50% of employers not ready for Fair Work Act: survey

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50% of employers not ready for Fair Work Act: survey

Half of Australia’s small to medium companies do not understand the key changes of the Fair Work Act and are not prepared for the 1 January 2010 compliance deadline, according to the initial results of a survey.

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Half of Australia’s small to medium companies do not understand the key changes of the Fair Work Act and are not prepared for the 1 January 2010 compliance deadline, according to the initial results of a survey.
 
This finding comes from CompliSpace's national in-depth benchmark study into SME-preparedness for the Fair Work Act 2009, due for completion later this month.
 
Early results show 47% of organisations with 50–200 employees believe management does not have a good understanding of the key changes to be introduced in the final phase of the Fair Work Act.
 
Ill-prepared for modern awards
 
They also show two in five employers are ill-prepared for modern awards.
 
CompliSpace executive director David Griffiths said that having had to deal with three different industrial relations systems over the past four years meant many business managers are feeling overwhelmed by the looming compliance deadline for the Fair Work Act.
 
‘For the past 12 months, most managers have been firmly focused on maintaining their business through the downturn,’ Griffith said.
 
‘Now, employers need to address how dramatic changes to workplace laws will impact on their individual businesses.’
 
Griffith said 1 January 2010 will see 10 new National Employment Standards (NES) replace the Minimum Conditions of Employment introduced by WorkChoices. On the same day the new system of Modern Awards commences. Both the Standards and Modern Awards will apply to most Australian businesses.
 
‘These changes present significant compliance challenges for all SMEs,’ he said.
 
‘CompliSpace's data shows 52% of small corporates believe senior staff don't know 1 January 2010 is the start date of these new standards.’
 
Don’t have internal resources
 
Griffith said the main hurdle for employers who've managed to weather the global financial crisis, is that they don't have the internal resources or in-depth understanding of the law required to identify and address gaps.
 
‘As it stands, many SMEs don't know what they don't know,’ he said.
 
‘However, the Government and Fair Work Ombudsman have warned that ignorance will not be an acceptable excuse for non-compliance.’
 
‘Preparation in the next two months is critical. Businesses should use this time to identify and address risks, to ensure compliance.’
 
Identify gaps
 
CompliSpace has developed a free online tool that identifies 'gaps' and compliance risks that need to be addressed before the 1 January 2010 deadline.
 
Griffiths said The Human Resources Risk Self-Assessment Survey allows organisations to quickly assess the readiness of their HR infrastructure for the Fair Work Act. An instant, tailored report outlines the organisation's risk profile and identifies key areas that need to be addressed.
 
He said data from the survey is being collated into a national benchmark study that will highlight the key areas of concern for Australian SMEs.
 
Flexible work arrangements
 
One example is the opportunity for employees to request flexible work arrangements for parents of pre-school children.
 
‘To put it simply, nearly every employer in Australia will need to review and upgrade their internal policies and procedures over the next two months,’ Griffith said.
 
‘Employers need to take positive steps to mitigate risk. Our early benchmark data indicates more than two in five employers are ill-prepared for the Modern Awards system, which will see 4000 awards merged into 100, and one in four aren't sure how they will effectively communicate new company policies with staff.’
 
‘The sheer weight of changes is making it tough for managers to stay on top. A robust human resources infrastructure is essential to ensure organisations are ready on 1 January and effectively transition to the new Fair Work Act.’
 
Initial findings
 
Other initial findings from CompliSpace's Fair Work Act SME-preparedness benchmark study show:
  • 44% of respondents do not maintain copies of the relevant awards and/or agreements that apply to their organisation.
  • 26% of respondents do not have an effective internal communication platform to provide all staff with easy access to current company policies and procedures.
  • 33% of respondents do not adequately maintain an up-to-date suite of policies and procedures that deal with general conditions of employment.
 
Griffiths said organisations need to act now to strengthen HR policies and procedures, instead of waiting to deal with the consequences of non-compliance.
 
Top tips
 
Griffiths offers the following top tips to small to medium corporates preparing for the Fair Work Act:
  1. Mitigate risks relating to the introduction of the National Employment Standards:
    • Ensure policies and procedures are in place to manage newly-created obligations in relation to such areas as flexible work arrangements for parents, community leave and redundancy entitlements.
  • 2. Mitigate risks relating to the introduction of the modern awards system:
    • Identify which modern awards will apply in your organisation's workplace particularly as many work areas that were not covered previously, will now be covered and, unlike the old, complex system, modern awards are likely to be rigorously enforced. 
    • Develop internal systems and procedures to ensure compliance with the terms of the relevant modern award, or if the terms do not seem suitable, consider implementing some form of enterprise agreement in conjunction with the BOOT (better off overall test) that may provide more flexible working arrangements.

 

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