Numerous businesses have gone down the path of establishing either a Collective Agreement under previous legislation or an Enterprise Bargaining Agreement under the Fair Work Act. The formulation of such a document along with the process of consultation and then lodgement is complex and time consuming – even where businesses elect to adapt a previously lodged document. Whilst the advantage of removing the application of Awards from your workplace and genuinely constructing an Agreement that is reflective of the needs of the operation is very clear there appears to be one outstanding issue once the Agreement has been lodged and approved common amongst many employers.
This issue establishes itself over time and centres on the turnover of staff. In this case I don’t mean general turnover as it relates to general employees but specifically those people within an Organization whose task it is either to manage a workplace in line with the requirements of an EBA or those tasked with paying staff in terms of the requirements of the Agreement. Too often, once the initial effort and energy have subsided and the Agreement is up and running, key people move on and then everybody slowly forgets that it’s there in the first place, or if they know it is there fail to read it or re read it on a regular basis. As a result of this, strange things can begin to happen; not limited to the following amongst these events are:
- failure to pay appropriate rates according to the EBA
- misinterpretation (or multiple interpretations) concerning penalty rates/allowances etc
- breaches of your own Agreement in terms of the management of entitlements or other operational aspects of the business
- major changes occurring to employment practices without appropriately and lawfully changing the Agreement itself to which you are bound
It is important that business’ ensure that there are mechanisms in place, from a management perspective, to support sound knowledge and understanding of the Agreement to avoid inconsistencies and breaches and that new staff are appropriately inducted into the Agreement so that they also are fully familiar with how it works – this particularly applies to payroll staff who are often left ‘out in the cold’ and make decisions based on limited knowledge and ‘context’.
Possibly one of the most under utilized ways to lawfully adapt Award pay rates to reflect operational realities such as the payment of ‘trip rates’ and aggregated (‘Flat’) rates of pay. The ability to formulate Flexibility Agreements forms part of all Modern Awards and is a mandatory inclusion in an EBA. Signing an EBA cannot be a a condition of employment but the simple way around this is to offer employment under a Contract that is based purely on the Award rates and penalties etc and then offer an ‘IFA’ that speaks to alternative higher pay rates and more beneficial associated conditions.
An IFA cannot be signed by a junior worker and must be signed by their parent or legal guardian. A flexibility agreement however can only be used to amend by agreement between the parties specific matters which are detailed in the Award, these generally relate to remuneration and the application of pay rates, loadings, allowances, penalties and variation to agreed hours of work. An employee must not be worse off by signing and agreeing to an IFA, and although not lodged with any Federal Authority, must be kept as a record as this could be audited by the Ombudsman and made subject to a ‘Better off overall Test’ (BOOT). Remember that an IFA can only deal with prescribed matters specifically as they are detailed in an Award and cannot be used to amend the application of the Act in terms of the cashing out of leave for example unless the Award itself allows this.
If you would like more information on either of these topics please call us to discuss.
Please be advised that our Office will be closing early on Friday the 20th November at 1pm – we are very excited that following on for our Award as the ‘2015 Micro business of the Year’ in the Southwest we are now finalists in the Regional Small Business Awards in Perth.Very exciting!!
We will however be very happy to take your calls as the phones will be diverted.
Many thanks for your forbearance in this.