You’ve always employed staff – but are you getting employment law essentials right?

As a specialist workplace compliance provider, QMS Certification Services has helped thousands of organisations achieve high standards through ISO Certification, NDIS Compliance Audits, and Training. It’s evident the majority of employers in Australia aim for high standards for certification and employment law compliance.

However, there can be serious consequences when businesses stop taking care of basic record-keeping, Modern Awards and other areas of workplace compliance.

• In December 2021, the owners of a Gold Coast Chinese restaurant, Fu Kang, were handed $225,500 in penalties over staff underpayments, and providing false, misleading or non-existent records – showing just how seriously the Fair Work Ombudsman (FWO) takes HR record-keeping. The restaurant directors had made a cook (a Chinese national visa holder sponsored by the company) work up to 87 hours a week from May 2016 to January 2017, underpaying the man by $46,555 – which on some days worked out to be as little as $2.30 an hour. Luckily, the FWO’s case was strengthened by way of the worker who, unlike his bosses, kept a diary of hours worked and the amounts he was (under)paid, rendering the success of the prosecution of the cook’s boss inevitable.
• Prior to this, in November 2020, the Federal Circuit & Family Court handed down $230,040 in penalties for HR compliance failures after a former Han’s Café franchisee in Perth breached payslip laws and underpaid dozens of employees. Despite being warned and fined after breaches in 2015, the café owners did it again in 2018 and were fined for 172 contraventions of the applicable modern award.
• Also in 2020, the FWO fined massage company Austop Natural Therapy and Supplies plus its directors for underpaying an employee $13,521.68 over seven months in 2017, paying the employee in cash on a commission-only basis, and providing no payslips. The Federal Circuit Court then fined Austop’s external accountant $5,000 for knowingly creating false and misleading payslips.

These consequences of HR oversight should serve as a reminder to stop and check you’re complying with Australia’s strict, and very complex, employment laws. And to help you, our sister company, HR Assured, a leader in outsourced HR and workplace safety solutions, is providing these five employment law essentials:

1: Modern awards

Did you know there are 121 modern awards in Australia? These modern awards operate as legal documents which contain all relevant entitlements, conditions of employment, and minimum pay rates. Where applicable, businesses must appropriately classify their employees under one of these awards and pay them accordingly. It can be an incredibly tricky process but that’s no excuse for getting it wrong. Classifying employees under the correct modern award is crucial to ensuring they receive their legal minimum entitlements around pay, hours, roster, breaks, allowances, overtime and penalty rates – on top of National Employment Standards (NES).

2: Employment contracts – Do you have these written, and are they effective?

In Australia, employers aren’t legally required to issue employment contracts, but it is best practice to do so. A well-drafted employment contract protects both parties by outlining the terms and conditions of employment. Ensuring that your contracts are tailored to your industry and business’s needs will significantly reduce the likelihood of misunderstandings occurring. The most common pitfall seen by HR Assured is employers simply not having an employment contract in place because they’ve never had them and deem them unnecessary in the presence of a ‘hand-shake’ agreement.  Others have contracts, but the way in which they are drafted offers very little protection to either party in the event of a dispute.

Having an agreement in place is one thing, having an effective one is another. Remember, some clauses in contracts may be better suited to company policies or employee handbooks – this is something that the workplace experts at HR Assured can assist your business with.

3. Casual conversion – Have I offered this to staff? Do I need to?

Casual conversion laws, which came into effect on 27 March 2021, require employers to either offer casual employees permanent employment, or explain why they can’t. This entitlement under the NES provides that casual employees must have been employed for 12 months to attract the obligation.  The employer then needs to check if the employee has had a ‘regular and systematic pattern of hours’ for the last six months. If they have, and there are no reasonable business grounds that mean an offer of conversion is not necessary, the employer must offer conversion.  It is a complicated obligation with plenty of grey areas, so being able to give HR Assured a phone call at any time to make sure you get it right can be invaluable.

4. Are you keeping records correctly?

The Fair Work Act 2009 (Cth) has created a mandatory requirement for employers to keep employee records for a minimum of seven years. Failure to comply with this may result in significant fines and harsh penalties. Consider that the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 also places the onus on employers to disprove any underpayment allegations in a court of law rather than the employee having to prove the occurrence of an underpayment. Keeping correct and accurate records is therefore important.

5. Annualised salary

If an employer chooses to pay an annualised salary, it’s essential that the employee’s contract of employment clearly specifies what award entitlements (such as penalty rates, leave loadings and allowances) have been used to calculate this annualised salary. The annualised salary should also be reviewed yearly to ensure any changes in the relevant modern award are reflected.

How should your business check if it’s complying correctly?

A free HR Health Check is the answer. HR Assured has a dedicated 24/7 Telephone Advisory Service which is just a phone call away when you need to ask yourself: “Am I complying with workplace laws correctly?”.

Click through, book in a health check, and create a culture of compliance for your company today.