SLC Top 5 Series: Top 5 Tips: Back To Basics
Sometimes we all need a reminder of the basics that employers need to be across when engaging employees. From what terms and conditions apply, what records you need to keep or provide, what technical aspects can trip you up, and how/when can employment end:
- Awards, National Employment Standards (NES) and Contracts: What applies?
Employers can understandably find it confusing navigating what terms and conditions apply to their employees. The NES apply as a minimum standard to all employees covered by the Fair Work Act (which covers national system employers such as corporations – ie basically all employers unless they are a State-based organisation). Some employers have enterprise agreements which cover their employees. Most employers will have one or more Modern Award applying to their employees. Awards set out minimum terms and conditions – employers can always offer terms and conditions more favourable than Awards. Whether an Award applies to the employment is a matter of law, it usually does not form part of the employment contract. SLC can assist with identifying which Award may apply and ensuring your employment contracts set out not only the minimum terms but all those terms and conditions important to you and your employees.
- Fair Work Information Statements
Employers must provide a copy of the current Fair Work Information Statement to all new employees as soon as possible when the employee commences employment. These statements provide new employees with information about their conditions of employment. These statements are updated by Fair Work from time to time – and can be found here:
Many employers attach these to their contract template so they always remember to include it with the contract for new hires. There is a separate FW Information Statement for casual employees (see our notes below on Casuals).
- Record keeping
The Fair Work Act sets out minimum record keeping obligations with which employers must comply. These include pay records. Records need to be readily accessible, legible and in English and kept for a minimum of 7 years. Best practice suggests employers have a good system to record employee details, commencement dates, pay records, hours worked, nature of employment, eg casual or permanent, their roles and reporting lines, and leave records. We also recommend all performance or conduct discussions should be documented and kept – even a filenote or a follow up email is better than no record. If records required under the FW Act are not kept or are not kept in a legible, readily accessible form, then fines can apply.
- Casuals – conversion after 12 months
There has been significant change in the employment of casuals in the last 18 months. There is now a definition of a casual employee in the FW Act. A casual employee is an employee that is offered a job with, and they accept that job knowing that the job has, no firm advance commitment to ongoing work with no agreed pattern of work. Casuals have the right to decline any offer of a period of work, and are to be paid a casual loading which should be separately identified to their base hourly rate of pay.
A casual employee can become a permanent employee through casual conversion. This means that casual employees who have worked for their employer for 12 months need to be offered the option to convert to permanent (part time or full time) employment. Small business employers do not have to offer their eligible casual employees to convert, but a casual employed by a small business can request conversion after 12 months service as a casual. Non small business employers must make a written offer to convert a casual employee within 21 days of the employee’s 12 month anniversary, if the employee:
- Has been employed for 12 months;
- Has worked a regular pattern of hours on an ongoing basis for at least 6 months, and
- Could continue working these hours as a permanent employee without significant change.
If the employer does not make an offer, they need to write to the employee within 21 days of their 12 month anniversary confirming they are not offering casual conversion and the reasons why.
SLC can assist with advising on whether your casual employees are eligible, and what process you should follow.
- Termination of employment
The NES set out minimum notice periods for termination of employment, based on length of service, and an additional week’s notice in certain circumstances for employees over 45 years of age with at least 5 years service. Some Awards (and Agreements) provide for a greater period of notice (which must be complied with). If you have a contract of employment which has a greater period of notice than the NES or Award then that greater period in the contract must be provided. Importantly, where a termination is arising at the employer’s initiative, employers should have sound reasons for initiating termination, particularly if there is a risk that an employee may be eligible to bring a claim for unfair dismissal, discrimination or other claims relevant to termination including adverse action claims (that is, that they were treated adversely because they exercised a workplace right). Typically, reasons for employer instigated terminations include performance, conduct or redundancy/restructure. Providing notice to an employee to terminate their employment without reason exposes the employer to risk of a termination claim, and those claims are hard to defend if no reasons have been given.
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As always, it is important to seek advice relevant to your particular circumstances but the above provides a reminder of some of the basic principles of employing staff in Australia.
