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Employment Law – FWC Slams Poor Agreement Drafting

Employment Law – Background

A poorly drafted enterprise agreement has been criticised by the Fair Work Commission (FWC). The case was brought by the Electrical Trades Union (ETU) and the Communications Union (CEPU) against electrical contractor Kentz Pty Ltd (Kentz) in dispute of a clause requiring the purchase of particular income protection products.

The case was initially heard in February this year when Commissioner Michelle Bissett found “no ambiguity” in the wording of the contractual requirement to purchase income protection insurance. However, an appeal was permitted by the Commission because the decision was “attended with sufficient doubt” to permit a rehearing. The full bench of the FWC reaffirmed the earlier decision. Furthermore, it highlights the importance of clear drafting of enterprise agreements in employment law. [...]  READ MORE →

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Employment Law – New Financial Year Changes

What every employer MUST know for 1 July 2017

With the commencement of a new financial year, it brings with it important changes and new rates which will apply from 1 July 2017.

NEW! High Income Threshold (HIT)

With the HIT:

  • it is expected to increase to $143,500 (subject to formal confirmation by the FWC)
  • it impacts:
  • who can make a claim for unfair dismissal (for those not covered by a Modern Award or to whom an enterprise agreement does not apply)
  • the maximum amount of compensation payable in an unfair dismissal claim
  • those on a ‘guarantee of annual earnings’ (a Modern Award does not apply to an employee whilstever this guarantee is in place provided it continues to meet the relevant legislative requirements)

NEW! Modern Award Increases

With Modern Awards (including enterprise awards):

  • minimum wages increase by 3% (starting on the first full pay period on or after 1 July 2017)
  • absorption of wage increases into over-award payments is permissible (subject to the terms of the relevant employment agreement and what other amounts are being absorbed into any annualised salary)
  • increases to the minimum wages of junior workers, apprentices, trainees, piece workers and employees on the supported wage system will occur
  • expense-related allowances in Modern Awards will increase as set out in the Modern Award (eg, by the applicable CPI index figure)
  • annualised salaries will need to be checked to ensure they can still properly absorb/include all relevant minimum Modern Award amounts and that they continue to meet the technical requirements of the Modern Award

NEW! National Minimum Wage (NMW)

With the NMW:

  • this is applicable to employees to whom neither a Modern Award or enterprise agreement applies
  • the NMW increases by 3% to become $694.90 per week or $18.29 per hour
  • in addition:
  • special NMW rates apply to employees with disabilities, junior employees, apprentices, and those on training arrangements
  • the minimum casual loading remains unchanged at 25%

NEW! Impact on Enterprise Agreements

With enterprise agreements:

  • they must always meet or exceed the minimum wage of:
  • the relevant Modern Award (ie, the Modern Award that would have applied had the enterprise agreement not been in existence)
  • the NMW (ie, where a Modern Award would not apply even if the enterprise agreement was not in existence)
  • thus, pay rates in enterprise agreements may need to be increased (even if the enterprise agreement has its own wage increase regime)

NEW! The Sting

Be mindful that wage increases may have flow-on effects such as increasing:

  • the value of leave loading, penalty rates, overtime and superannuation contributions
  • the value of accrued leave entitlements
  • the cost of wage related expenses such as payroll tax and workers compensation premiums

NEW! Redundancy

The tax-free component of a genuine redundancy payment increases to be:

  • a base amount of $10,155
  • an additional amount of $5,078 for each completed year of service

NEW! Superannuation Contributions Base

With superannuation:

  • the maximum superannuation contribution base increases to $52,760 per quarter ($211,040 per annum)
  • an employer is not required to make superannuation contributions on behalf of employees on earnings in excess of that maximum contribution base

Questions/Assistance

If you have any questions or would like any assistance, please feel free to speak with or email a member of our Matthews Folbigg Workplace Solutions team on (02) 9635 7966 or jcc@matthewsfolbigg.com.au [...]  READ MORE →

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Employment Law – Recommendations for Employment Entitlements

Employment Law – Background

This article provides a consideration of the pros and cons of including employment entitlements in the following forms:

  • HR policy
  • Enterprise agreement
  • terms in a separate employment contract

Employment Law – Enterprise Agreements

Employers should actively encourage diversity and inclusion by using ‘inclusive’ language in the Enterprise Agreement. It should include:

  • Paid parental leave for both primary and secondary carers (this language includes same-sex couples)
  • A flexibility term
  • A consulation term
  • A disputes, grievance handling provision
  • Rates of pay
  • Provisions that enhance productivity improvement and flexibility.

Employment Law – HR policy versus Enterprise Agreement

Pros of using a HR policy include:

  • the benefit of non-binding application compared to a binding provision for the life of the Enterprise Agreement
  • less legal exposure in policy statements as breaches of enterprise agreements can incur fines or legal action
  • HR policies can be amended from time to time
  • a policy statement adds details and implementation procedures to the core entitlements contained in the Enterprise Agreement

Employment Law – Contract Provisions

Pros of putting provisions in individual contracts include:

  • flexibility to accommodate personal circumstances compared to a collective enterprise agreement
  • opportunity to trial new arrangements such as flexible working arrangements

Cons include:

  • provisions are difficult to remove later on
  • offering different conditions to different employees may increase the likelihood of discrimination complaints

Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • engage an employment lawyer to ensure consistency with all employment documents containing employment entitlements
  • aim to include every employee demographic group to avoid criticism
  • use specific advertisements for employment to target specific demographic groups
  • ensure management are aware of the implications of a policy
  • educate staff particularly managers who are responsible for eligibility and implementation
  • train managers on handling ‘sensitive’ conversations with ‘minority’ employees
  • provide supporting resources such as toolkits and access to external experts
  • consult an employment lawyer about whether to adopt a policy, enterprise agreement or the insertion of provisions in a separate contract
  • speak to an employment lawyers about the cost-benefit analysis of each approach
  • prepare new employment law policies as required
  • draft new/changes to employment contracts with the assistance of an employment lawyer
  • draft new/changes to employment law policies with the assistance of an employment lawyer

Employment Law – More Information

Please call the leading employment lawyers in Parramatta, the Matthews Folbigg Workplace Solutions employment law team on 9635-7966 to speak with one of our employment lawyers. [...]  READ MORE →

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Consultation – Essential for a ‘Genuine Redundancy’

Most employers are generally aware that a ‘genuine redundancy’ is a complete defence to an unfair dismissal claim. However, a redundancy is not rendered ‘genuine’ simply because the redundancy is justified or necessary. The Fair Work Act 2009 (‘the FW Act’) requires employers to undertake a consultation process prior to the implementation of redundancies.

The consultation process requires employers to give employees adequate notice of potential workplace changes (i.e. redundancies), and discuss what steps can be taken to mitigate the effects of the workplace changes. [...]  READ MORE →