Annual Wage Review 2018-2019

Rocio Paradela, Graduate Associate

Minimum wage up by 3% from 1 July 2019

On 30 May 2019, the Fair Work Commission (the “FWC”) handed down the decision in its annual wage review.

From the full pay period on or after 1 July 2019, the national minimum wage will be $740.80 per week (or $19.49 per hour). This represents an increase of $21.60 per week.

Following the decision, minimum wage rates in modern awards will be increased by 3%.

What does this mean for employers?

  • Subject to the requirements of relevant modern awards, enterprise agreements and employment contracts, from 1 July 2019, employers must ensure that their full-time employees are paid at least $740.80 per week (or $19.49 per hour).
  • Employers must be aware of the award or agreement (if any) that applies to their employees and ensure wages are paid pursuant to it, noting that minimum wage rates in modern awards will be increased by 3%.
  • An employer who fails to pay wages in accordance with the national minimum wage order or requirements of a relevant award or agreement will be exposed to liability for breach of the Fair Work Act 2009 (Cth).

 

International Bar Association (“IBA”) Annual Employment and Diversity Law Conference 2019 Copy

George Stent, Paralegal 

At the IBA’s recent Annual Employment and Diversity Law Conference, Founder and Managing Principal of People + Culture Strategies, Joydeep Hor was a guest speaker on the topic of Artificial Intelligence (“AI”) bias and data transparency in the legal workplace. Joydeep is Secretary of the IBA Diversity and Equality Law Committee, and he was joined by guest speakers from Latin America, Continental Europe and South Asia. Joydeep spoke to the difficulties that AI presents for managers and HR professionals in terms of the potential for inconsistent treatment, unequal opportunities and ultimately, unlawful discrimination, from the bias of AI in the workplace.

What is AI?

 AI refers to digital computers performing tasks that would usually be performed by “intelligent beings” such as people. At the conference, Joydeep described how AI achieves this by being similar to the neuron connections in the human body. These connections are called synapses and form a complex network. It is through this network that the brain receives and processes information enabling the human to learn. He explained that certain branches of AI work with “artificial neural networks”. It is these programs that imitate the functioning of the human brain. Information is then entered as input on one side, processed, and the result is output on the other side.

 Advantages and Opportunities of AI in the workplace

All businesses, including law firms are investing in AI technology. The Wall Street Journal estimates that spending on AI by companies will grow from $8 billion in 2016 to $47 billion by 2020 – which is an almost 600% increase. Joydeep attributes this increase to AI’s ability to optimise business processes by enhancing efficiency and automating time consuming administrative tasks. For example, in a legal context, AI is able to review contracts and undertake legal research almost instantly. One such software is “ROSS Intelligence”, which was used in a recent test where a partner at a law firm was able to find a matter that was identical to the firm’s case almost instantly, while his own research took ten hours. Joydeep and the panel noted that the research was not only efficient, but highly accurate.

However, at the conference, Joydeep questioned whether productivity control is automatically accompanied by greater effectiveness at the workplace. In making this point, Joydeep gave the example of the Henn Na Hotel, a hotel in Japan almost entirely staffed by robots. The hotel, shortly after opening, had to dump half of the robots due to them “annoying” the guests, not being capable of the jobs they were designed for, or creating more work for their human counterparts.

Risk of AI in the Workplace

 Joydeep also raised the impact that AI has on the hiring, firing and promotion decisions of HR professionals. AI has been introduced recently to screen CVs to find the best possible applicant. Joydeep therefore raised how the lack of transparency in recruitment decisions may cause a problem for employers. In illustrating this point Joydeep highlighted that the vast increase in data sources may result in employers not being aware of what information has been used to make recruitment decisions and therefore what risks may arise. This problem is compounded by the fact employers and work councils often do not understand the numerical codes according to which the algorithm acts. This may mean employers cannot guarantee that an AI system has not made a recruitment decision that does not carry a risk of a discrimination claim. Joydeep recommends that in order to prevent these claims from arising employers should monitor the data input at the very initial levels and regularly review the systems they use. He suggests that employers using AI should prepare themselves to explain why one applicant was hired and another one rejected.

 

Embracing a new approach in handling challenging employment grievances, disciplinary matters and terminations

Roxanne Fisch, Senior Associate

People + Culture Strategies Founder and Managing Principal, Joydeep Hor recently gave a thought-provoking and well-received presentation to leading HR professionals on how employers should rethink handling discipline, termination and grievances in the workplace. In taking the audience through ten key guiding principles, HR leaders were provided with a strong foundation to deal with challenging employee relations situations.

The Challenge

Every HR professional can relate to being asked to reflect on the most challenging employment relationship they have had to deal with. In having this scenario at the forefront of their mind, Joydeep tasked the audience with considering what it was that made it difficult and what tools they could have incorporated that might have yielded a different outcome.

Ten Guiding Principles

The ten guiding principles set out by Joydeep were in strong contrast to how a traditional law firm would approach handling challenging employee relations situations. The focus should be shifted from a compliance-based approach, which tends to view these situations in a vacuum, to an approach which considers the whole context and environment in which it occurred. As noted by Joydeep, this is particularly important as these days people are far better informed about their workplace rights then they used to be, and issues are becoming more prevalent earlier in the employment relationship. The conversation, he surmised, needs to be reframed and his guiding principles provide a practical toolkit in being able to do so.

1. Embrace quadrant methodology
Managing people should be undertaken through a wholistic approach. Instead of simply focusing on the commercial aspects of a decision, consideration should be given to each of the four quadrants: commercial; legal; psychology and sociology. It is often these last two quadrants which are overlooked, yet the importance of understanding how the person thinks or feels as well as considering the bigger impact on the organisation can lead to better outcomes in resolving the issue.

2. Embrace the “Kingdom”
Joydeep provided the audience with the powerful analogy of viewing the workplace as a kingdom, where the ruler (employer) is entitled to impose any rules (policies) they want to apply in their kingdom (of course within limits), the ministers (managers) are to ensure the rules are complied with and the ruler is entitled to evict anyone they wish provided they do so in the right way. The implementation of appropriate company policies are important to ensure the kingdom runs smoothly.

3. The importance of substance over process
HR is often viewed as process driven rather than substance. It is important to challenge this perception so that it becomes more about substance and value over process.

4. Grievances: Understand the core of the issue
HR professionals must seek to understand the root of the grievance. Getting better at going beyond what is being said to find out the core of the issue will assist in being able to improve it.

5. Little things matter
In people management issues, it is always necessary to think about how the employer’s actions will make that person feel. Empathy and common decency can go a long way.

6. Explain, don’t convince
In handling challenging performance related situations, the aim is to infuse your language with words that seek to explain why you have come to the view that you have.

7. Honour the promises you make
Employers often make promises to employees, whether it be at induction, by way of company policies (which should be limited wherever possible) or in their values statement. These promises should be followed through with.

8. Assume nothing and take nothing for granted
This principle is particularly relevant in relation to confidentiality. Whilst HR professionals often do things in a certain way because we are often fixated on the legal quadrant, it is worthwhile investing more time in optics management and counter-messaging.

9. Right and wrong have nothing to do with it
In the context of workplace investigations, it is very easy for the investigation to take on a life of its own where the investigation itself becomes a pseudo institution and the employee’s concerns about their job security is thereby intensified. To avoid this, HR professionals should commit to undertaking an investigation quickly, with minimal fuss and disruption and form a view on the balance of probabilities.

10. Specifics around termination
Often the most unrecognisable yet dominant category in termination decisions is based on the aspect of a lack of a cultural fit in the organisation. More energy should be invested in determining an answer to the question, “what does good look like” in the organisation. If employers invest in answering this question, they can then create the infrastructure necessary to put them in the best possible situation in dealing with termination decisions.

In providing these ten guiding principles, Joydeep provided HR professionals with practical advice to implement within their organisations straight away. People + Culture Strategies can assist with the implementation of Joydeep’s powerful people management strategies. Please feel free to contact us if you are interested on (02) 8094 3100.

Ray’s Rage – Managing Bullying and Harassment by a “Star Employee”

Daniel Anstey, Graduate Associate

The recent allegations of bullying against star radio host Ray Hadley, serve as a reminder to employers of the potential dangers posed by inaction towards complaints of bullying by a star employee. Indeed, the greater the status of an employee, the more an organisation stands to lose if allegations of bullying are not dealt with in line with best practice.

The “fresh allegations” which have surfaced this week, refer to alleged events which occurred many years ago, even dating as far back as 1984, showing that these issues require careful management and cannot simply be swept under the rug.

What are the possible consequences of bullying/harassment?

Bullying has become a buzzword in recent times and any claims against a public figure can attract a frenzy of media coverage. This means that some victims may be hesitant in coming forward with claims for fear of unwanted attention on top of what they might already be dealing with.

Conversely, victims may be motivated to go to the media by the desire to enact revenge, extract financial compensation or take the opportunity to have their moment in the spotlight. This can result in damage to the brand and reputation of an organisation, or of any individuals caught up in the situation.

Employers must be wary of the attitude that star employees are worth protecting from these sorts of allegations, as this will benefit no-one in the long term. If exposed, a cover up will damage the brand and reputation of both employee and employer, and an organisation risks seeing valuable employees walk out the door if they feel that fair procedures are not in place.

Workplace bullying can cause lasting physical, mental and psychiatric harm to victims and their close ones. This may also have a flow-on effect to productivity and culture and within an organisation.

Furthermore, if a victim suffers psychiatric or physical harm and sues in tort, the employer may be found vicariously liable, as well as breaching their own non-delegable duty of care not to expose employees to reasonably foreseeable risks of harm. For example, in the case of Sneddon v The Speaker of the Legislative Assembly an employer was held liable to the tune of $438,613, for past and future economic loss arising when a senior manager was found to have bullied an assistant.

So, what can you do?

It is now increasingly important for employers to manage proactively the reputational damage which can accompany allegations of bullying, and not to be seen to be tolerating or turning a blind eye because a particular employee is a well-known or highly successful individual.

Dealing with the issues and discontent resulting from bullying, internally and before they escalate is crucial in avoiding a situation such as the one 2GB is currently facing. The best practice is to have very clear policies prohibiting bullying as well as accessible and confidential procedures for handling complaints and managing investigations.

Employees who believe they are being bullied also may apply to the Fair Work Commission’s anti-bullying jurisdiction for an order to stop the bullying, but it is always preferable for the parties to deal with the issues proactively themselves.

If you require advice on best practice policies and procedures for your organisation, or on bullying and harassment in the workplace please feel free contact People + Culture Strategies on (02) 8094 3100.

Asians with PhDs: Managing Perceptions of “Difference” in the Workplace

Justin Peñafiel, Senior Associate

Have you recently employed any “Asians with PhDs”? Recent political rhetoric suggests it is a new phenomenon to have a diverse workforce, but whether in metropolitan Sydney, or regional Australia with its skilled labour shortages, nothing could be further from the cosmopolitan truth.

However, unlike most political offerings, here are some practical tips for understanding why controversy about equality and diversity never fades away despite years of promoting it, and managing what people feel and think about their personal differences in the workplace, in spite of strategies to support them.

Does discrimination still occur with “equality”?

This article could have easily been another diatribe about anti-discrimination laws and what not to do, but unless they want to Make America Great Again, what manager actively treats anyone differently or unfavourably based on their physical appearance, apparent cultural background, or a whole host of protected attributes under section 351 of the Fair Work Act 2009 (Cth), and other anti-discrimination laws?

It begs the question, if managers do not actively discriminate against certain employees on an unlawful basis, and HR has been promoting equality and diversity for decades, why the ongoing controversy about “Asians with PhDs” and persistent talk of shattering ceilings of the glass, bamboo and/or pink varieties? The ongoing sensitivity suggests that it is useful to apply two steps from what we call of our four-quadrant model – “Sociology” and “Psychology”, or in other words:

  • considering what people may feel and think about policies and procedures to promote outcomes of equality and diversity (or lack thereof); and;
  • considering how the policies might look internally and externally to different audiences?

Applying the PCS People Management Quadrants: The gap between equal opportunity and hidden differences

There’s no better place to start than the beginning of an employment relationship, the recruitment phase. We could have easily commenced this section with, “statistics show that X percentage of Asians with PhDs change their name when applying for jobs”, but it may be more constructive to ask, “how does it look if people feel the need to change their name to apply for a job at our organisation?”, and “what must they be feeling and thinking about our company if they need to change their names to get a job?”.

Changing one’s name on a resumé is easy, but other differences are too difficult or perhaps impossible to hide – gender, pregnancy, ethnicity, even sexuality. According to the law, these points of difference shouldn’t matter, and managers generally do what they can to convey a sense of equality in the workplace. However, employees may still not see or feel a sense of “equality” despite all that you might have done to promote it. Conversely, employers may not see, know or think to ask about inequality that their employees’ sense or feel because of everything that they have done to promote it. Knowledge is power, and hidden differences can reduce it.

What can we do about differences that we cannot see? Auditing culture, policies and procedures

Asking these questions from the People Management Quadrants could ultimately lead to some uncomfortable home truths for your organisation – what must employees be seeing or thinking (about perceived barriers in the workplace), if they feel that they cannot disclose differences that their managers cannot see, but which might affect their experiences at work, for example, family obligations, domestic violence, cultural differences (e.g.: cultural differences with communicating with management), or their sexual orientation? What can we do about it? Misconception can lead to claims which may have no substance, but which aren’t any less painful to investigate or defend.

Enhancing Employee Engagement and Leadership Development, Coaching and HR Executive Education

People + Culture Strategies can assist you with Strategic HR Consulting in a variety of ways, such as performing a “Culture and Effectiveness” audit which combines a series of staff interviews and collection and review of staff data, or a review of your organisation’s people strategy tailored to your organisation’s needs. We also offer Leadership Development, Coaching and HR Executive, to enhance and improve your skills with engaging and managing your diverse workforce.

If you are interested in ways to engage better with your employees, or any of our traditional services with legal advice, investigations and dispute resolution, please feel free to contact People + Culture Strategies on (02) 8094 3100.

Salaried Staff Shake-Up

Donna Trembath, Executive Counsel

Is your organisation ready for the new rules?

The Fair Work Commission (“FWC“) has decided to vary 22 modern awards to include stricter requirements for salaried employees.

Employers who prefer the administrative ease of paying annual salaries rather than award rates may be surprised by the new rules.

Which occupations and industries are affected?

The decision handed down on 27 February 2019 applies to 22 modern awards including a number of occupational awards, for example the Clerks Award and the Health Professionals Award. The affected industries include restaurants, hospitality, banking, finance and insurance, contract call centres, legal services, mining, salt, telecommunications, water, wool, broadcasting and recorded entertainment, local government, manufacturing, pharmacies, rail, pastoral and horticulture.

What are the new rules

The FWC is in the process of dividing the 22 relevant awards into “Category 1” (relatively stable hours) and “Category 2” (highly variable hours, or where significant penalty rates apply to ordinary hours).

Category 1 awards (including the Clerks Award) will receive the least burdensome model clause. Even so, subject to specified modifications for specific awards, it will require an employer who elects to pay an annual salary that is inclusive of overtime, penalty rates, allowances and loadings to:

  • detail the method by which the annualised wage has been calculated including specification of each separate component of the annualised wage and any overtime or penalty assumptions used in the calculation;
  • set outer limits on the number of penalty-rate attracting hours that an employee may be required to work each pay period or roster cycle (e.g. no more than 3 hours of work on a Sunday each week);
  • set outer limits on the number of overtime hours that an employee may be required to work each pay period or roster cycle (e.g. no more than ten overtime hours per week);
  • pay employees separately for hours not covered by the annual salary, at award rates;
  • conduct a reconciliation every 12 months (and on termination of employment) to calculate the remuneration that would have been payable to the employee under the award, and pay any shortfall to the employee; and
  • keep records of start and finish times and unpaid breaks, to be signed by the employee each pay period or roster cycle.

Category 2 awards will, subject to specified modifications for specific awards, receive a more onerous model clause under which an annual salary can only be provided if the employee agrees in writing. The employee will have the right to terminate the annual salary arrangement with 12 months’ notice and revert to award rates.

When will it take effect

The FWC is still finalising the changes and considering whether transitional provisions are needed. Written submissions are due on 27 March 2019.

Concerns for employers

Some of the criticisms of the new rules include that they are impracticable for small business, obviate the benefit of administrative simplicity which employers seek to obtain by paying an annual salary, and that salaries are often established having regard to market conditions rather than award-related matters.

While various employer parties submitted to the FWC that provisions that are too costly or burdensome will not be used, in our view annual salaries are here to stay. Employers should prepare to adapt to the changes as the FWC has come down firmly on the side of workers and preventing exploitation and wage theft.

Recommendation

PCS recommends reviewing how your organisation employs salaried employees and manages its award compliance and record keeping obligations. It is important that if you pay an employee an annualised salary where there is an underlying modern award, that you comply with the award’s strict requirements once they come into effect. Given other recent changes regarding failures to keep proper employee records, record-keeping requirements for all employees (including non-award employees) should also be reviewed. Please contact us to discuss further.

Here comes 2019: Changes to Remember

Rocio Paradela, Graduate Associate

With the start of the new year upon us and everyone slowly getting back to work, it’s time to reflect on what changes organisations need to keep in mind in 2019.

Fair Work Amendment (Casual Loading Offset) Regulations 2018

The new Fair Work Amendment (Casual Loading Offset) Regulations 2018 (Cth)1 came into force on 18 December 2018. These amendments are the direct result of the Full Court of the Federal Court of Australia decision in Workpac Pty Ltd v Skene2 (discussed in our previous blog) and seeks to address employers’ concerns that wrongly classified employees may be able to “double dip”.

Under the amendments, employers who have wrongly classified an employee as casual, may be able to offset the amount already paid as a casual loading to satisfy entitlements found to be owing to the employee under the National Employment Standard (“NES”).

The Regulation will only apply if all of the following conditions are met:

  • a person is employed on the basis that they are a casual employee;
  • the employer pays the employee an amount (the casual loading) that is clearly identifiable as an amount paid to compensate the employee for not having one or more relevant NES entitlements;
  • during all or some of the employment period, the person was in fact an employee other than a casual employee; and
  • the person makes a claim to be paid an amount in lieu of one or more of the relevant NES entitlements.

The new regulation applies to time worked both before and after 18 December 2018.

Modern Slavery Act

Following our blog on 15 October 2018, the Modern Slavery Act 2018 (Cth) has been passed by the Commonwealth Parliament and commenced on 1 January 2019, imposing new reporting requirements on employers.

Changes in Modern Awards

As part of the Fair Work Commission (“FWC”) four yearly review of modern awards, there have been several changes to some modern awards.

Termination Payments

A new termination payment clause has been included in some modern awards. This clause imposes a requirement that on termination an employer must pay an employee’s outstanding wages and other entitlements no later than seven days after the day the employment was terminated. Common modern awards that now have this clause include:

  • Clerks – Private Sector Award 2010;
  • General Retail Industry Award 2010; and
  • Banking, Finance and Insurance Award 2010.

Casual Conversion

On 1 October 2018, a model casual conversion clause was inserted in 84 modern awards (with others containing a modified clause or already having such a clause). This clause allows certain casual employees to request their employment be converted to permanent, provided they satisfy certain conditions. The employer can refuse to convert a casual employee to permanent status where the employer has consulted with the employee first, there are reasonable grounds to do so, and the refusal is put in writing within 21 days of the request being made.

Flexible Work

A new clause that supplements the flexible working arrangement provisions of the Fair Work Act 2009 (Cth) (the “FW Act“) has also been introduced into modern awards. In our blog of 2 October 2018 we explain the implications of this new clause.

It is worth noting that the FWC will no longer be required to conduct four-yearly reviews of modern awards as the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 20185 passed both houses of Parliament on 5 December 2018 and received Royal Assent on 11 December 2018.

Family and Domestic Violence Leave into NES

The Fair Work Amendment (Family and Domestic Violence Leave) Act 20186 took effect on 12 December 2018. The FW Act now includes the right for workers to take up to five days of unpaid family and domestic violence leave per year as part of the NES. This extends the right to all workers, beyond the coverage of the award system.

If you require any advice as to how these legislative changes may affect you or your organisation, please feel free contact People + Culture Strategies on (02) 8094 3100.


1 Fair Work Amendment (Casual Loading Offset) Regulations 2018 (Cth)
2 http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2018/2018fcafc0131
3 4 yearly review of Modern Awards
4 Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017
5 Fair Work Amendment (Family and Domestic Violence Leave) Act 2018

The Devil is in the Detail: New Model Term on Flexible Working Arrangements

Therese MacDermott, Consultant and Rohan Burn, Graduate Associate

As part of the four-yearly review of modern awards, the Full Bench of the Fair Work Commission (“FWC”) has recently published a provisional model term that supplements the flexible working arrangement provisions of the Fair Work Act 2009 (Cth) (“FW Act”) (the “Model Term”).

This follows the FWC’s decision in March 2018 where it rejected a major overhaul of the right to request flexible working arrangements on the basis that what was being sought would effectively remove the ability of businesses to determine how to roster labour.

While acknowledging there was a significant unmet employee need for flexible working arrangements, the FWC settled on an approach that would see a model term incorporated into modern awards that would “facilitate” arrangements and raise awareness of the right, rather than offering an avenue to challenge a denial of a request. Hence, the end result is a proposed model term that sets out the process an employer must follow if it is responding to a request and gives the FWC a degree of supervision over this process, but no decision-making role in relation to the underlying decision to refuse the request.

Further submissions relating to any award-specific issues will be made within the next two weeks. Subject to these submissions, it is the FWC’s provisional view that all modern awards should be varied to insert the Model Term. That provisional view will only be displaced in respect of any particular modern award if it is demonstrated that there are matters or circumstances particular to that modern award that do not necessitate the inclusion of the Model Term.

Flexibility requests under the FW Act

Under section 65 of the FW Act:

  • an eligible employee may make a written request for a change in working arrangements which sets out the details of the change sought and the reasons for the change;
  • the employer must give the employee a written response to the request within 21 days, stating whether the employer grants or refuses the request;
  • the employer may refuse the request only on reasonable business grounds; and
  • if the employer refuses the request, the written response must include details of the reasons for the refusal.

Under this scheme an employer’s decision to refuse a request for a flexible working arrangement is not subject to any review or appeal. As a result, the FWC is unable to deal with a dispute about whether an employer had “reasonable business grounds” for refusing the request unless the parties have agreed in a contract of employment, enterprise agreement or other written agreement that the FWC can deal with the matter.

What will change with the Model Term

The proposed Model Term will apply to all categories of employees who make a request under section 65 of the FW Act, and is not confined to parents and carers only.

Of particular importance for employers are the following process aspects:

  1. before responding to the request, the employer must discuss the request with the employee and “genuinely try to reach agreement” on a change in working arrangements that will reasonably accommodate the employee’s circumstances having regard to:
    1. the needs of the employee arising from their circumstances;
    2. the consequences for the employee if changes in working arrangements are not made; and
    3. any reasonable business grounds for refusing the request;
  2. the written response to the request must include details of the reasons for the refusal, including the business ground(s) for the refusal and how the business ground(s) apply;
  3. if the employer and employee cannot agree (at (1) above) on a change in working arrangements, the written response must:
    1. state whether or not there are any changes in working arrangements that the employer can offer the employee so as to better accommodate the employee’s circumstances; and
    2. if the employer can offer the employee such changes in working arrangements, set out those changes in working arrangements;
  4. if the employer and the employee reached an agreement (at (1) above) on a change in working arrangements that differs from that initially requested by the employee, the employer must provide the employee with a written response to their request setting out the agreed change(s) in working arrangements; and
  5. disputes about whether the employer has discussed the request with the employee and responded to the request (as required) are to be dealt with under the consultation and dispute resolution clauses of the modern award.

As a consequence, a dispute resolution clause can only be relied on in respect of a dispute about whether the employer has discussed the request with the employee and responded to the request, rather than the substantive decision whether to grant the request.

Implications

While the Model Term (for the most part) may already reflect the practices that organisations engage in, it does:

  • require employers to be mindful of the level of genuine deliberation and consultation they engage in with employees in responding to requests; and
  • increase the regulatory burden in administering requests.

It is also likely that organisations may find that, in the bargaining context, employees (or their bargaining representatives) seek to build on the Model Term and expand its scope to include disputes about whether an employer had “reasonable business grounds” to refuse the request within the dispute resolution clause.

PCS recommends that organisations update staff who are responsible for dealing with these requests (particularly line managers) about these proposed changes and any practices that may need to be revisited as a result of these changes.

Organisations should also consider the impact of these changes on employees who are not award covered and consider whether it will treat all employee requests in accordance with the proposed Model Term, or whether it will adopt different approaches for requests by award and non-award employees.

When is employment correctly characterised as casual?

Meriska Lourens, Associate

The approach to characterising casual employment was the subject of a recent determination of the Federal Court of Australia. This decision necessitates that organisations review their engagement practices around casual employment.

The Facts

The employee was a fly-in-fly-out truck driver and argued that he was a permanent full-time employee because his employment was continuous, predictable and determined in advance. On this basis he claimed to be entitled to payment for accrued annual leave when his employment was terminated.

The employer contended that:

  • it engaged the employee as a casual under its Agreement (making him ineligible for annual leave and other entitlements);
  • the employee was engaged by the hour and could choose when and where to work;
  • the Agreement described the employee as a casual; and
  • both it and the employee regarded his employment to be of a casual nature.

The Decision

The Court was asked to consider whether Parliament intended the words “casual employee” in the legislative provision granting the entitlement to annual leave to be used in their ordinary sense, their legal sense or a specialised non-legal sense.

Ultimately the Court found in favour of the employee and settled on a characterisation of “casualness” as involving an “absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work“.

The rationale for this is that employees who don’t have this firm advanced commitment will have the capacity to enjoy breaks from work when they choose, and therefore do not need to be guaranteed annual leave.

What a “no firm advance commitment” looks like

The Court outlined a range of indicia relevant to a characterisation of casualness, including:

  • irregular work patterns;
  • uncertainty;
  • unpredictability;
  • intermittency of work; and
  • unpredictability

Taking Stock

The decision has led employer groups to call for changes to prevent casual workers “double dipping” by claiming annual leave on top of a casual loading, and for a clear definition of “casual employees” in the legislation.

Unions have responded to the decision stating that there could be a sizable proportion of employees who have been incorrectly characterised as being engaged casually, and that those that have been in regular and predictable work patterns may be entitled to paid annual leave.

PCS recommends reviewing how your organisation engages with its casual workforce. It is risky for organisations to rely simply on the fact that an employee has been engaged on an hourly basis or that the applicable award or agreement provides for a definition of casual employment where this does not match the actual form and manner in which casuals are in fact engaged.

Updates to Victorian long service leave and labour hire legislation

Daniel McNamara, Graduate Associate and Rocio Paradela, Graduate Associate

Businesses that operate in Victoria need to be mindful of recent legislative changes in this jurisdiction. Two areas subject to change in Victoria are changes to long service leave entitlements and the new labour hire licensing framework.

Long Service Leave

The Victorian Parliament has passed new long service leave legislation, replacing the existing Long Service Leave Act 1992 (Vic) (the “LSL Act“). The provisions are likely to become operational later this year.

What are some of the major changes?

  • Employees will be entitled to take long service leave after completing seven years’ continuous employment instead of 10 years.
  • Both paid and unpaid parental leave will count as service (other than in the case of a casual or seasonal worker).
  • An employee can request to take long service leave for a minimum period of one day, although an employer may refuse such a request if the employer has reasonable business grounds to do so.
  • Continuity of service will not be broken where a casual or seasonal employee:
    • takes up to two years’ parental leave (whether paid or unpaid);
    • obtains the employer’s agreement in advance to an absence;
    • has a break which is impacted by seasonal factors; or
    • has been engaged on a regular and systematic basis and has a reasonable expectation of being re-engaged.

In addition, if an employee’s working hours have changed during the two years immediately before taking long service leave, the employee’s normal weekly number of hours is the greater of: the average weekly hours worked over the past 52 weeks (one year), 260 weeks (five years) or the last period of continuous employment.

Criminal liability has been established with respect to breaches of a number of obligations under the LSL Act. This includes where an employer takes adverse action against an employee because the employee is entitled to long service leave or other entitlements under the LSL Act.

The LSL Act also provides for accessorial liability of certain officeholders of a corporation where they are shown to have been knowingly involved in the commission of an offence by the corporate entity.

Labour Hire Licensing

Victoria is continuing the trend of other states, such as South Australia and Queensland, with the Labour Hire Licensing Act 2018 (Vic) (the “Licensing Act”) receiving Royal Assent on 26 June 2018.

What are some of the major changes?

Similar to labour hire licensing legislation in other Australian states, the core features of the Licensing Act include:

  • the mandatory licensing of labour hire organisations operating within Victoria;
  • the requirement of labour hire licensing organisations to meet a “fit and proper person” test to ensure that minimum standards are met;
  • penalties imposed on non-compliant labour hire organisations and on individuals/organisations engaging with non-compliant labour hire organisations; and
  • the establishment of a Labour Hire Licensing Authority (based in Bendigo) and the Office of the Labour Hire Licensing Commissioner.

A Federal labour hire system?

The Federal Labor party has promised, as an election pledge, to introduce a uniform federal scheme that would guarantee the same pay and conditions for labour hire workers as award-covered employees throughout Australia. In addition, under this model, labour hire organisations would need to demonstrate compliance with relevant workplace legislation (including the Fair Work Act 2009 (Cth) and tax, superannuation, WHS and immigration laws) in order to maintain a license.

If you require any advice as to how these legislative changes may affect you or your organisation, please feel free contact People + Culture Strategies on (02) 8094 3100.