Do you have Written Employment Contracts?

Every employee has a contract of employment. When a person accepts an offer of employment a contract is made. The contract can be written, oral, or both. However, anything short of a well written contract can invite trouble where the contract is disputed or terminated.

A written contract lets you address employment matters important to your business. It should be in plain English; cover all terms of employment; comply with legal entitlements; and be signed by both parties, preferably before employment commences.

Many employees are covered by ‘awards’ and it is not uncommon to think a written contract is unnecessary. But, awards don’t cover all terms of employment. A written contract provides protection to an employer with trade secrets and intellectual property; it spells out an employee’s duties; provides grounds for termination without notice, and more. Importantly, awards cannot be overridden by a contract, even where the employee is paid a ‘salary’ above award wages. The award still applies and the employee may claim other award entitlements e.g. overtime rates. A well drafted written contract can minimise this risk.

Employees can also be ‘award free’ meaning no award applies and their terms of employment are mostly found in the contract, making a written contract vital. Generally, managers are not covered by awards. Managers earn more money and know more about your business. Any dispute over the contract can be costly and disruptive. A written contract can outline its duration; specify remuneration and the process for termination including a notice period. Without a written notice period an ‘award free’ employee could claim ‘reasonable notice’ which may be far greater than the legal minimum period that can be used in a written contract.

KEY POINT: A comprehensive written contract of employment ensures both parties know their entitlements and what’s expected of them - its absence exposes an employer to a potential minefield of claims.

Are you paying employees correctly?

There has been a lot of confusion since WorkChoices about award rates of pay and minimum entitlements for employees. We expect to see even more confusion over the next 12 months with further new laws and the introduction of Modern Awards from 1 January 2010.

The Workplace Ombudsman is responsible for ensuring employees receive their minimum entitlements under Federal workplace relations laws and awards. Its Inspectors have the power to investigate suspected breaches and may do so as a result of a complaint from an employee or through a ‘target’ audit where they select an industry and conduct random audits.

If you receive a letter from the Workplace Ombudsman you must cooperate during the investigation. By not doing so, you will greatly increase the risk of being prosecuted.

The Inspectors can prosecute an employer for breaching the award/legislation resulting in the employer being ordered to pay the underpayment in entitlements, and possibly fined up to $33,000 per offence. If the Company is unable to pay, the Inspectors can prosecute the directors and managers personally.

The penalty imposed can be far greater than the underpayment. For example, the prosecution of a restaurant in the ACT saw $3,816.33 of underpayments recovered but the court imposed a penalty of $64,000 against the employer for breaches of their workplace obligations.

KEY POINT: It is vital that employees are paid their full entitlements. Legislation and awards set minimum entitlements and there are no excuses for paying less. The award still applies even where an employee receives a salary greater than the award wage – the employee may still be entitled to overtime, penalty rates, etc depending on the wording of their contract. 
 

Apprentice awarded $11,000 after pregnancy discrimination

The Anti-Discrimination Tribunal of Queensland has awarded an apprentice hairdresser $11,500 after finding she had been discriminated against because she was pregnant.

The apprentice alleged discrimination on the basis of her pregnancy after her employer verbally abused her when she sought time off for an antenatal doctor’s appointment. The employer’s verbal abuse was to such an extent that she felt she had no choice but to resign. She said this conduct had been preceded by weeks of ‘antagonistically nitpicking behaviour’ by her employer which started when he found out she was pregnant.

Before she became pregnant the employer made comments to her that if she fell pregnant she would be sacked. The employer maintained he had said this as a joke but the Tribunal found that a young woman in the employee’s position had reasonable cause to consider the comment as one she should take seriously.

The employer believed that as an apprentice the employee was contractually bound to work for him and she was not to become pregnant or impose upon him any of the consequences of that pregnancy during the apprenticeship.

The Tribunal found the employer had discriminated against the apprentice because she was pregnant and that she would have been dismissed if she hadn’t resigned. The Tribunal awarded $5,000 compensation and $5,373 for loss of wages plus interest.

KEY POINT: Discrimination laws apply to apprentices in the same way as to other employees. It is unlawful to treat any employee that is pregnant less favourably to an employee who is not pregnant or to put in place systems that only a non-pregnant employee can comply with.