Recently the Federal Court considered a case in which an Australia-wide 2 year restraint period for a former director and founder of an HR outsourcing business was upheld and considered to be reasonable in the circumstances.

The case reinforces the importance of employers including well-drafted restraint clauses in their employment contracts to protect their business in the event that an employee with important company or business knowledge and contacts is not able to unfairly compete with the employer when leaving the company.

The case involved a former managing director who resigned from the company (HRX) to work in a senior position for a competitor of the business (Talent2). HRX sought to enforce the restraint clause contained in the employment contract which prevented the former MD from working for any HR outsourcing or consulting companies in Australia for a period of 2 years, in “…a business or operation similar to or competitive with” HRX.

The former MD argued that the clause was too wide and unreasonable in the circumstances, however after careful consideration of the contract itself as well as the overall circumstances of the case, the Court found that the restraint clause was not unreasonable and found in favour of HRX.

One of the factors considered by the Court was whether the parties had accepted the restraints as reasonable at the time that the contract was signed. Although Justice Buchanan commented that restraints of trade are, on the face of it, contrary to public policy and primarily invalid, he went on to say that “…a restraint of trade will not be invalid as contrary to public policy if it was reasonable in all the circumstances at the time it was made”. In this case some time had elapsed while the former MD was working for HRX and during this time the contract was negotiated with input from his accountant and solicitors. There was also express acknowledgement by the parties that the restraints and the duration were reasonable.

An additional factor in favour of upholding the restraint was that it was accompanied by a specific agreement that the former MD would receive an 8% shareholding in consideration for the restraint. The impact of this was that he was effectively paid for all but 3 months of the 2 year restraint period, so that any financial disadvantage was significantly decreased.

Justice Buchanan further referred to the former MD having “very special ability” in relation to connecting with clients and developing the business. He also took into account that the employee was in discussions with Talent2 prior to resigning from HRX, and that it was clear that the employee “…proposes to do the very thing which he agreed he would not do”.

The restraint clause was upheld, and the Court ordered that the MD should be restrained for two years from working (in any capacity) for Talent2, any other provider of HR outsourcing (including recruitment process outsourcing), or any HR or recruitment consulting business in Australia.

It is interesting to contrast the decision in this case with that of Wallis Nominees (Computing) Pty Ltd v Pickett [2012] VSC 82 (14 March 2012). The result in this case was quite different in that a 12 month restraint period was not upheld and the former employee was able to move to a management position with a former client of the employer. The Judge in that case found that the restraint clause was not enforceable as the company was not able to show that there was a legitimate commercial interest it was trying to protect. The court took into account the nature of the IT industry, the position of the employee (not the “human face’ of the company and no special relationship with the client) and that there was no risk of exploitation by the client.

In summary, Justice Sifris stated that several recent cases had shown that “more than exposure to or interaction with the customer or client by the employee is required” to justify an employer’s protection.

The message for employers is to make sure you have a well-drafted employment contract which includes business protection clauses such as restraints, non-compete and non-solicitation clauses. Provided that these clauses are reasonable and mutually agreed, and protecting a legitimate business interest, they can be enforced and will provide the business protection that was initially intended.

To download this Article Click here  When is Restraint Unreasonable

Author: Christine Broad

For more information, please contact us at enquiries@blandslaw.com.au

It is intended as a guide only and does not replace specific legal advice.

Personal or Carers Leave

Background and eligibility

Paid personal or carers leave isthe correct terminology for the phrase ‘sick leave’. All employees (other than casuals) are entitled to paid personal leave or paid carer’s leave, of 10 days per year. The entitlement to paid personal/carers leave accrues from year to year. Paid personal/carers leave is leave that is provided for an employee if, due to their own personal circumstances, they are sick or injured, or if they need to provide care or support to a member of their immediate family or household. The Fair Work Act 2009 (Cth) sets out who qualifies as a member of an employee’s immediate family. This definition encompasses a spouse, de facto partner, child, parent, grandparent, grandchild or sibling of an employee; or a child, parent, grandparent, grandchild or sibling of the employee’s spouse or de facto partner.

Unpaid personal/carers leave is an entitlement to 2 days leave for each instance, which an  employee can take when a member of their immediate family or household requires care or support due to illness, injury or an unexpected emergency. This type of unpaid carers leave can be taken in one continuous period, or broken up for example, over four half days, to share caring with another person. The entitlement to unpaid carers leave is available to all employees, including casual employees.

Accrual of Paid Personal/Carers Leave

Paid personal/carers leave is accrued on a yearly basis. It accumulates from year to year and accrues on a pro-rata basis for periods of less than a year. When an eligible employee takes paid annual leave or paid personal or carers leave, the personal/carers leave owing to them will continue to accrue. Unless provided for specifically in an award, personal or carers leave will not accrue whilst an employee is on any form of unpaid leave.

Notice and Evidence

Employees need to give their employer notice for any periods that the employee proposes to take as personal/carers leave. This notice must be given as soon as is practicable. In relation to the evidence required, most awards will stipulate the provisions relating to the type of supporting evidence that must be supplied by an employee taking personal/carers leave, or refer to the evidence requirements as set out in the National Employment Standards (NES).  When and award refers back to the NES, s107 of the Fair Work Act 2009(Cth) outlines the notice and evidence requirements in relation to personal/carers leave. This section states that the employer can request evidence to confirm the need for personal/carers leave.

Termination and cashing out

Paid personal/carers leave is not paid upon termination. However, some individuals and organisations choose to make arrangements to ‘cash out’ their paid personal or carers leave to reduce the balance owing to employees. This is permissible, providing the employee freely agrees, in the following circumstances:

• the award or agreement that covers the employee allows for the practice, and
• there is an agreement in writing in each instance of ‘cashing out’, and
• the employee retains a balance of 15 days personal or carers leave, and
• the employee is paid the same amount that they would have been paid had they taken the leave in the usual manner.

Transferring employment or business

A transfer of employment occurs when an employee moves from one employer (the old employer) to another employer (the new employer) within three months of a transfer of business and performs substantially the same work for the new employer as they performed for the old employer.

A transfer of employment can also occur where an employee moves from one employer (the old employer) to another employer (the new employer) who is an associated entity of the old employer within a specified time frame of ending employment with the old employer (this time frame may vary state by state).

A transfer of business can occur where one of the following connections between the old employer and the new employer exists:

• a transfer of assets,
• outsourcing,
• insourcing, or
• where the two employers are associated entities.

When there is a transfer of employment, the period of service with the old employer will generally count as service with the new employer, and the employee will keep any accrued personal or carers leave that they had with the old employer.

Compassionate Leave

Background and Eligibility

Personal/carers leave should not be confused with compassionate leave. Paid compassionate leave is available to all employees, except casuals. It is a period of leave that can be granted for an employee when an immediate family or household member sustains an injury that is considered life threatening, or when an immediate family or household member dies.

The entitlement to compassionate leave is for a period of two days for each occasion that an employee is eligible. It can be taken as two separate or continuous days, or as otherwise agreed to between the employer and employee.

Unpaid compassionate leave is available for any eligible casual employee providing they meet the criteria in relation to an immediate family or household member sustaining a life threatening injury or dying.

Accrual of Compassionate Leave

Compassionate leave does not accrue as it is granted for each occasion in the circumstances outlined above.

Notice and Evidence

The notice and evidence requirements for taking compassionate leave are the same as those required in relation to personal and carers leave. Evidence may be requested by the employer to confirm that the compassionate leave is taken for a permissible occasion.

Termination and Cashing Out

As compassionate leave is taken on an each occasion basis and is not accrued, there are no payments made in relation to compassionate leave upon termination, and no cashing out options available.

Community Service Leave

Community service leave is a form of miscellaneous leave that some employees may be eligible for when participating in a community service activity. These types of activities include jury service, voluntary emergency management activities or some other activity that may be prescribed by various regulations. Notice must be given to employers by the employee as soon as practicable regarding leave proposed to be taken under these circumstances and evidence may be required by the employer to support such leave taken. This type of leave is unpaid, except for jury service leave, when the first 10 days are paid. The payments made to any employee for jury service leave is a form of ‘make up’ pay, that is, the employer pays the difference, if any, between what the employees base rate of pay is, and any jury service pay that the employee receives whilst attending jury service.

Points for Employers

• Have a thorough understanding of the personal/carers, compassionate and community service leave entitlements for your employees. Further details can be found in the National Employment Standards (NES) contained within the Fair Work Act 2009 (Cth), this Standard must be adhered to.
• Keep up to date records on the amount of leave owing to employees, and consider keeping a journal of outstanding long service leave in a excel spread sheet, updated monthly.
• Understand what the termination payments or cashing out provisions in relation personal/carers leave may be.
• Make it clear to employees what the evidence requirements are for employees when taking personal/carers, compassionate or community service  leave.
• If in doubt, seek help from a professional as to how the NES, and particularly the leave provisions apply to you and your employees.

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Author: Danica Leys
For more information, please contact us at enquiries@blandslaw.com.au
It is intended as a guide only and does not replace specific  legal advice. ]]> http://blandslaw.com.au/articles/employee-leave-entitlements/personalcarers-compassionate-community-service-leave/feed/ 0 http://blandslaw.com.au/articles/employee-leave-entitlements/annual-leave/ http://blandslaw.com.au/articles/employee-leave-entitlements/annual-leave/#comments Wed, 21 Mar 2012 07:52:29 +0000 admin http://blandslaw.com.au/?p=1134

Since 1973, a four (4) week annual leave period for the benefit of an employee has been standard practice, increasing from the initial one (1) week annual leave standard introduced in 1941. Today, annual leave entitlements now form part of the National Employment Standards (NES) providing a minimum safety net of employee entitlements.

Under the NES, all employees (except casual employees) get paid annual leave based on their ordinary hours of work. An employee is entitled to:

• 4 weeks annual leave for each 12 months of service; or
• 5 weeks annual leave for some shift workers for each 12 months of service.

To qualify for the shift work entitlement of 5 weeks annual leave, an employee must either be classified as a shift worker under an award or agreement, or if not covered by an award or agreement, they must meet all of the following criteria:

• they are employed in an enterprise where shifts are continuously rostered 24 hours a day for seven days a week;
• they are regularly rostered to work those shifts; and
• they regularly work on Sundays and public holidays.

An annual leave entitlement that comes from an award or agreement may be different, but cannot be less than the NES entitlement.

Casual employees are excluded from annual leave entitlements on the basis that casual loading is intended to compensate them for such entitlements together with paid personal leave.

Annual Leave Accrual

Annual Leave is based on the number of hours worked. For example, a full time employee working 38 hours per week accrues annual leave at the rate of 2.92 hours per week. A part-time employee working 15 hours per week will accrue1.15 hours of annual leave per week.

An employee’s entitlement to annual leave under the NES accrues progressively during a year of service according to their ordinary hours of work and accumulates from year to year.

Leave continues to accumulate while employees are taking paid annual leave and paid personal leave. However, annual leave does not normally accumulate during periods of unpaid leave, such as unpaid parental leave, or unpaid authorised absences.

As long as an employer can determine an employee’s entitlement at any time they request leave, or their employment ends, it is generally sufficient to accrue it on any regular basis, unless an applicable award or agreement specifies a particular accrual method.

The Fair Work Ombudsman suggest that an employer should record the accrual of leave not less than monthly (or more frequently if required by the applicable award or agreement).

Taking Annual Leave

An employee can take paid annual leave when their employer has agreed to their request for leave. The employer must not unreasonably refuse to agree to a request to take annual leave.

There’s no minimum or maximum amount of accrued annual leave that must be taken at a time.

An award or agreement may allow for an employee to be directed to take annual leave in certain circumstances, for example:

• during a period of shut down (such as between Christmas and New Year)
• if the employee has an excessive accumulated annual leave balance.

However, the employer’s requirement or direction to take leave must be reasonable, taking into account factors such as:

• the needs of the employee and the employer’s business;
• any agreed arrangement with the employee;
• custom and practice of the business;
• timing of the direction or requirement to take leave; and
• reasonableness of the period of notice given.

Annual leave falling on a public holiday is to be paid on the basis of the public holiday and is not considered to be annual leave or to be deducted from an employee’s annual leave balance.

Annual Leave Payments during the course of employment

Under the NES, an employer must as a minimum, pay annual leave at an employee’s base rate of pay for their ordinary hours during the period of leave.

An employee’s base rate of pay (other than a pieceworker) is the rate of pay payable to an employee for his or her ordinary hours of work, but not including any of the following:

• incentive-based payments
• bonuses
• loadings
• monetary allowances
• overtime or penalty rates
• any other separately identifiable amounts.

Awards and agreements may provide for annual leave to be paid at a higher rate than that required by the NES. For example this may include the payment of annual leave loading (usually 17.5%) in addition to the ordinary rate of pay.

Cashing Out Annual Leave Entitlements

Under the NES, for employees covered by an award or agreement, annual leave can be cashed out if the award or agreement allows it. Award or agreement free employees may also agree with their employer to cash out annual leave.

However, for all employees that agree to cash out annual leave, the following conditions apply:

• an employee must retain an entitlement to least four weeks paid annual leave;
• there is a separate agreement in writing on each occasion that leave is cashed out;
• an employer must not exert undue influence or undue pressure on an employee to agree to cash out an amount of annual leave; and
• an employee must be paid at least the full amount that would have been payable had the annual leave been taken.

These restrictions on cashing out are intended to safeguard employee entitlements to annual leave. Determinations seeking to limit cashing out provisions in enterprise agreements with respect to satisfying the ‘Better Off Overall Test’ (BOOT) have been overruled on the basis that legislative safeguards should be regarded as adequate.

Termination

On termination of employment an employer must pay an employee for any untaken annual leave which has accrued.

Whilst annual leave loading is not a minimum entitlement, if an employee is entitled to annual leave and annual leave loading, then they must be paid out for both entitlements if their employment is terminated. This applies even if a clause in a modern award, agreement or contract expressly states that either entitlement is not payable.

This entitlement is based on the annual leave on termination provision in s.90 (2) of the Fair Work Act , 2009 which provides that a terminated employee with a period of untaken annual leave must be paid what they would have been paid if they had taken that period of leave.

The correct payment of annual leave entitlements on termination is important. In the event that an annual leave payment on termination is paid incorrectly, employers may be exposed to underpayment claims from employees who have not received payment of their correct annual leave entitlement of annual leave loading on termination. Underpayment claims may be brought up to six years after the claim arose, and may give rise to penalties of up to $33,000 per breach.

Transferring Employment

A ‘transfer of employment’ occurs when an employee moves from one employer (the old employer) to another employer (the new employer) within three months of a transfer of business and performs substantially the same work for the new employer as they performed for the old employer.

A transfer of employment can also occur where an employee moves from one employer (the old employer) to another employer (the new employer) who is an associated entity of the old employer within 3 months of ending employment with the old employer.

A transfer of business can occur where one of the following connections between the old employer and the new employer exists:

• a transfer of assets
• outsourcing
• insourcing
• where the two employers are associated entities.

When there is a transfer of employment, the period of service with the old employer will generally count as service with the new employer, and the employee will keep any annual leave balance they had accrued with the old employer.

However, where the employers are not associated entities, the new employer can decide not to recognise an employee’s service in relation to annual leave with the old employer. In such cases, the old employer will be required to pay out the employee’s untaken accrued annual leave.

In Summary

Annual leave entitlements are generally straightforward. Notwithstanding, employers should ensure that in paying out an employee’s entitlements on termination inadvertent breaches of the Fair Work Act, 2009 do not occur.

Employers should also be mindful as to whether an employee has an entitlement under the NES that overrides or complements entitlements in a relevant award or agreement.

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Author: Jo-Anne Chong
For more information, please contact us at enquiries@blandslaw.com.au
It is intended as a guide only and does not replace specific legal advice. ]]> http://blandslaw.com.au/articles/employee-leave-entitlements/annual-leave/feed/ 0 http://blandslaw.com.au/articles/employee-leave-entitlements/parental-leave/ http://blandslaw.com.au/articles/employee-leave-entitlements/parental-leave/#comments Wed, 21 Mar 2012 07:39:34 +0000 admin http://blandslaw.com.au/?p=1128

There are two types of parental leave: paid and unpaid.

While many organisations have historically chosen to provide a period of paid maternity or paternity leave, legislated paid parental leave is relatively new to Australia having only been introduced by the government on 1 January 2011.

Unpaid parental leave is available according to the National Employment Standards under the Fair Work Act 2009.

Unpaid Parental Leave

The NES provide for an unpaid period of parental leave for employees when they become parents.

For primary caregivers of a newly born or adopted child, this period is up to 12 months provided that:

• The employee is a full-time or part-time employee (or classified as a “long term casual”- that is, has worked on a regular and systematic basis); and
• The employee has worked for the employer for a continuous period of 12 months.

An employee can apply to extend their parental leave for a further 12 months and this request must be made to the employer in writing at least 4 weeks before the expiry of their current unpaid leave period.

What to do prior to taking unpaid parental leave

Employees

• Give the employerwritten notice of their intention to take unpaid parental leave at least 10 weeks before they start the leave
• Inform the employer of the expected start and end dates of the leave
• If required provide the employer with a medical certificate confirming the expected dates
• Discuss with the employer any arrangements for payment of entitlements such as annual leave or employer-funded parental leave provided for pursuant to the employment contract

Employers

• Ensure the employee meets the requirements for an entitlement to take unpaid parental leave
• Ensure the employee has provided the required notice and dates for leave and provide written confirmation of the agreed dates to the employee.
• Make any necessary arrangements for payment or the employee’s entitlements

What to during unpaid parental leave

Employees

• It is good practice to keep in touch with the employer every now and then so that you are aware of any changes happening in the workplace
• If you wish to vary the period of unpaid parental leave within the first 12 month period, provide a written request to the employer at least 4 weeks prior to the end date of the agreed leave period specifying the new end date requested.
  • Extension of leave: If your original leave period is less than 12 months then you are entitled extend the period of leave on one occasion without the approval of the employer, provided the total period is 12 months or less. Any further extensions (up to the full 52 weeks) must be by agreement.
  • Returning to work early: Any request to return from parental leave earlier then originally agreed must be by agreement between the employee and the employer.
• If you wish to extend the period of unpaid parental leave beyond the original 52 week period, again you need to provide a written request to the employer at least 4 weeks prior to the end of the original leave period including the new end date requested.
• The employer can only refuse a request for additional parental leave up to a further 52 weeks on “reasonable business grounds”.

Employers

• If the employee requests an extension of parental leave and their initial period is less than 52 weeks, then they are entitled to an extension on the first occasion without approval. Any further request must be by agreement.
• If the employee makes a request to return earlier than agreed then this must be by agreement between the employer and employee.
• If the employee requests an extension beyond the initial 52 week entitlement, the employer must provide a written response within 21 days after the request is made. The request can only be refused on reasonable business grounds. Reasonable business grounds may include the impact on the business, the inability to organize work amongst existing staff, or the inability to replace that employee.
• It is a good idea to stay in touch with employees on parental leave and this can include occasional emails or invitations to social work functions.

Paid Parental Leave

The Paid Parental Leave Act2010 entitles all eligible Primary Carers to up to 18 weeks pay at the national minimum wage (currently $589.30). The paid parental leave is in addition to any employer-provided benefits that the employee currently receives upon the birth or adoption of a baby.

Who is Eligible?

A new parent is eligible if they:

• have a newborn baby or have recently adopted a baby from 1 January 2011
• are the primary carer of that baby
• have individually earnt less than $150,000 in the previous financial year (worked out with the adjusted taxable income)
• have worked at least 330 hours in the ten month period before the baby is born or adopted
• have worked 10 of the 13 months before the baby arrives
• are on leave or not working from the time they become the primary carer

Paid Parental Leave can be taken anytime within the first 12 months after the baby is born/adopted, and the claim can be lodged up to 3 months before the baby’s due date. The paid parental leave does not affect any employer-funded paid parental leave.

In most cases the government pays the benefit directly to employers who are then required to administer the payment to the employee.

What to Do: Paid Parental Leave

Employees

In addition to the notice requirements for unpaid parental leave, you will need to assess whether you are eligible for paid parental leave using the criteria above. If you are eligible then you will need to:

• Complete the Parental Leave Pay claim form and lodge with the Family Assistance Office (FAO). This can be done online or by posting a hard copy of the form to FAO up to three months prior to the expected arrival date of your child. You should specify the date you would like the parental leave pay to start which will depend on when you become the full time carer of the child. In order to receive the full 18 weeks of pay the start date for payments must be within 34 weeks of the birth or adoption of the child.
• Once the child is born you will then need to lodge the proof of birth form with the Family Assistance Office within 28 days so that your claim can be finalised.
• If you are receiving parental leave pay and you return to work or are no longer the primary carer of the child, you will need to inform the FAO as this may affect your payments.

Employers

The Family Assistance Office (FAO) will determine if an employee is eligible for paid parental leave.

If the employee is eligible, Centrelink will then determine if the employer is required to provide the pay to the employee and advise the employer accordingly. If the employee has been employed for 12 months or more and is taking at least 8 weeks of parental leave pay, then the employer must make the parental leave payments to the employee. In other circumstances the employer can volunteer to make the payments, otherwise payments will be administered by the Family Assistance Office. Centrelink provides the parental leave pay to the employer in advance and the employer then pays the employee.

If the employer is administering the payments then:

• Centrelink will contact the employer to advise the amount and duration of parental leave pay.
• The employer should ensure it makes the necessary changes to payroll systems to accommodate the payments.
• The employer is not required to make any government-funded parental leave payments to an employee until these funds have been received from Centrelink.

Resignation or Termination during Parental Leave

Resignation by Employee

An employee may resign while on maternity leave by giving the required notice of resignation according to the NES, the relevant award or the employment contract.

Termination by Employer

The same provisions apply in relation to termination of an employee on parental leave as to termination while not on leave. The termination must be for a valid reason, for example a genuine redundancy, and not for reasons connected with the pregnancy. If termination is not for a valid reason it may be challenged in a number of ways including:

• A claim for unfair dismissal which is harsh, unjust or unreasonable
• A general protections claim
• A discrimination claim
• A claim for unfair dismissal based on temporary absence due to illness or injury

Frequently Asked Questions

Can I work while I am on maternity leave?

If you are receiving payments under the paid parental leave scheme, one of the requirements is that you be on leave or not working. This means that if you return to work your parental leave will stop.

However, after the first two weeks of your parental leave pay, you can ‘keep in touch’ with your workplace by participating in workplace activities for up to ten days until the end of the parental leave period. Women often use these days for training, conferences or special planning meetings. These ten days do not need to be all together, and you must be paid as usual in addition to your parental leave pay. This ‘keeping in touch’ can only be done at your existing workplace, so if you worked for another employer then your parental leave pay would stop.

If you are on unpaid maternity leave, it must be taken in one continuous period. So you cannot work ‘keep in touch’ days during your unpaid maternity leave, though this law is currently under review and you should check with your employer before agreeing to any ‘keep in touch’ days.

If you are on employer-sponsored maternity leave you can check with your human resources department or your employment agreement about the conditions of that leave.

Can my partner take leave when the baby is born?

When the baby is born the father is entitled to the government-funded paid parental leave, as long as he is the primary carer of the baby and meets the eligibility criteria. If you are already being paid parental leave and aren’t working, then your partner can’t get paid parental leave at the same time. If you go back to work before your 18 weeks of leave has been paid then your partner may begin paid parental leave if he becomes the baby’s primary carer. If he is eligible for the government’s paid parental leave scheme then he may be paid the remainder of the 18 weeks of leave.

If your partner has been employed for a continuous 12 months with his employer he will also be eligible for up to 12 months unpaid paternity leave. If he wants to take unpaid paternity leave at the same time as you, then the period of simultaneous leave must be three weeks or less.

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Author: Christine Broad
For more information, please contact us at enquiries@blandslaw.com.au
It is intended as a guide only and does not replace specific legal advice. ]]> http://blandslaw.com.au/articles/employee-leave-entitlements/parental-leave/feed/ 0 http://blandslaw.com.au/articles/employee-leave-entitlements/long-service-leave/ http://blandslaw.com.au/articles/employee-leave-entitlements/long-service-leave/#comments Wed, 21 Mar 2012 06:25:54 +0000 admin http://blandslaw.com.au/?p=1115

The entitlement to Long Service Leave (LSL) is contained in the National Employment Standards (NES). As of 1 January 2010 the NES applies to all employees covered by the national workplace relations system (national system employees)

There is currently no uniform national LSL standard, and the legislation governing LSL is contained in state Acts. For example, in NSW, LSL is governed by the Long Service Leave Act 1955 (NSW). Until a uniform national standard is developed, the state legislation needs to be read on conjunction with the NES.

This area of law can be very complicated due to the various pieces of legislation that can apply to workers, the classification of the workers relevant award, and whether that worker is a party to a pre-modern award or collective agreement.

What are the entitlements?

The NES states that an employee is entitled to LSL as per the provisions of their pre-modern award. Modern awards do not contain LSL provisions. There are however, certain instances where the entitlement to LSL from a pre-modern award does not apply, and the LSL entitlements are derived from other agreements or determinations. These include instances when:

• a collective agreement is made after 26 March 2006, or an Individual Transitional Employment Agreement (ITEA) came into operation before the commencement of the NES, or
• there is an instruments that excludes the provisions from an employees pre-modern award in relation to LSL, and the entitlements to LSL are contained in the instrument itself, including;
• Enterprise agreements made before 1 July 2009 and approved by FWA,
• Preserved state agreements, a certified agreement, AWA, section 170MX award made before 26 March 2006,
• A workplace determination made by Fair Work Australia, or
• An old IR agreement approved by the AIRC before December 1996.

Also, the provisions relating to LSL contained in any enterprise agreement made during 1 July 2009 – 31 December 2009 will overrule any state based legislation.

If an employee is covered by a modern award, or if there are no award or agreement terms regarding LSL, the state based provisions apply.

How much continuous service will an employee need to do to be eligible for LSL and what do they get?

In general, depending in the state/territory that the employee resides, or other instrument which may be applicable,  an employee may have to serve between 7 to 15 years to be eligible for LSL. Any untaken LSL is payable on termination, at the employees current ordinary rate of pay, with some states providing for a pro-rata payment on termination depending on the circumstances surrounding the termination.

The laws are complex, but an attempt to summarise the entitlements has been made in the table below, and some practical considerations for employers that come out of the relevant legislation have been addressed in the commentary below.

How is LSL paid?

LSL can be taken during the course of employment, or paid out as a benefit upon termination. If it is taken during the course of employment then the employee takes leave from work and is paid according to their current rate of pay. If it is paid out at termination then, the amount will need to be calculated (perhaps on a pro-rata basis depending on which state you are in) and then paid out, subject to relevant taxation laws. The amount is based on the employees current rate of pay.

In some select jurisdictions, LSL can be cashed out as detailed above, although there may be certain circumstances that may need to be demonstrated prior to any cashing out occurring, so it is best to refer specifically to your own state legislation before considering this.

What counts as continual service?

The entitlement to long service leave is based on an employees continual service to an employer for the periods specified in the table above. Time spent on paid leave will count towards this continual service. Other periods of unpaid leave will not count towards LSL accrual (such as parental leave) but will not break the continuous employment relationship with the employer. For example, if Mary (NSW) works for her employer for 6 years, then takes a year off on parental leave and then returns to work, she will be entitled to LSL after 11 years with the employer (provided there are no more periods of unpaid leave taken).

What about part-time or casual employees?

Part time employees are still eligible to receive LSL, subject to the minimum service requirements being met. In some instances, an employers hours may have varied over the course of their employment. For example, if a full time worker moves to part time. The relevant LSL Acts outlined above will give guidance on how to calculate LSL payable in these circumstances, but as a general rule, LSL is payable based on the hours that the employee is doing immediately before taking LSL. If those hours have varied in the last twelve months, then it may be stipulated that an average amount of hours is calculated.

Casual employees, may, in certain circumstances, be eligible for LSL. This will depend on the jurisdiction in question, but generally, if the casual workers hours are regular in nature and there has been no break in employment, the employee will be entitled to LSL benefits. Some states impose a minimum monthly hour’s amount for a casual employee to benefit from LSL also. LSL benefits for eligible casual employees are generally calculated based on an average amount of hours over their whole employment period.

What are the notice and consent obligations?

The notice requirements for employees taking long service leave will vary from state to state, and in some cases, a pre-modern award or agreement will set out what these requirements are. Employers and employees will need to check the provisions that are applicable to them, but generally, most long service leave will require at least one months notice to be given by the employee. An employer cannot unreasonably deny long service leave.

What happens upon the sale or transfer of a business?

We covered the definition of a ‘transfer of employment’ in our earlier annual leave article. To recap though, a transfer of employment occurs when an employee moves from one employer (the old employer) to another employer (the new employer) within three months of a transfer of business and performs substantially the same work for the new employer as they performed for the old employer.

A transfer of employment can also occur where an employee moves from one employer (the old employer) to another employer (the new employer) who is an associated entity of the old employer within a specified time frame of ending employment with the old employer (this time frame may vary state by state).

A transfer of business can occur where one of the following connections between the old employer and the new employer exists:

• a transfer of assets,
• outsourcing,
• insourcing, or
• where the two employers are associated entities.

When there is a transfer of employment, the period of service with the old employer will generally count as service with the new employer, and the employee will keep any LSL they had accrued with the old employer.

However, in some states, where the employers are not associated entities, the new employer can decide not to recognise an employee’s service in relation to LSL with the old employer. In such cases, the old employer will be required to pay out the employee’s untaken accrued long service leave. This step needs to be approached with caution however, as in some jurisdictions, it is unlawful to cash out long service leave early, and what is determined as a transfer of business may be complex.

What are the penalties for non-compliance with the legislation?

All LSL is required to be paid in full in all instances where LSL is payable. In addition to this there are various penaltiesfor employers who do not comply with the relevant LSL laws. These are normally expressed by way of ‘penalty units’ imposed for those who do not comply. In most jurisdictions the fine for a breach of the relevant LSL legislation is around 20 penalty units, which at the moment equates to approximately $2200 (subject to change).  On top of this, in some states, criminal convictions can apply to employers who fail to make the long service leave payments to their eligible employees.

Points for Employers.

• Have a thorough understanding of the LSL entitlements that may be payable to your employees.
• Not all employees may be entitled to the same amount of LSL, depending on the award, agreement or instrument that is applicable to them.
• Keep adequate records of start dates for all employees and consider keeping a journal of outstanding long service leave in a excel spreadsheet, updated monthly.
• The laws in this area are quite complex, so if in doubt, seek help from a professional as to how the LSL legislation applies to you and your employees.

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Author: Danica Leys
For more information, please contact us at enquiries@blandslaw.com.au
It is intended as a guide only and does not replace specific legal advice. ]]> http://blandslaw.com.au/articles/employee-leave-entitlements/long-service-leave/feed/ 0 http://blandslaw.com.au/articles/employee-leave-entitlements/leave-without-pay/ http://blandslaw.com.au/articles/employee-leave-entitlements/leave-without-pay/#comments Wed, 21 Mar 2012 05:54:59 +0000 admin http://blandslaw.com.au/?p=1103

Entitlement to Leave Without Pay

While there is no general entitlement to unpaid leave under the Fair Work Act 2009, there are some provisions that deal with when unpaid leave can be taken and in other cases it is a matter for agreement between the employer and employee.

Unpaid Leave under the Fair Work Act 2009

• Employees with at least 12 months continuous service are entitled to 52 weeks of unpaid parental leave (which can be extended for a further 52 weeks).
• Employees can take unpaid personal/carer’s/compassionate leave when they have used up all of their paid personal/carer’s/compassionate leave.

Other Unpaid Leave

Leave without pay can be taken at other times by agreement between the employee and employer.

Impact of Taking Leave Without Pay

Public Holidays

An employee is not entitled to be paid for public holidays that fall during a period of leave without pay.

Annual Leave

An employee absent on leave without pay does not accrue annual leave during that period of absence.

Sick Leave

As with annual leave, sick leave does not continue to accrue while an employee is on unpaid leave.

Parental Leave

Leave without pay does not break the continuity of service provisions so that, if an employee wishes to take unpaid parental leave and the 12 month period of continuous service with the employer includes a period of unpaid leave then the employee is still entitled to the unpaid parental leave.

Long Service Leave

Long service leave will continue to accrue while an employee is on leave without pay as the employee’s continuity of service includes periods of unpaid leave.

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Author: Christine Broad
For more information, please contact us at enquiries@blandslaw.com.au
It is intended as a guide only and does not replace specific legal advice. ]]> http://blandslaw.com.au/articles/employee-leave-entitlements/leave-without-pay/feed/ 0 http://blandslaw.com.au/in-the-media/wide-open-cyberspace-brings-farm-to-the-city/ http://blandslaw.com.au/in-the-media/wide-open-cyberspace-brings-farm-to-the-city/#comments Tue, 28 Feb 2012 01:14:15 +0000 admin http://blandslaw.com.au/?p=1087

This article appreared in the technolgy section of the SMH

Wide open cyberspace brings farm to the city
DANICA LEYS‘S minimalist office in a North Ryde commercial district does not get much further from the farm gate.

But it is a sign of the times. The solicitor took out a statewide country women’s award last night – not for mustering or harvesting, but for tweeting.

As co-developer of the online farming forum AgChatOz, the 32-year-old believes social networking sites can help close the gap between food producers and city folk walking the supermarket aisles.

”There’s no disputing that there’s definitely a divide there and that divide has probably grown over the years,” she said.

…….  Urban dwellers traditionally had more relatives in country areas, and when they visited them they developed a connection to and understanding of rural life and food production, Ms Leys said. ”That happens less and less. AgChatOz, I think, helps bridge that divide.”

At Parliament House in Sydney last night, Ms Leys was named the winner of the 2012 Rural Industries Research and Development Corporation NSW and ACT Rural Women’s Awards for her skill at the keyboard.

Wide open cyberspace brings farm to the city

An Article in BRW

When Qantas invited its Twitter followers to describe a luxury inflight experience to win a gift pack, the airline presumably was seeking to repair relations strained from its grounding of the entire fleet a few weeks earlier in response to a labour dispute.

Instead it faced an almighty backlash. Within hours, thousands of angry and unimpressed customers took to the social media site to voice their views. Responses ranged from “Getting from A to B without the plane being grounded or an engine catching fire” to “More than 3 mins notice that the whole service has been grounded #QantasLuxury” to “#QantasLuxury is a massive executive bonus while your workers starve and your former customers choke”…..

To read the rest of the article go to http://www.brw.com.au/p/sections/professions/more_than_social_xSkeSQBU5dohjJWFCXQIbN

…… Blands Law general manager Vivienne Storey, says it’s smarter to embrace the technology and set the terms for its use with a tailored policy than to ban it.

“This will enable your staff to freely participate in social media but also remain clear and informed about what is acceptable on these platforms,” Storey says. “Social media is the tool. If employees are time wasting on social media, they’d be time-wasting anyway.”

Investing time and resources to ensure the policy is implemented effectively is the best course of action. “Implementation is crucial, it’s more important than the policy in some ways,” Storey says. “Employees need to have a thorough understanding of the contents of the policy and the ramifications for breaches if it is to be successful.”

Law Firm Helping Companies Manage Social Media Risk

In an historic first in Australia, a law firm (BlandsLaw)has developed a suite of social media policy products, designed to assist companies and suppliers manage their social media risk. As BlandsLaw has extensive expertise in workplace and commercial law and is an active user of social media, they are well placed to advise companies on the many aspects of social media.

“I would call us a ‘social’ law firm” says General Manager, Vivienne Storey. “Meaning that social media is integrated into the way we do business, not just used as an add on or marketing afterthought.”

Australians are among the most avid consumers of social media worldwide with nearly 11 million users on Facebook as of December 2011(socialmedianews.com.au). And it’s not just about sharing photos and status updates with friends. Businesses are increasingly using social media to engage with customers. LinkedIn Australia, the professional social networking site, now has over two million members.

With an increasing number of cases relating to social media in the courts, this suite of social media policy products is a timely resource for employers. Implementing a social media policy helps ensure employers are across the potential risks faced with the increasing use of social media in the workplace.

Postings on Facebook and the general use of social networking sites by individuals to display their displeasure with employers, employees and coworkers are becoming common. Nearly every business is affected by it. Even a business that doesn’t make use of social media for recruiting or branding purposes can be affected by what others post about it, including their own employees. And unless employees have clear guidance to tell them what type of social media posting is acceptable and what is not, they may think they have free reign to post whatever they want, including information about the company.

• Some of the risks companies face include:
• Leaking of confidential information (often inadvertently)
• Bringing the company into disrepute
• Potential unfair dismissal claims
• Public airings of employee grievances
• Ambiguity regarding ownership of social media accounts
• Adverse impact on brand reputation

The recent case where Fair Work Australia found against Linfox for an unfair dismissal case, where an employee was making disparaging remarks about his employer on Facebook, further highlights the need to have a well thought out social media policy that employees are trained on. Policies should be comprehensive and tailored to the work place in order to be relied upon in a court case. “Additionally, a strategically executed social media policy can be an invaluable training resource to ensure employees understand the social media medium and it’s inherent risks”, says Vivienne.

The social media policy products have been separately branded under the MySocialPolicy identity and more detailed information can be found at http://mysocialpolicy.com.au

Press Contact

Vivienne Storey

General Manager

BlandsLaw

Tel: 61 2 98055600

www.blandslaw.com.au

www.mysocialpolicy.com.au ]]> http://blandslaw.com.au/media/law-firm-helping-companies-manage-social-media-risk/feed/ 0 http://blandslaw.com.au/media/using-social-media-know-your-legal-risks/ http://blandslaw.com.au/media/using-social-media-know-your-legal-risks/#comments Tue, 24 Jan 2012 10:13:02 +0000 admin http://blandslaw.com.au/?p=1047

An Article in  the SMH MySmallBusiness - Using social media? Know your legal risks

If one of your employees posted a dodgy comment on Facebook, or a customer tweeted a false claim against your business, would you know your legal rights?

The benefits of social media are becoming increasingly obvious to many SMEs, but the medium comes with its own array of risks – unless you develop a robust media policy and thorough staff training, experts say……

Reputation is everything

Vivienne Storey, general manager of law firm BlandsLaw, agrees that staff training is key to mitigating not only legal risks, but also the risk of damaging or ruining a business’ reputation.

“Social media is just another tool – and just like driving a car, you need rules to make it safe to use,” says Storey.

“Businesses have to understand that social media is a very public medium and that what’s said on social media platforms is permanent. Smart companies educate their staff about this and once people understand that, there’s usually a shift in the way it’s used.”

Storey says it’s essential for every business to develop a social media policy and highlight privacy and confidentiality issues to staff.

“As the laws in this area are still developing, it’s important to have an ongoing discussion about what the company’s policy is,” she says.

Storey uses BlandsLaw’s own social media policy as an example.

“Our policy is very free. We allow staff to access social media at any time during work hours and everyone here is allowed to talk on behalf of the organisation and about the organisation. But there are only six of us in the firm. If you’re a larger business, you probably don’t want everyone to talk on behalf of the business,” she says.

“Social media is just a tool, but it is a high risk, high benefit tool. What’s important is trying to help people understand how to manage those risks through education and clear policies.”