by Rob Sheppard
[Approx 3.5 min read]
In the dynamic landscape of Australian industrial relations, interpreting award conditions can be a formidable challenge for businesses of all sizes. Just ask some of the biggest corporations in Australia (ahem- Commonwealth Bank and Woolies just to name two).
The complexities involved in understanding both the Western Australian (WA) State system and the Federal (Fair Work) System can seem overwhelming at times.
And if you think it’s already tough, brace yourself, because with recent and upcoming changes under the national Industrial Relations (IR) framework, it’s only going to get more challenging.
Here are some key lessons-learned we feel every business owner, especially those in the small and medium-sized enterprise (SME) sector, should heed when trying to navigate paying their people.
1. Multiple Awards = Multiple Headaches
Many workplaces in Australia are subject to multiple awards, each with its own set of rules and conditions.
Knowing which ones apply to you is critical (we’ll not worry about those with Enterprise Agreements – not yet anyway).
Fair Work will assume at least one award applies to your workforce
Managing the diverse award requirements can quickly turn into a logistical nightmare for even HR and payroll teams – thus it is always THE starting point to navigating wages and conditions correctly.
2. No Payroll Provider Guarantees
Contrary to what some might assume, not all bookkeeper/payroll providers offer comprehensive award interpretation services (the good ones do).
Relying solely on your payroll experts to keep you compliant might leave your business exposed to risks associated with incorrect interpretations.
No guesses as to who pays the penalties though.
3. Flat Rates and Contracts Aren’t Foolproof
Overlooking this could lead to inadvertent breaches and it is the wise leader who reviews and updates these important calculations and documents from time to time.
Awards are often intricate… and can change.
4. The Looming Threat of Wage Theft
Even if you have simplified your wage structure with flat rates and well-drafted employment contracts or Enterprise Agreements (‘EA’), it doesn’t guarantee compliance with conditions.
As we look ahead to 2024, wage theft is poised to become a much more significant issue in Australia.
The Fair Work Ombudsman is already cracking down on businesses that underpay their employees and applying penalties (even if they have an EA).
5. Early Detection Mitigates Pain
Discovering and rectifying underpayments can be painful, but it’s far less painful than allowing issues to multiply over the years.
Underpayment of wages can happen at anytime, even if you have an Enterprise Agreement!
The longer non-compliance persists, the more significant the financial and reputational risks become.
What can you do?
Given these challenges, what can SME business owners do to navigate this intricate world of award interpretation?
Seek Expert Guidance:
- One of the most effective ways to ensure compliance with complex award conditions is to enlist the help of experts. Considering the impending changes in the IR landscape, partnering with a knowledgeable HR or Payroll advisor can save you time, money and stress [shameless plug I know, but true].
Stay Informed:
- For SMEs looking to stay informed and stay ahead, there are valuable and FREE resources available for further reading. The Fair Work Ombudsman website is an excellent starting point for understanding Australia’s NATIONAL award system. It provides up-to-date information on awards, including links to the awards, conditions under the National Employment Standards and wage rates.
Managing award conditions in Australia is no small feat, and it’s only going to become more challenging with the evolving IR landscape.
SME business owners must take proactive steps to ensure compliance and protect their businesses from the looming threat of wage theft. Remember, it’s better to address compliance issues early than to face the consequences down the line.
And if it’s all still confusing?
If you’re a business owner grappling with the intricacies of awards or concerned about the potential risks of non-compliance, don’t wait until it’s too late. Reach out to us for guidance and support as our team of experts is here to help you navigate the ever-changing landscape of employment regulations in Australia.