Check out-dated contracts now - "no excuses" next year
With the holiday season approaching, employers need to beware that if they grant employees leave in advance there's a risk they won't be able to deduct it from the final pay packet, says DLA Phillips Fox senior associate Alex Manos.
Pay in lieu of noticeProvisions of the Fair Work Act coming into effect on 1 January also mean payments in lieu of notice must include all of the remuneration an employee would have received had they actually worked the notice period, Manos says.
This can not only include overtime, allowances and penalty rates, but also payment in lieu of entitlements such as access to private use of a company car or superannuation.
"Traditionally some of those entitlements weren't incorporated into payment in lieu of notice clauses, so that's one to watch out for," says Manos.
"Unfortunately ignorance isn't an excuse and come 1 January 2010 all employers will be expected to comply with the National Employment Standards and the terms contained in the modern awards," he says.
Contracts call for careful wordingEmployment contracts must not contradict the relevant modern award, but neither should they incorporate its terms, Manos says. "This requires some careful wording."
When an employer wishes to refer to a modern award, enterprise agreement or a policy , it should express this wish cautiously, "to avoid the terms of a modern award actually becoming a term of the employment contract," he explains.
Manos says there have already been well publicised cases where employers' policies and enterprise agreements were found to have been incorporated into the employment contract and "lessons should be learned from this".
In such cases an employee accusing their employer of failing in their obligation to deliver on a particular policy can pursue a breach of contract claim, which can significantly increase the compensation that they can claim.
The Miscellaneous AwardAs of 1 January 2010 the miscellaneous modern award, which will cover employees who are not covered by any other modern award, is one to watch, Manos says. This award is designed to capture workers in industries that have traditionally been award-free.
"Come 1 January some employers that weren't previously covered by awards may indeed find themselves covered by a modern award and it is up to employers to investigate that and make sure that if they are covered by a modern award, they're applying it," he says.
"This can be a challenging process as the statement released by the full bench of the Commission actually admits that it is unclear which employees will be covered by the Miscellaneous Award."
It is possible that certain professionals who are not traditionally award-covered employees will fall within the scope of this award, he says. These may include occupations such as managers, software programmers, accountants and human resources professionals, despite the fact that this is not the intention of the award. Organisations potentially affected by this need to be mindful of the final form that this award takes and how it develops.
"Most organisations, however, will know which awards apply to their workforce at 1 January 2010 and they should be focussing on ensuring that they are award compliant and do not, as a result of any changes to the award under which they operate, incur additional operational expenses."
Manos says that organisations should be using the tools in the award and legislative framework to work for them to help achieve their operational needs. "This may involve the use of individual flexibility agreements, guarantees of annual earnings and annualised earnings agreements."
Before January, employers must also prepare for how to deal with employees' requests for flexible work arrangements. To learn what to include in your policy, and how to avoid sanctions, click here to sign up for our webinar.