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Employment Law – Employee Compensated After Award Obligations Ignored

Employment Law – Background

The Fair Work Commission has compensated an employee who was unfairly dismissed because her employer failed to comply with their consultation obligations under the relevant award.

Employment Law – Facts

In essence:

  • Carer’s that Care (CTC) terminated Ms Morris’ employment because it could not afford to pay her full-time wage after losing a significant number of clients
  • Ms Morris argued that she hadn’t received any warnings but was only told that CTC was shutting down and staff would be made redundant
  • She also argued that she was not provided with the opportunity to respond, because the managing director refused to have any discussions with Morris
  • Morris lodged an application for unfair dismissal

Employment Law – The Relevant Law

  • Section 389 of the Fair Work Act (‘The Act’) states that a genuine redundancy occurs when an employee’s position is no longer required and the employer has complied with any obligations under the modern award or enterprise agreement
  • The Fair Work Commission will then examine whether the dismissal was harsh, unreasonable or unjust under s387 of the Act

Employment Law – Fair Work Commission decision

The Fair Work Commission:

  • found that the employee’s dismissal was not a genuine redundancy because the consultation obligations under the Clerks-Private Sector Award were not satisfied
  • accepted that Ms Morris was dismissed because her role could no longer be performed due to operational changes
  • found that the company had failed to consult with Ms Morris as required under the award was significant. Additionally, the company only verbally notified Morris of the dismissal
  • consequently ruled that her dismissal was harsh, unjust or unreasonable.
  • ordered compensation of $5482

The decision is available for you to read through the hyperlink:

Morris v Community Caring P/L t/a Carers That Care (U2017/6386) [2017] FWC 4433

Employment Law – Tips for Employers  [...]  READ MORE →

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Employment Law – Modern Awards Reductions

Employment Law – Background

In June this year, the Fair Work Commission (FWC) announced the reductions of public holiday penalty rates for the hospitality, retail, fast food and pharmacy sectors. The reductions were decided as part of the FWC’s four-yearly review of modern awards.

As of 1 July 2017, public holiday penalty rates were reduced while Sunday rates will reduce over three to four years. Although the unions argued for the delay in reductions, the FWC agreed with employer organisations. As a result, the first transition step is smaller than later transitions. Furthermore, the retail and pharmacy sectors will have longer transition periods due to their reductions being more significant. [...]  READ MORE →

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Fair Work Commission – Minimum Wage to Increase by 3.3%

Background

On 6 June 2017, The Fair Work Commission announced a 3.3% increase to the national minimum wage and minimum award wages.

The Fair Work Commission Decision

In essence:

  • The national minimum wage will now be $694.90 per week, or $18.29 per hour
  • This is an increase of $22.20 per week to the weekly rate and 59 cents per hour to the hourly rate
  • The changes will be effective 1 July 2017

Fair Work Commission’s Reasoning – Economics & Worker Poverty

  • The Fair Work Act required the Fair Work Commission to take into account economic considerations
  • However, they were satisfied that the level of increase decided upon would not lead to inflationary pressure and would be highly unlikely to have any measureable impact on employment or lead to job losses
  • They based these conclusions on findings that productivity growth has risen sharply and profit growth had been “particularly strong” in 2016 compared to previous years. Consequently, business conditions were positive and above long-term averages
  • The Fair Work Commission concluded that increasing the minimum wage would improve the relative living standards of those employees who are reliant on the national minimum wage, lifting the lowest-paid out of poverty
  • However, they did acknowledge that the increase would not lift all-award reliant employees out of poverty, especially those households that have dependent children and a single-wage earners

Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • review these employment law changes
  • seek the assistance of an employment lawyer to understand the impacts of this Fair Work Commission decision
  • ensure employment contracts and employment law policies comply with relevant employment laws, Fair Work Commission decisions, common law employment law principles and contractual obligations
  • update employment contracts in response to this employment law change
  • raise any employment law questions with an employment lawyer
  • damages can apply for breaches of employment laws including Awards and enterprise agreements (which an employment lawyer can advise on)

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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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 – Payroll Company Liable for Client’s Award Breach

Employment Law – Background

The decision in Fair Work Ombudsman v Blue Impression Pty Ltd & Ors serves as a warning to payroll and accounting companies, as the court held an accounting company liable for its client’s breaches of the Fair Work Act.

Employment Law – Facts

In essence:

  • Blue Impressions, a Japanese restaurant chain, engaged EZY Accounting to do its data entry, bookkeeping and payroll processing for its employees
  • Blue Impressions sent data to EZY Accounting who uploaded it to MYOB for calculating and processing the payroll for employees
  • the relevant employees were covered by the Fast Food Industry Award 2010
  • the employees were being paid approximately $16.50 an hour, when they should have been receiving at least $19.44 an hour
  • the restaurant was audited by a Fair Work inspector
  • it was determined that the Fast Food Industry Award 2010 applied to the business and the Ombudsman sent a letter to Blue Impressions to that effect
  • the restaurant then engaged a workplace relations specialist to provide employment related advice
  • due to the audit and the specialist’s advice, EZY Accounting became aware of the details of the Fast Food Industry Award 2010 and the correct rates to be paid to employees, however, it failed to change the pay rates because they claimed they had no authority to do so
  • EZY Accounting argued that it was the responsibility of its client, Blue Impressions, to ensure its employees were paid correctly
  • further underpayments occurred

 

Employment Law – Decision

The Federal Circuit Court of Australia found:

  • EZY Accounting was an accessory to its client breaching the Fair Work Act
  • EZY Accounting had the requisite knowledge of the employment underpayments because of the audit and because it produced workers’ payslips through its payroll system, yet “deliberately shut its eyes” to what was going on
  • this employment related conduct “amounted to connivance in the contraventions” by the restaurant of the Fair Work Act as EZY Accounting had “had at [its] fingertips all the necessary information that confirmed the failure to meet the Award obligations by [the restaurant] and nonetheless persisted with the maintenance of its (payroll) system with the inevitable result that the Award breaches occurred”
  • paying less than the employment law rates in the Fast Food Industry Award 2010 is a breach of the Fair Work Act
  • under the Fair Work Act a person who is involved in a breach of the Fair Work Act is deemed to be in the same position as the person who actually breached the Fair Work Act
  • a person is considered to be “involved” if they aided, abetted or procured the breach, or if they were in any way, by act or omission, directly or indirectly, knowingly concerned in, a party to, or a conspirator with others to, the breach
  • EZY Accounting breached the Fair Work Act under these ‘accessorial liability’ provisions
  • that is, EZY Accounting was ‘involved’ in the contraventions of the Fair Work Act by the fast food restaurant chain
  • the penalty to be imposed on EZY Accounting will be determined later

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers: [...]  READ MORE →

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FWO flags review of abandonment clauses in Awards

The Fair Work Commission has indicated that it will conduct a review of abandonment clauses contained in six modern awards, following the decision of the Full Bench of the Fair Work Commission in Benias v Iplex Pipelines Australia Pty Ltd [2017] FWCFB 38.

In the decision, the Full Bench overturned the decision of Senior Deputy President O’Callaghan ([2016] FWC 6624), who dismissed an employee’s unfair dismissal claim on the basis that the termination was not at the initiative of the employer.

The facts

Section 386 of the Fair Work Act 2009 defines a dismissal as a termination of employment ‘on the employer’s initiative’. The Act provides that where an employee’s employment is not terminated on the employer’s initiative (i.e. a voluntary resignation), that employee is unable to pursue a remedy for Unfair Dismissal. [...]  READ MORE →