11 questions to ask your HR team

by Julian Arndt, Associate Director, Australian Business Lawyers & Advisors

With most businesses wrapping up their financial compliance obligations required by the Australian Tax Office, it is the perfect time to review your employer obligations and the human resources and industrial relations aspects of your business.  As we move into another busy HR period with Christmas leave, public holidays, extra casual hires and of course the work/client functions, set some time aside to review the compliance environment you’re operating within. 

Here are 11 key questions to ask your HR team when reviewing the state of your employment law basics:

1. How much personal leave are your part-time employees accruing each year? What are you paying them when they take a ‘day’ of leave
   Following the very recent decision of the Full Federal Court in Mondelez Australia Pty Ltd v AMWU [2019] FCAFC 138, the current state of the law is that:

• Part-time employees are entitled to 10 working days of paid personal/carer’s leave for each year of employment (i.e. not a pro-rata amount).
• Leave must be calculated and paid in working days, not hours. This means that an employee needs to be paid for the hours they would have worked on a personal leave day, not necessarily a generic 7.6 hour payment.

While the Mondelez decision may yet be appealed (or its effect legislatively varied), it is the current state of the law. Are your part-timers being credited with 10 days personal year per year right now?

2. Does your business have an up-to-date employment contract?
   If not, it is time to review and update your employment contract before your next employee arrives.  Does your template have the five contractual essentials?

• general obligations clause
• set-off clause
• notice of termination clause
• policies and procedures clause
• surveillance clause

Does your contract incorporate what has changed over the past 18-24 months, including protections against accrual of leave by casual employees?  If you are unsure, seek expert guidance to ensure your obligations are met and your business protected.

3. Do all your employees have written contracts referencing their current employment position?
   If your contracts for some employees are out of date, the business may be running a considerable risk. “Reasonable notice” claims are the first of many potential headaches that can arise when your employees’ obligations and entitlements are not clearly and accurately recorded. If your employees’ contracts do not have each of the five contract essentials as listed above, it’s time to reissue.  If you have changed the job descriptions for employees but not updated their contracts, this can open you to issues when managing performance.

4. Do you intend to conduct pay reviews shortly? It could be time for a new contract.
   Performance reviews and pay reviews are often scheduled for this time of the year.  If so, it is useful to think about whether you need to update an employee’s contract of employment. Consent is required for any contract variation so if you are in a position to offer a salary or wage increase in exchange for agreeing to sign a new contract, the employee is much more likely to consent.

5. Do you have compliant and effective workplace policies and are your employees aware of them?
   At an absolute minimum, in addition to a current Code of Conduct, all workplaces should have the following policies in place:

• Complaints and Grievances
• Social Media
• Information Technology (including specific and legislatively valid workplace surveillance clauses)
• Drugs and Alcohol (for safety-critical industries)
• Discrimination, Harassment and Bullying.

Workplace policies should be clear as to what your expectations are as an employer, while providing enough flexibility for you to run your business.  As a general rule, these workplace policies should not form part of an employment contract.

Is your business covered by the new whistleblower laws which came into effect on 1 July 2019? If so, you will need to have in place a compliant whistleblower policy which is consistent with the new regime.

6. Is your enterprise agreement (EA) due to expire in 2019 or 2020?
   If it is, the time to start planning for the EA bargaining process is now. New issues on the radar with Fair Work Commission (FWC) include forensically examining loaded rates, a much stricter Better Off Overall Test (BOOT), thorough analysis of information given to employees during the access period and an assessment of the moral authority of certain votes.
   Employers will need to ensure their EAs genuinely improve upon the conditions in underlying awards.
   Many EAs that were approved in the past would not likely survive the FWC’s new EA ‘triage process’, where a specialist team of agreement assessors place agreements under the microscope before they reach a member of the Commission.
   Equally, based on new scrutiny into what has been said and done during the access period to explain the terms of the agreement to employees, procedures which would have passed muster in the past will no longer cut it.

7.  Are you aware of the changes to Modern Awards and the Four-yearly Review and their implications?
   All businesses should be aware of what Modern Awards apply to them (including those awards which underpin their EAs). Modern Awards will continue to change as the Four-yearly Review continues into its seventh year. Are you up-to-date on award entitlements in relation to flexibility requests? Are you aware that Family and Domestic Violence leave is no longer an Award entitlement (but instead is now in the National Employment Standards)? Have you been providing casual employees with conversion notices? It’s time to review your award to ensure your compliance.

8. Do you have injured employees undertaking long-term absences?
   Managing your ill and injured employees is a legal obligation and now is the time to make sure that you are up-to-date with the status and progress of these employees in order to develop a plan and timeline going forward. This is hugely beneficial for all parties in managing what are always extremely difficult situations.

9. How many long-term or regular casuals are on your books? What about fixed-term employees? Do you know their rights?
   The position of seemingly non-permanent employees has never been more uncertain. Depending on their circumstances (including what is in their contracts) your regular casual employees may be unknowingly accruing paid leave entitlements despite their loaded rates. Long term award covered casuals are also likely to have conversion entitlements. Finally, if you have rolling fixed term contracts in your business, you need to assess whether these employees may have dismissal rights.

10. Are your regular contractors legitimately engaged as contractors?
    The vast majority of regular legitimate contractors are entitled to superannuation contributions from the principal that engages them. If you employ regular contractors it would be timely to review the entitlements as set out in their contracts.

11. Did FY2018-19 raise any employee disputes, contractual or award interpretation queries, or entitlement calculation questions, which remain unresolved?
    The start of the financial year is a good time to call the experts to discuss outstanding issues that might be tempting to throw back into the too-hard basket.  Take the time to review what employee disputes arose last financial year, how they were handled and what could be improved to reduce dealing with unfair dismissals, harassment claims or adverse actions filed against the business.

Training your HR team is also critical.  You can have the correct policies and documentation but if the managers don’t behave appropriately or they are unsure how to have a difficult conversation or address poor behaviour in the workplace, the paperwork means nothing.  The two need to work in tandem for a fully functional workplace that presents minimial risk for claims.

Continual improvement around managing your workforce is imperative for all businesses.  With one of the most complex workplace relations frameworks in Australia, businesses should get expert advice when reviewing key employment documents and ensure they are on top of legislative changes that will impact employees.

If you need to review your HR, ER or IR policies or procedures and you want to ensure all bases are covered, get in touch with Julian Arndt at Australian Business Lawyers & Advisors. 

If it’s time to upskill the HR team, consider sending them to the Employment Law Fundamentals course running in Sydney, Newcastle or Brisbane in October.  Discounts are available for businesses sending multiples.