The unions last week began a push to enable casual employees to transfer to permanent employment.
The plan proposed by the unions would require employers to make casual employees permanent after 12 months. There was also some discussion in the plan about governments “favoring’ companies with majority permanent workforces in the awarding of contracts. The unions believe such an approach is necessary to tackle “precarious employment”.
Business groups were not happy (as you would expect) claiming that such moves would drive companies “to the wall”. They called the approach a “misguided view of the jobs sector” and said “it doesn’t relate to the modern-day Australian economy, which is dominated by the services sector”.
We gave had such rules before. In 2004/5, rules where “regular and systematic” casual employees were allowed to request part time employment were introduced. We had a similar “hue and cry” then!
From my experience, very few casual employees wanted to take up the opportunity. Australian workers generally understand the difference between casual and permanent employment and are often loath to let go of the 20-25% loading for casual employment.
Casual employment is designed to allow an employer to handle the peaks and troughs of their business. Casual employment contains no guarantees and no expectations of employment beyond the end of the current shift. In its purest form, it is “call and come to work”. Because there are no guarantees or expectations of future work, a loading is paid to compensate for the lack of annual leave, sick leave etc etc.
But the needs of the business often necessitate rostering casuals for work, sometimes weeks in advance. Overtime, this leads to businesses adopting rostering systems which virtually “guarantee” work to a casual. Basically, the employment becomes “regular and systematic”. When work becomes regular and systematic, the question needs to be asked – are they really casuals?
This is the point behind the unions push. If a person is employed as a casual but doing regular shifts and systematic work then they should receive the entitlements of permanent employees because in practice, that is what they are.
Whether you agree or don’t agree with the unions, there are many advantages to creating a permanent workforce in your business. A guarantee of employment encourages commitment and develops “ownership” in the role. Accountability is easier to assign to someone whose employment is guaranteed and your ability to develop consistent behaviors’ is improved.
Many businesses I deal with argue that putting on permanent staff “takes away the flexibility” from their business. For some businesses this may be true, and for them, I would not recommend such a measure providing the employment they were offering was not “regular and systematic”.
Another argument I often hear is that it is too expensive to have permanent employees. Well, the fact is that in the long run it is probably cheaper! While you need to accrue leave etc, you will not be paying the 20-25% loading and your productivity will most probably improve. The reality is that it often has nothing to do with “cost” but more to do with “ease” – it is easier to pay everything out with a 20-25% loading than have to “accrue”.
The ease of “getting rid” of casual employees is also stated as a reason for keeping people as casuals. However, the reality is that if they are regular and systematic in their employment, the unfair dismissal rules will most probably apply – the end result being that this argument is flawed in its execution!
For any workforce, permanent or casual, I recommend you sit down and work out the number of hours being worked in your business. Is there a constant number of hours worked in each week? This is the first step in working out whether you can (or should) put permanent employees in place. If you can, casual employees can then be used to handle the peaks and troughs – not for the constant hours.
If you must have casuals in your business, then think seriously about how you work with them. Do you roster them in a regular and systematic way? Do you need to do this? Can you do it any other way? In other words – do some workforce planning!
Would you like to know more about how you can improve the use of people in your business? At People Smartz, we assist businesses in planning for the most efficient and effective use of their workforce. We work with you to ensure that you are using your most important resource in a manner which leads to success for you, your business and your team. Call us today!
A free (and optional) super clearing house service is now available to small businesses with less than 20 employees to help them meet their super guarantee obligations.
The Small Business Superannuation Clearing House is administered by Medicare Australia and lets employers pay their super contributions to a single location in one simple electronic transaction.
Small businesses that register to use the service will have their super guarantee obligation discharged, as long as all of the following apply:
Employers who receive an employee's choice of fund nomination will have their choice obligation discharged if they pass the information to the clearing house within 21 days of receiving the choice of fund nomination.
Small businesses can register online for the service by:
She said the number of claims in the 12 months to June this year was 10,751. This is significantly up from 2008-2009 where a total of 7,994 claims were made.
If you like talking in terms of percentages, this is a 35% increase in claims.
Significantly, she also said that “83% of claims” were resolved through conciliation. She used this as evidence that the new system was “working”.
I am seeing clients weekly who are becoming more concerned about the effects of the new laws and the ease of making an unfair dismissal claim. For them, the figure of “83% of claims” is evidence that the system is “not working”.
They are hearing stories of businesses paying “go away” money to make these claims go away – regardless of the validity of the claim.
Now, there has to be some protection for employees against unfair dismissal – I don’t think anyone will argue with me on that. Laws of the type we have now work better in the corporate environment, and largely that is where their designed for use (I will not argue whether they “work” in the corporate environment – that is another issue). In smaller businesses however, a different set of circumstances are at work.
First, SME’s normally do not have access to HR Teams or the systems in place to manage problem situations. Normally they are handled from gut instinct or based on a small amount of experience. Often that experience is under previous industrial relations regimes and not necessarily relevant to the current circumstances.
Second - Without having the systems in place, the business owner and the employee are often directly affected by the complexity of the new laws. The majority of small business owners I have spoken to have never heard of the “Fair Dismissal Code for Small Businesses” and have very little idea about the steps they need to take to protect their business – and themselves.
I regularly receive calls from businesses that are having problems with employees. Because they do not have formal processes in place, they are concerned that their actions may result in a complaint or claim against them. The regularity of these calls is increasing. Another example of this is the increasing number of businesses approaching People Smartz to request assistance with putting in place systems to protect their business – this has increased by 22% since this time last year!
For the first time ever, we are also receiving calls from employees – asking how they go about making a claim! Over the last month, we have received 12 such calls with another 5 queries through our website. All except one have revolved around perceived unfair treatment in the workplace or underpaid entitlements.
While this is good for our business, the fact is that small to medium sized businesses need education, a concentration on developing fair and equitable systems and assistance with developing productive and efficient workforces. They do not need increased complexity, aggressive regulation and regulatory systems that encourage claims regardless of their validity.
However, this is the regime that we have. The Work Choices legislation has resulted in a polarization of the debate about the industrial relations system and we are unlikely to see a constructive debate about the system for awhile yet. As a result, businesses need to work to develop the needed systems and infrastructure to ensure they are compliant.
People Smartz is ready to assist small to medium sized businesses to ensure they are compliant and protected. We offer a number of services designed to review and inform businesses of the areas of risk in regards to the new legislation. Why not start by booking your Human Resources Review of Your Business today!
Recently I read a blog by a member of a large international coaching organization. In the blog, the writer quoted W Edwards Deming (a guru of quality management and credited with the rise of Japan as a world powerhouse in manufacturing after WW2).
According to the writer, in the quote, Deming said that “that 94% of all failures in a business are the result of the “systems” in the business and only 6% of the failures are caused by the people in the business.”
I agree with Deming, however I disagree with the blog writer (who even managed to spell Deming's name incorrectly) who basically then went on to use this quote to explain why systems over people will create “leverage” in the organization.
The basic fault with the article was that it was designed to promote a systematic version of business coaching that is more concerned with short term gains rather than long term ones. It is designed to encourage people to take a one size fits all approach to a business without taking into account the individual aspects of; or the people in, their business. In short, it was an article designed to inform about how to save time, create a picture of short term success and promote their product.
Now, I’ll be up front and say that my blog is designed to raise the profile of my business. I believe you were probably aware of this when you started reading; however my approach here is to ask you to think about the relationship between people and systems.
I believe that a business’s success is a result of the direct relationship between efficient systems and the people running them. Systems are not the end, they are the beginning of the real process – that of creating a long term viable business.
See if you agree with the following comments:
I am not writing here saying that systems are not important. In fact I believe they are important tools in maintaining consistency and quality, setting expectations and ensuring your business succeeds. The more systemized a business is, the more likely it is to succeed. Not because it is systemized, but because the systems create the time to concentrate on the important factors of business success.
The important word in the previous paragraph is “tool”. Because that is what a system is - a tool that assists you, and your team, to achieve business success. Imagine telling a carpenter that he didn’t build the shelf, the power drill did? Would he or she accept that? No way! It is the same with your business, you need the systems as a tool towards the end product – and success for your business is the end product.
But regardless of the systems you have in place, it is important to have the right people to run them. This means becoming very good at knowing who the right people are in terms of attitude, skills and abilities. Simply getting the right person in your organization, training them and working with them is probably one of the most important roles of a business owner or manager.
I know of one coaching organization that is so systemized in its recruiting approach that it advocates placing an answering machine on the phone, asking people to sell why they should get the job to the answering machine and then inviting the best answers to a “group interview” (Don't believe me - drop me a line and I'll give you the title of the book!) The designers of this "system" know business owners are time poor, they know that saving time is attractive - so they have come up with a system designed to “save time” not to select the right person. Ask yourself would such a system really work for your business? Would you be confident of selecting the right person?
In the last week, I have received a call from a client of one of the bigger coaching groups. They are looking for a business coach who is “people” rather than “system” orientated.
They commented that they had commenced coaching on the same week as another business run by a couple they are friendly with. They were in different capital cities, using a different coach from the same international coaching franchise.
The funny thing is that they had compared notes and found that the things they were being asked to do, the information they were being given and the advice they were being given was exactly the same – even to the point of them receiving exactly the same fax one day before a coaches visit on the same week of their program! What’s more, they both saw red when advised that all future coaching sessions would be over the phone to “save them time” – and that advice was given in the same week!
Maybe they were similar business you say? No - one was retail and the other light manufacturing, one had 120 employees, the other 15. One had been established less than a year, the other more than 10. In short, they were being coached via a system with no tailoring for their individual needs. Both companies are now in the process of finding a new coach. Why - because it was the system that was coaching them, not the coach.
To end this article, I would like to go back to W Edwards Deming. In his book “Out of Crisis”, he advocated a 14 point plan to save US industry in the 1980’s. While Deming was a big (read this to mean big) believer in systems, he was criticized for providing a set of goals (his 14 points) without providing any tools to make them happen. When asked about this by managers his reply was “You’re the manager, you work it out”.
And to end, another quote from Deming – “A system must be managed. It will not manage itself” (The New Economics for Industry, Government, Education (1993))
Seems even the quality guru, Deming, believed that business was about a relationship between people and systems....
I can only say that business coaching and consulting is the same. Think about this next time you look for a business consultant or coach – regardless of their specialty area!
P.S. I have made several comments and criticisms in this article, If you would like details of where this information has come from (i.e. links, books etc.) please contact me and I will be happy to provide (except where it would break client confidentiality).
A couple of days ago, I had a long conversation with one of my clients.
His lament was one I have heard before from business owners - that staff these days are no longer "loyal" to their employer.
There is an endless amount of research regarding the difference between generations, and the changing face of our workforce and really I don't intend to go into those in this blog - what I would like to talk about is an often missed part of "loyalty" - that of individual identity and identification.
Let me explain by using myself as an example - I spent a good period of my life in the Navy. If you were to ask who I was, I would say I was a "Sailor" - it is how I identified myself to myself. In fact, if I was talking to someone with a naval background I'd probably take this further and describe myself as a "Yeoman" - a title that would not mean much to people outside the Navy.
Now over the years, I have begun a new career, founded a company and been fairly successful in my endeavours. I truely enjoy the work I do, dealing with clients who are pursing their own dreams and goals. While my personal picture of myself has altered, there is still that element of my description which says "Sailor".
My point is that this personal identification has created in me a certain amount of loyalty to an organisation I left quite a while ago. In my mind, that recognition and loyalty is still there.
For Business Owners, it is easy for them to identify themselves with their business - after all they own it, run it and are responsible for its success or failure.
Sometimes it is hard for them to understand that their employees may not feel the same way about the business. But after all, if their employees have had no opportunity to "recognise" themselves as part of the business - what have they got to be loyal about?
Speaking to my client the other day, we begun discussing this in relation to his business. He is a very hands-on type business owner. For him, his employees are people who come in, do a days work and then leave - the business is his to run.
While talking, he begun to share some of his own experiences about when he felt the most loyalty to his own employers.
With this - he realised that he couldn't really expect loyalty from his staff if he was not offering them something to be loyal about.
I left him to think this over and consider what actions of his own were actually leading to the situation that was annoying him.
I'll let you know how he goes over the coming weeks.......
In my travels around businesses, I speak to a lot of businesses owners. One of the most frequent responses I get when speaking to them about the new industrial relations laws is the title of this blog.
“We don’t need to worry about that” is a refrain that I hear quite alot. The basic premise is that if they haven’t had a problem before, then they will not have one in the future.
As far as the industrial relations laws are concerned, thinking this way is not a smart move for business owners and managers. Over the last couple of months, I have seen an increase in the number of businesses calling me for assistance after having received a letter from the Fair Work Ombudsman regarding a complaint from an employee. On nearly every occasion, the business concerned had, until now, a belief that “We don’t have to worry about that”.
In a recent article, Judith Radisich from the Council of Small Businesses of Australia, in a response to a survey of small businesses said the following: “I am surprised that a higher proportion of small business respondents did not report complying with IR and OH&S laws takes up a higher proportion of their “people” time. Perhaps the main reason for this is that survey respondents don’t spend much time on compliance because the laws are simply too complex and virtually impossible to get on top of for most small business owners”. So, yet another reason for businesses to say “We don’t have to worry about that” – it is simply too hard to say otherwise!
One business I am currently working with has received two complaint letters and has been requested to provide payroll records. The danger for this company is that the complaint, if found correct, could result in a large amount of back pay being ordered that the company cannot afford to pay. Now the owners are not bad people, they have not set out to deliberately underpay their staff and are quite distressed that they may have. But even they admit that they thought “We don’t have to worry about that”.
The fact is that we have recently gone through one of the biggest revamps of industrial relations in a long time. When this is combined with an active workplace ombudsman (The Fair Work Ombudsman) with the power to order back pay, award fines and commence prosecutions then you have to wonder whether businesses can really afford to say “We don’t need to worry about that”.
Many thanks for this story to the HR Coach Network - it is a timely reminder for employers regarding bullying in the workplace and the possible effects of not having the appropriate measures in place.
A recent tragic case has highlighted the need for employers of all sizes to be proactive and vigilant in respect to bullying behaviour within the workplace.
The case involved the death of a 19-year-old cafe employee in Victoria, who committed suicide after more than 12 months of bullying at the hands of her co-workers. It was found that the victim was subject to constant taunting, criticism, name-calling and on at least one occasion had sauce poured over her clothes and hair.
In what is largely being regarded as a turning point for workplace bullying cases, the business was fined $220,000 for failing to provide and maintain a safe workplace and failing to adequately train and supervise its employees.
The presiding Magistrate said that the company had “tacitly approved” of the bullying behaviour. One of the company directors was personally convicted and issued a fine of $30,000. In a further landmark decision that has seen the liability for bullying extend beyond businesses to individual employees, three of the victim’s co-workers were convicted and fined a total of $85,000.
Combined with a recent survey indicating that nearly 1 in 5 workers has been subject to bullying, the case highlights the importance of employers and employees alike taking measures to prevent and eliminate bullying in their workplaces.
