People Smartz Blog

The HR Coach Research Institute has released its latest quarterly index.

According to the research:

"The last quarter has shown a marked change in business sentiment in Australia with an increase of 6% in overall business confidence.  The last half of 2011 saw a 15% drop in business confidence so the increase offers welcome respite.  There is, however, a lot of ground to make up from the highs of 2007 and early 2008.

For the first time since 2008 wage pressure looks to be back on the agenda with an 18% increase in wage expectations by employers"

To download the latest Quarterly Index Dashboard -  Click Here

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!

Yes it nearing the end of the year.  We are entering party season - a great time to unwind, rub shoulders with workmates etc.  This can be a fun time!

But end of year parties have a very serious side as many of these antics lead to "regrets" after.

Recent research in Australia found that 70% of people believed that hitting the booze led to a more "personal" feeling amongst staff.  Nearly a quarter of females interviewed admitted that their boss had made a pass at them at an office party. 

Such behaviours can present many problems for businesses, particularly if the "antics" involved lead to a complaint from a member of staff regarding the behaviour of another.

It would be easy to say "no office party" or "its too risky", but sometimes the advantages of holding the party far outweigh the negatives.  The decision to have or not have one is one for the business alone. 

I would recommend a level headed approach to this years Xmas party - making sure the party is well planned and your staff are aware of the required behaviours before hand.  This way you can have the fun while managing the risk!

To help you plan for your businesses party, download our Christmas Checklist today.

Recent research has identified the challenges businesses are facing in managing people in 2011.

This is quite a list!  

• Uncertainty in times of change impacts on confidence of employers and clarity of their strategic direction.

• Fatigue of key employees and additional workload due to shrinking workplaces leads to disengaged workers or management turnover.

• Labour is on average the largest cost to business. The statistics show that it is escalating due to employee expectations for pay increases, the growing anxiety of individual debt and increased competition between employers for talent.

• Over 50% of employees will be looking for new jobs in the next year.

• Employers are ramping up employee numbers but not planning on wage increases.

• Small business is struggling with the fact that they cannot attract quality applicants.

• It is estimated that it can cost more than $48,000 to replace an average employee on $45,000 a year.

• The Red Tape Commission estimates 75% of businesses struggle with paperwork and compliance.

• According to the published National Accountant, 65% of employees have experienced harassment.

• Changes in legislation causes confusion and mistrust. Businesses are at risk externally and it cannot be ignored. Changes in the health and safety and parental leave in Australia are major changes in compliance.

• Internationally, labour laws are becoming more stringent and complex, adding a cost and compliance burden that did not exist before.

• The aging workforce, generational shift, technology adaptation and social media impact are issues that will take hold in the coming year.

If you identify with any of these and are wondering how you can meet the challenge - then give People Smartz a call!  Contact Us

Ever wondered what successful businesses do differently?  We may have some answers for you in a new white paper!

I don't think anyone will disagree that we are operating our businesses in a very complex environment at the moment.  Uncertainty regarding overseas economies, uncertainty regarding new taxes and charges, a relatively unstable political environment (for Australia) and many other facts are contributing to a down turn in business confidence.

A new white paper is now available from our website titled "Managing Back To Certainty".  Developed by the HR Coach Research Institute, the white paper discusses the current external and internal factors effecting businesses and identifies the "Top 5 Attributes of High Performing Businesses".

Based on research conducted over 6 years and 5000 businesses, the paper identifies the factors that allow a business to be "agile and move with the times".  The research shows that employers who are thriving are focusing on key differentiators as opposed to organisations that are at risk.

The important factor in regards to the research is that it has been conducted in the "business" rather than the "corporate" environment. As a result, we get a very good idea about some of the issues that are effecting small and medium sized businesses.

The paper identifies that small to medium sized businesses have "clear advantage" over the corporate world in responding to the challenges that face us and can create long term opportunities leading to sustained growth - despite the external environment.

To download the white paper - Click Here

Fair Work Australia has published their decision varying the General Retail Award 2010 to allow casual school aged workers to work shifts shorter than 3 hours.

The award has been varied as follows:

Clause 13.4 is varied by the addition of the following words at the end of the clause:

“provided that the minimum engagement period for an employee will be one hour and 30 minutes if all of the following circumstances apply:

(a) the employee is a full time secondary school student; and

(b) the employee is engaged to work between the hours of 3.00 pm and 6.30 pm on a day which they are required to attend school; and

(c) the employee agrees to work, and a parent or guardian of the employee agrees to allow the employee to work, a shorter period than three hours; and

(d) employment for a longer period than the period of the engagement is not possible either because of the operational requirements of the employer or the unavailability of the employee.

As we have stated in a previous blog post (Common Sense at Last! After School Work Back on the Agenda for Teenagers), we believe that this decision is a win for common sense by Fair Work Australia.  It is a pity that it has taken so long, and a needless appeal to make it happen!

To download the determination, download the Determination from Fair Work Australia

Last financial year, the Fair Work Ombudsman commenced prosecutions against in excess of 50 companies for underpayment of wages and entitlements to their employees.

The simple fact is that this number is just the tip of the iceberg.  Many other employers have had to backpay employees as a result of underpayment.  Just check out the Ombudsman's media release page (Fair Work Ombudsman - Media Releases) and you will see the number of press releases on the subject.

Late last year, we worked with a business that had been underpaying their employees over a long period. By the end of the process, they had back paid their employees nearly $100,000 - quite a hit on a small business!

Now, this situation was one where they had innocently made an error in calculating a 40 hour week. The Ombudsman recognised this and no further action was taken.  However, there have been fines handed out to businesses and Directors where the Ombudsman found that taking further action was appropriate.

One example of a company based fine was where a franchisee from a major franchise group was fined $150,000 for underpaying staff.  Directors have also been targeted, with a recent prosecution fining individual directors a total of in excess of $130,000 for underpaying 47 staff.

Under the current system of Modern Awards and Transitional Arrangements, calculating how much you need to pay your employees can be confusing.  However, it is important to recognise that confusion, or not understanding your commitments is not an excuse for underpaying staff.  In the end, at best, you will be required to back pay them any entitlements they may have not received.

So what can you do to protect your business?  Well here are our recommended 5 Steps to Protect Your Business:

1. Understand and be compliant with the National Employment Standards.
2. Identify the modern awards and classifications that apply to your employees;
3. Make sure your employees receive compensation for actual hours worked, paying particular attention to ordinary hours of work, overtime and penalty rates, and shift allowances. 
4. Do you work a 40 hour week in your business?  Do you roll leave loading into a salary or hourly rate?  These type of arrangements (and others) come under the heading of "Award Flexibility" and you are required to ensure your employees are "Better Off Overall".   If you do not understand the requirements around Award Flexibility - seek advice. 
5. Make sure you keep the right records!  If you are investigated, you will need to demonstrate compliance.  To do that your record keeping will need to be accurate and in accordance with the requirements.  

If you need assistance in any of the above areas - then give us a call!  At People Smartz, we are more than happy to assist you!

Contact Us

Did you know that 89% of employees in Australian Businesses were employed by companies employing 20 employees or less? (Australian Bureau of Statistics 8165.0 2010)

When you consider this statistic, you need to wonder why our industrial relations system is designed for 11% of the workforce!

It all comes down to some very important factors (in our opinion):

1. The employers of 11% of the workforce are bigger contributors to the political parties
2. The 11% of the workforce are the primary targets of our union movement; and,
3. The employers of 11% of the workforce are the major drivers of industry bodies supposedly in place to support business.

On Monday, Fair Work Australia finally laid down a decision that should have not been required in the first place.

Nearly a year and a half ago, a number of teenagers lost their after school jobs because of a clause within the General Retail Award which basically said a casual could not work for less than a 3 hour period.

For these teenagers, this effectively ruled out going to work after school as the time between school finishing and the retail outlet they worked in closing was less than 3 hours.

Now having restrictions on the minimum hours that can be worked is understandable.  In fact, to a certain extent, I support them.  However, when you are restricting the ability of teenagers to learn important work habits, then the law needs to be modified.  

Arguments from unions etc that easing this restriction would lead to "job losses" and "lower wages" did not really argue the primary point - that by enforcing this rule we were interfering with what is basically a vital learning area for our younger generations.  To suggest that allowing teenagers to work out of school hours was going to cost adults jobs just goes against the fact that most of those adults started exactly where these teenagers are now - with after school work!  Where did these adults learn the work habits that brought them to employment in later life if not in jobs such as these?

While it took 16 months and 3 rounds of arbitration to get there, this is a decision that should be congratulated. Despite the unions and government supporting the maintenance of the 3 hour limit, the tribunal has decided that provided a certain set of circumstances exist, a school aged person can work for less than a 3 hour period.

Under the new arrangements, school age persons can work a minimum of a 90-minute shift.  This will apply only if the employee is a full-time student; that the hours worked are between 3pm and 6.30pm on a school day; and the employee and their parent or guardian agrees on the shorter period. The shorter period is also allowed only if employment for a longer period is not possible because of the operational requirements of the employer or the unavailability of the student.

These arrangements are simple commonsense.  It is a pity it took so long to arrive at this decision!

For the last two years, we have released many blogs posts on the unfair dismissal laws contained in the Fair Work Act.

Earlier this month, Fair Work Australia released its latest quarterly report.  It contains some interesting numbers in regards to unfair dismissal claims and the Fair Dismissal Code for Small Business

With unfair dismissals, the tribunal received 3219 unfair dismissal applications in the quarter. The overwhelming majority of these (2564), were settled at or before conciliation. The tribunal made decisions on only 64 dismissal claims in the quarter, finding 24 were unfair and 40 fair.  Only 18 claims resulted in a decision awarding compensation to the ex-employee.

Employees are now much more aware of their rights under the act and claims are on the rise.  Many of our clients are reporting that claims made against them have been frivolous and they have settled "just to make it go away".  The numbers released this month certainly seem to uphold what they are telling us!  

From the numbers presented by Fair Work Australia, The Fair Dismissal Code for Small Business is not working!  While 609 applications related to a small business employee, only two were rejected because the dismissal was consistent with the code. 
We believe this is a worry - if followed, the code is designed to protect a small business from unfair dismissal claims.  At People Smartz, our experience is telling us that, if they know about the code at all, most businesses are finding it difficult to understand - after all, it is basically a corporate process that they need to follow!

We believe that small businesses are generally finding it difficult to work with these laws and over time the issues they present are compounding.  The latest set of numbers from Fair Work Australia seem to indicate this is correct!

Given the current state of Australia's workplace laws, small businesses need to ensure they have the systems in place to protect them against unfair dismissal claims.  This includes having appropriate systems in place to manage poor performance and terminate staff.  

At People Smartz, we are experienced in assisting our clients to put such systems in place.  For many years, we have had in place a review process for small business called a "People and Business Review".  This is designed to review what is in place in your business and assist you to identify the changes you need to make to protect your business.  Why not book yours today?

Contact Us Today!