THE GOVERNMENT’S industrial relations changes are likely to increase the cost and complexity of administration in industries dependent on award payments, according to the head of a local HR software firm
THE GOVERNMENT’S industrial relations changes are likely to increase the cost and complexity of administration in industries dependent on award payments, according to the head of a local HR software firm.
A percentage of workplaces will find that their current computerised payroll systems are unable to handle the demand, said Silvano Basso, managing director of Aurion Corporation, while some employers will make promises beyond their ability to deliver.
“Smaller employers are the most likely to be using systems that will not cope with the workload the new laws will create. Many of these systems also have no HR, or limited HR, which is increasingly important for attracting and retaining staff,” he said.
Companies with multiple employee awards can expect twice that number of payroll variations as an outcome of this legislation, and he said they might need to think about upgrading the hardware that supports their current payroll systems.
“Consider an HR system for 4,000 employees that comfortably handles eight awards. Under the new rules, there may only be three awards, but individual agreements mean that no two employees need to be paid exactly the same. Older and less flexible payroll solutions will struggle to implement the new arrangements,” said Basso.
Every time an employee negotiates a different mix of entitlements and benefits, he said, it would involve a payroll data input to make and record changes to tax, superannuation, net salary and benefits.
“The current award structure simplifies administration with common terms of employment such as pay rates and leave entitlements applying to all people doing similar work,” said Basso.
“But under the new rules, all that simplicity goes out the window and the system, computerised or manual, will need to get it right first time every time.”
He also said the new rules also will impact accounts departments and external relationships such as employee car finance, benefits programs and superannuation companies.
“Under awards, you can say this group of people has these entitlements. That is no longer the case with individual agreements,” said Basso.
Although the proposed IR changes may have few immediate effects on the labour market, he said the long-term impacts need to be understood and planned for. Moreover, Basso said the changes are coming at a time when employers are under pressure to reduce operating costs.
