As an Australian business owner or manager, your compliance responsibilities are far-reaching. From accounting, to HR, to operations, all facets of your business have legal requirements that you need to ensure are met.
While this is still a confronting concept for many businesses across the country, there are more and more organisations now approaching their legal and ethical obligations with a best-in-class mindset, resulting in them greatly exceeding many of their base compliance requirements. Why? Because they recognise the tremendous upside of doing so, particularly in the area of HR.
Therefore, while the concept of best practice HR compliance can be daunting, having your competitors become the preferred destination for your staff and clients should be a bigger concern.
In my experience, I have found that business owners and managers almost always have the right intentions when developing their systems, policies and procedures, yet lack the right guidance or frameworks to ensure they are compliant.
If this sounds like you, here is an overview of how you can get started.
Modern Awards & Agreements
The first thing you need to do is look at what you are paying people. It’s okay to pay staff more than required but you can’t pay less!
Pre-2010 there were over 1,000 awards governing industries and occupations across the country. The Government eventually saw the light and went through a rationalisation process of merging and removing awards down to the more civilised number of 122.
Your first step is to see if your industry (and subsequently your workplace) is covered by one of these awards.
If you are covered by an award, you need to check the ‘classifications’ listed – these are the levels detailing the different duties and skills that might be covered under each role. The higher the level, the higher the rate.
Unfortunately, there are a few other considerations in relation to allowances and other entitlements employees may be entitled to as part of their job. Don’t be deterred, keep reading and ask questions where you need to get clarity. You can do this through the Fair Work Ombudsman or call a specialist provider like Evans Faull to help fill in the gaps! Be mindful, these rates increase every July as part of the safety net review which reviews minimum wages in line with cost of living increases.
From here you need to put the pay rates and other terms and conditions in an employment contract. No doubt you can do a google search for ‘employment contracts’ and find a plethora of options to download. Just make sure you don’t include anything you don’t understand or worse still, don’t include something you are not going to follow through with!
I find employers usually have something in place, but it’s either outdated (referring to old legislation), it is more complex than it needs to be, or it is missing important pieces of protection, like termination clauses, confidentiality, intellectual property and leave entitlements. This document is what binds you and the employee, it has to be correct or you may be at risk before they have even walked through the front door.
The next stage is the documentation and implementation of company policies. Quite simply – these are the rules of the workplace, just as vital as they are in a school or government. Without them, there would be chaos.
Employers often get lazy in this area and their policies can be too brief or simply non-existent.
Obviously, policies assist both the employer and the employees, but putting my commercial hat on for a minute, they are way more important to you as the employer.
Unless you tell people what is expected of them in regards to their performance and behaviour, then you have no ground or legal recourse to take action when they fail to meet the expectations.
Policies need to be written in clear, digestible language. Don’t complicate them with jargon, just tell people what they need to know and make sure your legal obligations are covered. It doesn’t matter if you have 5 employees, 50 or 500, you must have policies in place.
Furthermore, ensure your policies cover the essentials like Bullying, Harassment, Safety, Performance Management, Leave/Absenteeism, Dispute Resolution as a minimum.
Finally, at the end of the employment cycle is termination. I’d be writing this blog from the Cinque Terre if I had a dollar for every time a friend or family member has said to me “it’s just impossible to sack people anymore”. Sorry but it’s just not the case. All you need to do is understand the processes involved and follow them.
Myth buster: there is no longer the need for a prescriptive number of verbal or written warnings, not sure exactly when that went out the window, but it no longer exists.
Now before you jump out of your chair and go and tell John he is fired because he is absent more than he is at work, there are a few steps to follow to ensure you are compliant and not at risk of an unfair dismissal claim. Firstly, ensure you have policies in place to support your action and make sure the employee is aware of the policies (no point leaving them in a filing cabinet collecting dust, they need to be shared and regularly discussed).
When their performance or behaviour is not meeting the organisation’s requirements, tell them! Start the dialogue, it’s the manager or employer’s obligation to do so - the law requires this.
You must give the employee the opportunity to improve prior to any termination actions. If you have supported the employee, given them counsel/feedback and the improvement is still not satisfactory, you can commence the exit process.
I know it’s not always that cut and dry and I sincerely appreciate how frustrating it is for owners and managers when their goodwill is taken advantage of and a bad seed is infecting the workplace. However, don’t wait until your emotions get the better of you and you do something rash, it will almost always come back to bite you. Be proactive, take the lead and stay in control.
Unfortunately, being a nice boss is no longer enough, you must ensure your organisation meets its legal obligations and create compliant processes accordingly.