Inspire Success

On February 1st 2012 Fair Work Australia announced their decision to increase pay for private sector employees in social and community services. Pay rates of employees in the social, disability and community services (SACS) sector will be increased in order to achieve pay equity for the female employees. But, what does this mean for employers.

As a result of the FWA decision, up to 150,000 social and community service workers will receive pay increases of between 19% and 41% over eight years, which is the length of time of the transitional phasing arrangement. For a Level 2 graded employee the increase to the rate in the SACS Award will be 19%. This works out to be an extra $6324 per annum. A Level 8 graded employee will be entitled to a wage rate rise of 41%. This will mean a wage increase of $24,346 per annum. This decision is being estimated as costing the NSW State Government up to $1 billion over the next five years in funding.

While FWA’s decision affects those employees covered by the Social, Community, Home Care and Disability Services Industry Award (the SACS Award) in the social and community services sector and the crisis assistance and supported housing sector it is also likely to affect other industries in the future. In particular, other female dominated industries such as clerical, cleaning and nursing industries could be next to look for similar pay increases on the basis of historical industrial inequities.

The concerns are that the impact of these pay increases will be felt most heavily by non-government funded organisations who would then have to bear the brunt of the cost. This would then have some knock on effects such as a decrease in job security and result in retrenchment or reduction of available services despite the phasing in period. For example, the NSW Government has warned that having to fully fund the pay rise could lead to cuts to other government services and higher taxes.

Given Fair Work Australia's approach in this matter, it is expected that similar applications by unions will be made in respect of pay rates in other modern awards. In particular, other female dominated industries such as the clerical, cleaning and nursing industries will be likely union targets. The Australian Nursing Federation has already commented that the pay rises awarded could pave the way for aged-care nurses and staff to achieve pay equity.

The real impact of this FWA decision and action on employers and the economy remains to be seen but there can be little doubt that pay equity is now high on the industrial relations agenda and will likely remain there for quite some time to come.

For more information see Fair Work Australia’s website - http://www.fwa.gov.au/index.cfm?pagename=aboutbriefs&year=2012#010212

 

Is this something that could be an issue at your place? Inspire Success is all about implementing practical solutions that help create high performing workplaces which are customer focussed and free of conflict - no matter what size your business is. Contact Inspire Success for further information raephillips@inspire-success.com

You need proof you did it!

With the introduction of the Fair Work Act 2009, from 1 January 2010 it became mandatory for an employer to provide an employee with a copy of the Fair Work Information Statement. The statement needs to be provided to the employee before employment or as soon as practicable after commencement of employment. Provision of the Fair Work Information Statement is one the 10 National Employment Standards (NES), which are outlined in the Fair Work Information Statement. Additional information in this document includes modern awards, agreement making, individual flexibility arrangements, freedom of association and workplace rights, termination of employment, right of entry, and the Fair Work Ombudsman and Fair Work Australia.

In recent audits conducted by the Fair Work Ombudsman, businesses have been asked to provide proof that an employee has received a copy of the Fair Work Information Statement from their employer. Additionally, as provision of the Fair Work Information Statement is one of the NES, employees are able to make a claim against their employer for a breach of the NES if they have not received the Fair Work Information Statement.

Keep this in mind when you are inducting your new employees. It may also be worthwhile reviewing your standard induction processes to ensure you have a system in place to record the provision of the Fair Work Information Statement to your employees when they join your business. Here is an induction checklist we prepared earlier!

Contact Inspire Success on 1300 620 100 or terri@inspire-success.com if you would like to discuss how this affects your business.

Significant dates for new employees:-
Now you have completed your interview process and selected your new employee it is important to manage some critical dates. These include induction, probation and confirmation of the new employee. A very important step is to set a probation period for the new employee and for that length of time and the process to be clear to them. 

Length of probation period:- 
The length of the probation period and the terms around it should be set out in the terms and conditions of your employment and then be managed carefully.  A ‘probation period’ is usually a three month period (based on calendar months) from the date of commencement of employment where you assess the suitability of the employee for the role and the employee has the opportunity to settle in and to determine if the role meets their needs. A key thing to remember is the probationary period must be set in advance and must be reasonable. Three months can be suitable for some roles but for a more senior role you could have a probationary period of six months (as long as there are reasonable grounds for this). For a ‘small business’, i.e. less than 15 employees by head count and including associated entities (see s.383 of the Fair Work Act), the period can be increased to twelve months.  

Why have a probation period:-                                                                            
The probation period is a time when you can validate your selection and ensure there is a good fit between the new employee and the job. It is a time when there should be communication between you and the new employee and some assistance given to them to settle in.  In essence, an employee on probation has been appointed but not yet confirmed in a permanent role. The purpose of a probationary period is to provide:

• Time for induction / onboarding and training
  
• An opportunity to assess the employee and their ability to perform in the job
  
• Time to assess fit into your business
  

Regular feedback to the new employee is important and should be provided throughout the probationary period.

What are the benefits of a well managed probation period:-

• allows the new employee settle into the workplace
  
• provides a focus for you and the new employee on what knowledge and skills are required to be developed during probation for them to succeed in the job
  
• provides some structure for the new employee on the key aspects of their job and the key people they will be interacting with
  
• allows you to give and receive feedback on a new employee’s progress during probation.
  

If you are generally happy with the performance of your new employee but continue to have a few concerns at the end of their probationary period, then you can extend the probation via a review on or before the end of it. You will also need to provide information in writing, detailing the period of the extension and the areas which require improvement. Provided you act sensibly, you can let the person go if they are not working out without having to carry out the usual disciplinary procedures once an employee is confirmed.  

Review the new employee’s progress regularly and provide them with feedback so they know how they are progressing – either with praise or with explanations as to where improvement is required.  We think it is a good idea to do a Probation Review at the mid point of the probation period.

Overall, the probationary period is an excellent tool to ensure that the new employee is performing in the way you want and is motivated, committed and happy working with you and your organisation. It allows you to be fair and highlight areas which require improvement, and it provides time and scope for the new employee to improve in those areas. The result should be that at the end of the period, the decision to continue or not is easy and clear for both parties.

Confirmation of appointment:-
As the probationary period nears its conclusion, you need to decide whether you wish to retain the new employee or not. If you do, then confirmation of appointment is the process used to end a probation period and appoint an employee permanently. Ideally, a letter is given to the employee confirming the date their probation period ended and affirming the details / conditions previously agreed upon of their employment. The letter states that the employee's performance has been satisfactory and it confirms the employee's appointment to the job. It is good practice to give your new employees a confirmation letter when they successfully complete their probation but it also provides affirmation to the employee that they are doing well in their role and have peace of mind that their job is now confirmed.

Is this something that could be an issue at your place? Inspire Success is all about implementing practical solutions that help create high performing workplaces which are customer focussed and free of conflict - no matter what size your business is. Contact Inspire Success for further information - kate@inspire-success.com

If you have a business using a Modern Award, Enterprise Agreement , NAPSA, transitional APCS or Award Free Employees, On the 3 June 2011, Fair Work Australia handed down its 2011 annual wage review decision.

All Modern Award Rates of pay are increased by 3.4% (or $19.40 per week) effective from the first full pay period commencing on or after 1 July 2011.

The Decision has increased the adult minimum wage by 3.4% to $589.30 per week (or $15.51 per hour). This decision applies to businesses utilising Modern Awards, Enterprise Awards and NAPSAs, all transitional APCSs and award free employees.

Important Reminder: New definition of small business in 2011



Today, I thought it would be a good time to remind you about an important change to the definition of a small business under the Fair Work Act.

From July 1 until December 31, 2010, a small business was defined as a business that employed less than 15 full-time equivalent staff. 

However, as of 1 January 2011, a small business is now defined as being a business that employs less than 15 employees on a head count basis.

In other words, a small business is now one that employs less than 15 employees in total (including part-time and casual employees). 

Make sure you take note of this important change. 





Please call Inspire Success on 02 4356 1767 if you need some more information.

Figures from Fair Work Australia have revealed that three quarters of the unfair dismissal claims conciliated involved employers paying a financial settlement to former staff.

I have summarised the recent Fair Work Australia board report to the Senate Committee, as it relates to unfair dismissals, let me know what you think:

There has been a 35% increase in unfair dismissal claims under the Labor Government's Fair Work confirming that applications around termination of employment issues soared by over 63% to 13,054 in 2009-10, of which almost 10,000 were unfair dismissal cases (the others were adverse action and unlawful termination claims).

Previously released figures showed the number of claims in the 12 months to June 18 was 10,751, compared with 7,994 claims in 2008-09, when the Howard Government's WorkChoices rules were still in place.

In the first 11 months under the Fair Work Act, 83% of matters that were conciliated were resolved at conciliation, compared to a settlement rate of 75%. 196 unfair dismissal claims proceeded to a hearing, with 15 resulting in reinstatement, 35 resulting in a payment in lieu of reinstatement and 144 being dismissed

The figures show that of claims that were settled at conciliation with an employer payment, 28% of these were settled for less than $2,000 and 30% were settled for between $2,000 and $4,000. A further 3% of claims were settled for payments of between $20,000 and $40,000.

25% of cases are settled with no payment at all, and that most cases are settled for very little payment shows many cases are a "try on". For small businesses – this is down time that costs! On top of having to pay out settlements, small businesses are also having to meet the costs of legal services and simply not being able to run their business.

These figures also include claims lodged, but not progressed based on jurisdictional reasons – for instance, that the employer was a small business.

Hearings have become as much about whether the employer has followed the Small Business Fair Dismissal Code as about the dismissal itself. However, the Fair Dismissal Code checklist has been labelled “deficient” because it does not mention that employees have the right to have a support person present in a termination discussion.

So here are the keys to minimising your small business risks:

1. Be fair – treat your employees the same, don’t have ‘one rule for some’, focus on the behaviour not the person;
2. Be clear - set standards early, schedule regular performance discussions and provide feedback;
3. Be concise - document all of your performance discussions, get into the habit of providing a copy so that employees are aware of your practice;
4. Be systematic - follow the Small Business Fair Dismissal Code, but also provide the opportunity for the employee to bring a support person; 
5. Be informed – an employee is still able to lodge an application for unfair dismissal which will be denied in your response on jurisdictional grounds.
6. Be prepared – if you become involved in a claim, make a financial provision for a settlement at conciliation.

The reality is that under the Labor government, Fair Work Australia has been giving a substantially increased role compared to under WorkChoices. As a consequence, we are going to be dealing with Fair Work much more.

Since we now have some clear statistics on what is keeping the Fair Work Ombudsman and Fair Work Australia busy, there are also some very clear steps for us to take moving forward.

We know that in the first 11 months under the Fair Work Act, 83% of matters that were conciliated were resolved at conciliation, compared to a settlement rate of 75%. 196 unfair dismissal claims proceeded to a hearing, with 15 resulting in reinstatement, 35 resulting in a payment in lieu of reinstatement and 144 being dismissed.

The figures show that of claims that were settled at conciliation with an employer payment, 28% of these were settled for less than $2,000 and 30% were settled for between $2,000 and $4,000. A further 3% of claims were settled for payments of between $20,000 and $40,000.

This means it is critical that as small businesses we are very diligent in managing our workplace risks.

So here are the keys to minimising your small business risks:

1. Be fair – treat your employees the same, don’t have ‘one rule for some’, focus on the behaviour not the person;

2. Be clear - set standards early, schedule regular performance discussions and provide feedback;

3. Be concise - document all of your performance discussions, get into the habit of providing a copy so that employees are aware of your practice;

4. Be systematic - follow the Small Business Fair Dismissal Code, but also provide the opportunity for the employee to bring a support person;

5. Be informed – an employee is still able to lodge an application for unfair dismissal which will be denied in your response on jurisdictional grounds.

6. Be prepared – if you become involved in a claim, make a financial provision for a settlement at conciliation.

So once we are managing our risk appropriately, why not have a go at adopting some best practice employee engagement systems? Here are the winners of the 2010 Dream Employers Awards to give you some inspiration – www.dreamemployers.com.au

The First Fair Work Australia Wage Case

This decision concerns the first Annual Wage Review under the Fair Work Act 2009 (Fair Work Act). A large number of interested organisations and bodies participated in the review. 

For the entire decision - please click on this link. 

The Increase!

An increase of $26 applies to all modern award minimum weekly wages.

The national minimum wage in the national minimum wage order will be $569.90 per week or $15 per hour. The hourly rate has been calculated on the basis of a 38 hour week for a full-time employee, consistent with s.62 of the Fair Work Act.  

 

 

 

For more details on the decision - follow this link. 

Implementation

This pay increase is effective 01 July 2010. The effect will be that where the phasing provisions are included in an award the pre-modern award conditions relating to minimum wages, casual and part-time loadings, Saturday, Sunday, public holiday, evening and other penalties and shift allowances will apply until 1 July 2010 when the modern award obligations will commence. There will be a further four instalments on 1 July of each year concluding on 1 July 2014.  

For more information on transition arrangements - follow this link.

 

 

 

Did you know that there has already been more than $33million in fines to small business for Fair Work Act non compliance?

Determining the Modern Award that applies to your business is a key element of becoming compliant - but it can be challenging! From thousands of state and federal awards there are now around 200 that will affect most businesses. For many of our customers, it has been very easy to identify the Modern Award that applies to their business - for others it has been quite difficult. Getting the pay and transitional arrangements for your staff right is even more critical in this time of change. 

Modern Award Madness - get it right for your business

Modern Awards, together with the National Employment Standards (NES) and the national minimum wage orders, form the safety net for employees under the new Fair Work system. Under the Fair Work Act 2009, penalties of up to $6,600 for an individual and $33,000 for a corporation may apply to a breach of a term of a Modern Award and/or the NES. Here is our action plan to make it easier for your business:

1 – Confirm your Awards
What Modern Awards cover your employees now? Check our Fair Work Support Site - http://www.inspire-success.com/fairworkact
Identifying the Modern Award or award/s that applies to your business may require specialist advice.

2 – Check the old award/s with the Modern Award/s
What award were your employees covered by? Compare those provisions with those of the Modern Award and the NES. Remember that if the former award conditions are better, they could still apply to your people.

3 – Research any transitional provisions
Do your Modern Award/s have transitional provisions? July 2010 might be one of several new milestones for your business.  This could include wages, loading, penalties and non-expense related allowances. Most Modern Awards have transitional requirements, which are key to effective implementation of the awards in your business.

4 – Update your people practices
Many of your people policies, procedures and letters will need to be modified. Updating these systems may need some guidance.

Still unsure about how it applies at your place? Why dont you take a look at our FWA Support Site for a one stop shop! Use our Fair Work Checklist to do your initial review of your people systems and if you need any help, give me a yell!