National minimum wage to increase by a “modest” $16 per week

Moments ago, the Fair Work Commission (the “FWC”) handed down the decision in its annual wage review.

From 1 July 2015, the national minimum wage will be $656.90 per week (or $17.89 per hour). This represents an increase of $16 per week from the current national minimum wage of $640.90 per week.

The decision follows months of submissions from and consultations with government, employer and employee stakeholders, as well as research and reports by the FWC’s Expert Panel.

Following the decision, minimum wage rates in modern awards will be increased by 2.5% and a new national minimum wage order will be made with respect to award free employees.

What does this mean for employers?

  • Subject to the requirements of relevant modern awards, enterprise agreements and employment contracts, from 1 July 2015, employers must ensure that their employees are paid at least $656.90 per week (or $17.89 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 2.5%.
  • 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).

Termination process doesn’t “stack” up, leading to extension of time to lodge unfair dismissal application

Merlino v Coles Supermarkets Australia Pty Ltd [2015] FWC 1185

A Coles employee was granted an extension of time to lodge his unfair dismissal claim after two Coles HR managers were found to have misled the employee into believing that his dismissal was being investigated with the possibility of his dismissal being reversed. The employee, who was on a final warning, was dismissed for breaching safety standards by standing on a number of pallets. The employee did not accept the termination of his employment and asked for an investigation into the circumstances surrounding his dismissal and his prior first and final warning. 

The first problem with the process undertaken by Coles was that its HR Manager informed the employee that the termination of his employment may be reversed.

The second problem was that Coles proceeded on that basis and provided the employee with a process to formalise and escalate his concerns to a senior manager. 

These conversations were found by the Fair Work Commission (“the Commission”) to have led the employee to believe that his dismissal would be “stayed” during any internal investigation by Coles and the employee delayed the lodgment of his unfair dismissal application. The employee followed the advice of the HR manager and raised his concerns with the State HR Advisory Manager where he was invited to provide submissions and evidence in relation to a number of complaints he had identified that he considered relevant to his dismissal. 

The Commission found that whilst the Coles HR managers did not set out deliberately to mislead the employee to delay the lodgment of his unfair dismissal application, the statements made to the employee by the HR managers lead to a series of miscommunications and misunderstandings. The Commission was of the view that even though the employee became aware of the dismissal on the day, he had a genuine belief that his dismissal was being reviewed and could be overturned. The ultimate problem with the dismissal process was that at no point did Coles make it clear to the employee that the review process did not relate to his dismissal and would not encompass the termination of his employment and as such there was no prospect that it could be overturned. Rather to the contrary, the HR manager left open the possibility that the dismissal might be reversed.

The Commission decided that these circumstances were exceptional circumstances and made an order for an extension of time.

Lessons for Employers

Employers and HR managers who are involved in dismissals must ensure they clearly state that the employee is dismissed and not provide any false hope to the employee as to the possibility that the dismissal may be reversed. 

HR managers are expected to take reasonable steps to ensure employees are not misled in these types of situations.

Workplace Investigations | Five steps to best practice

When it comes to workplace investigations, an employer’s good intention sometimes isn’t enough. In a recent decision, the Fair Work Commission held that an employer’s otherwise well handled investigation into complaints made against an employee was unfair because the employee (who was the subject of the complaint) was only interviewed after findings in the investigation had been made. Although the employee had an opportunity to respond to the findings before a disciplinary decision was made, this opportunity was not “genuine” because the employee wasn’t given a chance to explain his conduct.

To ensure workplace investigations meet best practice standards, and to protect themselves from liability in a range of areas, employers should:

  • Be thorough: plan the investigation. Particularise allegations made by the complainant.
  • Communicate with fairness in mind: don’t make assumptions. Listen, put allegations to the accused, and give all parties an opportunity to respond before a finding is made
  • Report on your decision: detail the steps you have taken and why.
  • Use findings proactively: could the findings uncovered in the investigation be indicative of a wider problem in the workplace? Could they be used to inform behaviour and culture training to prevent future incidents?
  • Maintain confidentiality and an open, non-victimising culture: this is important from both a legal perspective and to ensure trust in the investigation process.

Handled properly, workplace investigations not only ensure employers are prepared should a worker pursue a legal claim arising out of the investigated conduct, but have the potential to prevent workplace issues from becoming legal issues in the first place.

Bargain for your brand: Enterprise Agreements that protect your brand inside and out

As a business you invest a considerable amount of time, money and effort in order to build a strong brand and maintain its status. Commercial reputation takes years to develop but can be destroyed with a few poor decisions and bad luck. Enterprise bargaining presents a situation that can at worst damage your brand beyond repair and at best offer a chance to solidify the hard work put into creating goodwill. Most businesses recognise the possible risks associated with enterprise bargaining and work to merely manage it throughout the process. Others avoid them altogether and rely solely on modern awards and individual contracts to govern their employment relationships. Instead, we encourage businesses to embrace the opportunity of entering into an enterprise agreement as a way to strengthen and protect their brand.

For example, an enterprise agreement can form an important part of the recruitment, selection and retention strategy by showcasing the terms and conditions of employment offered by your business, especially if it contains innovative clauses. Not only do such terms potentially attract talented employees to come and work for your business, they also provide a competitive advantage over competitors who may be seeking to entice your employees away from your business. 

While enterprise agreements do offer an opportunity for creativity, the Fair Work Commission (“FWC”) must approve them before they become operational. The FWC’s annual report shows that while only a relatively small number of enterprise agreement were not approved last year, there was still a two-thirds increase in the number of applications that were not approved. This highlights the need to understand all of the requirements under the Fair Work Act 2009 (Cth) (“FW Act”) before beginning negotiations. 

In addition to the stipulations around the content of an enterprise agreement contained in the FW Act there are several important rules that must be adhered to during the bargaining process. There is nothing more potentially detrimental to a business’ brand than when it appears that the employer does not, or is perceived to not, understand their own rights and obligations or respect the rights and obligations of other bargaining parties in that process. Issues such as employers giving employees notice of their representational rights, following good faith bargaining requirements and providing a proper access period and voting procedure can stall negotiations and reflect poorly on the employer even after an agreement is reached. 

If bargaining does hit a standstill, employers face the further risk of industrial action being taken by the employees which can be very public and very costly to the organisation, particularly if that industrial action is ongoing. Preventing protected industrial action largely depends on effectively managing the stakeholders involved in the process. 

The best way to ensure that your business is in a position to appropriately manage the stakeholders throughout the process is to know and understand your own position inside and out. There are a number of practical mechanisms that your business can also adopt, including through establishing bargaining protocols at the outset of the bargaining processes. These protocols are particularly important if there are a number of bargaining parties at the negotiating table. 

We often advise clients to consider and document their expectations about how negotiations will progress, including whether the parties are to exchange written logs of claims setting out their respective positions, whether draft enterprise agreements will be prepared from which the parties are to work from, how matters discussed at meetings are to be recorded (notes and/or transcription), expectations around timeliness of responses and how responses will be delivered. A further way of managing stakeholders is to develop an expansive communications strategy that is flexible, precise, concise and transparent. 

Enterprise agreements not only reduce administrative complexity and add commercial certainty to a business. They also represent a clear strategy for a business to improve its brand and to differentiate itself from its competitors. At PCS we work everyday to achieve these goals for our clients, and we would be happy to assist your business with implementing an enterprise agreement. 

Managing employees through an acquisition

Many big name acquisitons reported in the last few days such as the acquisition of the Toll Group may be exciting news in the market but may set alarms bells for employees on what the future holds. In these situations, the employer should manage the culture of their organisation.

An acquisition can be a difficult process for both employers and employees. Employees often live in uncertainty and want to be kept in the loop on their position and their status within the organisation regardless of whether or not their employer is acquiring a company or is being acquired by another company. A clear process should be established for employers to follow to ease the transition for employees.

Below are some key factors an employer should take into consideration when managing employees in this situation:

Communication

Communication is vital in any organisation but especially important when there is a level of uncertainty faced by employees. The culture of an organisation will most likely be affected with the addition of more employees. The key to a smooth acquisition is communicating clearly and often and this can happen in a number of ways (e.g. one to ones, regular updates, group consultations). Employers should aim to clarify roles and benefits to employees.

Employees of an acquired company may want to know what will change when their company is acquired. Employers should try to be upfront with all employees about what will change, as well as the cultural aspects that will stay the same.

Employee Representation

There are bound to be employees who would support company cultural efforts and it would be useful for these employees to act as liaisons to their organisation.

Talent Management

Employers should consider the talent which would be brought to the table. Each employee would have to be considered individually to see what they can offer to the larger company. It would be extremely beneficial for the employer to clearly evaluate their talent before making rash decisions only for financial reasons.

Development program

Employers should also develop a robust development program which aligns employees into the larger business. This should go further than the basics of job titles, compensation and benefits. Detailed information should be made available to educate the new employees.

The PCS Basic Guide to Unfair Dismissals

This is the first of a two-part series on unfair dismissals. Part 1 will look at the basics behind the national unfair dismissal jurisdiction, with a view to assisting your organisation in understanding and responding to these claims. Part 2 will look at some practical tips in the unfair dismissal jurisdiction, arising from some recent case law.

Organisations of all sizes and in all industry sectors experience unfair dismissal applications. Be they at conciliation or hearing stage, unfair dismissal applications can be an emotional rollercoaster for all involved, and often require significant investment in terms of time and money.

The basics

  1. The unfair dismissal jurisdiction is available to most Australian private sector employee
  2. Employees can bring an unfair dismissal application to the Fair Work Commission (“FWC”) within 21 days of their termination becoming effective
  3. Employees must have served the “minimum employment period” (6 months where the employer has 15 or more employees, 12 months if less than 15) to bring a claim
  4. Employees earning over the high income threshold(currently $133,000, excluding super) are not eligible to bring a claim, unless they are covered by an award or an enterprise agreement
  5. Employees whose employment has been terminated because of a genuine redundancy (that is, where their position is no longer required to be performed by anyone because of operational changes, and where applicable consultation/redeployment requirements have been complied with) are not able to bring an unfair dismissal application
  6. Small business employers (employers will less than 15 employees) can (but are not obliged to) utilise the Small Business Fair Dismissal Code, which can then be used as a defence in unfair dismissal procedures
  7. In proceedings, the employee is called the “Applicant”, and the employer is called the “Respondent"
  8. The first step is usually a conciliation by telephone. A large majority of matters settle at or shortly following conciliation or are discontinued
  9. If the matter does not resolve at or following conciliation, the matter is listed for hearing before the FWC

What factors does the FWC consider?

The FWC looks at whether the dismissal, was “harsh, unjust or unreasonable”, with a view to producing a “fair go all round” for all parties.

There are three main factors that the FWC looks at in relation to a dismissal:

Was the dismissal substantively unfair?

  • Was there a valid reason to dismiss?
  • Was the dismissal appropriate given the issues at play? Would a warning have been a more suitable sanction?

Was the dismissal procedurally unfair?

  • Was the employee advised that their employment was at risk?
  • Were any allegations in relation to conduct put to the employee?
  • Was the employee given an opportunity to address these factors/respond to the allegations?
  • Was the employee given the opportunity to have a support person present at any disciplinary meeting?

Was the dismissal otherwise harsh?

  • What effect did the termination have on the individual, and is this appropriate given that person’s age, period of service, prospects of reemployment etc?

The above list is not exhaustive.

What orders can the FWC make?

IF a matter goes to hearing, the FWC will make a binding decision.

The FWC can dismiss matters where they do not consider that the dismissal was unfair.

If the FWC finds that a termination was unfair, they may make a monetary order of up to 26 weeks’ pay, or make an order for reinstatement (with or without backpay).

The FWC can discount orders by virtue of employee behaviour/misconduct and/or to take into account sums earned by an employee since their dismissal (mitigation of loss).