Business owners need to adapt to Award changes

Edward Mallett, Employsure

Managing a business is hard at the best times, but no more so than during a pandemic. Depending on the industry, there are different Awards employers have to get their heads around to ensure they’re abiding by Fair Work standards. Whether it be the rate of pay, the hours certain employees can work, or the leave they’re entitled to, there are a myriad of workplace complexities that must be maintained.

The Children’s Services Award is one of a number of Awards that have seen important changes recently. Since November 1, 2020, employees who have their roster changed in an emergency are entitled to overtime rates. What’s interesting about this is the term ‘emergency’ includes cases where an employer is locked down due to a Government direction. We’ve seen thousands of businesses affected by this as a result of the COVID-19 pandemic. While this change is good for the employee, it leaves a greater financial dent on business owners, who need to change or adapt their operations to accommodate the extra cost.

Working from home has not just been an adjustment employers and employees have had to make for themselves, but also for their families. Those with young or school-aged children have, over the past year, the added complication of working remotely from home, while also caring for and entertaining their children due to the forced closures of childcare centres.

An eight-hour a day working professional needs those services as there’s simply no way to focus on a computer while also supervising a child at the same time. You take your eye off your work for a few minutes and your efficiency greatly decreases. You take your eye off your child for even a second and the outcome could be much worse.

Another relevant change involves non-contact hours. Educational leaders are now entitled to at least two hours of non-contact time a week, where they are not required to supervise children or perform other duties as directed. This can be increased to four hours if they also have programming responsibilities for children.

When the employee is in charge of children outside, such as during lunch, their employer must now provide them with hats and sunscreen, or they must reimburse the reasonable cost back to the employee. What we’ve seen in the past is a grey area that can lead to arguments between the employee and employer over who foots the bill for purchases like this. While it is good to have clarity, again, employers will have to consider that extra cost. There are further changes coming to this Award but are yet to be finalised.

Changes have also come into effect for those, particularly casual workers, who fall under the Educational Services (Teachers) Award. Casual employees who work for a children’s or early childhood education service are now paid under different rates. The former ‘quarter day’ or ‘half day’ rates have been scrapped, in favour of a new method that sees them paid on either a two-hour, four-hour, or full-day rate.

Initially there has been confusion amongst employers over what rate of pay they should be paying employees who work three or five hours for example, however it really is quite easy. If an employee is required to work for up to two hours a day, they’re obviously paid for that period. If the employee is required to work for more than two hours and up to four, they’re paid on the four-hour basis. If they’re required to work more than four hours and up to a full day, then the full day rate applies, based on their appropriate hourly rate.

Overtime is generally a tricky subject when it comes to casual workers. Casual employees working in early childhood services that operate for at least 48 weeks a year, are now entitled to overtime when working outside or in excess of their ordinary or rostered hours.

Further changes to casual overtime for many awards which concern the rate of pay were introduced as of the first full pay period on or after 20 November 2020. The changes were complicated and no doubt kept employers busy leading into the Christmas period trying to best schedule rosters and ensure correct payments.

In this sense, changes to casual pay rates that will have an arguably bigger impact on the retail industry are those where the penalty rates for evening work have increased. Employers need to take a proactive approach and make adjustments to staff and their pay accordingly, to ensure they aren’t incurring unnecessary costs by employing casual staff in more expensive periods.

These changes, coupled with Australia’s complex industrial relations system, will lead to confusion among SMEs when paying staff. In light of the changes it would be prudent for businesses to review their operations and see if increased costs can be avoided.

These changes will undoubtedly lead to more challenges small business owners will need to learn to overcome. With changes to modern awards happening so regularly, it’s no wonder SMEs struggle to get payments right.

Many employers who were hoping to take on extra casuals over busy periods simply won’t be able to now. Complexity breeds a lack of confidence, when simplicity is what we need at the moment. Workplace relations legislation should be the framework that enables business growth, not prohibits it.

 

About Edward Mallett:

British-born Edward Mallett started his professional life out as an employment relations barrister after having studied law at Cambridge University in the UK and Duke University in the US. After migrating to Australia in 2010 and seeing how high legal fees for business owners seeking HR advice were, Mr Mallett wanted to establish a new system which offered professional help at an affordable price. Seeing a gap in the market, Mr Mallett founded Employsure, a subscription-based workplace relations service offering round the clock advice to employers.

 

About Employsure:

Employsure is Australia’s leading workplace advisory firm for SMEs, advising over 28,000 clients in Australia and New Zealand on workplace relations and workplace health & safety issues. It was founded in 2011 to help SMEs navigate changes to Australia’s complex industrial relations system with the introduction of the Fair Work Act. It does this via its advice line where businesses can speak with its team of workplace relations specialists, and through onsite visits to their business.

www.employsure.com.au