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Employment Agreements

The Importance of Comprehensive Employment Agreements
Navigating Australia’s complex employment system can pose significant challenges for employers including when it comes to employment agreements.

Protect and Defend
The importance of comprehensive employment agreements cannot be overstated as they can:

  • afford an employer greater control and power over matters such as remuneration, duties, termination, confidential information, intellectual property and restrictive covenants
  • promote compliance and consistency with the Fair Work Act and relevant industrial laws and instruments
  • assist employees to minimise (and sometimes eliminate) a wide variety of claims including underpayment claims and breach of contract / constructive dismissal claims
  • assist employers to pursue claims for any loss suffered due to an employee breach of a confidentiality, intellectual property and/or restrictive covenant obligation

Depending upon the situation at hand, the costs of not having comprehensive employment agreements in place can be catastrophically high.

Essential Terms
Terms that should be contained in a comprehensive employment agreement include:

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New – Proposed Changes to Single Touch Payroll including Jail Terms

The Federal Government has recently proposed legislation which formalises new payroll reporting obligations and which imposes greater penalties on employers and other individuals who refuse to remit PAYG withholding tax and superannuation contributions.

By way of recap:

  • in 2016 legislation was passed introducing Single Touch Payroll (STP) reporting
  • STP reporting requires employers to report to the ATO payments such as salaries and wages, PAYG withholding and super information at the same time that wages are paid to employees
  • the legislation requires that all employers with 20 or more employees comply with STP reporting obligations from 1 July 2018
  • for initial purposes, the calculation of the number of employees is to be undertaken on 1 April 2018

However, recent legislation proposed by the Federal Government would require all businesses to comply with STP obligations from 1 July 2019.

The proposed legislation also:

  • grants the Australian Taxation Office (ATO) a suite of enforcement tools, including a strengthened regime of director penalty notices for unpaid superannuation and other tax-related liabilities
  • Continue reading…

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New – Fixed Term Contracts Expose Employers to Unfair Dismissal

In a decision that upends a decade of legal precedent, the Full Bench of the Fair Work Commission has opened the door for employees engaged under fixed or specified-term contracts to bring unfair dismissal claims at the end of their contract term.

It has long been accepted that:

  • employers are free to structure their affairs, including the contracts they offer to employees, in the way that they think best suits their interests
  • this freedom has led to the proliferation of fixed-term or maximum-term contracts
  • where these types of employment agreements expire at the conclusion of their term, employees are not eligible to bring unfair dismissal claims because the expiry of the agreement does not result in a ‘termination of employment at the employer’s initiative’

However, in the recent decision of Khayam v Navitas English Pty Ltd:

  • a dark cloud has emerged over the above held principles
  • a distinction was drawn between:
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New – Variations to Casual/Part-Time Rules in Modern Awards

The Fair Work Commission has varied a number of Modern Awards to include additional provisions and protections for casual and part-time employees.

In summary of the Fair Work Commission’s decision:

  • the affected Awards include:
    • Fast Food Industry Award 2010
    • General Retail Industry Award 2010
    • Hair and Beauty Industry Award 2010
    • Hospitality Industry (General) Award 2010
    • Restaurant Industry Award 2010
    • Social, Community, Home Care and Disability Services Industry Award 2010
  • it varied clauses dealing with casual and part-time employment in 11 Modern Awards, with one other scheduled for variation
  • each variation is specific to the Award concerned (so the wording varies)
  • in essence though the variations:
    • (a) give casual employees the right to elect to have their employment converted to full-time or part-time employment
    • (b) provide greater flexibility in the rostering of hours of part-time employees in certain occupations and industries
    • (c) confirm that casual employees who work in excess of ordinary hours in a day or week are entitled to overtime penalty rates
    • Continue reading…

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Employer and Director Heavily Fined

The Federal Circuit Court has relied upon the recently-introduced “protecting vulnerable workers” legislation to impose a heavy penalty on a company and its director who underpaid an apprentice employee and failed to keep time and wages records.

The new “protecting vulnerable workers” legislation:

  • increased penalties by up to 10 times for serious contraventions
  • strengthened the Fair Work Ombudsman’s evidence gathering powers
  • reversed the evidentiary onus in underpayment claims where employers fail to make and keep time and wages records

In FWO v Pulis Plumbing Pty Ltd & Anor:

  • the employer underpaid an apprentice employee by almost $27,000
  • the employer was unable to explain why it underpaid the apprentice or why it failed to keep time and wages records for the apprentice’s hours of work
  • in the absence of such records the Federal Circuit Court relied upon detailed records kept by the apprentice of his working hours
  • the company’s contained refusal to pay the apprentices wages was stated to be ‘nothing short of avarice’
  • Continue reading…

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Draft Legislation – Increased Discrimination Protections for Pregnant Workers

The NSW State Government intends to remove two exemptions/defences from the Anti-Discrimination Act which (currently) permit employers to discriminate against pregnant workers.

The changes proposed by the NSW State Government in the first half of 2018 are summarised as follows:

  • section 25 of the Anti-Discrimination Act currently prohibits discrimination in employment on the basis of sex
  • however, sections 25(1A) and 25(2A) of that legislation contain exemptions where the discrimination is because of the employee or potential employee’s pregnancy status
  • the proposal to remove sections 25(1A) and 25(2A) means an employee or potential employee would be protected from discrimination because of their pregnancy status

Employers need to be aware that irrespective of whether the above occurs, protections for pregnant workers already exists. For example:

  • the Fair Work Act contains specific and detailed rights for pregnant workers and those taking parental leave
  • section 351 of the Fair Work Act prohibits discrimination in employment on the basis of pregnancy status, however, that section also contains a limited exemption for discrimination ‘that is not unlawful under any anti-discrimination law in force where the action is taken’ – the proposed amendments to the Anti-Discrimination Act will therefore strengthen this particular protection
  • Continue reading…

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Unfair Dismissal – Are Employers on their Own?

A recent decision of the Fair Work Commission may force employers to fend for themselves in proceedings before the Commission, such as unfair dismissal, by denying them the right to even have legal assistance in the background.

In Stephen Fitzgerald v Woolworths Limited:

  • section 596 of the Fair Work Act requires a party involved in a matter before the Fair Work Commission to seek leave to be represented by a lawyer or paid agent
  • the employer (a national supermarket chain with a dedicated HR department) wished to be represented by a lawyer at a contested unfair dismissal hearing
  • this request was refused, however, the Fair Work Commission stated this did not prevent the employer from obtaining background or shadow assistance from its lawyers prior to the hearing
  • on appeal, however, it was held that the concept of legal representation extends beyond mere advocacy at the final hearing and into the realm of advice and/or the preparation of documents beforehand
  • Continue reading…

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Employment Law – WARNING! Inappropriate Christmas Party Behaviour

Employment Law – Christmas Party Behaviour

With the festive season upon us, a few timely reminders to avoid the celebratory hangover and deal with its effects should it arise. Although we wish all of our staff enjoy the end of year parties and behave themselves, alas this does not always occur.

Below we set out some of the key employment law matters an employer needs to bear in mind:

Do’s and Don’ts

  • do ensure you have suitable workplace policies in place including drug & alcohol policies, bullying, harassment and discrimination policies, WHS policies, grievance procedures and any other relevant codes of conduct
  • do remind and train staff including managers about your relevant workplace policies before the function and, for guidance purposes, give examples of behaviour that is and is not acceptable
  • do empower relevant managers to act if they observe any improper conduct during the course of the function
  • do check your insurance policies to ensure they cover the type of event being held
  • Continue reading…