Employment Law Fundamentals Bendigo Regional HR Network 11

Employment Law Fundamentals Bendigo Regional HR Network 11 July 2019 Katherine Hietbrink Employment Lawyer and HR Consultant

Disclaimer The contents of this presentation are for information purposes only and do not constitute legal advice. If you have any particular concerns or queries, please contact our office for specific advice. © 2019 Robertson Hyetts Solicitors. All Rights Reserved.

Today • • • Overview of employee relations Legal framework Employment Lifecycle and how the law applies High level obligations for employers Helpful resources

Employment Lifecycle Recruitment Exit Onboarding Obligations during employment

Legal Framework • • Federal, State / Territory laws Industrial awards and agreements Tribunal decisions (eg. Fair Work Commission) Contracts of employment • All of these intersect to create a framework for employing staff

Legal Framework - Victoria • Why are Victorian employees covered by the Commonwealth Fair Work Act 2009 (FWA)? – The ‘corporations’ powers in the Constitution; plus – Referral of powers from the States to the Commonwealth with respect to Industrial Relations (Victoria – 1996) • Some State public sector and local government employees are not covered • Western Australia – only employees of companies are covered federally, otherwise state laws apply • Know which jurisdiction applies to your employees

Legal Framework - Victoria Employers in Victoria must abide by: • Federal Legislation: – – – Fair Work Act 2009 and Regulations Superannuation Guarantee (Administration) Act 1992 ATO rules and legislation Racial Discrimination Act 1975 Migration Amendment (Employer Sanctions) Act 2013 • State legislation (Vic): – Long Service Leave Act 2018 – Occupational Health and Safety Act 2004 – Workplace Injury Rehabilitation and Compensation Act 2013 – Equal Opportunity Act 2010 – Anti-Discrimination – Crimes Act 1958 – Brodie’s Law and others…. .

Recruitment • Things to consider: – Type of employment Recruitment • Full time, part time, casual, labour hire (agency), contractor, fixed term, apprentice / trainee / group training – Hours of work and days of work must be set • Refer to Awards and Agreements eg part timers – Interview Questions • Don’t ask anything discriminatory – The applicant is also interviewing you! – Helpful reference: ‘A guide to hiring new employees’ by the Fair Work Ombudsman

Employee v Contractor Recruitment • Avoid ‘Sham Contracting’ • Refer to the FWO site for the ‘test’ of whether a person is an employee or contractor – An ABN and an invoice may not be enough – Look at totality of factors – Factors include degree of control, hours of work, expectation of work, uniform, risk, superannuation, tools, leave, tax • In some circumstances, the ATO requires employers to pay superannuation for contractors – Use their ATO Employee / Contractor Decision Tool • The Independent Contractors Act 2006 (IC Act) and the Fair Work Act 2009 (FW Act) protect the rights and entitlements of independent contractors.

Pre-Employment Checks • Things to consider: – Know the requirements for your industry or sector Recruitment • Some are required by law eg. working with children for teachers and child care; legal right to work in Australia • Qualifications or registrations eg doctors • Consult with your local industry or advisory group • Seek applicant’s permission first and consider privacy – Have a policy in place that deals with an adverse check • Particularly relevant to medical tests and police checks • Can be a ground for discrimination (AHRC has guidelines available on pre-employment checks) – Refer to inherent requirements of the job and determine whether the results of the check are relevant to the particular job

Criminal Record Checks Smith v Redflex Traffic Systems Pty Ltd (2018) • Ms Smith applied for a mobile speed camera position with Redflex • The role was offered subject to a criminal record check • Ms Smith notified Redflex that the criminal check was likely to show previous offences • Two months after her criminal record check, Redflex withdrew their offer of employment to Ms Smith because of her criminal record, citing that she was unable to fulfil the inherent requirements of the role, which required trustworthiness and good conduct • Ms Smith made a complaint to the Australian Human Rights Commission alleging unlawful discrimination based on her criminal record Ms Smith’s criminal record: assault occasioning bodily harm (2004, aged 19) and marijuana possession (2007, aged 22) – 12 years ago….

Criminal Record Checks Smith v Redflex Traffic Systems Pty Ltd (2018) Finding: • Redflex had discriminated against Ms Smith • AHRC accepted that a general level of trustworthiness and good conduct was an inherent requirement, as well as the ability to respond calmly and professionally in hostile situations • These convictions did not necessarily make Ms Smith untrustworthy 12 years later • Redflex should have made enquiries with Ms Smith as to the circumstances leading to the convictions and whether she was rehabilitated • Redflex did not have the information necessary to undertake a sufficiently comprehensive and individual assessment to determine whether Ms Smith could fulfil the inherent requirements • Ms Smith was paid $2500 in compensation and Redflex reviewed its recruitment and HR practices

Onboarding • Things to consider: Onboarding – Provide New Starter paperwork • Contract of employment (in writing) • TFN, Super Choice, Employee details • Fair Work Information Statement – Induction • Workplace tour, policies, OHS, training

Probationary Period Onboarding Usually for a period of 3 or 6 months Allows you to monitor and assess new staff Actively manage this process If a staff member is not working out, use the probationary period to exit them • Unfair dismissal is not available until 6 (or 12) months of service – period relates to service, not whether person is in probationary period • General protections claims are available – ensure you have a valid reason and provide this to the employee upon exit • Document your reasons for dismissal • •

Industrial Framework Contract Individuals Registered Agreement All employees of a particular employer Modern Award All employees in a particular industry or occupation NES All employees covered by Fair Work Act

National Employment Standards (NES) • 10 minimum standards for all employees under FWA • All conditions of employment (contract of employment etc) must be more favourable than the NES and cannot exclude the NES • The minimum entitlements of the NES relate to: Maximum weekly hours Requests for flexible working arrangements Parental leave and related entitlements Annual leave; Personal/carer's leave, compassionate leave and unpaid family and domestic violence leave; Community service leave; Long service leave – Public holidays – Notice of termination and redundancy pay – Fair Work Information Statement – –

Modern Awards • Modern Awards provide minimum entitlements and conditions to particular industries or occupations • Whether an Award applies, depends on the industry and the job done • Awards do not apply if an employee is covered by a Registered Agreement • To work out which award applies, read: – the coverage clause (usually clause 4) – the job classifications (usually in the pay clause or a schedule). • Employees who are covered by more than one Award – eg a pub worker who works in the kitchen and who also occasionally works in gaming – use the award that is “most appropriate” - relates to the principal purpose of the employee's employment – in some rare cases an employee may genuinely have two employment contracts and a different award may apply to each contract • Know which Award(s) applies and refer to these often – visit FWO site • Awards should be made available to employees at the workplace

Registered Agreements • Enterprise agreements and other registered agreements set out minimum employment conditions and can apply to: – one business – a group of businesses • They are negotiated between the employer and employees (often involving unions) through collective bargaining • When a workplace has a registered agreement, the award doesn’t apply. However: – the base pay rate in the registered agreement can’t be less than the base pay rate in the award – the National Employment Standards still apply – some businesses may still have both an Award and Agreement in operation – any terms about outworkers in the award still apply. • Registered agreements apply until they are terminated or replaced, but usually have a nominal expiry date of up to four years. • Know your Agreement – these set out the rules! Source: fairwork. gov. au/awards-and-agreements/agreements

Contract of Employment • Should always be in writing (but can be verbal) • Outlines essential terms and conditions of employment and should be comprehensive • Clauses to note: – – – Offset clause Part time hours v flexibility Averaging provision of time – over four week period Restraint of trade Garden leave Policies should be expressly stated as not forming part of the contract and are not incorporated • Casual contracts – include casual loading paid in addition to hourly rate as compensation for leave; no expectation of continuing work; employee not obliged to accept work offered • Contracts can only be varied by agreement, once signed and accepted • Free employment contract templates are available from FWO

Award Free • An employee who is not covered by an Award or Agreement is entitled to at least: – Minimum Wage – NES minimum conditions • Look to contract of employment for terms and conditions of employment, company policies, as well as ‘custom and practice’ • Awards don’t apply to a ‘high income earner’ if: – The employee has accepted a written ‘guarantee of annual earnings’ – Earns at least $148, 700 (as at 1 July 2019) annually which is more than the high income threshold – The ‘Guarantee’ can be offered to new employees or as a variation to existing contract • May still be able to access unfair dismissal, general protections and unlawful termination, as well as all other workplace laws

Policies • HR Policies set out the rules for employees and the obligations of employers. They also set out processes to be followed. • Essential policies – Code of Conduct • Conflict of interest (if relevant) • Drug and Alcohol • Internet, Email and Social Media – – – OHS and Mental Health Bullying, Harassment and Anti-Discrimination Leave Policy Performance Counselling and Discipline Grievance Policy (to deal with workplace disputes) Any relevant to your particular industry Helpful sites for policy templates: Business Victoria website - HR Manual Template; Fair Work Ombudsman - Best Practice Guides

Flexible Work Arrangements • Certain employees are eligible to request flexible work arrangements: – Parents, carers, those with a disability, if > 55 years old, if experiencing themselves (or supporting someone with) domestic or family violence • Examples include: – hours of work (eg. changes to start and finish times) – patterns of work (eg. split shifts or job sharing) – locations of work (eg. working from home) • Employers must consider and respond to a request, taking into consideration: – the needs of the employee – consequences for the employee if changes in working arrangements aren’t made – any reasonable business grounds for refusing the employee’s request. • All employers who receive a request must provide a written response within 21 days which outlines whether the request is approved or refused • Employers can only refuse a request on reasonable business grounds. If a request is refused they must provide reasons for the refusal

What are your obligations? Some of your legal obligations as an employer include: Obligations during employment • • paying your employees correctly providing employees with pay slips ensuring a safe working environment ensuring you have workers compensation insurance for each employee not acting in a way that will damage the relationship or the employee’s reputation not providing a false or misleading reference forwarding PAYG tax withheld amounts to the Australian Taxation Office (ATO) making appropriate payment under the Superannuation Guarantee legislation. Source: www. business. gov. au

Your obligations as an employer Obligations during employment • Do things correctly! – Pay salary, wages, penalties and allowances correctly, according to Award, Agreement or Contract. – Record leave accruals and all leave taken – Accrue and pay superannuation at least quarterly – Record keeping – pay slips

Underpayments • Can happen easily if you do not follow the Award, Registered Agreement or Contract • Can become costly if over a number of years • Fair Work Ombudsman can investigate and prosecute for underpayments • Employees can also pursue a claim for wages owing in Magistrates Court or Federal Circuit Court • The FWO list ‘media releases’ about their prosecutions on their website – don’t become a statistic! • FWO Latest Media Release: 13 June 2019 – “The Fair Work Ombudsman has recovered $331, 386 in wages for 725 underpaid workers after conducting surprise audits in Albury. Wodonga, Ballarat and Wollongong”.

What happens if you don’t get it right? Obligations during employment • Fair Work Ombudsman – Can investigate suspected underpayments or other breaches of the Fair Work Act – Audits • ATO – PAYG tax, payroll tax – Unpaid superannuation – will investigate • Potential litigation, penalties and fines

FWO Prosecutions Source: https: //www. workforceguardian. com. au/resources/recent-prosecutions-fair-work-breaches/

Exiting the organisation • Employees generally exit due to: Exit – Resignation • Should be in writing with clear dates • Accept or acknowledge in writing, agree dates – Termination by Employer • Serious Misconduct • Poor performance – Incapacity – Redundancy • Role no longer required – Retirement

Terminating employees • Follow the process and get it right: – Know your rights as an employer and have a valid reason: • Poor work performance • Serious misconduct • Redundancy – Know your employee’s rights • Refer to their contract of employment, Award or Registered Agreement or the NES • What do company policies say about discipline, termination for misconduct or redundancy • If there is a process to be followed, follow it closely! – Notice provisions and payment in lieu – Seek professional advice • FWO, Employer Organisations, Employment Lawyer

Terminating employees • Follow the process and get it right – Procedural fairness • Goes to process, not outcome • Principles: – Clearly set out the issue – Provide the employee with a fair and reasonable opportunity to respond – Offer a support person (and allow them to be present) – Consider all relevant factors in an unbiased way – Ensure the employee understands the seriousness of the situation and that termination is being considered • You can have a valid reason for termination, but if not done properly, it could be deemed ‘harsh, unjust or unreasonable’

Unfair Dismissal • • S. 385 Fair Work Act – Unfair Dismissal Harsh, unjust or unreasonable Not consistent with Small Business Fair Dismissal Code – s. 388 Threshold jurisdictional issues to be able to claim - salary limit, length of service, covered by an Award Time limit to put in application – 21 days Process = application > defence > mediation > hearing (FWC) Usually resolves at mediation with compensation. If not, it may go to a hearing at the Fair Work Commission Remedies: Compensation (up to 26 weeks’ salary), Reinstatement, Change reason for termination, or as agreed…

General Protections Claims • The Fair Work Act 2009 provides protections of certain rights, including: – – workplace rights the right to engage in industrial activities the right to be free from unlawful discrimination the right to be free from undue influence or pressure in negotiating individual arrangements • S. 351 of Fair Work Act – An employer must not take adverse action against a person who is an employee, or a prospective employee, because of the person’s [protected attribute] • If an employee is dismissed or adverse action is taken against them, because of a protected attribute, they can lodge an application with the Fair Work Commission • Anyone can apply – no time limit, no $ limit • Can be within probationary period • Compensation is uncapped • Cannot apply for both a general protections and unfair dismissal claim

Small Business Employers • Small Businesses have less than 15 employees – includes systematic and regular casuals • Small Businesses and the Fair Work Act: – Small Business Dismissal Code – Not required to pay redundancy pay – 12 month qualifying period for unfair dismissal • Small business employees can still access general protections or unlawful dismissal at any time • Small businesses are still required to comply with all other relevant workplace laws • The ‘Small Business Showcase’ on the FWO website is a handy reference tool for small employers

What’s new? • Single Touch Payroll • Accessorial Liability • Casual Employment post Work. Pac v Skene – ‘double dipping’ • Casual Conversion in Modern Awards • Long Service Leave Act 2018 • Review of Workplace Relations system by Christian Porter • Award rate and Minimum Wage increase 1 July • Labour Hire Licensing scheme • Fair Work Information Statement update

Helpful Resources • Fair Work Ombudsman – Sign up for updates and create an account • Fair Work Commission Bench Books • Sign up to daily newsletters – HR Daily, Portner Press, Lexology, Workforce Guardian, Health and Safety Bulletin • Business Victoria – business. vic. gov. au – Long Service Leave information • Business (Aus Govt) – business. gov. au – General information about employing staff

Fair Work Ombudsman

Questions?