How employment law compliance underpins great company culture

1. Following workplace laws creates a culture of fairness

Non-compliance with employment laws continues to be a problem throughout Australia. The Fair Work Ombudsman (FWO) has instigated prosecutions against big brands such as 7-Eleven, Yogurberry and Dominos for systemic underpayment and other serious contraventions of workplace laws. This publicity has prompted law reform as the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017, which increases penalties for failure to honour employees' minimum entitlements, the National Employment Standards, Modern Awards, record-keeping and payslip obligations or engaging in sham contracting. FWO has recovered more than $20 million in backpay every year for the past five years. Moreover, approximately 34,000 claims of unfair dismissal, breach of an employee's general protections, or other workplace related disputes are lodged each year.

The workplaces behind these statistics not only face legal issues, but cultural issues. Where employment laws are not followed, employees will justifiably feel that the workplace is fundamentally unfair. They will feel ripped off, distrust management, and be unmotivated to serve the company.

On the flip side, where managers are not informed about the lawful manner in which to performance manage, discipline and dismiss staff, may fail to deal with behaviours such as sexual harassment, bullying and underperformance, or conversely overreact to unwanted behaviour and neglect to follow process when managing it.

A workplace that strives for full compliance with Australian employment laws will be objectively fair, and an organisation that most employees will feel proud to work for. Rather than an 'us' against 'them' mentality between management and employees, the workplace can function as a team where everyone respects what is fair and just under the law.

2. Modern Award or Enterprise Agreement classifications, position descriptions and role clarity statements provide clarity, structure and accountability.

Power-plays between employees breed a toxic culture. Common scenarios include where one employee becomes envious of another employee's job and seeks to 'take over', or where employees seek to curry favour with management to obtain promotions and/or pay rises other than on the basis of merit, thereby subverting rational performance-based recognition and reward programmes.

If an employee is covered by a Modern Award, they must be classified to a level in that Award and paid at least the minimum corresponding pay rate. This is a legal obligation under the Fair Work Act 2009. The classification in the Award will set out the level of responsibility of the role, the indicative tasks expected to be performed at that level, and the requisite competencies and qualifications which entitle the employee to be classified to that level. Classifying employees in accordance with the applicable Modern Award defines the scope of the employee's role. If an employee attempts to engage in tasks outside the scope of their classification, which are unauthorised or which they are unqualified to perform, they can be reminded of the definition of their job by referring them to their classification under the applicable Award. The same principles apply if a business is covered by an Enterprise Agreement.

If Modern Award or Enterprise Agreement classifications are the cornerstone of a compliant culture, then position descriptions and role clarity statements are the foundation that facilitate optimised organisational performance. These documents should set out the mission of the role, and how it contributes to the purpose of the company. They should also set out the key accountabilities of the role, the tasks to be completed pursuant to that accountability, how performance of each accountability will be assessed, and the weighting of the accountability and corresponding hours that should be spent on those tasks. These documents should be drafted in consultation with employees, and implemented with their agreement. With these documents in place, discussions around performance appraisals and pay can be informed by measurable standards which have been agreed to by the employees.

3. A compliant culture provides certainty

When an organisation is complaint, having implemented an appropriate suite of policies and processes, expectations are clear. Employees should be informed and trained on how management expects them to act, and management can respond to desired or undesired behaviour in accordance with an objective, well known standard.

Certainty is a prerequisite for inspiring confidence in employees to choose act in accordance with the organisation's values. Employees should clearly understand what behaviours are regarded as high performing, acceptable, as well as what actions are regarded as warranting disciplinary action, up to and including dismissal.

Certainty is the antidote to instability, which only breeds fear that hamstrings growth and performance and profitability.

4. A compliant workplace is a harmonious workplace

If an organisation is compliant, then employees will have no just cause for dispute. Employees may still raise complaints, and incidents of workplace underperformance or misconduct may still occur. Mistakes and accidents will inevitably still happen. However, if a business has completed its due diligence by becoming educated about Australian employment laws, and implementing employment contracts, policies, processes and communications plans to handle conflict, then the risk of disputation is drastically minimised, and any disputes can be handled with a confident professionalism.

Where staff are not preoccupied with alleging this, or defending that, they can focus on doing what they were employed to do. The business is also enabled to pursue corporate or team goals.

5. Ensure staff are rewarded with pay rises when they are entitled to them, or deserve them

The Fair Work Commission conducts an annual wage review and consequently hands down its minimum wage decision toward the end of every financial year. This generally results in an increase to the national adult minimum wage, effective 1 July. On 1 July 2017, the national adult minimum wage increased by 3.3% to a base rate of $18.39 per hour, or $694.30 for an ordinary, 38-hour week. This increase subsequently flowed onto Award minimum rates, with a Fair Work Commission decision handed down with respect to each one.

These are the basic changes, however, Modern Awards are creatures of history and context, and as a result, there are complexities applicable to certain sectors in certain industries subject to transitional remuneration orders if they were previously covered by certain State and Territory Awards.

It is critical to be informed of any wage increases imposed by law, seeking expert advice where necessary, so that you can ensure staff are being paid at least the minimum rate they are entitled to.

Naturally, once these minimum compliance requirements are sorted, you can think about recognising and rewarding high performing employees, in accordance with the extent to which they have fulfilled their key accountabilities (see point 2 above), and offering incentives to do even better in the year ahead.

6. A compliant workplace is a safe workplace

Workplace fatalities, injuries and illnesses are emotionally traumatic at worst, and simply an administrative nightmare to manage at best.

Employers are required under workplace health and safety legislation to take all reasonable steps to provide a safe workplace. The object of the legislation is to minimise risks to employees' physical and mental health and wellbeing through assessing risks and implementing appropriate measures for eliminating and controlling them. Hazards should then be reviewed and monitored, and the efficacy of the controls should be evaluated periodically.

Compliance with this legislation assures workers that the business cares about their wellbeing at work. A workplace policy could also mandate that employees must report certain unsafe behaviours to their manager, HR, or a designated health and safety officer for investigation. Such a policy would encourage employees to look out for the safety of their colleagues, strengthening team culture.

Ensuring compliance with employment laws is the bedrock of a great company culture. Before considering installing a ball pit, starting a 'bring your puppy to work' day, or even a paid parental leave policy or diversity initiatives - get the basics right. Legal due diligence, while a laborious task at times, ensure fundamentally good values such as fairness, clarity, accountability and reward for effort, become embedded in your business.

Need help with HR and compliance?

Workforce Guardian provides everything needed to achieve best-practice HR management and full-compliance with Australian employment laws.

Used correctly, Workforce Guardian can help you save time and money on HR and reduce the risks of expensive and damaging employee claims, and substantial fines and penalties.

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