VANA Industrial Relations Alert. October 2016

Transcription

1 VANA Industrial Relations Alert October 2016 Could we see the introduction of loaded rates of pay in the retail sector? Do you pay a loaded rate of pay, rather than calculating penalty rates and overtime rates separately? If so, it is your obligation to ensure that what you pay is sufficient so as to cover at least the minimum entitlements that your employees would have been otherwise entitled to receive. While this may sound like a relatively straight forward process, the reality is that consumer demand fluctuates, making it difficult to pre-estimate an employee s roster. And with Sunday penalty rates being so high, whether an individual works every second or every third Sunday can have a huge impact on what they should be paid. Some employers, such as those operating in the Hospitality industry, benefit from award provisions allowing them to pay a specified loaded rate of pay or annualised salary for all hours worked, rather than applicable penalty rates and overtime rates. While those in retail and other industries aren t so lucky, the President of the Fair Work Commission recently indicated that this could all be about to change. What are my obligations? Under the General Retail Industry Award 2010, you are required to pay your employees various penalty rates and overtime rates, as well as allowances and loadings. Your obligation is to ensure that your employees receive at least their minimum entitlements, either by calculating each of these separate penalty rates and overtime rates, or by paying a single loaded rate of pay. Your obligation is the same if you chose to pay an annualised salary. You must be able to demonstrate that this salary is sufficient to cover all minimum entitlements that the individual would have received over the course of the year. While this sounds simple, the Fair Work Ombudsman has recently conducted a number of successful random audits and workplace investigations, uncovering the fact that employers continue to get this wrong time and time again. The Ombudsman has been targeting anyone and everyone, from large national organisations right down to small mum and dad operators. The consequences of getting this wrong are serious. An inadvertent error will inevitably result in a time consuming audit being conducted and costly back payments being made to those employees affected. However, there are also hefty penalties for blatant non-compliance, those being up to $54,000 per breach for a corporation and $10,800 for any individual who is involved in a contravention.

2 These penalties are only set to increase after the Coalition announced its intention to introduce a new higher category of serious contraventions. This category will be accompanied by a 10 fold increase in the current maximum penalties and will apply to any employer who has intentionally ripped off workers, regardless of the size of the business. The modern award review process and the penalty rates case: Following the Productivity Commission s recommendation that Sunday penalty rates be reduced, the Fair Work Commission has been busy hearing arguments from unions, employers and businesses as part of the 4 yearly review of modern awards. The Fair Work Commission is currently considering changes to the penalty rates in a number of different awards, including the General Retail Industry Award 2010, Fast Food Award 2010 and the Restaurant Industry Award 2010, amongst others. While a decision is now not expected until late November, it is largely expected that the Commission will accept the submissions put forward by employer organisations that Sunday penalty rates should be reduced. If successful, this reduction will come as a huge relief to many retailers and other organisations who are currently required to pay excessive penalty rates for work performed on Sundays. Could we see the introduction of a loaded rate of pay for retail employees? Speaking at the recent Future of Retail conference held in Melbourne, Justice Iain Ross flagged the possibility of allowing employers to pay a specified higher loaded rate of pay instead of complex penalty rates and overtime rates that currently exist. Major retailers have for some time now been able to negotiate loaded rates of pay through enterprise bargaining, thereby leaving smaller businesses at a disadvantage. Recognising the significant process of change that the retail industry has undergone, Justice Iain Ross reportedly advocated for a loaded flat rate of pay to be specified in the Award, subject to appropriate safeguards. A loaded rates schedule would allow small businesses to access additional flexibility, without the need to enter into an enterprise agreement, remarked Justice Ross. While there is nothing inherently wrong with paying your workers a loaded rate of pay, you have an obligation so as to ensure that the rate you pay is sufficient to offset all minimum rates of pay and entitlements that the employee is otherwise entitled to. Although the introduction of a loaded rate of pay for retail employees is a long way off, Justice Iain Ross recent comments demonstrate that the concerns of those in the retail industry face are being heard loud and clear.

3 For more information regarding loaded rates of pay please contact the VANA Employment Relations Team on Common questions about casual employees answered Christmas is fast approaching and many members are looking forward to strong sales over the coming months. But have you considered your staffing arrangements as the season moves closer towards summer? Are you considering hiring casuals? Here are the answers to the 5 most common questions that members have in relation to casual employees. 1. Do casual employees need a written contract of employment? There is no legal requirement to have a written contract of employment for any employee. But what happens when everything goes wrong? A well-drafted employment contract is first and foremost designed to protect you, the employer. Members are advised to contact the VANA Employment Relations team to discuss the ways in which we an assist you. 2. How much notice do I have to give if I want to cancel a rostered shift for a casual employee? This is usually covered in the employment contract. A casual employee under the retail award must be rostered for a minimum of 3 hours per shift. However, a rostered shift can generally be cancelled by giving the person reasonable notice, which can be as little as 1 hours notice. 3. Do casual employees get overtime? Casual employees covered by the General Retail Industry Award 2010 are not entitled to overtime, regardless of what days and times they work. 4. Do casual employees get penalty rates? Casual employees covered by the General Retail Industry Award 2010 will get an additional 10% penalty for hours worked on Saturdays, double time on Sundays and double time and a half on public holidays. 5. Can a casual employee bring an Unfair Dismissal claim?

4 A casual employee who has served the Minimum Employment Period and who has been employed on a regular and systematic basis can bring an Unfair Dismissal claim. A casual employee can also bring a General Protections claim or a Discrimination claim against you. A number of recent cases have seen casual employees awarded significant compensation following termination of employment. Members are advised to always contact the VANA Employment Relations team and discuss the risks prior to termination. For more information regarding casual workers please contact the VANA Employment Relations Team on common workplace myths busted Myth 1: I can t fire someone until I have issued 3 written warnings Fact: Surprisingly, there is no legal requirement to issue 3 written warnings before termination. You should, however, take steps to prevent an irritating unfair dismissal claim. Sometimes a single serious instance of employee misconduct may be enough to justify termination. However, in the case of poor performance, you are required to undertake some performance management before termination. Myth 2: I can only request a medical certificate if an employee takes sick leave around a weekend or a public holiday Fact: This is incorrect. As the employer, you have the right to request a medical certificate on each and every occasion that an employee is absent from the workplace due to illness or injury. Myth 3: It is safe to sack someone within their first 6 months of employment Fact: It is true that an employee must have served the Minimum Employment Period before they can bring an Unfair Dismissal claim. But an employee s length of service will not stop them from bringing a costly General Protections claim or a claim under Australia s anti-discrimination legislation. You should therefore always consider the range of potential claims that you are exposed to before dismissing an employee. Myth 4: There is no risk if I just cut a casual employee s shifts, rather than sacking them Fact: Although a casual employee will generally have no entitlement to fixed shifts or any expectation of ongoing work, you should be careful to avoid risking a constructive dismissal. A constructive dismissal occurs where an employee considers your actions forced them to resign. An employee who has been forced to resign because of your actions will be able to bring the same claims as one who was actually dismissed.

5 Myth 5: If a worker has an ABN then they are an independent contractor Fact: The fact that someone has an ABN does not automatically make them an independent contractor. Whether a person is in fact an employee or a contractor is a complex legal question that depends on a range of factors and the nature of the relationship as a whole. Sham contracting is prohibited under the Fair Work Act 2009 (Cth) and there are hefty penalties for employers who get it wrong. For more information regarding this alert please contact the VANA Employment Relations Team on