By Bayside Group
Oct 19, 2020
Employment relation developments of 2020: are you still compliant?
There’s no doubt that Coronavirus has created a sudden and dramatic change to the way we work, and has brought with it significant changes to workplace legislation. As well as needing to navigate these changes relating to the pandemic, the year 2020 has seen many other developments with regard to the employment relations landscape.
On top of juggling your day job, these changes give business owners a lot to consider. Workplace relations is a crucial function of any business: managed well, it can maximise productivity and retention, but if managed poorly there can be serious consequences, including disgruntled employees, large fines, a damaged reputation and an increasing risk of being taken to court.
With this in mind, the Bayside Group Workplace Relations team have provided you with the below snapshot into some important developments over the last several months, in order to help you remain informed.
COVID-19 sees more claims before the Fair Work Commission
With the coronavirus pandemic now stretching into the final quarter of the year, many businesses have been forced to downsize and make staff redundant simply to remain operational.
A dramatic increase in the number of unfair dismissal and adverse action claims have come before the Fair Work Commission as a result since the beginning of the pandemic. This highlights the importance for employers to follow the right procedures and legislation during this precarious time in order to keep them and their business safe from preventable risks.
JobKeeper, ‘Legacy Employers’ and temporary flexibility options: Who can do what?
From 28 September, the JobKeeper provisions in the Fair Work Act were extended with some changes. Employers significantly affected by coronavirus and meeting the outlined criteria can access the JobKeeper scheme, or else may qualify as being a ‘Legacy Employer’. Each of these scenarios come with their own rules as to what an employer can do should they need to reduce hours, stand down employees or reduce wages under the extended JobKeeper provisions.
Underpayments, increased fines and criminal charges
The number of large organisations and high-profile businesses that have joined the growing list of employers wrapped up in wage theft scandals this year has increased action from the FWO on wage underpayments. For example, earlier in 2020 Fair Work Inspectors investigated 132 Geelong businesses and found that 77% of them failed to comply with workplace laws. Out of those, 52% both underpaid staff and breached pay slip or record-keeping obligations. The most common breaches were failures to correctly pay penalty rates and underpayments of the minimum hourly wage, while the most common reason for noncompliance was a lack of awareness of workplace obligations (55%).
In June, the Victorian Parliament passed the Wage Theft Bill 2020 (Vic) (Act), being shortly followed by the ACT. Now, after an initial inquiry into wage theft in Queensland, the state government has also followed suit to become the third in Australia to criminalise wage theft.
These harsher penalties coupled with numerous amendments made to existing award terms and an increase in the minimum wage, make it essential for all employers to check their existing payroll systems to avoid underpayments.
Annualised salaries under Awards
From 1 March 2020, three model annualised wage clauses for approximately 20 Awards took effect, along with detailed record keeping and periodic reconciliation requirements. One such requirement, for example, states that the employer must keep a record of the starting and finishing times of work, and any unpaid breaks taken, of each employee subject to an annualised wage arrangement. This record must be signed, or acknowledged as correct in writing (including by electronic means), by the employee each pay period or roster cycle.
These new clauses, combined with the significant rise of penalties to $630,000 per serious contravention and the ongoing discussion on criminalising wage theft (above), imposes a substantial risk for any business.
Is a causal employee really a casual?
The WorkPac v Skene case in 2018 and, subsequently, the finding of the WorkPac v Rossato case of 2020, caused shock waves across all industries, setting off multiple million-dollar class action lawsuits claiming back years of annual leave entitlements for people paid as casual employees but now deemed not to be a casuals.
While the Skene case was about an employee engaged under an Award, the new Rossato decision dealt with the nature of casual employment under the Fair Work Act (The Act) which means it has a broader impact for casual employment across all Awards.
The big issue with the instance of Rossato is that he was able to what is being called ‘double dip’, seeing him take a 25% casual loading and be able to claim leave entitlements as a permanent employee. This case is now going to the High Court. Note that these issues only arise when the employment relationship has ended.
Other issues currently evolving about casual employment arrangements are:
- What strictly defines a casual employee?
- The casual conversion clause
- Long service leave for casuals
- Portable long service leave
- Unfair dismissal protection for casual employees
Modern Awards 2020
Earlier this year, the Fair Work Commission reviewed and redrafted all 122 awards, which have been released in stages throughout 2020. For most awards, the biggest change is to the layout, language and the inclusion of rates tables to assist in finding the correct pay. This will mean that employees’ awards should be simpler and easier to read and understand. The first stage of award changes came into operation on 4 February 2020. You can find a full list of the awards and when the changes become operational here.
Major change in application of personal/carers leave
Last year, the majority of the Full Federal Court handed down an important decision in Mondelez that all full time and part time permanent employees would be entitled to 10 working days of personal/carer's leave (a.k.a. sick leave) per year, regardless of how many hours per day or days per week they worked. This impacted on part time workers, who normally were treated pro rata, as well of those who work more than 8 hours a day or inconsistent patterns.
However on 13 August this year, the High Court overturned this decision. Although the clarification of what constitutes a day is technical, in essence, full time employees accrue 72 hours of personal/carers leave a year and part-time employees accrue this entitlement pro rata.
Whistleblower Legislation applies to all Australian businesses
On 1 July 2019, new legislation relating to Whistleblower Protections came into effect, taking Australia’s whistleblower protection frameworks from one of the world’s weakest to one of the strongest. This legislation applies to all businesses and provides a major expansion of the category of persons who can make disclosures. It also makes breaching the Whistleblower Protection laws a criminal offence and significant penalties of up to $10.5 million and $1.05 million for individuals.
As of 1 January 2020, large companies must have a compliant whistleblower policy with prescribed mandatory content. However, it is strongly recommended that organisations that fall outside this bracket also develop a policy to ensure they are compliant with the legislation. You can find out more about the Whistleblower Protection Amendments here.
Victorian Industrial Manslaughter Legislation
Victoria's Parliament has passed legislation that make industrial manslaughter a criminal offence. Under this new legislation, employers and senior officers of a corporation that are deemed to have negligently caused a workplace death (including mental injury that leads to suicide) will now be liable under the law if they fail on workplace safety, and could face fines of up to $16.5 million and individuals up to 20 years jail.
Though the new law does not create additional duties, it aims to provide a stronger incentive for duty holders to comply with their occupational health and safety obligations, by introducing tougher penalties on already existing duties under the OHS Act.
The Modern Slavery Act 2019 (Cth) commenced in 2019 and requires large businesses to report on modern slavery risks in their operations and supply chain, as well as actions they can take to address those risks. The Department of Home Affairs recently released the ‘Guidance for Reporting Entities’ to assist organisations with this responsibility. Click here to view Bayside Group’s Modern Slavery Statement, which has been devised to outline our approach and commitment to minimising the risk of modern slavery in our business operations and supply chain.
How to ensure your business is compliant
All of these changes are a lot for businesses to take in, however the importance of getting it right cannot be emphasised enough, as the ramifications of getting it wrong can induce massive fines and, in some cases, jail time.
While some employers may struggle on through the headache of this often confusing and rapidly changing workplace relations landscape, others have realised the benefit of seeking professional assistance in order to keep them compliant, mitigate their risk and keep their business safe. Bayside Group’s dedicated Workplace Relations team will help you ensure compliance, as well as assist you in navigating situations such as a disciplinary action or redundancies, as well as supporting businesses during periods of growth.
Contact us today to see how we can help you with any of the above developments, or any other queries you might have regarding workplace relations.