People Smartz Blog

It is becoming more and more apparent, that no matter how small your business is, you can not avoid your obligations in regards to meeting your employer obligations.

Many thanks to our great friends at Brands Law for this great example of the line of thinking to which our courts are dealing with breaches of the Fair Work Act:

"Back in April 2011, in a case involving underpayment of penalty rates to employees, Magistrate Hawkins said there was a need to "send a message to the community at large and small employers particularly, that the correct entitlements for employees must be paid and that steps must be taken by employers (of all sizes) to ascertain and comply with minimum entitlements (as opposed to ignoring those obligations).

"Compliance should not be seen as the bastion of the large employers with human resources staff and advisory consultants (accountants, consultants, lawyers) behind them"."

In a speech in May 2011, the Fair Work Ombudsman made a point that it "was not sufficient for companies to turn a blind eye and hope that they are meeting their obligations".  He particularly made the point that companies need to make sure that they are resourcing their obligations appropriately.

With this type of language coming from our courts and the Ombudsman, it is very evident and important that all businesses, regardless of size have in place a system for ensuring compliance with their awards, the Fair Work Act and the National Employment Standards.

Our experience with small to medium sized businesses has shown that business people are finding it more and more difficult to manage these obligations.  As we have said in our blog posts before - the system itself is not built for small business.

Unfortunately, it appears that the message from our courts is that small businesses need to manage their obligations similarly to the way they would be handled in big business.  However, small businesses do not have the human resources staff etc to do that!

Understanding your obligations can be difficult and managing them can be time consuming. The place to start is to ensure you are compliant now!

Why not book one of our People and Business Reviews where we can help you identify the actions you can take to ensure you are meeting your obligations.

Book your review today!

It appears that we are finally starting to see some real pressure being put on the Opposition to provide a real policy difference between the parties in relation to industrial relations.  Even Heather Ridout, once a supporter of the Fair Work Act, has recognised the need for debate in this area

And it is about time too!

The Fair Work Act does not balance the playing field in industrial relations and is providing disincentives to small and medium sized businesses.  It is complex and a minefield for players in the game who do not have the time, resources or knowledge to manage it.

At People Smartz we work predominantly with businesses who do not have a Human Resources team, they do not have experience in interpreting the awards and they do not have the time to understand all the complex points of the different areas of the law.

Only last week I conducted a review for a small business person.  His business was operating well and, as far as he was concerned, was compliant with the award and legislation.  However, by the time the National Employment Standards, the Modern Awards, the transitional arrangements and the difference between state and federal jurisdiction had been explained to him his comment was "how am I supposed to keep up and understand all this!"

This particular gentlemen was not working with his staff compliantly and needs to make changes to his employment arrangements.  Due to the changes between state and federal coverage, he had missed several important points of coverage, because of transitional arrangements he had missed increases in minimum wages, because of a lack of understanding of the National Employment Standards he was underpaying staff in accordance with the "Better Off Overall Test".

He is not alone.  We see small and medium sized businesses every week who are in some way not meeting the minimum entitlements under this legislation.  And it is important to note that this is because they don't understand the requirements on them.

Over 80% of those employed in Australian businesses are employed within businesses that have less than 5 staff. These businesses are the real engine room of Australia's economy and they are woefully ignored by an industrial relations system which is not designed to help or support them. Nor have we seen any real effort to provide them with the education they so badly need. 

Since 2005 we have had two pieces of legislation that have led the industrial relations debate - Work Choices and the Fair Work Act.  In my opinion, each of them has taken the debate to the extreme left or right in an effort to either decrease or increase the power of unions within the Australian political and industrial relations arena.  Their underlying aim has not been the development of any "fair and equitable" system, nor have they been designed with the primary aim of benefiting the Australian Economy. Their real and underlying focus was on union power.

It is time that we moved this debate along, the opposition needs to move on and start challenging the inadequate aspects of the current legislation and bring the discussion back to developing a system designed for all Australians and that can support all Australian businesses.  The Opposition needs to stop treating this as a "no-go" area, forget Work Choices and begin encouraging real debate in this area.

It is only through real debate that we will see change - thank god, we are beginning to see some movement in that direction.  
 

A recent case before Fair Work Australia has emphasied the importance of employers having a fair and published process in regards to handling disciplinary problems with staff.

The case (Michelle de Leon v Spice Temple Pty Ltd [2010] FWA 3497, revolved around the "abrupt and quite unprofessional" manner with which an employee had dealt with a high profile customer.

As a result of a complaint from the customer, the employee was dismissed from her position.

The Deputy President of FWA was very critical of the employer because:

• the decision to dismiss the employee was made prior to meeting with her to discuss the issue.  In the words of the Deputy President, she was effectively "ambushed" by the allegation and was given no opportunity to respond to the allegation.
• she was not given the opportunity to have a support person present at the meeting (the employer did suggest that the staff members immediate supervisor was present to support her but this was not accepted).
• she was not given any written warning about her conduct nor was she given a letter of dismissal stating the reasons for the dismissal.

With Queensland in the midst of one of the great natural disasters, nearly every business we are speaking to is effected in some way. Some are under water, or commencing the clean up after being under water, others are not but have staff and team members effected.  This scale of this is just incredible.  Our thoughts are with each and everyone of you.

Over the last couple of days we have begun receiving queries about issues regarding employment and the floods.  If you would like information on employment issues such as leave, standing down employees etc, visit our Queensland Floods page.

We have also created a forum topic where people can go to ask questions - The People Smartz Forum.  It you have any questions regarding employment and the floods, feel free to post them so everyone can see.

Australia's new Modern Award system is now nearly 3 months old.  In that time, I have been dealing with small to medium sized businesses, assisting them in ensuring they are meeting the requirements of the awards and the National Employment Standards.

One of the comments that keeps coming up revolves around which award covers a particular business.

Now, this is really not surprising - there has not been a strong education process for small to medium sized business about the changes and most are not experts in industrial relations or reading awards.

Without going into great detail, some of the changes effecting small to medium sized businesses include:

• The introduction of modern awards
• The introduction of National Employment Standards
• The move for most from state based to national based awards.

The introduction of Modern Awards has involved major changes for small and medium sized businesses.  The process of introduction begun with a "modernisation" process which saw over 1200 awards reduced to approximately 120.

This process of modernisation has resulted in some broad classifications of employment, which for some business people is hard to understand.  Once again, with such a large change, this is not surprising - the move to "modernise" awards has led to Modern Awards with very broad coverage and classifications need to  be generic enough to allow this.

As an example of this, I was recently working with a business which found it difficult to actually identify the award their employees could be classified under.  Going by the classification themselves, it was a difficult exercise, with none in the most obvious award (the General Retail Industry Award 2010) really fitting.

We were able to step our way through a process of identifying the appropriate award and classification, finally ensuring that their employees were employed under the appropriate award.  This has allowed them to identify the changes they will need to make over the coming period as the transitional arrangements take affect.

To assist business people to identify their awards I am conducting a free webinar next Tuesday (30 March) at 1pm (Brisbane Time).  Titled "Modern Awards and Your Business", the webinar will cover areas like identifying award coverage for your business and other practical areas.

If you would like to reserve your seat on the webinar - click on the following link:

https://www1.gotomeeting.com/register/675812345