Two years of the Fair Work Act: still no end in sight

By David Bates, MD, Workforce Guardian

It's now been more than two years since the introduction of the Fair Work Act 2009 and employers remain confused by its complexities and frustrated by the activities of the Fair Work Ombudsman. While employees are clearly much better off under the Act - with its 10 National Employment Standards (NES) and accompanying system of 122 Modern Awards - most employers are still struggling with the hefty compliance burden and the corresponding drain on productivity.

Earlier this month the Productivity Commission was demanding reforms for the retail sector and for the Australian Government to review those constraints imposed by workplace relations regulations which stop retailers from increasing their productivity and improving levels of customer service.

Under the Fair Work Act 2009, hiring and managing staff has become more difficult than ever before and, as many employers have now discovered, dismissing employees is even harder. Almost everyone is finding it challenging to achieve compliance with the Fair Work laws - big and small businesses alike.

Modern Awards

Take Modern Awards for example. Understanding and applying the correct Modern Awards is not a simple process, yet employers are held personally responsible for getting it right. All employers, regardless of whether their business is big or small, are expected to comply with each and every minimum condition of employment set out in an applicable Modern Award and penalties apply for getting it wrong.

Many employers have therefore sought help from the only government agency responsible for helping employers and employees understand their rights and obligations: the Fair Work Ombudsman (FWO). However, the FWO will not provide binding advice and it will not determine Award coverage upon request. This makes it virtually impossible for even the most well-meaning employer to get it right every time. Employers are happy to follow the correct Award, but that's hard to do when no one can tell you which Award applies!

Unfair Dismissal

When it comes to unfair dismissals, the news is even worse. In the 2009-10 financial year alone, unfair dismissal applications increased dramatically to more than 13,000. This represented a staggering 63% increase compared with the previous year. This increase in applications is hardly surprising given eligible employees can now make a claim for unfair dismissal after having worked for their employer for only 6 months. The only exemptions are for small businesses - those with fewer than 15 employees - where employees need to have worked for their employer for at least 12 months in order to be eligible to make a claim.

And don't forget about the latest legal avenue being pursued by disgruntled employees: adverse action claims. Any employee can bring an adverse action claim against their employer - there is no 'minimum period of employment' requirement and the number of claims is on the way up.

Expert Help

Given all of this, it's no surprise that SMEs are reaching out to you, their accountant, for help and advice in this complex area.  After all, you are their most trusted business advisor.

But how can you be certain that you're providing the right advice? Given the complexities involved in employment law, do you really want to get involved?

If your clients are at all uncertain about any area of compliance with the Fair Work Act 2009, Modern Awards and the Paid Parental Leave Act 2010, then clearly they need expert help.

In the same way your clients turn to you rather than the ATO for business and tax advice, they should turn to Workforce Guardian and not the FWO when it comes to compliance with employment laws.

As Australia's leading online employment relations service for employers, Workforce Guardian provides a comprehensive range of practical and compliant HR tools. These include dynamically generated employment agreements, online employment files, downloadable HR processes, policies and essential documents and templates.

Accountants are on the FWOs Radar

But the Fair Work Act 2009 doesn't just apply to your clients. Accountants, like all national system employers, are also bound by the Act and by the National Employment Standards.

And even if you're one of the many firms that pays employees over and above the Modern Award pay rates, it doesn't mean you're exempt from meeting other provisions of the Modern Award.

Indeed, I think this is going to be a major focus of the Fair Work Ombudsman's forthcoming audit of accountants. And I'd strongly recommend that you prepare for a visit by an inspector by undertaking an employment relations compliance audit sooner rather than later.

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Disclaimer

This article is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice may be necessary in particular transactions or on matters of interest arising from this article. Workforce Guardian Pty Ltd (www.workforceguardian.com.au) is not responsible for the results of any actions taken on the basis of information in this article, nor for any error or omission in this article.