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employment

Are you employing on a Commission Only Basis? Think about whether you are breaching the Fair Work Act

Are you employing on a commission only basis? Or do you have a commission only position.  It could be that you are breaching the Fair Work Act.  The only positions that exist for commission only that I know of is under the Real Estate Industry Award 2010 MA 000106.  This means that unless your position or job is under an Award that allows for commission only, that employment may be in breach and therefore attract penalties not to mention the employee can go back 6 years and attempt to recover any unpaid entitlements from the employer.

What’s the problem if everyone agrees?

It is typical for an employee who is under a lot of pressure to find a job to take the first thing that they are offered.  That employee may be thinking that if it doesn’t work out and they don’t get the money anticipated at least they are working and can look for another job.  Sound familiar?  There are 100 scenarios in which it looks like a good idea at the time for the employer and employee.  Another way that businesses get around this problem is by turning the employee into a contractor.  This has its pitfalls too and you could be entering into a sham contracting arrangement which the ATO will be very interested in.

What’s the down side?

A fairly recent case outlines the pitfalls of taking commission only workers.  This case involved an employer Longridge Group Pty Ltd who was in the business of constructing and selling new residential homes.  The employees were employed to sell those homes on a commission only basis.  The entire matter ended up in the Federal Circuit Court because of, among other things, failure to pay minimum wages and other entitlements, and breaching the Fair Work Act and Award.

The court took a dim view of these breaches and after a lengthy decision and penalised Longridge Group Pty Ltd $29,790 in penalties.  The Court also said that the purpose of the penalties was to deter other from doing this as well as for this specific company doing it again.

What can you learn?

The lesson is simple… don’t employ or be employed on commission only basis unless the specific award allows for it.  Even then the Award will stipulate how that commission is set out and how much.  The penalties are high, it can go back as far as 6 years and for contractors you may be penalised by the ATO if it is found that the contracting arrangement is a sham.

What can you do next?

If you are thinking about employing or being employed on commission only basis give the Fair Work Ombudsman a call and have a chat to them first.  Don’t worry everything remains confidential and as they are there to provide information only you can be certain that they will at least point you in the right direction.

Have a chat to the person who does your payroll, make sure they have up-to-date information on what the rules are.  Finally have a quick word with your accountant, they may be able to steer you in the right direction with regards to sham contracting arrangements.

How can MJT Law help?

We can help you navigate the Awards and the system to make sure you are on the right path and are not leaving your business open to litigation and taxation risks.  Give us a call if you have any questions, we are here to help.

Unfair Dismissal – how to calculate damages

When filling in the Form F2 Unfair Dismissal Application you will be asked a simple but important question “what outcome are you seeking by lodging this application?”.

This is complicated because almost always an ex-employee will be seeking damages but the problem is how much?

Under section 392 of the Fair Work Act 2009 (the Act) states that the maximum amount of compensation that can be awarded is capped at the lessor of either 6 months’ pay or half the high-income threshold.  But what does this really mean.

Section 392(2) of the Act sets out the criteria as:

  1. the effect of the order on the viability of the employer’s enterprise;
  2. the length of the applicant’s service;
  3. the remuneration that the person would have received if the person would not have been dismissed;
  4. the efforts of the applicant to mitigate the loss suffered because of the dismissal;
  5. the amount of remuneration the applicant would have earned from employment or other work during the period between the dismissal and order for compensation;
  6. the amount of income the applicant would have earned between the order for compensation and when the compensation is paid; and
  7. any other relevant matter.

The above is a lot to think about.  To make matters even more complicated there is also a formula developed called The Sprigg Formula which is used to work out the appropriate amount of compensation.  The Sprigg Formula was developed out of a case back in 1998 which is still good law today as proved by a recent decision made on 6 January 2017 following the formula.

The Sprigg Formula is as follows:

  1. estimate the likely amount the applicant would have received if the employment has not been terminated;
  2. deduct any earnings accrued since termination of the employment;
  3. deduct an amount to account for any contingencies;
  4. calculate the impact of any taxation; and
  5. apply the legislative cap.

In Bob Millard v K & S Freighters Pty Ltd t/as K&S Freighters [2017] FWC 105 the above test played out as follows:

  1. notwithstanding past issues of misconduct Millard’s employment would have continued for at least another 6 months = $83,200
  2. Mr Millard found alternative employment on a lower salary and was unemployed for 5 weeks. This was deducted and the figure was reduced to $67,288;
  3. Mr Millard received 3 weeks pay in lieu of notice, this was deduced from the overall figure making it $57,688; and
  4. Mr Millard’s earnings involved overtime which may or may not have continued and the Commissioner deducted 20% for contingencies making the total figure to be $46,151.

When coming to a figure that you will likely receive in a decision is difficult but with some genuine consideration of the situation and using the above as a guide hopefully you will be able to come to a figure that you can put the form and take to a conciliation conference.

If you have any questions about the above or want some help just give me a call.  Remember MJT Law has a fixed fee of $600 to attend the conciliation conference and act as your advocate.

Casual Employees – can be protected by unfair dismissal legislation

It is common for employers to believe that because the employee is a casual worker they are not protected under the unfair dismissal provisions of the Fair Work Act 2009.

Before being able to make a valid unfair dismissal application, the dismissed casual worker must, among other things:

  1. make the application within 21 days from the date the dismissal takes effect;
  2. be employed by a constitutional corporation (private business); and
  3. earn less than $138,500 per year.

It is also important that the dismissal is unfair, unjust or unreasonable.  This means that it is not acceptable to terminate an employee who is a casual worker for any reason.  The reasons must not be unjust, unreasonable or unfair.

The Fair Work Act 2009 also states that the criteria for making an unfair dismissal application includes a certain period of employment. If the private business has less than 15 employees then the minimum qualifying period of employment must be 12  months.  If the business has 15 employees or more then that qualifying period is 6 months.

To establish the requisite qualifying period the Fair Work Act 2009 also states that a casual employee can count his or her period of employment only if:

  1. The casual work was regular and systematic; and
  2. There was a reasonable expectation of continuing employment.

Just remember that it is okay to terminate a casual employee without notice as long as the reason is not unfair, unjust or unreasonable.

The thing to think about is why are you terminating the employee, is it because they took a day off for being sick? Or did they just not turn up for a shift. The reason will make all the difference.

If you are a small business, you can use the Small Business Fair Dismissal Code and go through the checklist when you decide it is time to terminate an employee even if they are casual.

 

Can my employer make me take Long Service Leave

This is another question that I get asked when talking about long service leave (“LSL”).  First it is important to go to your work contract, then to your Award or Enterprise Agreement.  Once you have established that there are not provisions for how LSL is to be taken it is time to go to the legislation.

An employer must make an agreement with the worker about the time, the way and the conditions of how LSL is to be taken.  This means that you must come to an agreement between you and your employer as to when you are going to take LSL and for how long.

If you and your employer can’t agree then it is the employer who will decide when you will take LSL.  There are conditions though: the employer must give at least 3 months’ written notice of the date which you are to take LSL if they direct you to take 4 weeks or more.  Of course this is subject to any Award or Enterprise Agreement.

The information in this document, broadcast or communication is provided for general guidance only. It is not legal advice, and should not be used as a substitute for consultation with professional legal or other advisors. No warranty is given to the correctness of the information contained in this document, broadcast or communication or its suitability for use by you. To the fullest extent permitted by law, no liability is accepted by the publisher for any statement or opinion, or for an error or omission or for any loss or damage suffered as a result of reliance on or use by any person of any material in the document, broadcast or communication.
Bullying in the workplace – how defriending a colleague on Facebook can attract sanctions

A recent application to the Fair Work Commission brought up the issue of how people can use on-line media to perpetuate a bullying regime that can attract sanctions.  The definition of what constitutes bullying includes a requirement that it occurs more than once.  For most businesses or companies this can be a very low bar.

Earlier this year a worker for a small business made a complaint to the Fair Work Commission which included an application for an order to stop bullying.  In his decision the Commissioner stated the following about the employee’s situation and the actions of her boss

“This action (the unfriending of the employee from Facebook) by Mrs Bird evinces a lack of emotional maturity and is indicative of unreasonable behaviour, the likes of which I have already made findings on. The ‘school girl’ comment, even accepting of Mrs Bird’s version of events, which I am not, is evidence of an inappropriate dealing with Ms Roberts which was provocative and disobliging. I am of the view that Mrs Bird took the first opportunity to draw a line under the relationship with Ms Roberts when she removed her as a friend on Facebook as she did not like Ms Roberts and would prefer not to have to deal with her”

It was the unfriending of the employee on Facebook along with other actions that were aggressive and demeaning that amounted to bullying under the definition provided in the Fair Work Act.

If you are a victim of bullying or have an issue that could amount to bullying in the workplace, please contact us for assistance.

The information in this document, broadcast or communication is provided for general guidance only. It is not legal advice, and should not be used as a substitute for consultation with professional legal or other advisors. No warranty is given to the correctness of the information contained in this document, broadcast or communication or its suitability for use by you. To the fullest extent permitted by law, no liability is accepted by the publisher for any statement or opinion, or for an error or omission or for any loss or damage suffered as a result of reliance on or use by any person of any material in the document, broadcast or communication.
Texting Afterhours ends in Termination of Employment

Facts

In the case of Ambrose v Moolarben Coal Operations Pty Ltd [2014] FWC 3899 an employee was dismissed after sending a co-worker an obscene image and comment to him with a mobile phone after work hours.

In July 2013 the employee had been working at the coal mine for about three years when he received an official warning noting that behaviour was against the company’s harassment creed.  In August 2013 the employee sent the co-worker the mms at which point the co-worker complained to his employer and the police.  After a disciplinary process he was dismissed.

The employee complained to Fair Work Australia claiming that the dismissal was harsh, unjust or unreasonable citing a number of reasons including that the conduct was not sufficiently connected to the employment relationship to warrant disciplinary action.

The Fair Work Australia rejected the arguments, stating that the mining company’s creed and its bullying and harassment policy clearly prohibited such conduct.  Fair Work Australia found that the company made all employees aware of the policies and had provided training on them.  It went on to say that the employee has been warned about inappropriate behaviour and there had been a clear breach of policies.

What to learn

It goes without saying that sending an obscene text messages to a work colleague is not a good idea with or without explicit policies prohibiting such behaviour.  The mining company ticked all the right boxes by having the policies in place that enabled them to discipline the employee.  They also effectively put into practice the policies to successfully defend a Fair Work Australia claim.

The information in this document, broadcast or communication is provided for general guidance only. It is not legal advice, and should not be used as a substitute for consultation with professional legal or other advisors. No warranty is given to the correctness of the information contained in this document, broadcast or communication or its suitability for use by you. To the fullest extent permitted by law, no liability is accepted by the publisher for any statement or opinion, or for an error or omission or for any loss or damage suffered as a result of reliance on or use by any person of any material in the document, broadcast or communication.
Changes to Portable Long Service Leave

As of 1 July 2014 there were changes to the building and construction industry’s portable long service leave legislation.  The changes affect the long service levy rates which are now reduced from 0.3% to 0.25% of the total cost of building and construction work for projects where the total cost of work is up to $1 billion dollars.

There is a tiered levy rate for projects that are over $1 billion dollars but below $5 billion, any work over $5 billion will not attract the levy.

Exemptions

The amendments exclude ‘resource operation work’ which is defined as:

  • Mining under a mining tenement.
  • Separating, producing, gathering, storing, processing, refining or smelting a substance that is the product of mining, whether or not under a mining tenement.
  • Treatment operations undertaken in relation to a substance that is the product of mining, whether or not under a mining tenement.

Under the definition of ‘resource operation work’ also includes activities ancillary to, or undertaken in connection with, a resources operation.

A person may be exempt from paying the levy, or part of the levy, if the person their workers or contractors are considered to be not substantially engaged in the building and construction Industry.

There are transitional provisions that will apply to construction projects which will not apply to works that cost over $5 billion.

The information in this document, broadcast or communication is provided for general guidance only. It is not legal advice, and should not be used as a substitute for consultation with professional legal or other advisors. No warranty is given to the correctness of the information contained in this document, broadcast or communication or its suitability for use by you. To the fullest extent permitted by law, no liability is accepted by the publisher for any statement or opinion, or for an error or omission or for any loss or damage suffered as a result of reliance on or use by any person of any material in the document, broadcast or communication.
Think about employing someone who needs to relocate – more incentives to get them to you

The Relocation Assistance to Take Up a Job programme provides practical and financial assistance to job seekers who need help to relocate to take up ongoing and sustainable employment.

To be eligible to receive assistance under the Relocation Assistance to Take Up a Job programme the job seeker must:

  • be registered as a fully eligible job seeker with a Job Services Australia provider or be participating in Disability Employment Services
  • have been receiving an eligible income support payment (Newstart Allowance; Youth Allowance (other) or Parenting Payment) for the last 12 months
  • have activity test or participation requirements.

The programme provides long-term unemployed jobseekers who live in areas of high unemployment with the opportunity to secure employment in regions that have more jobs on offer.

What funding is available?

Eligible job seekers may be entitled to be reimbursed up to:

  • $3,000 (GST exclusive) if relocating to a capital city
  • $6,000 (GST exclusive) if relocating to a regional area, and
  • An extra $3,000 (GST exclusive) if relocating with dependent children.

Helping potential employees tap into this new resource may be just the thing you need to get a greater applicant pool in a ‘hard to employ’ area.

The information in this document, broadcast or communication is provided for general guidance only. It is not legal advice, and should not be used as a substitute for consultation with professional legal or other advisors. No warranty is given to the correctness of the information contained in this document, broadcast or communication or its suitability for use by you. To the fullest extent permitted by law, no liability is accepted by the publisher for any statement or opinion, or for an error or omission or for any loss or damage suffered as a result of reliance on or use by any person of any material in the document, broadcast or communication.
Helping young job seekers – they have all the incentive they need

The Job Commitment Bonus is part of the Australian Government’s plan to boost workforce participation and productivity in Australia.

The Job Commitment Bonus will provide a payment of $2500 to eligible young Australians aged 18 to 30 who have been on Newstart Allowance or Youth Allowance (as a job seeker) for 12 months or more, if they find and keep a job and remain completely off welfare for a continuous period of 12 months.

Eligible young people will receive a further payment of $4000 if they remain in a job and off welfare for a continuous 24-month period.  Eligible young people may undertake more than one job either at the same time or one after the other and still qualify for the Job Commitment Bonus however they will not be eligible for more than one Job Commitment Bonus for the same 12-month period.

The Job Commitment Bonus will provide long-term unemployed young Australians with a real incentive to get into paid work.

Claims for the Job Commitment Bonus must be made within 90 days after the end of the 12 and 24-month qualifying periods. The Department of Human Services will pay the Job Commitment Bonus directly to the job seeker at the end of the 12 and 24-month qualifying periods upon suitable confirmation that their work has been ongoing and they have not returned to income support.

Employing a young person can be a great way to get someone at ground level that will give you both enthusiasm and loyalty.

The information in this document, broadcast or communication is provided for general guidance only. It is not legal advice, and should not be used as a substitute for consultation with professional legal or other advisors. No warranty is given to the correctness of the information contained in this document, broadcast or communication or its suitability for use by you. To the fullest extent permitted by law, no liability is accepted by the publisher for any statement or opinion, or for an error or omission or for any loss or damage suffered as a result of reliance on or use by any person of any material in the document, broadcast or communication.
Restart is here – incentives to employ people over the age of 50

The Australian Government will be providing subsidies to businesses who employ eligible job seekers who are over the age of 50 or have been unemployed and on income support for six months or more.

Employers can receive up to $10,000 (GST inc) to assist in employing an eligible job seeker over two years.  This subsidy is called Restart and will be paid in four six-monthly payments:

  • $3,000 after 6 months’ employment;
  • $3,000 after 12 months’ employment;
  • $2,000 after 18 months’ employment; and
  • $2,000 after 24 months’ employment.

Mature age job seekers employed for at least 30 hours per week will attract the full rate and eligible job seekers employed between 15-29 hours per week will receive a pro-rate subsidy.

The Restart subsidy is only available for employers who employ an eligible job seeker on or after 1 July 2014 for a minimum of 15 hours per week and not be receiving any other Government wage subsidies with the exception of the Tasmanian Jobs Programme wage subsidy.

The information in this document, broadcast or communication is provided for general guidance only. It is not legal advice, and should not be used as a substitute for consultation with professional legal or other advisors. No warranty is given to the correctness of the information contained in this document, broadcast or communication or its suitability for use by you. To the fullest extent permitted by law, no liability is accepted by the publisher for any statement or opinion, or for an error or omission or for any loss or damage suffered as a result of reliance on or use by any person of any material in the document, broadcast or communication.