New Year’s new laws for employers

Every New Year brings its own challenges for small and medium sized employers.  One of those challenges is the prospect of more new laws, and the compliance obligations that follow from them.  Here are a selection of legal changes in store for 2011 – keep on top of them and stay out of trouble.

Small business unfair dismissal

Remember how the unfair dismissal provisions of the  Fair Work Act are not supposed to apply to employers who have less than 15 full time equivalent employees?  As part of the deal done between Family First Senator Fielding and the then IR Minister Gillard to have the legislation passed, the definition of what constitutes a small business changed from January 1, 2011.

The count of employees is not longer taken on the basis of “full time equivalents”.  It is now a straight headcount; do you have 15 employees or not.  This includes regular and systematic casuals and part-time employees, so the change may result in employers who rely heavily on these forms of employment moving into the same unfair dismissal regime as larger employers.  It also means that they will lose the benefit – albeit, in my view a limited one – of relying on the Small Business Fair Dismissal Code.

Tip for employers – review your HR procedures and ensure that any disciplinary step take against an employee or a decision to terminate employment is for a valid reason and complies with the procedural fairness requirements of the Fair Work Act.

Paid parental leave

Even if you haven’t been living under a rock, you still have time to make the adjustments you need to in order to accommodate the new Federal Government funded entitlement.

Under the scheme, employers will be acting as a clearing house for employee’s paid parental leave entitlements.  If you don’t already have the capacity to do so, you will need to make changes to your payroll systems.  Some of the key obligations on employers (courtesy of the Australian Government’s website) are as follows:

  • Provide your bank account details, employee’s usual pay cycle and pay cut off details to the federal Department of Human Services Family Assistance Office to ensure you receive any Paid Parental Leave funds;
  • Withhold tax from Parental Leave Pay under the usual PAYG withholding arrangements. You will need to include Parental Leave Pay in the total amounts on the employee’s annual or part-year payment summary (statements given to the employee for tax purposes);
  • Notify the Government:  
    – if and when your employee returns to work before or during their Paid Parental Leave period
    – if and when your employee resigns from your business
    – if you change your bank account details or your employee’s pay cycle, or
    – if you receive an incorrect amount of Paid Parental Leave funds from us or if you are unable to provide Parental Leave Pay to your employee.

Tip for Employers – Your obligations to receive government funds and pay them out to eligible employees are voluntary until  July 1, 2011, so you’ve only got a short amount of time to get moving to get your systems compliant.  Read the DHS Business Requirements Statement http://www.familyassist.gov.au/__documents/draft_ppl-employer_brs.pdf or call Centrelink for assistance. And no, the Government assures us that paid parental leave doesn’t count for the purposes of superannuation guarantee contributions, payroll tax or workers’ compensation premium.

Anti-discrimination laws

There is movement at both State and Federal level with the prospect of anti-discrimination laws that will be more onerous for employers.

The Federal Government put a Bill before Parliament prior to the election to strengthen protections against sex and age discrimination, including further recognition of breastfeeding and family responsibilities as grounds of discrimination and the explicit protection of men from sexual harassment. The legislation would also create the office of Age Discrimination Commissioner.  This Bill is the first step in a longer term project to consolidate all Federal anti-discrimination laws, including the Racial Discrimination Act, into one piece of legislation.

At State level, Victoria will have a new Equal Opportunity Act starting on August 1, 2011.  The new Act has some differences to the previous legislation, which means employers need to be familiar with their obligations in advance.

First, the new Victorian Act imposes a positive duty on employers to take reasonable steps to prevent discrimination and sexual harassment.  Further, the Equal Opportunity Commission is to be given more investigation and enforcement powers.  All this means that your work environment may come under the microscope even if there isn’t any complaint against you.  The new Act also makes indirect discrimination easier to establish.  Discrimination is indirect where a requirement applied to all or a group of employees adversely affects someone with any of the protected attributes (such as family responsibilities) and not necessarily because of events which happen in relation to an individual.

Tip for employers: Whether you are a small or large employer, get your equal opportunity practices, policies and education programs in place – you may be investigated even if there is no complaint.

National occupational health and safety laws

They are finally coming with the model legislation due to be finalised in the first half of 2011 and legislated by the States by the end of 2011.

While each state will be affected, differently key changes which will be brought about by the legislation include enhanced duties of care both to employees and the public at large. Company officers will also have more onerous duties to conduct due diligence into the adequacy of their company’s occupational health and safety policies and procedures, or risk personal liability for a breach.  The legislation will extend the obligations of employers to consult with employees about health and safety issues.  It appears that the NSW state government also continues to insist that the legislation replicate the current right of unions under NSW law to commence prosecutions for breach of the health and safety obligations and maintains the onus of employers to prove that they took all reasonably practicable steps to avoid the breach, which effectively shifts the burden of proof from the prosecution authority to the employer.  This would be a fundamental shift for all other states.

Tips for employers: You need to start now on preparation for the introduction of model OHS legislation.  Ensure that policies and procedures will be compliant by the end of 2011.  Develop a strategy for conducting due diligence and for compliance with new consultation and union right of entry requirements.

A new approach to litigation in Victoria

Many employers will be at some time or another be subject to a legal claim in courts of record, for example for breach of an employment contract.  This type of legal action can be far more expensive and time consuming than unfair dismissal proceedings in Fair Work Australia.   All Australian State and Federal Courts have been changing their rules and practices to try and reduce the cost of litigation and to resolve claims more quickly, and Victoria have taken matters a step further.

From January 1, 2011 a person cannot commence litigation unless they have followed appropriate pre-litigation steps to try and resolve their claim.  This might include exchanging documents, or mediation.  The catch is that is you proceed to make or defend a claim without taking these steps, a court can impose greater costs penalties on you, essentially for not avoiding the litigation in the first place.  Legal practitioners and clients will have to certify to the court that they have taken steps to try and resolve the dispute.

Tip for employers: If you get into a dispute with an employee you may have to be far more open to co-operating with them and their legal representatives and making genuine efforts to resolve the dispute early than ever before.


This article was originally published on SmartCompany.com.au where Peter is a regular contributor.

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