Over the last two months, we have seen a huge increase in businesses requesting we conduct our free compliance check on their business. The reason for this is the implementation of the new Modern Awards and the National Employment Standards. We are now seeing the effect of these new awards and standards on business and the additional burdens they involve. Our experience with these reviews has enabled us to identify the 5 most common things we are seeing that businesses need to change because of the new laws.
Here they are (in no particular order):
- Expectations of 40 hour working week - a 40 hour working week is not in accordance with the National Employment Standards. These standards set the maximum number of hours at 38 hours. Now there are ways businesses can continue to use a 40 hour working week providing their employees are better off overall. But these need to be agreed in writing through either individual flexibility agreements or a collective agreement.
- Ordinary working hours not in accordance with the new Modern Award - the new awards may include a change to the hours used to define ordinary working hours. This means that from 1 July 2010, overtime or penalties may kick in at new times when compared to other agreements. These are subject to transition arrangements, but businesses need to be aware of the potential of extra cost here. Once again these may be changed by individual flexibility agreements etc.
- Businesses still utilising State Awards - All Australian States (except W.A) have referred their powers for industrial relations to the Federal Government. This means that, except for state government employees, the vast majority of employers previously on a state award are now covered by new modern award. Businesses need to be aware and compliant with the appropriate award.
- Lack of awareness of National Employment Standards - the National Employment Standards lay down the minimum standards of employment for all employees. By not being aware of the changes between the standards and their current practices, employers run the risk of being in breach of the standards. A couple of the most common things we are seeing are an unawareness of new work flexibility requirements and the altered termination and redundancy requirements.
- Thinking they can ignore the changes - this is just not a smart business move, but a number of businesses are electing this option. I recommend if you are considering this, you visit the Fair Work Ombudsman website and read the press releases concerning the breaches they have identified and taken action against.