Making flexibility work

Michael Starkey, Graduate Associate

The drive to more flexible working arrangements is in the spotlight again, with big four professional services firm EY announcing recently that coming into work is optional for its employees. The arrangement is part of EY’s Workplace of the Future program and aims to place focus on outcomes rather than presenteeism. While the EY method might not be right for all organisations, here are our top tips on how to get flexible working arrangements right in yours. 

Know your obligations

Under the Fair Work Act 2009 (Cth) (“FW Act”) certain employees (for example, parents of school aged or younger children, carers and employees with a disability) have the right to request a flexible working arrangement. An employer may only refuse such a request on reasonable business grounds, which might include the arrangement being too costly, or it being impractical to change the working arrangements of other employees to accommodate the arrangement.

Recognise the benefits

There is nothing preventing employers from offering flexible working arrangements to employees who fall outside the scope of employees entitled to request such an arrangement under the FW Act. Rather than being seen as an impost, organisations should consider the potential benefits of implementing flexible working arrangements on a wider level. Those benefits might include:

  • building organisational diversity by, for example, encouraging the workplace participation of carers with children;
  • encouraging employees nearing retirement age to continue working through more flexible practices; and
  • attracting top-talent by differentiating your organisation from others through non-monetary benefits.

Recognise your options

Flexible work comes in many forms, with options growing rapidly as technology advances. Employees might be allowed to work, for example:

  • part-time;
  • compressed hours (full-time over fewer days);
  • from home;
  • in job-sharing arrangements; or
  • reduced hours in certain weeks through the creative use of leave.

Organisations should think innovatively to come up with an option, or combination of options, that works best for them.

Set clear expectations

Employers should make clear (for example, through documented policies) that, in return for the benefit of flexible work arrangements, employees are expected to maximise discretionary effort and deliver on agreed outcomes. The success of flexible work arrangements should be tracked through regular check-ins. By framing flexible work arrangements as part of broader initiatives to build employee engagement, organisations can achieve buy-in and reap the rewards of associated cultural and productivity benefits.

Notice of Employee Representational Rights – Have you complied?

Elizabeth Kenny, Associate

When preparing to bargain for a new enterprise agreement, many employers know that they must provide employees covered by the proposed enterprise agreement with what is known as a ‘Notice of Employee Representational Rights’ (“NERR”).

The NERR is a requirement under the Fair Work Act 2009 (Cth) (the “FW Act”) and its form and content is prescribed by the Fair Work Regulations 2009 (Cth) (the “FW Regulations”). However, many employers do not know that the form and content prescribed by the FW Regulations must be strictly complied with, or this may later jeopardise the approval of the enterprise agreement when it reaches the Fair Work Commission (“FWC”).

Recently, two case examples highlight the importance of strictly complying with the form and content set out in the FW Regulations and the consequences of failing to do so.

In the case of DP World Brisbane Pty Ltd [2016] FWC 385, the FWC noted deficiencies with the NERR being that:

  1. the NERR contained other content in the form a company logo and letterhead information; and
  2. the NERR incorrectly referred to the DP World Brisbane Enterprise Agreement 2014.

The FWC formed the view that the incorrect date in the title of the agreement referred to in the NERR did not invalidate the NERR as it does not represent a material change to the form and content prescribed for a NERR. However, the additional content, being the company logo and letterhead information, was considered to be significant in that its inclusion had the effect of altering the character of the document from a regulatory document to an Employer document and as such, the FWC was unable to approve the agreement and the application was dismissed.

In the case of WorkPac Mining Pty Ltd [2016] FWC 251, communications about the NERR were sent to employees via SMS text and email. The text of the email set out some, but not all, of the terms of the NERR and SMS text messages sent to the employees directed employees to a link on the employer’s intranet site including the NERR.

The dispute arose around whether the primary method of distribution of the NERR – by email – was consistent with the FW Regulations and whether the alternative or secondary method – by SMS text message – was also consistent with the FW Regulations.

The FWC determined that the employer did not comply with the requirements to give the NERR in the required form for the following reasons:

  1. two versions of the NERR were contained in the email, the first being incomplete and the second having content above and below the NERR so it was unclear what is part of the notice and what is additional content. Therefore, the email did not contain a NERR in the required form; and
  2. the Regulations require the employer to “give” the notice which connotes a positive action on the part of the employer. By simply providing a weblink in a SMS text message was not enough on the employer’s behalf to satisfy the requirements as it does not identify the purpose of the communication, being to give the NERR or identify how the notice can be accessed.

Lesson for Employers

Although employers are aware that NERR must be provided to start the bargaining process of a new enterprise agreement, it is important that employers are aware that the NERR must be provided in the exact form as provided by the Regulations and failing to do so will result in the application of the enterprise agreement subject to the NERR being dismissed. The employer must ensure that the NERR is given without any additional content, particularly anything that could characterise the document as being an employer document such as a company letterhead or logo.

Employers must be also be aware in giving the NERR, that it is clear what information is part of the NERR and what information is additional information. This could be done by providing the NERR as an attachment and any additional information is contained in the body of the email. In addition, employers must ensure that they “give” the NERR to their employees and identify how it can be accessed. This can be as simple as including a statement in an email or SMS text message such as “We are required to give you a Notice of Employee Representational Rights. It is attached to this email/SMS message in the form of a weblink/attachment”.

Top 5 Unfair Contract Terms

Beverley Thomas, Associate

From 12 November 2016, the Unfair Contract Term (“UCT”) protections under the ASIC Act 2001 (“ASIC Act”) and the Australian Consumer Law (“ACL”) currently only available to consumers will be extended to cover small businesses. Under these provisions, standard form contracts are void to the extent they contain unfair terms but will continue to bind the parties if they can operate without the unfair term. Here are our top 5 takeaways to help you understand what these changes mean for your organisation.

1. What do the amendments affect?

The law will apply to standard form contracts entered into or renewed on or after 12 November 2016 where the contract is for the supply of goods or services or the sale or grant of an interest in land, the upfront price under the contract is under the threshold amount (either $300,000, or $1 million if the contract is for more than 12 months) and at least one of the contracting parties is a small business (employs less than 20 employees, including casual employees engaged on a regular and systematic basis). 

2. How do these amendments tie into my workplace practices?

If your organisation offers to small businesses standard form contracts that are valued at less than the prescribed threshold, then you should review and amend your suite of template contracts to ensure they are compliant with the new protections. Standard form contracts are generally pre-prepared by one (bigger) party with greater bargaining power and offered to the other (smaller) party on a “take it or leave it” basis with little to no scope for negotiation. From a workplace perspective, examples of standard form contracts that your organisation should review include:

  • independent contractor agreements;
  • tripartite agreements between a principal, an entity and its key personnel;
  • consulting services agreements; and
  • labour hire agreements.

3. What is an unfair term?

A term of a standard form contract will be unfair and therefore void if it would cause a significant imbalance between the parties, is not reasonably necessary to protect one party’s legitimate interests or would cause a financial or other detriment to one party if relied upon. Examples of possible UCTs include terms that would enable or permit one party (but not another) to:

  • terminate the contract;
  • avoid or limit performance of the contract;
  • impose a penalty for a breach or termination of the contract;
  • vary the terms of the contract;
  • renew or not renew the contract;
  • vary the upfront price payable without permitting the other party to terminate the contract; and
  • limit the other party’s right to sue another party.

The transparency of the UCTs within the standard form contract will have a bearing on whether the term is considered to be unfair. 

4. What could happen if we don’t comply with the amended UCT Laws

The ACCC or the small business party to the contract may commence legal proceedings claiming that your organisation has breached the UCT protections. It will be the role of a Court to determine whether a term in a standard form contract is unfair and to make orders that remedy any breach of the UCT protections. Your organisation could be liable under the UCT provisions of the ASIC Act and the ACL if a Court finds that you have included UCTs in your standard form contract.

UCTs in standard form contracts will be declared void and unenforceable. However, to the extent possible, the contract may continue to operate without the UCTs. If contractual terms are no longer binding on parties it could dramatically impact the effectiveness of the standard form contract. It could prevent the completion of a project if personnel no longer provide services due to unenforceability of the agreement and the damage to your ongoing commercial relationships may be compromised. 

5. What should our organisation do?

While the amendments to the UCT laws will only apply from 12 November 2016 onwards, now is the time to:

  • review your relevant standard form contracts for any UCTs and the transparency of any terms that could be construed as unfair;
  • consider whether it is necessary for your organisation to offer standard form contracts and whether a more flexible approach can be taken towards negotiating agreements;
  • assess whether the value of your standard form contracts may be in excess of the monetary thresholds for UCT laws applying; and
  • decide whether to have two sets of documents – one to issue to small businesses for contracts within the threshold amount and the other to issue to other businesses in accordance with your usual protocol.

Do the code and the conduct match?

David Weiler, Associate

Last month two former ANZ financial traders brought separate but related actions against the bank following the termination of their employment. The Australian Financial Review has  reportedthat one of the claims is for approximately $30 million in damages for loss of deferred shares and future income.

The reasons for the terminations were cited as “serious breaches” of ANZ’s code of conduct including inappropriate comments over the bank’s internal messaging system. The employees allege that behaviour such as drug use, excessive alcohol consumption and trips to the strip club during work were known about, and in some cases encouraged, by senior members of the bank.

While the actions have not been heard by a court yet and may not ultimately be established, on a general level, the allegations highlight the importance of leaders of organisations doing exactly that, leading. Employers should be aware of the potential difficulties in enforcing a code of conduct if executives and team leaders are not held to the same standard as those that they supervise.

While codes of conduct may be a good reference point, workplace conduct does not occur in a vacuum and festering “grey areas” can cause serious issues when a party comes to the conclusion that the employment relationship should come to an end.

While employers will inevitably need to draw a line in the sand and cannot continue to allow inappropriate behaviour to go on, they should be cautious of acting on the conduct without consideration of applicable workplace laws.

At the same time, employees who feel as though they are part of a “poor culture” must consider their position within the organisation and the impact of their own behaviour on the organisation as a whole.

The conduct alleged in these types of actions, if established, can negatively impact a business’ brand long after deeds are signed or orders are made. Although it is of course better to address these issues before they become ingrained in a culture, there is no better time than today to reflect on how your organisation’s code of conduct matches up with the conduct of its employees (especially those in leadership positions).

An Important Update on Redundancy Payments

In September, we reported on a decision (National Union of Workers; United Firefighters’ Union of Australia v Compass Group Pty Ltd [2015] FWC 6055) of the Fair Work Commission (“FWC”) which considered when an employer will and will not be exempt from making a redundancy payment because the termination of employment in question is “due to the ordinary and customary turnover of labour”.

A Full Bench of the FWC (“Full Bench”) (in Compass Group (Australia) Pty Ltd v National Union of Workers; United Firefighters’ Union of Australia [2015] FWCFB 8040) has upheld an appeal against that decision, quashing Commissioner Roe’s original order which required the employer, Compass Group Pty Ltd (“Compass”), to make redundancy payments to a number of employees whose employment was terminated following Compass’ election not to renew several of its government contracts.

Reasoning

The Full Bench held that while redundancies arising “because of economic circumstances, technological change or company restructure involve a common element of unexpected termination” (thereby justifying a redundancy payment), “termination of employment where an employee has been engaged for a job or contract is in a different category” (not justifying a redundancy payment). The Full Bench proposed a streamlined test to determine whether a termination of employment is due to the ordinary and customary turnover of labour:

  • “…it is necessary to consider the normal features of the business and then determine whether the relevant terminations are properly described as falling within the ordinary and customary turnover of labour in that business…

The Full Bench accepted that:

  • over a 12 month period, 54 per cent of Compass’ employees had been dismissed at the conclusion of one of Compass’ contracts;
  • since 1999, 67 per cent of Compass’ employees in the defence sector had been dismissed in such circumstances;
  • the employees in question were employed for a particular contract which implied a link between their employment and that contract;
  • dismissing employees at the conclusion of a contract was Compass’ standard practice; and
  • Compass customarily did not make redundancy payments in such circumstances, with employees understanding this (as evidenced by the long-standing inclusion of a standard redundancy clause in Compass’ enterprise agreement).

On the basis of the above, the Full Bench concluded that “the terminations of employment arose from the loss of the Department of Defence contracts and in the context of Compass’ business, this was due to the ordinary and customary turnover of labour”.

Lessons

The Full Bench’s decision is a win for employers because it indicates the correct approach to determining whether a termination of employment is due to the ordinary and customary turnover of labour is a question that “necessarily focuses on the business circumstances of the employer”.

It also indicates that the “ordinary and customary turnover” exception is less narrow than was indicated in the FWC’s first decision – for example, the exception may apply if a link between an organisation’s business contracts and contracts of employment can be implied, despite those contracts not being “clearly tied”.

For advice on your obligations in relation to redundancy and other termination payments, contact one of the PCS team today.

Ringing in the New Year without having to ring your Lawyers

With end of year festivities underway in most workplaces here are some helpful tips for employers to get the most out of celebrating while avoiding the fallout that often arises in the morning, week and month after.

1.  Manage the alcohol

As obvious, while perhaps controlling, as this may be perceived by some workers, employers must take steps to ensure the responsible service of alcohol to employees during the end of year party (and any party for that matter). This includes:

  • communicating with the venue about their procedures for ensuring the responsible service of alcohol;
  • offering light beer and soft drinks; 
  • providing plenty of tasty food throughout the night (preferably prior, or at least simultaneously, to the popping of champagne); 
  • a commitment to cutting off the service of booze at a reasonable time; and
  • recognising that employees “kicking on” doesn’t necessarily mean employers are absolved of any responsibility for their subsequent actions.

2.  Reminders are mandatory; make the most of them

Everyone expects the email from HR about the upcoming party, the organisation’s position on acceptable behaviour and the responsible consumption of alcohol - it’s a must for any employer. However, it doesn’t need to be a boring, killjoy communiqué that people don’t even bother to read. Use it as an opportunity to hype up the event while also getting the mandatory message across by treating employees as adults.

3.  Get home safe

If your event isn’t easily accessible by public transport, you need to provide a safe option for people to get home. Whether it’s handing out cab charges, arranging a bus or calling Ubers, designate a manager to stay sober and ensure that each and every attendee has an acceptable way home. The costs pale in comparison to the alternative if something goes wrong. 

4.  Entertainment in addition to booze

Just because dry parties are a tough sell in Australian workplaces doesn’t mean the bar has to be the only source of entertainment at the party. Arrange a Kris Kringle gift exchange, hire a band and think about some activities that don’t revolve around lemons and salt. Try organising a team building exercise that works towards building stronger ties among employees. 

5.  Have fun

Never forget what the party is about: celebrating the successes of the past year and setting the stage for an even better 2016. Use the event as an informal team building exercise where staff can bond and new team members can get to know the boss. The last thing you want is for this great opportunity to be turned into a disaster. 

Happy holidays from the whole PCS Team!

What do you do when a complaint is made against someone in HR?

It’s a gloomy, grey Monday morning. You arrive at your desk to find a long document sitting at the top of your in-tray - it’s a complaint lodged against one of your Executive Team. The complaint is flagged for urgent attention, with a note from your 2IC recommending that an investigation be held as soon as possible.

You pick up the phone to call your HR manager. Then you look at the complaint more closely: the alleged perpetrator is a member of your HR team. What do you do?

The above is an increasingly common scenario. Workplace investigations are becoming increasingly prevalent, in part due to the introduction of the Fair Work Act anti-bullying regime and as part of a general increase in cases (complaints and grievances) relating to workplace behaviour. The fact that performance management can be a genuine (or not) source of grievance means that complaints related to alleged bullying in this arena often include reference to the HR professionals conducting, or involved in, the process. 

Investigations are typically conducted internally for the purposes of taking remedial or disciplinary action, or for discovering the factual circumstances behind a grievance. 

But what happens when the persons who usually carry out the investigation are also named as alleged perpetrators of the conduct? 

Is an investigation required?

It is important that organisations treat complaints and grievances with necessary seriousness, as a failure to do so may compromise their defence if the matters raised internally progress to bullying claims and/or litigation. Treating complaints and grievances with seriousness requires, at the very least, compliance with any applicable contractual terms, policies or procedures. Those terms, policies or procedures may or may not indicate when an investigation must be conducted (and how).

While each case will turn on its own facts because of the individual nature of the documents governing the process, there are some clear circumstances that may justify the need for an investigation, such as where:

  • the allegations relate to the conduct of another employee for which the employer may be vicariously liable or which may cause a risk to health or safety;
  • the allegations of misconduct are complex, and an investigation is required to clearly establish the relevant facts and circumstances;
  • the allegations relate to “serious” misconduct; 
  • the allegations could cause an organisation reputational and brand damage;
  • the allegations implicate senior executives and managers; or
  • a formal investigation is required by contract or an industrial instrument as part of the disciplinary process.

Who should conduct the investigation?

Employees, particularly when subject to an investigation, like to know that decisions made in the workplace are impartial and free from bias. An effective workplace investigation allows each of the participants to be heard, for evidence to be submitted and for an impartial decision to be made on the facts and merits of each case.

As such, while in many cases it may be appropriate for your HR team to conduct an investigation, there are many scenarios in which an external investigation is prudent, including:

  • where the incident involves sensitive issues in which you need to ensure legal professional privilege, to the extent possible; 
  • where the relevant HR professionals do not have sufficient expertise or confidence to conduct the investigation; 
  • where there is no internal person that is able to undertake an investigation at arm’s length, for example where the relevant internal person has a conflict of interest (because they may be directly or indirectly implicated, or their manager is);
  • where the relevant internal person is going to be the decision maker (as to the outcome in respect of the investigation’s findings); or
  • where the internal investigation has failed to resolve the matter and the aggrieved employee seeks to escalate the matter (whether by way of an appeal against the findings, as an entitlement under the governing documentation or from an organisational viewpoint if that will prevent the employee lodging an anti-bullying application or some form of external complaint). 

In situations like this engagement of a firm, like PCS, with skill and experience in investigations will ensure the process is invested with objectivity, fairness, natural justice and as a consequence the organisation is likely to save on costs, time and possible further litigation.

 

Our top 5 tips for avoiding employment litigation

All employers want to avoid the stress, cost and downtime associated with litigation commenced by an employee (or former employee). Here are our top five tips for preventing work-related litigation.

1. Establish and document clear expectations

Establishing clear expectations of your employees is fundamental in ensuring that the requirements of the position are met, the employee is a cultural fit for the organisation and you are able to attract and retain good employees.

A thorough position description which highlights the requirements of the role to potential employees before they apply for a position and a clear contract which reinforces when and how work is to be performed will assist in ensuring that both parties are on the same page.

Up to date policies and procedures should also be used to clearly outline operational and legal requirements of your employees in greater detail. That said, your contracts of employment should be drafted so that company policies do not form part of the contract of employment. Training in policies and procedures is also essential.

2. Give constructive feedback

Giving constructive feedback will assist employees to fulfil the requirements of the role and help them grow and develop within the organisation.

While regular performance appraisals are key, do not wait to give positive feedback or address areas of concern. Waiting to give positive feedback may make an employee feel undervalued and delaying addressing areas of concern could create a greater problem.

3. Create a paper trail

Take detailed notes of meetings (particularly if performance/conduct concerns are raised). Having a paper trail documenting the employment relationship and any hiccups that occur along the way may assist in defending against future employment litigation if a dispute arises down the track.

4. Know when to hold ‘em and when to fold ’em

If an employee’s employment is terminated within 6 months of their employment or 12 months for small business the employee will not be covered by the unfair dismissal protections in the FW Act.

Accordingly, if you have raised significant performance or conduct issues during this time and cannot see any improvement in the employee’s performance/conduct you may wish to consider calling time on the employment relationship before the employee can avail themselves of an unfair dismissal application. Be aware that employees terminated during their probationary period may have other options available, such as a general protections or discrimination claim.

5. Get prompt legal advice

When in doubt, and particularly before making a decision to terminate an employee’s employment, consider getting legal advice. In our experience, early legal advice will almost always save money in the long run.

Keeping Gen Y for the Long Haul

Many industries report a surplus of highly qualified and enthusiastic employees as being available to fill entry level roles, but keeping them in the long term poses a significant challenge. Developing effective strategies for retaining these employees is critical to a business, as high turnover is a burden on a business’ time and training resources and the potential disruption to client relationships can be damaging.

Here’s our top 5 list of motivators to assist your organisation to retain young achievers.

1.  Variety: Exposing young employees to a wide range of tasks, clients and departments within the business can keep interest levels high and subdue a new starter’s fears that they will be pigeon-holed early on their career. Variety can also extend to giving employees opportunities to work on different short and long term projects and with a range of mentors of varying seniority.

2.  Career progression: Graduate programs provide employees with the opportunity to develop a core set of skills for their career, but what happens when those programs come to an end? Some employers find that their graduates are susceptible to being lured away by clients and competitors as they reach the end of their programs. Ensure your business reaps the benefits of its investment in those foundational years by discussing career progression and remuneration with graduates throughout and prior to their program concluding, through such measures as performance development programs.You may even wish to consider extending the program or developing one to follow on from those first few years.

3.  Leadership: Organisations that have inspiring leaders are more likely to retain their employees if they have positive role models to look up to. Senior employees provide a snapshot to juniors of what they can expect to achieve if they settle in for the long haul.

4.  Work life balance: Junior employees can suffer from burn out from long hours in the office. Innovative employers are using technology to create a solution for this by developing internal search engines to identify previous examples of work and automate routine tasks such as form filing. While these types of technological initiatives work for businesses with the financial resources to do so, the effects can be replicated by creating a collaborative environment that promotes sharing of resources. Employers can also let their employees know their social time matters as much as their work does by encouraging employees to appropriately socialise together.

5.  Clear purpose: Longevity in a role is seldom motivated by monetary incentives alone. Employees are likely to stick around for the long haul if they work in an environment where the organisation’s vision, expectations and values are made clear to them and they align with them. Discovering what makes your new recruits get out of bed in the morning and come to work is something that should be done at the interview stage. That said, it’s never to late to work on clarifying what your business’ vision is and it can even work to its advantage to have all of your employees contribute to formation of the vision, expectations and values.

If you’ve been inspired to develop your business’ strategies around recruitment, training and retention, contact the team at PCS today.

Changes to the Fair Work Act: what they mean for you

The Government’s Fair Work Amendment Bill 2014 (Cth) (the “Bill”) has been passed after months of protracted cross-bench negotiations. While pared back significantly from the original bill presented to Parliament in February, the Bill has introduced three changes which employers should be aware of.

1.  Enterprise agreements

Employers negotiating single-enterprise greenfields agreements (that is, enterprise agreements in relation to a new enterprise which has not yet employed any employees) may now apply to the Fair Work Commission (“FWC”) to have the agreement approved if negotiations have been ongoing for six months and not resulted in agreement.

2.  Protected action ballot orders

An application for a protected action ballot order (required before industrial action can be taken lawfully) may no longer be made by a bargaining representative unless bargaining has commenced (for example, because the employer has agreed to bargain or a majority support determination has been obtained from the FWC). This change is intended to ensure that employees do not “strike first, bargain later”.

3.  Unpaid parental leave

If an employee on a period of unpaid parental leave makes a request to extend the period of his or her leave, an employer may no longer refuse the request unless the employee has been given a reasonable opportunity to discuss it. This is in addition to the existing requirement that an employer may only refuse such a request on reasonable business grounds. There is still no right of appeal by an employee if their request is refused.

The Government was unable to secure enough support to pass many of its proposed changes. Amendments in relation to the following were rejected:

  • annual leave – an amendment to make clear that annual leave is to be paid out as provided by any applicable industrial instrument;
  • leave accruals – an employee cannot take or accrue leave during a period that they are absent from work and in receipt of workers’ compensation;
  • right of entry – including provisions to repeal the transport and accommodation arrangements and default meeting place;
  • individual flexibility arrangements – including requiring a statement of acknowledgment that an employee is better off overall under the arrangement and changes to how such arrangements may be terminated; and
  • transfer of business provisions – will not apply to an employee who, at his or her own initiative, seeks employment with an associated entity of his or her former employer without his or her employment having been terminated first.

For advice on what these changes might mean for your organisation, contact one of the PCS Team on (02) 8094 3100.