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Deadline 1 March 2020 - How do the new annualised salary provisions affect your business?

A large number of employers will be affected by the introduction of new annualised salary provisions from 1 March 2020. Over 20 modern awards will have the new or amended annualised salary provisions and it may mean big (or small) changes for your business.

We have recently seen an increasing number of underpayment claims and a renewed focus by the Fair Work Ombudsman on pursuing these claims. Even if the new provisions do not apply to your business, it is a timely reminder to undertake an assessment of your agreements and record-keeping procedures to ensure you are compliant and minimise the risk of being on the receiving end of an underpayment claim.

Do you currently pay a salary to your award employees?

If you are already paying a salary to affected employees, you will fall into one of the following categories:

  1. Paying salary but no written agreement or employment contract
  2. Paying salary under an agreement or employment contract that has no buyout or offset clauses (or clauses are non-compliant)
  3. Paying
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New annualised salary provisions to take effect 1 March 2020

As part of its 4-yearly review of modern awards, the Fair Work Commission is making key changes to the annualised salary provisions of many modern awards from 1 March 2020. Most of the affected awards already include annualised salary provisions, however the new provisions will also be newly incorporated into the Pastoral Industry Award 2010, Horticulture Award 2010 and Health Professionals Award 2010.

The new provisions introduce a number of obligations on employers where annualised salary arrangements are entered into with award employees, including detailed record-keeping and annual reconciliations each 12 months from the commencement of the agreement.

Key points to note about the new provisions

  • Not all annualised salary arrangements require agreement with the employee. While in most cases employee agreement is required, employers of “Category 1”[1] employees can implement an annual salary arrangement without employee agreement.
  • Notification and record-keeping obligations for employers are more onerous and require employers to:
  1. notify employees of the specific award provisions that are satisfied by the annualised wage
  2. notify employees of how
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Terminating employment during probation – why you should provide a reason

Most employment contracts contain a probation clause stating that, during the probation period (usually 3 to 6 months from the employment commencement date), either party can terminate the employment by providing one week’s notice. Even if there is no probation clause, or no employment contract, a minimum employment period applies before an employee is eligible to make a claim for unfair dismissal. For a small business with less than 15 employees that minimum period is 12 months; for others it is 6 months. The practical effect of this is that the employer can terminate the employment without cause during the minimum period simply by providing the required notice.

However, many employers do not realise that there is no minimum employment period for other types of claims such as adverse action and discrimination claims. If an employee is terminated and believes that the reason falls within the general protections provisions, they are entitled to bring an adverse action claim, with the onus then falling on the employer to show that the

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Workplace investigations can be an important and useful tool. When used in the right situations and conducted appropriately a workplace investigation can resolve a range of issues including bullying and harassment complaints. A recent case, however, has highlighted the ramifications that may occur when an investigation is not conducted properly.

In Romero v Farstad Shipping (Indian Pacific) Pty Ltd[1] a shipping officer sent an email to her superiors alleging bullying by her ship’s captain during a 12 day sea voyage. In addition to Romero’s bullying allegations, the captain separately raised issues of competency in relation to Romero.

The employer, Farstad, proceeded to investigate the issues although failed to follow their own internal policy and the processes outlined within in. Specifically, Romero’s bullying complaint was investigated as a formal complaint although it had not been formally lodged as a complaint and this had not been the intention of Romero’s email. Added to this, the captain was interviewed before Romero (the complainant) about the alleged bullying and the issues of competency

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