business. What are you waiting for? Meet with our team now.
