Much has been made of the way that WorkChoices has changed the power balance between employers and employees. Employers, particularly those with less than 100 employees, do have greater power when terminating employees, but to suggest that it is now open slather for employers to do what they want in the workplace is wrong. In addition to freeing up the options for employers, there are now a new set of national minimums that all employers must provide to their employees.

When WorkChoices was enacted for “constitutional corporations”, or simply all companies, on the 27th March 2006, it had built into it a six-month grace period before employers would be required to comply with every aspect of the new system. That six-month grace period will come to a close on the 27th March 2007, so it is now worthwhile to review what WorkChoices means for the bulk of business in Australia.

For the first time in this country, there is now a standard set of entitlements for employees of companies. Irrespective of what State an employer is located, what industry the business operates in, or what, if any, award applies, companies will be obliged to provide their employees with entitlements that are either equal to, or better, than the Australian Fair Pay and Condition Standard (AFPC).

The only exceptions to the application of the AFPCs is where employers have a registered agreement prior to 27th March, or where the entitlements within existing State or Federal awards provide for a more generous quantum of entitlement, of which there are very few.

What are the AFPC obligations?

Employers need to make sure that in relation to part-time and full-time staff they:

• Do not require employees to work more than 38 hours per week, or average 38 hours per week over a period not exceeding 12 months, plus “reasonable additional hours”.
• Provide employees with annual leave of 1/13th of the number of nominal hours worked. For a regular 38-hour employee this will translate into 4 weeks per year, but the crediting of the accrual is on a monthly cycle. What this means in reality, is that if an employee leaves before the leave is credited, say 3 weeks into a month, then there is no obligation to pay the additional leave accrual.
• Provide any additional weeks annual leave on anniversary for shift workers, where shifts are continuously on a 24 hour, 7 day a week (roster), the shift worker is regularly rostered to work those shifts, and also regularly works on Sundays and Public holidays.
• Provide employees with paid Carers Leave of up to 10 days per annum to look after members of their immediate family who are ill. The carers leave is to be taken from the employees existing Personal Leave balance and is limited to 10 days per annum. Like Personal Leave, employers can require employees to provide proof of their family member being ill by furnishing a medical certificate.
• Provide Compassionate Leave to employees of up to two days per occasion when a member of the immediate family either sustains a serious personal injury, or develops a serious illness that possesses a threat to life.

Keeping records of hours of work and leave

In addition to pay records, there is a range of obligations to keep other employee records. It is necessary to keep the following:

• Employees status ie. full-time, part-time, or casual;
• Employees employment is permanent, temporary or casual;
• Hours of work for casual and any part timer whose hours are irregular;
• Start and finish times of overtime for employees who are eligible to receive payment for overtime at a penalty or loading;
• Type and amount of leave taken, paid or unpaid;
• Rate of accrual of the employees leave;
• Date on which the employee was credited;
• Balance of the employees leave entitlement;
• Amount paid to employees while on leave.

To-do list for WorkChoices payroll compliance

Employers need to ensure that they have systems and policies in place to ensure full compliance before 27th September 2006. To start this process it is important to:

• For employees covered by awards, review the amount of entitlements ie. number of hours or days per year for each leave category.
• Ensure that the payroll system is configured to accommodate the Australian Fair Pay and Condition Standard (AFPC) for annual leave, personal leave, carers leave and compassionate leave.
• Review the payroll system to ensure employee leave record keeping requirements are complied with.
• Ensure that pay slips provided to employees are configured to meet WorkChoices requirements.
• Employees’ payroll records should be credited with personal leave accruals back to 27th March 2006.
• Review each employee’s letter of engagement and ensure that no employee is required to work more than an average of 38 hours per week plus a reasonable number of additional hours.
• Ensure you have systems in place to monitor the record keeping provisions for hours of work for affected employees. Consider web based timesheets and attendance to easily manage this obligation.
• Make sure you can prove that you have the systems in place to monitor whether employees are averaging more than 38 hours per week plus a reasonable number of additional hours.

If you achieve the above before 27 of September you can be comfortable that you have minimised your payroll compliance risk for WorkChoice obligations. Above all in constructing your response ensure that it is efficient and doesn’t divert you from your main game, meeting your customer needs.

Other Links for this article

www.workchoices.gov.au

www.epayroll.com.au