Flexibility, compliance and culture: Ideas for 2018

Sam Cahill, Associate

For many employers, the summer break offers an opportunity to recalibrate and plan for the year ahead. In this article, we look ahead to the new year, and suggest some initiatives employers might consider implementing to enhance employee satisfaction, address cultural issues and ensure compliance with workplace laws.

Flexibility

In today’s workforce, the opportunity to work flexibly is coveted by many employees. But when employers think of flexible working arrangements, they usually limit themselves to the right to make a request for flexible working arrangements under the National Employment Standards (“NES”). This right is limited to employees who meet the eligibility requirements (for example, 12 months’ continuous service, returning from parental leave, carer’s responsibilities or over 55 years of age).

In 2018, employers should consider taking a proactive approach to flexible working arrangements, rather than simply waiting for eligible employees to make a request under the NES. A more open approach to flexible working arrangements can be used to attract talented people to the organisation and enhance satisfaction and retention among existing staff.

A proactive approach necessitates a focus on identifying particular functions, positions or duties that can be performed on a flexible basis (for example, at different locations and times). A good starting point for this exercise is to review the flexible working arrangements that have been provided to employees in the past and where the functions, positions or duties that have been the basis for flexible work arrangements can be expanded or modified in light of current operating needs.

Compliance

In recent years, the Fair Work Ombudsman (“FWO”) has pursued employers in relation to a range of compliance issues, particularly the underpayment of wages and entitlements.

In September this year, the Fair Work Act 2009 (Cth) was amended to include a number of new measures aimed at protecting “vulnerable workers”.1 These measures include:

  • stronger powers for the FWO to collect evidence in investigations;
  • new penalties for providing false or misleading information to the FWO, or hindering or obstructing an FWO investigation;
  • increased penalties for “serious contraventions” of workplace laws (ie, deliberate contraventions);
  • increased penalties for breaches of record-keeping and pay slip obligations; and
  • a reverse onus of proof in underpayment claims where an employer has not met record keeping or pay slip obligations and cannot show a reasonable excuse.

This means that it is more important than ever for employers to take a proactive approach to ensuring compliance with workplace laws. An important first step towards ensuring compliance is to conduct a thorough review of the organisation’s employment arrangements, including:

  • the engagement of employees and other workers (including the procurement of any external labour services);
  • the coverage and application of industrial instruments (Modern Awards and Enterprise Agreements);
  • compliance with award/agreement requirements with respect to rostering, minimum rates of pay, loadings, penalties and allowances;
  • the accrual and payment of leave entitlements, including the recognition of prior service where appropriate;
  • compliance with obligations in relation to pay slips and record keeping; and
  • the impact of any changes to Modern Awards made by the Fair Work Commission as part of its Four Yearly Review of Modern Awards (for example, the introduction of new provisions regarding annual leave and casual conversion).

The purpose of such a review is to uncover any existing or potential compliance issues so they can be resolved internally and with minimum disputation and/or external scrutiny. The review may also highlight areas in which the organisation will need to develop systems and processes to ensure compliance going forward.

An employer’s compliance obligations under the various workplace laws are subject to almost constant change. This means that employers are required to continually review and adjust their systems and processes. For example, in July this year, as part of the Four Yearly Review of Modern Awards, the Fair Work Commission decided to incorporate a model “casual conversion” clause into 85 Modern Awards. The model clause provides that:

  • the employer must inform casual employees of their right to request a conversion within the first 12 months of employment;
  • casual employees who have worked a standard pattern of hours over the 12-month period will be eligible to make a request to convert to full-time or part-time employment; and
  • a request to convert can only be refused on reasonable business grounds (for example, where the conversion would require a significant adjustment to the casual employee’s hours of work or where it is known or reasonably foreseeable that the employee’s position will cease).

For some employers, the idea of casual conversion is nothing new, as it has existed in certain industries for some time. However, for others, it will be necessary to develop the appropriate systems and processes for:

  • monitoring the engagement and pattern of work of casual employees;
  • notifying relevant employees of their right to request a conversion to permanent employment; and
  • considering and making decisions in relation to requests for permanent employment.

The performance of these systems and processes will then need to be measured as part of the next review of the organisation’s employment arrangements.

Culture

In recent months, a number of allegations, mainly relating to sexual harassment and other inappropriate behaviour, have surfaced in relation to a growing list of high-profile men, including Hollywood celebrities, politicians and business leaders. In some cases, the alleged conduct was repeated over many years and was even well-known within certain organisations and industries. This has raised the question: why has it taken so long for the allegations to surface?

As discussed in the earlier article, “Power, sex and silence in the workplace”, this delay has been attributed to a number of factors, including a reluctance to report misconduct due to fear of victimisation, leading to a “culture of silence” within particular organisations. Some have argued that this culture of silence amounts to a “culture of complicity” in the action of the perpetrator. This topic will be one of the topics addressed in our series of PCS webinars next year.

Employers can take a number of steps to try and overcome a “culture of silence”. These include:

  • encouraging a culture of appropriate conduct modelled by senior staff within the organisation;
  • ensuring that anyone who reports conduct is treated with respect and their experience is not minimised;
  • ensuring the policies are drafted so that employees are specifically required to report any inappropriate conduct;
  • introducing stronger protections against victimisation for workers who report conduct; and
  • ensuring that workers receive training in relation to bullying, harassment and discrimination and what to do if they experience or witness this type of behaviour in the workplace.

  1. Fair Work Amendment (Protecting Vulnerable Workers) Act 2017.

How to warm up cold employees: building engagement for disengaged team members

Erin Lynch, Senior Associate and David Weiler, Graduate Associate

Cold winter days often highlight one of the greatest threats facing positive, productive organisations all year round: disengagement amongst employees. This article addresses identifying disengagement in your workplace, understanding the costs it has on businesses, ways to prevent it from affecting your high- performing culture and the benefits that come from engagement.

Engagement vs disengagement?

Engaged employees are easy for both managers and colleagues to spot in a workplace. They volunteer for new projects, actively seek out work, support colleagues, encourage a team approach and rarely raise criticisms or concerns without also providing a potential solution. Quite simply, they are passionate about their jobs, are committed to the organisation and display discretionary effort (above and beyond the bare minimum) throughout their work.

Disengaged employees can also be just as easy spot. They are often unenthusiastic about their work, shirk responsibility on projects, isolate themselves from team members, do not understand (or embrace) the company’s direction and lack initiative while complaining about the work they are doing.

When identifying disengagement it is important to distinguish between employee satisfaction and employee engagement. Employee satisfaction represents the extent to which employees are happy or content with their jobs and work environment. While this may be integral to engaging employees, it is not the same thing as engagement.

There are two primary features that, together, comprise employee engagement: engagement with the organisation and engagement with management.

Engagement with the organisation is an indication of how employees feel about senior leadership as well as the organisational levels of trust, fairness, respect and commitment to values. Engagement with management is a more specific measure of how valued employees feel, the quality of feedback and direction and generally the strength of the working relationship between an employee and their direct manager.

What does disengagement cost organisations?

A 2013 Gallup study found that approximately 3 out of 4 Australians are not engaged with their work.1 The cost of this disengagement to the domestic economy was estimated in the same research to be around $54.8 billion.

As disengagement spreads, retaining the top talent in an organisation becomes more and more difficult. The lost potential not only affects the bottom line of a company, it also hinders it from competing effectively in the marketplace. Engaged employees are more productive which inevitably has a positive impact on a company’s income.

If good workers continually leave a business it becomes increasingly more difficult for employers to guarantee work will be done to the necessary standard and almost certainly will prevent the company from exceeding expectations. The pressure put on remaining talent becomes unsustainable as more and more people leave. This means that one instance of disengagement has the potential to spread exponentially, often catching employers off guard and unprepared to re- engage employees in time. That is why it is crucial for businesses to be equipped to identify the symptoms of disengagement and to understand how best to engage employees.

How to engage employees

Just as disengagement can rapidly infect a culture, engagement too can be contagious. Like many topics concerning culture, the benefits are obvious but the real difficulty comes from trying to achieve it.

While some employers may consider the best way to motivate employees is through remuneration, leading organisations recognise that once an employee is paid around market value, a salary becomes largely ineffective at sparking passion in, and commitment to, one’s work.

Instead, leading organisations use these managerial practices to engage employees:

  • commendation for a job well done;
  • regular feedback;
  • opportunity for growth with new, challenging projects;
  • mobility across the organisation;
  • a clear direction for the company; and
  • encouraging employees to work together.

Performance appraisals, if done properly and regularly, offer businesses an opportunity to use the above methods to engage or re-engage employees. In practice the most successful performance evaluations focus on the future (while also not ignoring the past) by approaching each appraisal as a meaningful part of an employee’s career development. In fact, just recently Accenture announced that it was overhauling its entire performance review structure for nearly 330,000 employees.2 The company is moving away from a rigid annual review schedule to one that is done on an ongoing basis relative to the completion of projects.

This change reflects an understanding that in order for evaluations to be effective, they must reflect the needs of both employees and managers.

It is important to note that you can have adequately performing employees who are disengaged as well as disengaged employees who may have once been high performing but have become detached from their role for reasons that are beyond the business’ control. It is therefore useful to appreciate the difference between turnover and unwanted turnover. Facilitating the smooth exit of employees who have not responded to re-engagement strategies can be a positive step in addressing the spread of disengagement.

Warmed up workplaces

When engagement does spread through an organisation, employers will notice an improvement in:

  • productivity;
  • talent retention; and
  • customer loyalty.

Engaged employees are more productive because they put greater focus into their work and their motivation extends further than just individual gain. Productivity is also improved through a decrease in absenteeism compared to that of disengaged employees.

When employees are committed to their jobs for reasons more than just a pay check they are also more likely to stay with that organisation. Encouraging engagement helps insulate employers against losing their best workers and the cycle of disengagement which can quickly follow.

Finally, an engaged workforce leads to stronger customer loyalty through positivity and excellence in service. Clients notice the discretionary effort that passionate and committed employees display and appreciate being the recipient of work done above and beyond what is required. Customers who have had a positive experience with an organisation are often the best marketing a company buy.

Although winter often makes engaging employees a difficult task, it is also an opportunity to re-evaluate how an organisation will address disengagement in the new financial year. As your company gets ready for spring, take stock of your workplace and look for two or three small ways you can make it easier for others to feel engaged with their job; the results will speak volumes.

Key Takeaways

  1. Engagement is passion. Passion is contagious.
  2. Cash is not always king.
  3. Notice disengagement early ; re-engage immediately.

1. Gallup, State of the Global Workplace: Employee Engagement Insights for Business Leaders Worldwide, (2013).

2. Cunningham, Lillian, ‘Goodbye rankings: Accenture gives annual performance reviews the flick’, Sydney Morning Herald, 22 July 2015 

Why do you want to know that? How is that relevant?: Capturing diversity metrics in the workplace

Jia Ali, Graduate Associate

Many organisations aspire to recruit and manage staff so as to create a culture that utilises the contributions of people with different backgrounds, abilities, genders, ages, responsibilities, experiences and perspectives. A diverse workforce is an admirable goal for any organisation, but bringing this about and substantiating claims to achieving such diversity can be difficult.

Capturing diversity information can present some challenges for an organisation, but a clear communication strategy can convey the positive benefits of knowing this information and help to manage expectations and perceptions. While some current or prospective employee may take the data collection positively and consider it an integral part of promoting diversity, others may perceive it as likely to affect their employment prospects. Therefore it is critical for employers to understand how best to convey the diversity message to their employees.

What does the law say?

There are federal and state anti-discrimination laws that protect workers against employment discrimination. Discrimination refers to treating a person with an identified attribute or personal characteristic less favourably than a person who does not have the attribute, or creating conditions which indirectly discriminate against those who have the particular attribute. Discrimination in employment can generally occur in three areas: pre-employment; during employment and termination. There are specific provisions in place at federal and state level which prohibit discriminatory questions being asked in the recruitment and selection process. The employment terms and conditions that they may offer to an applicant should also be free of discrimination.

While there are clear obligations regarding compliance with non discrimination obligations in Australia, there are few positive obligations on employers to review and report on the composition of their workforce.

A notable exception is the requirement to report on the gender composition of the workforce under section 13 of the Workplace Gender Equality Act 2012 (Cth) (“WGE Act”). The WGE Act aims to promote equality for both men and women in the workplace and requires non- public sector employees with 100 or more staff (relevant employers) to submit a report to the Workplace Gender Equality Agency between 1 April and 31 may each year for the preceding 12 month period (1 April- 31 March reporting period).

How do you capture data in the recruitment and selection process?

A risk in the recruitment and selection process is that data or information requested by the employer will be perceived as influencing selection in ways that might be discriminatory or exclusionary. This could potentially expose an organisation to adverse action claims under the Fair Work Act 2009 (Cth) (“FW Act”) or discrimination claims under federal state or territory anti-discrimination laws.

In 2013 it was reported in the media that, Chevron, the oil and gas giant was being challenged for recruiting information from potential employees on how many still births or abortions they had. Chevron reportedly withdrew the application forms and stated that many of the questions were not relevant to the local Australian employment situation and that they were amending the form to ask only medical information relevant to the position to ensure people are safe and fit for duty.

The goal of recruitment is to identify and attract talent from a diverse pool and to ensure that each candidate is treated fairly throughout the hiring process. The application and screening processes should be bias- free and hiring managers should not let their own biases or conscious cultural references negatively impact the hiring process. Below are ways in which employers can seek to address such issues:

1. Job description

A barrier free job description can help reduce bias in the selection process. One way to do this is by specifying the need in the job description, rather than how it is achieved e.g. instead of a valid driver’s license being a requirement, ask for the “ability to travel and provide own transportation”

2. Application forms

Organisations should review and where necessary re-design application forms so that they exclude potentially discriminatory questions, for example, about marital status, number and ages of children, nationality, age and disability from the main part of the form.

Organisations should try to distinguish between information that is needed for the purpose of monitoring, and information required for the recruitment and selection process when requesting information regarding candidates’ gender, age, race and whether they have a disability.

3. Interviews

In order to ensure fairness during the interview process, it is important for an organisation to ask only questions that relate to the requirements of the job and not to stray over into personal or intrusive questions that may indicate a biased view on the interview’s part.

How do you capture reportable data of staff during their employment?

Monitoring diversity with existing employees in the workplace is equally as important as capturing data in the recruitment and selection process. Top companies make assessing and evaluating their diversity process an integral part of their management system. Below are methods by which an organisation can try to capture the data of staff as well as encouraging diversity:

1. Diversity policies

Adopting diversity policies offer clear benefits for organisations and their workforce, such as resolving labour shortages and a better image for the organisation. Such policies may boost employee morale and as a result improve communication processes and managerial styles as well as reduce staff turnover and absenteeism. Businesses that commit to and implement diversity policies are more likely to retain a committed and satisfied workforce resulting in greater profitability.

2. Employee satisfaction survey

A customised employee satisfaction survey is a means of assessing how the organisation is faring on diversity in a practical sense. This approach can help the management team determine what challenges and obstacles to diversity are present in their organisation and how to address them. Ideally such a survey would reveal what is and isn’t working well within their organisation.

3. Promotion

Processes used by an employer to determine internal promotions must be non-discriminatory. The process should be transparent and readily available to all employees in order to minimise the perception of discrimination.

4. Lead by example

Leaders and managers within organisations need to imbed respect for diversity into every aspect of the organisation’s operations. Attitudes towards diversity are influenced by the behaviour and practices of those at the top and can filter downwards. Management commitment and participation is required to create a culture favourable to the success of an organisation’s plan.

5. Employee engagement and creating a culture of openness to diversity

Organisations should involve employees in formulating and executing diversity initiatives in the workplace so they are not afraid to express their ideas and opinions in relation to diversity. Organisations should actively seek information from people from a variety of backgrounds and cultures to create a robust team culture and should look to develop an atmosphere that makes it safe for all employees to ask for help, and to give help in return.

6. Training

Effective training programs and workshops by the organisation can encourage a culture of diversity and allow employees to be more open to such areas.

7. Review and reassess

This can be done in ways such as:

  • conducting exit interviews;
  • using staff surveys or a diversity audit to identify areas of weakness;
  • gathering new information on demographics of the organisation when new opportunities arises;
  • considering casual and part-time participation rates; recruitment, promotion, retention and separation rates for equity groups;
  • assessing the rate of promotion for these groups;
  • monitoring absenteeism more closely;
  • monitoring more closely returns from maternity leave or leave without pay for family or carer reasons; and
  • conducting regular surveys on behaviour and attitude and analysing the results from a range of perspectives (e.g. satisfaction of employees at different levels or in different locations).

Key Takeaways

  1. Be aware of your legal obligations not to ask questions that could be construed as discriminatory or exclusionary in job applications and interviews.
  2. Develop a culture where employees are open to diversity.
  3. Review and assess any actions taken to promote diversity in the workplace.