The case that has redefined personal leave

Important Update around the recent industrial relations decision that redefines how personal leave is accrued and taken.

The decision in the case of Mondelez v AMWU [2019] relates to the interpretation of the paid personal/carers leave (also known as Sick Leave) entitlements pursuant to the Fair Work Act. The effect of the Decision is that all full-time and part-time employees are entitled to accrue 10 days of Sick Leave for each year of employment and the crux of the issue is the interpretation of the word ‘day’. Before getting into the impact, it is important to emphasise that the entitlement to 10 days is not an entitlement to take 10 days Sick Leave. Sick Leave can only be taken in the circumstances set out in the Fair Work Act (i.e. when an employee is not fit for work due to personal illness or injury etc).

The decision in this case came down to the fact that the majority of the Full Court considered the term ‘working day’ to mean “the portion of a 24 hour period that would otherwise be allotted to working”. Accordingly, all part-time and full-time employees, whatever their pattern of shifts, are entitled to payments reflecting the income they would have earned had they been able to work. This has the most impact on employees who work a roster with varied hours over a week, part time workers and shift workers.

Examples for context:

A shift worker working three 12-hour shifts each week who had 1 day of personal leave would have 1 personal leave day of the 10 deducted from their entitlement. This worker would actually, based on this roster then accrue 120 hours of leave each year (calculated as 10 days x 12 hours). In comparison an employee who did the same 36-hour week across five shifts would only accrue 72 hours per year (10 x 7.2 hours).

Both full and part time workers are entitled to 10 working days of Sick Leave for each year of employment. This contradicts current common practice of part time employees only receiving the pro rata equivalent of the 10 days. The roster/ordinary weekly hours worked is critical in determining what personal leave is paid. Where an employee is ordinarily rostered for an 8 hour shift as an example, they are paid their personal leave entitlement of the full 8 hours and 1 day is taken from the balance. Where an employee is rostered for a 4 hour shift, those 4 hours are paid and again 1 day is removed from the balance. Accordingly, all part-time and full-time employees, whatever their pattern of shifts, are entitled to payments reflecting the income they would have earned had they been able to work.

If an employee is only absent for part of the day, that fraction of the particular day should be deducted from the employee’s accrued entitlement (of 10 days).

Of such significance is this decision, that the Federal Government itself has launched an appeal process. This is due to the significant deviation from current and widespread leave accrual practices that opens businesses to the risk of employees making underpayment claims for personal leave entitlements they should have accrued in the past and the impact of creating significant inequities between employees. As an employer it is worth being across this case as it develops to effectively manage any employee inquiries and seek legal advice where required.

We will continue to monitor the appeal process and will communicate information as it comes to hand, however it is important to note the decision means this is the current state of the law. Fair Work have updated their website but have noted the application to appeal the decision and will review its advice at the conclusion of those proceedings.

Supporting Small Business Wellbeing

The Engaged Space is incredibly pleased to have been asked to be part of this initiative undertaken by the Federal Department of Employment, Skills, Small and Family Business.

The result was a series of five videos, where four coaches offer tips and tricks on different topics including:

• Pearls of wisdom
• A healthy mind a healthy business
• Managing stress
• Pressure points
• Family Business.

 

To make sure you have a healthy business, it’s essential to invest in your own wellbeing.

If you would like ideas around how to implement a wellbeing strategy into your business to support you and your team, contact Joslyn. In the meantime, start by checking out these videos:

https://www.employment.gov.au/small-business-wellbeing-and-support?media

Employer Guide to Family and Domestic Violence

Recently the FairWork Ombudsman released its employer guide to family and domestic violence, with the objective of assisting to help employers understand their workplace obligations and to support employees experiencing family and domestic violence.

The guide outlines

Family and Domestic Violence is an important workplace issue as most people who experience family and domestic violence in Australia are in paid employment. It can therefore impact workplaces in a number of ways including

  • It is a workplace health and safety issue. If a perpetrator harasses or stalks a person at their workplace, it can put the employee and their co-workers in danger.
  • Workplaces can be a place of refuge for employees. Employees experiencing family or domestic violence often rely on their workplaces to be a safe place to escape violence and a crucial source of social and economic support.
  • It is a workplace productivity issue. Employees experiencing family or domestic violence might be more likely to take unplanned days off, arrive late or finish early. When they’re at work, they might also be less effective carrying out their work because they’re distracted, anxious or lack energy. Workplaces could also experience higher staff turnover rates.

The full guide can be found on the following link: https://www.fairwork.gov.au/leave/family-and-domestic-violence-leave/employer-guide-to-family-and-domestic-violence

Get set for a 3.0% increase to base pay rates

The Fair Work Commission has announced a 3.0% increase to minimum wages following its 2019 Annual Wage Review.

The new national minimum wage will be $740.80 per week or $19.49 per hour.

The increase applies to base pay rates from the first full pay period starting on or after 1 July 2019.

Who does the increase apply to?

The change only applies to employees that get their pay rates from the national minimum wage, a modern award or in some cases a registered agreement.

Most employees are covered by an award. If you’re not sure which award applies to you or your employees, you can use Find my award on The Fair Work website.

Do you need help?

Feel free to contact us and we can undertake a review of your current wages to ensure you are meeting the minimum entitlements.

What are we about?

Have a listen to my wonderful morning spent with Troy Forrest from Strategy Road

The latest Servo Podcast is out! An interview with Joslyn Hutchinson, Managing Director of The Engaged Space, a consultancy that specialises in delivering integrated business & people management solutions. Joslyn specialises in workplace culture, employee experience and employee engagement. In this interview, Joslyn shares her experience on tailoring a Business Development strategy to suit your circumstances, the need to understand your capacity limits, and how investing internally in the wellbeing & sustainability of your people isn’t just the right thing to do… it carries great marketing benefits. Terrific insights in 15 minutes, thanks Jos! Listen here – https://lnkd.in/fUCgr6w

Is your business prepared for the latest changes to the Modern Awards?

Right to request casual conversion, minimum engagement periods and rostering arrangements.

Background:

The Fair Work Commission has varied a significant number of awards as part of its Modern Award Review. The changes affect rules about casual conversion, minimum engagement periods and rostering arrangements. The changes took effect from the first full pay period on or after 1 October 2018.

How is your award impacted? Follow this link to the full Schedule of Determinations

 

Example changes using the General Retail Industry Modern Award Sub Clause

Utilising the General Retail Modern Award as an example, a summary of the key points for noting are outlined below, with a link to the full sub clause provided below.

Right to request casual conversion

A person engaged by a particular employer as a regular casual employee may request that their employment be converted to full-time or part-time employment.

 regular casual employee is a casual employee who has in the preceding period of 12 months worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee under the provisions of this award.

A regular casual employee who has worked equivalent full-time hours over the preceding period of 12 months’ casual employment, may request to have their employment converted to full-time employment.

A regular casual employee who has worked less than equivalent full-time hours over the preceding period of 12 months’ casual employment may request to have their employment converted to part-time employment consistent with the pattern of hours previously worked.

Further things to note include:

  • Requests must be in writing
  • Requests may be agreed to or refused by the employer
  • If the request is refused this must be on reasonable grounds and following consultation with the employee
  • Reasonable grounds for refusal include
    • it would require significant adjustment to the casual employee’s hours of work in order for the employee to be engaged as a full-time or part-time employee in accordance with the provisions of this award – that is, the casual employee is not truly a regular casual employee as previously defined;
    • it is known or reasonably foreseeable that the regular casual employee’s position will cease to exist within the next 12 months;
    • it is known or reasonably foreseeable that the hours of work which the regular casual employee is required to perform will be significantly reduced in the next 12 months; or
    • it is known or reasonably foreseeable that there will be a significant change in the days and/or times at which the employee’s hours of work are required to be performed in the next 12 months which cannot be accommodated within the days and/or hours during which the employee is available to work.
  • Any grounds of refusal to be reasonable must be based on facts that are known or reasonably foreseeable
  • Where the employer refuses a regular casual employee’s request to convert, the employer must provide the casual employee with the employer’s reasons for refusal in writing within 21 days of the request being made. If the employee does not accept the employer’s refusal, this will constitute a dispute that will be dealt with under the dispute resolution procedure outlined in the Award. Under that procedure, the employee or the employer may refer the matter to the Fair Work Commission if the dispute cannot be resolved at the workplace level.
  • Where it is agreed that a casual employee will have their employment converted to full-time or part-time employment as provided for in this clause, the employer and employee must discuss and record in writing the specifics as outlined in the sub clause.

An employer must provide a casual employee, whether a regular casual employee or not, with a copy of the provisions of this sub clause within the first 12 months of the employee’s first engagement to perform work. In respect of casual employees already employed as at 1 October 2018, an employer must provide such employees with a copy of the provisions of this sub clause by 1 January 2019.

The full General Retail Industry Modern Award Sub clause can be located at https://www.fwc.gov.au/documents/awardsandorders/html/pr700568.htm

Downloadable pay guides are here

Now is the time to ensure your business will meet these new minimum requirements that take effect from 1 July.

Do you pay your staff rates from the national minimum wage, a modern award or in some cases a registered agreement?

The Fair Work Commission have now updated their downloadable pay guides, following the announcement of the 3.5% increase to the national minimum wage, impacting also on modern awards and in some cases a registered agreement. These changes take effect, on or after 1 July 2018. They can be accessed using the following link https://www.fairwork.gov.au/pay/minimum-wages/pay-guides

Alternatively you can use their Pay and Conditions Tool https://calculate.fairwork.gov.au/findyouraward, just remember to set the date as 1 July 2018.

If you need support or advice, please do not hesitate to contact us.

Australian Annual Wage Review

Do you have staff on the national minimum wage, a modern award and in some cases an enterprise agreement?

The Fair Work Commission has announced a 3.5% increase to minimum wages following its 2018 Australian Annual Wage Review. The increase will apply to base rates of pay from the first full pay period starting on or after 1 July 2018.
The change only applies to employees that get their pay rates from the national minimum wage, a modern award or in some cases a registered agreement.
Over the next 2-3 weeks the Commission will be updating their pay tools associated to the awards.

We’ll keep you posted!

Change in the workplace

As the saying goes… ‘the only constant, is change.’

Today successful businesses constantly monitor their ever evolving environment and these business leaders strategize to ensure they take opportunities as they present. These businesses are successful because they embrace change. However, whether it be a change in structure, vision, product, process, culture; it is how a change is implemented that is just as critical as the change itself. Essentially the hours put into strategic decision making can all be wasted if the change isn’t implemented effectively and key to this is actively managing the human element of change. In one way or another change will affect people and most find the process of change unsettling, as it takes individuals outside of their comfort zone. So what are a few basic strategies to consider when undertaking change?

  1. Consider the scale of the change

Take a step back and consider the scale of the change and the impact it will have. Is it transformational and complex, or limited in scope and impact? Then consider this in relation to the size of the organisation. Never underestimate the impact that small change will have on people, however it is worth being pragmatic in considering the range and investment in generating strategies and the outcomes you are hoping to acheive.

  1. Outline the ‘need’ for change and communicate

This critical first step is pivotal to ensuring people understand the real need for change and involves transparently communicating this message so that people can confront reality and understand what the business is hoping to achieve. A useful process is to create a shared vision statement that will assist align leaders and provide direction.

  1. Bring together the leadership team

The leadership team need to present a united front. This helps drive the aligned vision across the business and ensures the leadership team model the behaviour that is desired.

  1. Appoint a change leader

When everyone is responsible for change, then nobody is responsible for change. Appoint a change leader who owns the project. It creates a central point of contact, communication funnel and accountability.

  1. Change champions

Change champions are really useful to implement across every level of an organisation. They are employees engaged with the process and have contributed to implementation planning using their on the job expertise. They are an advocate for the change on the ground and can help uncover issues early to keep the project on track.

  1. Communicate, communicate, communicate

Communication cannot be underestimated. From outlining the case at the beginning to documenting progress, reinforcing key messages and celebrating appropriate milestones along the way, it enables the process to stay front of mind and demonstrates continued internal commitment. Communication should be consistent and planned, which reduces the risk of employees disengaging from the process through lack of information. It is also essential to listen. A great tool to allow employees the opportunity to feedback is a pulse survey. They are great to specifically monitor the emotional response to change and to track the effectiveness of how change is managed.

  1. Be flexible

Sometimes things don’t go to plan. Listen to the feedback of people on the ground and be flexible as you move through the process. This will increase the chance of success and provide opportunity to uncover and deal with issues as they arise.

  1. Celebrate

Evaluate both the process and the outcome and where possible and appropriate, celebrate the successes with your team.