Australia: Ten things for an HR Manager's "To Do" List in 2016

Last Updated: 2 March 2016
Article by Michelle Dawson

Happy 2016! With the new year now in full swing, here are 10 key items that we think should be on every HR Manager's "to do" list in 2016.

  1. Review Annual Leave Policies and Employment Agreements as to Annual Leave

The Fair Work Commission has finalised new annual leave provisions to be inserted into all Modern Awards. The changes will affect the rights of both employers and employees when it comes to the matter of when annual leave can be taken.

Whilst not yet in place (although imminent), the new provisions include:

  1. a right for employers to direct employees to take annual leave if they have accruals exceeding eight weeks;
  2. the ability for employees to take leave in advance with agreement from their employer (and where an employee's employment is terminated before they have accrued the leave taken in advance, the right for an employer to make an appropriate deduction from the employee's final pay); and
  3. the inclusion in all modern awards of a cashing out provision which will permit employers to agree with an award employee to cash out accrued annual leave subject to certain requirements.

ACTION: Once the changes occur, employers who have policies in relation to annual leave should review such policies with these changes in mind. Likewise, employers should review any relevant provisions in their employment agreements in order to ensure consistency with the new provisions (and/or the newly revised policies).

  1. Review Payroll Procedures in relation to the Payment of Annual Leave on Termination

In 2015 the Courts determined that annual leave owed to employees whose employment comes to an end is to be paid out at the same rate they would have received had they taken it whilst still at work – meaning that where an employee is covered by a Modern Award or is otherwise entitled to annual leave loading, annual leave loading should be paid to them on termination.

Accordingly, an employer who pays annual leave on termination without adding annual leave loading will be underpaying its employees (and in doing so is risking prosecution and the imposition of penalties of up to $54,000 per offence).

ACTION: Employers should review their payroll procedures in relation to the payment of accrued but untaken annual leave on termination to ensure that employees who are entitled to annual leave loading, are paid that annual leave loading upon the termination of their employment.

  1. Re-analyse Over-Award Payments and Review Employment Agreements for Award Employees

The Fair Work Commission has ruled that the standard absorption clause in Modern Awards will be removed.

ACTION: Once this change takes effect (and it has not as yet although it is imminent), employers who are making over- award payments to employees covered by a Modern Award will need to otherwise document any offset arrangements to ensure that they are able to lawfully offset over-award payments. This is likely to be best achieved by the inclusion of an appropriately worded "set off" provision in an affected employee's employment agreement.

It would be timely and advisable for employers to also conduct a re-analysis of Award employees' pays in order to ensure that the amounts which they are being paid are (or remain) sufficient and compliant under the relevant Award.

  1. Review Contractor Arrangements

The Fair Work Ombudsman, throughout 2015, ramped up its efforts in identifying (and prosecuting) employers who may have been breaching the obligations which they have to not involve themselves in sham contracting arrangements. All indications are that a significant focus of the Fair Work Ombudsman in 2016 will be to do the same.

A sham contracting arrangement is an arrangement which disguises (or tries to disguise) an employee as a contractor. Disguising or seeking to disguise employees as contractors (whether through the use of a third party such as a labour hire agency or otherwise) is an offence under the Fair Work Act2009 (Cth) in respect of which employers can face prosecution and the imposition of penalties of up to $54,000 per offence.

ACTION: Any business who engages contractors (particularly, but not only, contractors who are individuals rather than corporate entities) should review such arrangements and consider taking advice so as to mitigate any risk of falling foul of the prohibition on sham contracting.

  1. Review Drug & Alcohol Policies and Practices

In 2015 there were some significant developments in relation to drugs and alcohol in the workplace, including:

  • The Fair Work Commission upholding an employer's right to randomly sample both saliva and urine – opting for "saving lives" rather than preserving an employee's privacy; and
  • A Full Bench of the Fair Work Commission and a Full Court of The Federal Court overturning the reinstatement of a ferry captain who was dismissed pursuant to his employer's "zero tolerance" drug and alcohol policy after crashing a ferry into a wharf and failing a drug test administered afterward.

ACTION: As a consequence of these developments, the timing is right for employers to review their workplace drug and alcohol policies and practices, perhaps to include the ability of the employer to randomly sample both saliva and urine and/or to incorporate an overall "zero tolerance" approach (if not already).

  1. Review Bullying, Social Media and Internet Usage Policies

A Fair Work Commission Full Bench in 2015 said that employees can make bullying claims regardless of whether the alleged bullies were "at work" at the time of the relevant conduct. This decision:

  • increases the susceptibility of employers to bullying claims; and
  • means that employers are susceptible to bullying claims in respect of the conduct of any employee (or contractor) who bullies another worker whilst engaged in an activity which is authorised or permitted by the employer – regardless of whether or not they were at work (so, it picks up situations such as meal breaks, employees accessing social media while performing work, work- related social functions etcetera – regardless of location).

ACTION: Employers should review (or introduce, if they don't already have them) workplace policies as to bullying, social media and internet use so as to (as best as possible) mitigate the risks associated with bullying claims.

  1. Review Current Volunteer (Including Work Experience) Worker Engagement Practice

In 2015 the Fair Work Ombudsman completed its first prosecution of an employer for failing to pay minimum wages to interns on "work experience" (and who had worked for the employer as "volunteers"). The employer was required to back-pay the workers and was hit with a $24,000 penalty for breaching the Fair Work Act.

Only in very limited circumstances can businesses lawfully engage volunteers or persons on "work experience" and not pay them - and employers who do so unlawfully can face prosecution and the imposition of penalties of up to $54,000 per offence.

ACTION: Employers who engage volunteers and/or work experience personnel should revise and/or adjust their relevant current practices so as to avoid the potential risks involved.

  1. Review Anti-discrimination Policies and Practices

In 2015:

  • Australia Post was unable to avoid being vicariously liable for the racially discriminatory conduct of one of its workers because the Court found that whilst its policy was "exemplary", Australia Post did not effectively respond to complaints of discrimination and that they displayed "a curious lack of engagement" in relation to such complaints.
  • The Federal Court awarded a worker suffering from Crohn's disease $175,000 for pain, suffering and loss of wages, finding that she was discriminated against on the grounds of her disability and that her employer had failed to make reasonable adjustments to her workplace or employment conditions before terminating her employment.

ACTION: Accordingly, employers should ensure that their anti-discrimination policies are thorough and up to date and additionally, that their overall responsiveness and level of engagement in relation to complaints of discrimination is appropriate. This may, depending upon the employer and its individual circumstances, also entail any grievance policy and/ or internal grievance management procedure being revised.

This is all the more important given that we expect that the amounts awarded in discrimination cases for pain, suffering and loss of wages will increase in 2016 from what has been the norm for some time now, to align more closely with the relatively significant amount of $175,000 awarded as referred to above.

Regular training and refreshers in relation to such policies and practices remain, of course, important also.

  1. Review Injured/Ill Employee Situations and Practices

Whilst the concept has been debated by employers/employer groups and Unions for some years (employers citing the obligation of an employer to monitor the health and safety of its workers), in 2015 the Federal Court confirmed that an employer has the right to direct an employee to attend an appointment with the employer's nominated medical practitioner to decide whether the employee is fit for duties (and to dismiss an employee should s/he refuse to attend).

Consequently, where an employee is either absent from work or currently performing suitable or modified duties due to an illness or injury which is not a workers compensation illness or injury, employers are at liberty to direct the employee to attend an appointment with the employer's doctor to determine whether the employee is fit for duties – and, in the right circumstances, to dismiss an employee who refuses to attend.

ACTION: Employers who have previously taken a more conservative approach to the issue and/or whose policies and practices do not presently reflect these employer rights should consider revising their injured employee/return to work policies and practices for non-workers compensation injuries or illnesses accordingly.

Advance notice: Stay tuned for details about our Masterclass on 'Managing Ill and Injured Workers' this year.

  1. Reassess Paid Parental Leave Policies

With the Government's signature paid parental leave scheme having been scrapped in February 2015 (just five months before it was due to commence), the 2015 Budget dealt a further blow to paid parental leave. If legislation in regard to this particular 2015 Budget initiative is passed (although it seems that it does not currently have the requisite support within the Senate in order to be passed), from 1 July 2016 it will no longer be possible for employees to "double dip" by accessing both government funded paid parental leave and employer provided parental leave payments.

ACTION: Consequently, Paid Parental Leave Policies and general employer positioning in relation to paid parental leave will likely change significantly. As such, an HR Manager's time may be better spent on other things between now and July of 2016 - but after July, any Paid Parental Leave Policy may need to be reconsidered and/or revised.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.

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