Managing people is the bane of many a business owner. Here's a basic overview of what you need to know.
Speaking in an online seminar organised by HR Assured, solicitor and workplace relations consultant Alex Sullivan highlighted the importance of SMEs making sure they are up to date with employee relations, and the issues businesses could face if they do not keep employee relations in mind.
What does employee relations cover?
The Fair Work Act 2009 contains the 10 national employment standards. These are:
- Being able to work a maximum of 38 hours per week;
- The right to request flexible work arrangements;
- The right to parental leave;
- The right to annual leave;
- Personal carer's leave and compassionate leave;
- Community service leave;
- Public holidays;
- The right to be absent from work;
- Notice of termination and redundancy pay; and
- The right to receive the Fair Work Information Statement.
Ms Sullivan explained that the Fair Work Commission deals with workplace disputes, including “bullying, unfair dismissal, general protections, as well as decisions around modern awards and enterprise agreements”.
The Fair Work Ombudsman, an independent statutory office, ensures “harmonious, productive and cooperative workplace relations, ensure compliance with Australian workplace laws, and monitors the 457 subclass visa arrangements”, she added.
According to Ms Sullivan, common employee relations issues and questions include:
- Bullying and harassment – I've got a claim, now what do I do?
- Dismissal procedures – I need to get rid of an employee; how do I do it while minimising the risk to my business and myself?
- Contract creation and review – how do I create a contract? What goes in it? Will I ever need to update a contract? Do I really need one?
- Modern awards – what modern award, if any, goes into my employee's minimal entitlement? Am I paying the right wages? Do I have to pay annual leave, sick leave, parental leave and long service leave?
- Audits – I'm being audited, help!
If businesses do not cover all their bases in employee relations, Ms Sullivan said they could face massive fines and legal trouble.
“[There are] large legal fees if you get it wrong,” she said.
The Fair Work Ombudsman has been “cracking down” on underpayment claims, according to Ms Sullivan.
“It's so easy for your employees to report an underpayment to the Fair Work Ombudsman and have them investigate it for free.”
Unfair dismissal claims
If an employee applies for an unfair dismissal remedy and the Fair Work Commission believes the dismissal was harsh, unjust or unreasonable, the employee can be awarded up to six months' salary, Ms Sullivan said.
General protections claims
Ms Sullivan said there is no cap associated with the damages that the Fair Work Commission can award an employee with a general protections claim.
“The person, such as an employer, must not take adverse actions against another person, i.e. your employee, because that person has a workplace right, has exercised a workplace right, or proposes to exercise that workplace right,” she said.
Ms Sullivan explained that workplace rights include the right to take sick leave and the right to be a member of a union.
Actions that can be viewed as being “against an employee or a potential employee”, according to Ms Sullivan, include:
- Dismissing the employee;
- Not giving them their legal entitlements;
- Changing their job to their disadvantage;
- Treating them differently to other employees;
- Choosing to not hire them; and
- Offering them different or unfair terms and conditions compared with other employees.
If an employee feels they have been bullied at work, Ms Sullivan said they can apply to the Fair Work Commission to stop the bullying. The Fair Work Commission can then go as far as to visit your business and investigate.
Accessorial liability occurs when an employing entity is taken to court and a third-party accessory is named and held accountable for its actions. This includes parties such as accountants and HR managers.
Ms Sullivan said accessorial liabilities have been appearing more frequently in recent times.
She quoted a speech from Fair Work Ombudsman Natalie James, saying that “we're pushing the boundaries of the accessorial liability provisions contained in the Fair Work Act” and that 94 per cent of matters filed in court by the Fair Work Ombudsman include an accessory.
“Under section 550 of the Fair Work Act, a person who's involved in a contravention of the act is held responsible for that contravention,” said Ms Sullivan.
“They're involved if they aided or counselled or procured the contravention, or they've induced the contravention, whether by threats or promises, or have been in any way, by act or omission, directly or indirectly involved, or knowingly concerned.”
Section 550 can extend to any parties involved in a contravention, which can range from HR managers to payroll officers, line managers, accountants and advisers, Ms Sullivan explained.
Breaching an accessorial liability provision can be costly, as penalties can be up to $54,000 per breach for a business and $10,800 per breach for an individual.