EOFY HR/IR and Workplace Issues

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Leigh’s Corner #47

The recent re-election of the Liberal and National Coalition Government (LNP) means that many of the pressures on employers foreshadowed by the Federal Labor Government in relation to significant increases in wages and penalty rates and other changes to Industrial Relations matters have eased for now.

This does not mean that pressure from employees and Unions to increase wages will disappear.

Recent analysis of wages and costs in Australia shows that the cost of living and wage growth are staying about the same, but many commodities including housing and electricity are increasing in amounts well in excess of the CPI figures (currently approximately 1.8%) which means that many workers are feeling real financial pressure in their daily lives.

This relative stagnation of wages combined with increasing costs will see an increase of claims for increases in wages and conditions both at the local and industry level.

A national wage case decision is scheduled for later this year which will ease some of the pressure for award employees, but there are indications that industrial action is being contemplated by a number of Unions where Enterprise Bargaining Agreements are due for renewal.

This national wage decision will coincide with the end of the financial year in 2019 and therefore is an opportune time for employers to evaluate all of their employee responsibilities and ensure that their award and contractual obligations are being met.

It is important to review not only the rates of pay and conditions of award-based employees, but also employees who may be on an employment contract to ensure that the prescribed minimum basic wage is being paid, and their terms and conditions are not falling below the minimum rates or the National Employment Standards (NES).

If your workplace has an Enterprise Agreement, Employee Collective Agreement, and/or Individual Flexibility Agreements, they should be checked to see if there are any clauses which provide for increases in rates, and/or any links to increases in the national system to ensure that the minimum wages and conditions and terms of the agreement/s continue to be met.

Regardless of the conditions contained in these type of workplace agreements, it remains the responsibility of the employer to ensure that the rates contained in workplace agreements are at least equal to the adjusted federal minimum wage.

These reviews should include compliance with the Superannuation Guarantee Charge (SGC, currently at 9.5%) to ensure that the required superannuation payments are being made on behalf of employees, and bonus payments and incentive schemes should also be reviewed for their effectiveness and compliance.

Most employers at this time of the year are focussed on their financial responsibilities, but it can be useful to also examine the profit and loss status of the business, and to evaluate and assess where costs can be reduced, or efficiency improved.

A good place to start is to evaluate how many employees and contractors the business has, and how effective they are in contributing to the output and profit of the business.

Labour management has become more of a financial and planning task to ensure that the right number of staff and contractors are employed, and that they are providing a return to the business which more than offsets their costs.

Weekend work, especially Sunday trading, is something that each business needs to evaluate based on their own individual circumstances to ascertain whether or not they are getting value for money at these times when all costs are taken into account.

Many traders are finding that the costs of paying penalty rates to casual staff on Sundays and Public Holidays is prohibitive and are choosing to close on these days and concentrate on operating when they can maximise their profits without the high labour costs.

Reviewing the number of staff including casuals and contractors entails examining the total costs of each classification including all on costs and evaluating their contribution to the business.

The next step is reviewing the staffing structure, including the number and role of supervisory and managerial positions, and the number of staff required to perform the identified roles.

Quite often larger businesses, particularly with multi-faceted businesses and inter-state or overseas interests, hires casual staff and/or contractors when things are going well, but fail to trim these positions when profits begin to decline so are forced into major restructuring exercises where large changes occur and many positions are lost.

This time of year can also be a useful time to conduct employee performance appraisals so that staff are clear on what their objectives are and whether they are meeting them, and the process can be used to set training targets for the employees at the same time.

The company direction, goals and objectives can be reviewed and revised if necessary, during this process to ensure that everyone is aware of the corporate direction and requirements, and that the corporate goals and objectives meet the market that you are operating in.

This review process includes long term contractors and supply arrangements where applicable, to ensure that their contribution remains valid and cost effective.

Good housekeeping in these matters can be effective in saving costs and improving productivity and efficiency overall.

Please note that this is general advice for information only and any application of legislation and/or Industrial Relations or contractual requirements may require professional advice to suit your individual circumstances.

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Any questions for Leigh’s team send an email to: [email protected]