New HR challenges for the second half

With the new financial year now well underway, a number of important HR and employment relations changes that came into effect on 1 July should be on your radar.

By now you should have implemented the increases to the minimum wage and Modern Award pay rates as well as fulfilling your obligations for administering the Paid Parental Leave scheme. But are you also up-to-date with the following?

  • Changes to director’s personal liability for super payments?
  • Updates to Sex and Age Discrimination Laws
  • Rules and procedures for fair dismissals
  • Forthcoming harmonised OH&S laws.

Director’s Personal Liability

Back in May, in the 2011/12 Budget, it was announced that director’s personal liability was to be extended for non-payment of super from 1 July this year. With the calendar rolling on to August, it’s absolutely imperative that you’ve reviewed your employee super requirements and are meeting your obligations.

Of course not meeting your compulsory employee super commitments has always attached a penalty, called the superannuation guarantee charge. This is composed of the amount of the unpaid super contribution plus an administrative penalty and some interest. A penalty of up to $3,300 for an individual and $16,500 for a corporation applies for failing to keep records.

With the new director’s penalty regime, directors are now personally liable for their company’s failure to pay employee superannuation. While the new rules have been designed to snare businesses that are fraudulently trying to sidestep their obligations, the director’s penalty regime will also impact businesses that are simply facing a cashflow crisis. As a director, you must ensure your employees’ super is paid, and paid on time.

To this end, never has it been more important for you to plan for all your employee obligations so you don’t get stuck in a cashflow crisis. Seeking advice from your accountant will help ensure that arrangements are in place for the timely payment of superannuation guarantee obligations.

Updates to Sex and Age Discrimination Laws

Sexual harassment cases often lead to big splashy headlines with multi-million dollar claims attached to them. Of course not all sexual harassment claims make it to the front page, but if you fail to act in accordance with the law, you could end up facing a significant claim, not to mention some unwanted publicity.

So I’m urging all employers to take note of some important amendments to The Sex and Age Discrimination Act that were passed by Federal Parliament on 24 May this year. The amendments include a clearer test for sexual harassment. The revised definition provides that a reasonable person need only anticipate ‘the possibility’ that the subject of the harassment would be offended, humiliated or intimidated. The new protections include harassment over the internet or by texting.

The new law also provides greater protections by prohibiting discrimination on the basis of family responsibilities for both men and women in all areas of employment.

As well, the new legislation establishes breastfeeding as a separate ground of discrimination while employers need to take special measures to accommodate the needs of breastfeeding women in the workplace.

With these legislative changes, I strongly recommend that you review your HR and employment relations policies, and plan to update your staff on the changes and how they affect them.

Dismissal by text

After seeing a couple of dismissal by text stories circulating in the media, I thought it was a good idea to remind everyone that there are specific rules and processes that you must follow to dismiss an employee fairly. There are also consequences for dismissing casual employees (who work on a regular basis) without following due process.

It doesn’t matter whether you have two employees or a staff of 200, your employees will be entitled to significant compensation (up to half the High Income Threshold of $118,100) if their dismissal is found to be unfair by Fair Work Australia.

For small businesses, if you employed fewer than 15 employees – by simple headcount – during the four weeks immediately prior to a dismissal, then you should use the Small Business Fair Dismissal Code and Checklist. It’s important that you familiarise yourself with the contents of the checklist prior to considering any disciplinary action and remember that filling in the checklist does not guarantee that Fair Work Australia will find the dismissal fair. As a small business, your employees need to work for your business for at least 12 months before they become eligible for protection from unfair dismissal.

For all other businesses however, the National Employment Standards set out strict rules so that terminating employment is done in a fair and appropriate manner. When making an employee’s position redundant, it’s critical that the redundancy itself is a “genuine redundancy” and that you pay eligible employees a statutory entitlement to a redundancy payment. Remember, employees need only work for your business for six months to be eligible to make an unfair dismissal claim.

Fair Work Australia takes a number of factors into account when judging whether an unfair dismissal claim has merit. This includes whether a valid reason for the dismissal was given, whether your employee was advised of this reason and whether your employee was given a chance to respond to the reason given.

In any termination, employers must advise their employees of their right to have a support person present. Any termination that is not face to face, or at the very least, does not give the employee the ability to respond to the reasons for a termination. will breach the law. Clearly, using text messaging to dismiss an employee fails to comply with the Fair Work Act and the National Employment Standards.

Harmonised OH&S legislation

Minimising reckless and dangerous behaviour at work and ensuring workers and others are not exposed to a risk to their health or safety will be thrust into the spotlight in the coming months. As of 1 January 2012, significant changes to Occupational Health and Safety Laws come into effect across Australia.

The new changes are part of a “harmonised” system rather than a national one. Each jurisdiction will enact its own piece of legislation in line with the agreed model Work Health and Safety (WHS) Act, but with state variations of a limited nature. The new reforms impose a positive duty upon “officers” of companies (which includes directors) to exercise due diligence to ensure compliance with OHS laws. The penalties for breaching OHS laws will also be increased significantly.

In practice, this will require company directors and executives to ensure that the company has in place best practice OHS safety management systems and that there is appropriate reporting and review of OHS issues at board level.

With the introduction of the new Work Health & Safety Laws in January next year, it’s a good time now to review and improve your Work Health and Safety (WHS) management. Undertaking an audit of your Work Health and Safety compliance will help minimise your business risk and provide a checklist to remedy any non-compliance.

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