Fair Work Act: more tips for employers to prepare for 01/01/10

Analysis

Fair Work Act: more tips for employers to prepare for 01/01/10

Only a month before it becomes mandatory, but no sign so far of the Fair Work Information Statement (FWIS) which is one of the National Employment Standards due to commence on 1 January 2010.

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Only a month before it becomes mandatory, but no sign so far of the Fair Work Information Statement (FWIS) which is one of the National Employment Standards due to commence on 1 January 2010.
 
A seminar conducted by the Australian Institute of Management (AIM) on 25 November 2009 provided some advice on what employers can do to deal with this situation and address other Fair Work issues.
 
Michael Quinn, director of the Quinn Group, a workplace relations consulting firm, also provided a general overview of the provisions of the Fair Work Act, and issued several tips to employers regarding various provisions of it.
 
What the Act says about the FWIS
 
The Act requires the Fair Work Ombudsman to prepare the FWIS and publish it in the Gazette.
 
The FWIS will have to contain information about the following:
  • the Act’s agreement-­making provisions
  • the right to freedom of association
  • the role of Fair Work Australia and the Fair Work Ombudsman
  • the Act’s termination of employment provisions
  • employees’ entitlement to individual flexibility arrangements 
  • right of entry (including the protection of personal information by privacy laws)
  • any other matters or information prescribed by Regulation.
Regulation 2.02 sets out the manners in which employers may provide the FWIS to employees. They include:
  • handing it over in person
  • posting it to the employee
  • sending by email
  • a direct electronic link to the FWIS copy on the Fair Work Ombudsman’s website
  • a direct electronic link to the FWIS copy on the employer’s intranet
  • by fax.
The FWIS must also contain information about the effect on an employee’s entitlements under the NES if a transfer of business occurs and the employee becomes a 'transferring employee'.
 
In effect, the FWIS is likely to be an updated version of the short-lived Employment Fact Sheet which had to be issued to all employees under the previous Work Choices legislation.
 
Only new employees have to get it
 
Only employees who commence in a job after 1 January 2010 must receive copies of the FWIS. However, Quinn suggested that it would be good practice if all employees received a copy of one.
 
Document that you issued it
 
Quinn also recommended that employment contracts and letters of appointment should specifically record that the employee received either a copy of the FWIS or a direct link to one as described above. This documentation may be useful if a Fair Work Inspector later requires information.
 
Other Fair Work Act issues
 
Quinn also provided the following advice to employers on various aspects of the Act:
  • If an employee is likely to be required to work longer than the standard working hours on a regular basis, his/her remuneration should be well above minimum rates, as this will reflect an expectation that working hours may be longer than normal, and a useful defence should a dispute over whether the working hours were 'reasonable' later arise.
  • For long-serving employees, employment contracts should make provision for cashing out accrued personal/carer’s leave entitlements, because accrual of these entitlements does not have a cap on it and otherwise very large (and costly) accruals may build up.
  • Minimum wage rates under any AWAs and ITEAs must cater for all Minimum Wage adjustments that occur prior to 31 December 2009. 
  • Review all employment contracts and instruments to ensure compliance with the NES and modern awards.
  • Assess the impact of severance pay provisions in executive contracts. Given that many provisions will be more generous as from 1 January 2010, it may be worth attempting to reduce some other termination entitlements not covered by the NES to compensate for the gains.
  • Watch out for casual loadings. Quinn said he has noticed a trend in many modern awards to increase the standard loading to 25%, versus a typical current rate of 20%. This may also require amendments to some contracts.
  • Ensure redundancies are 'genuine', as defined by s389 of the Act. The previous defence was 'operational reasons', but the new one is tougher to meet. Document all relevant information.
Further information
  • About the seminar.
  • To contact the presenter, email or phone 1300 784 667.

 

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