FAQs

We get asked about overpayments often, for employers the question is ‘how do I get money I have overpaid an employee back?’ for the employee it’s ‘I have been overpaid this week, can I keep it?’

The short answer is – money cannot be taken out of wages to fix a mistake or overpayment.  The employer and employee should talk about the overpayment and come to an agreement for the employee to pay the money back.  If an agreement can be made then it must be put into writing and set out the following:

1.  reason for the overpayment;
2.  the amount of money that has been overpaid; and
3.  the way the money will be paid back, how much and how often.

Please note that the repayments must be reasonable taking into account all factors.

A deduction of pay can be made to recover an overpayment if a court order, award or registered agreement specifically allows for it.

The Fair Work Ombudsman provides the following example:

Tony was overpaid $2,000 over 3 years because of a payroll error.  His award does not allow for a deduction to be made when an employee is overpaid.

Tony and is employer, Alice, meet to discuss the overpayment.  Tony agrees to repay the money and they come up with a solution.

Alice says Tony can choose how the money is paid back and the amount and frequency of the payments.  Tony tells Alice that he’d prefer if $20 was deducted from his pay each week until the $2,000 is repaid.  This arrangement was put in writing and both sign.

his repayment is reasonable because Tony had a choice about how the money was paid back, and the amount and frequency of each payment.

If you think that you have made an overpayment do the following:

1. retrace steps to find out if an overpayment has been made;
2. check the award or agreement to see if deductions can be made;
3. talk to the employee/employer about the overpayment and provide the employee options as to how it is paid back;
4. call us and discuss how to best resolve the issue if you have not come to a  written agreement with the employee/employer.

Any money taken out of an employees pay is called a deduction.  The question of whether an employer can deduct wages is common and money can only be deducted under the following circumstances:

1. the employee agrees in writing and it’s principally for their benefit;
2. it’s allowed by a law, a court order, or by the Fair Work Commission; or
3. it’s allowed under the employee’s award or registered agreement.

A practical example of when deductions are okay are salary sacrificing arrangements  or payments to an employee health fund.  It is also important to note that any deduction must be clearly shown on payslips.

Any deduction that benefits the employer directly or indirectly and is unreasonable in the circumstances are not allowed additionally if the employee is under the age of 18 any deduction must be agreed by the parent or guardian in writing.

The Fair Work Ombudsman provides the following example:

Jenny works at a bar attendant in a tavern and is covered by the Hospitality Industry (General) Award 2010.

At the end of her shift her manager, Robert, counts the money for the day.  He notices that the till is $20 short.  Robert usually takes money out of the bar attendant’s wages to make up for the shortfall.

Even though the till is $20 short, Robert can’t deduct this money from Jenny’s wages.  This is because the award does not allow it, the deduction would not benefit jenny and it would be unreasonable in the circumstances.

This cost will need to be met by Robert as the employer.

If you think that you have made a mistake do the following:

1. retrace steps to find out if a mistake has been made;
2. talk to the employee/employer about the mistake and how to fix it;
3. call us and discuss how to best resolve the issue if you have not come to a  written agreement with the employee/employer.

Employees are entitled to sick leave, but often we get the question ‘what if I am attending a medical appointment or undertaking elective surgery?’ This can be more complicated.  Employees who take sick leave must notify their employer as soon as possible that they are not coming in to work because of being sick.  Often the notification is outlined in a workplace policy or employment contract.

If an employee is attending a medical appointment or undertaking elective surgery, they will only be covered by sick leave if an employee is not able to work because of personal injury or illness.  This will depend on each individual circumstance.

An employer has a right to ask for evidence that the employee was unfit for work as per the employment contract or workplace policy.  This can help the employer decide if sick leave should be paid out or some other leave entitlement is more appropriate.

The question ‘when should I get my final pay’ is common.  Final pay is the amount that the employer owes the employee at the time their employment ends.  Unless there is an award or registered agreement that states otherwise it should be paid out on the employees last day of work or the next work day.

The employee should expect the following:

1. any outstanding wages for the hours they have worked including any penalty rates or allowances;
2. any accumulated annual leave; and
3. if it applies the following additional payments:
   1. annual leave loading;
   2. accrued or pro rata long service leave; and/or
   3. redundancy pay.

It is important to note that sick pay or carer’s leave is not paid out at the end of employment.

Probationary periods are almost always misunderstood.  First a probationary period is the initial period of employment that the employer uses to determine if the employee is suitable for the role they have contracted in.  Additionally a probationary period can only be extended if the contract provides for a potential extension.  If the contract does not contemplate an probationary period extension then it can only be extended by mutual agreement.

Employers that do contemplate extending the probationary period need to consider the Award and the Fair Work Act.  If the period of probation goes past the maximum employment period outlined in the Fair Work Act  and Award then that employee will be entitled to the same entitlements and protections under the Act and Award regardless of the extension.

If your employee has notified you that they intend to demote you, you should seek proper legal advice straight away.

A demotion is essentially an offer by the employer and acceptance by employee of a lower graded position.  This can only be done if the employee consents to the demotion.

This type of action by the employer may amount to a repudiation (an absence of readiness or willingness to preform contractual obligations) of the employment contract.  If the employee accepts the demotion and therefore repudiation of the contract the employee and employer will be operating under a new contract of employment.

As with demotion an employee may not reduce the pay of an employee without the employees consent.  If you find that your employer has proposed a reduction in pay you should seek legal advice as soon as possible as any reduction may amount to unfair dismissal and a breach of contract.

The question as to whether an employer can direct an employee to take annual leave comes up every so often.  To provide a proper answer we need to separate the different types of reasons as to why an employer may make such a direction.

1.      I have been directed to take annual leave that is in excess.

Under some awards and registered agreements an employer may direct an employee to take their annual leave if they have accumulated a lot of leave

If the award or registered agreement provides for a direction then the employer must make the direction in accordance with that agreement or award. If the award or agreement does not state how the direction must be made then the employer must act reasonably.

There will be changes to the law with regards to excessive leave balances from July 2017.

2.      I have been asked to take annual leave during a shutdown.

A employer may only direct an employee to take their annual leave during slow periods of the year if their registered agreement or award provides for it.  Slow periods would include Christmas and New Year.

3.      I have been told that I must take annual leave when the firm decides.

Employees may only be directed to take annual leave if the request is reasonable.  Examples of reasonable include if the employee has excessive amounts or there is an annual shutdown.

The minimum person/carers entitlement leave commonly known as sick leave is 10 days per year.  It accumulates progressively during the year of service and continues year after year.  To have this entitlement expire will be a contravention of the Fair Work Act.

Finding out that an employee is working while on paid parental leave (“PPL”) at your business can mean that the worker loses their entitlements for PPL.  This is because a person on PPL will no longer be eligible if they return to work for a purpose that is not a permissible purpose.  The Paid Parental Leave Act 2010 states that a person performs paid work on a day if they receive a financial benefit.

There are many exceptions to this rule, including the following:

1. if both the employee and employer consent;
2. if the baby is still born or has dies before the day of birth; or
3. a person who has lost care of their child under certain circumstances may still be eligible for PPL.

A permissible purpose is different for self-employed persons and not self-employed person.  For a self-employed person a permissible purpose would include ad hoc activities like arranging repair of equipment, paying an account or checking a delivery.  For a person who is not self-employed a permissible purpose would be defined under a ‘keeping in touch’ day.

Keeping in touch days are provided to workers who are PPL so they can keep in touch with their employment or engagement in order to facilitate a return to employment after a long period of leave.  A person on PPL is allocated up to 10 keeping in touch days for this purpose and both the employer and employee must consent to them.

If you have an employee who is looking at taking PPL and wants to roster in keeping in touch days you will need to make sure that it is work of a nature that doesn’t breach the Paid Parental Leave Act.  If you are an employer who has become aware that an employee is taking paid work we advice to seek legal advice on your options.

If you need to speak to a solicitor about any of these issues as the employer or employee please contact us to talk to one of our solicitors.

The question as to whether a worker or employee is entitled to a pay increase each year is simple enough; for those employees or workers who are not under an award or enterprise agreement then no, unless your employment contract clearly states one.  For those employees or workers who are under an award or enterprise agreement then you must adhere to the clauses that set out pay and any pay increases.  These types of documents are usually very clear about what, if any, pay increases are required and at when.

For workers or employees in the first category employers must pay at least what is set out as minimum wage.  Minimum wage is set by the Fair Work Commission and any worker or employee receiving less than their entitlements may have an action under the Fair Work Act.

If you think that you are entitled to a pay increase and have not had it given to you then you should go back to the documents that outline your working and pay conditions to determine if you are in fact entitled to one.

If you are having problems negotiating with an employer in relation to a pay increase please contact us, we will be able to provide you with advice as to your entitlements.

Often we get asked if it is illegal to ask certain questions at job interviews. It is important to remember that if you are the one interviewing that you do not ask questions that are in breach of both anti-discrimination laws or workplace privacy laws.  To explain a little clearer it is necessary to break this into two groups:

Anti-discrimination

Current legislation specifically makes it against the law to ask for unnecessary information that may result in discrimination.  It is therefore only acceptable to ask questions about personal matters for very specific reasons, including where it is necessary under award conditions (e.g. for age related wages), for other reasonable purposes (e.g. if citizenship is a legal requirement of the job) or where an exemption may apply.

The employer must be able to show why the information is needed, and an applicant has the right to ask an employer to do so if they ask questions about personal matters.

Workplace privacy

Questions that identify someone are prohibited under Australian workplace privacy laws, there are certain questions that are generally acceptable for example; name, address, bank account details or a photo however; other personal information is considered sensitive and any potential employee generally shouldn’t be questioned about e.g.:

1. race;
2. ethnicity;
3. political opinions;
4. membership of political associations;
5. membership of professional associations and trade unions;
6. religious or philosophical beliefs;
7. sexual preferences (this includes whether you are married because it may indicate a sexual preference);
8. health and generic information;
9. criminal records
   1. Yes – it is generally okay to ask if a candidate has ever been convicted of a crime – if no conviction is recorded then a candidate may state no
   2. No – it is not generally okay to ask if a candidate has ever been arrested.

If you need to speak to a solicitor about any of these issues as the employer or employee please contact us to talk to one of our solicitors.

The question of what should or needs to be kept in an employee’s file comes up now and again.  It is usually a small business that is just looking into what requirements it needs to adhere to.  All employers have to keep written time and wages records for seven (7) year, these records need to be readily accessible to a Fair Work Inspector, legible and in English.  In addition to time and wage records the following needs to be kept:

1. general records about the name, ABN, commencement date and whether the employee is part-time, casual or full-time;
2. pay records including; rate, gross and net amounts of pay, and any incentive-based pay or deductions;
3. hours of work including any penalty rates or loadings, if there is a guaranteed pay rate for a set period what that is and a copy of any written agreement if the parties have agreed to an averaging of an employees work hours;
4. leave information like if any has been take and how much is left and if an employee is able to cash out annual leave and a running record of any leave being cashed out and the agreement itself;
5. superannuation contributions and its details;
6. any details of individual flexibility arrangements;
7. if there is a guarantee of annual earnings, a copy of that written agreement and the date it ll be or is cancelled;
8. details about the ending the employment, how it was ended, any notice provided and how much and the name of the person who terminated the employment if it was terminated; and
9. if there has been a transfer of business then the old employer has to give the new employer records of any transferring employee.

If you are not keeping proper records then you may find yourself in breach of the Fair Work Act.