Institute of Certified Bookkeepers

Workforce GuardianAustralia’s employers - your clients - are confronted by some of the world’s most complex employment laws. They’re expected to understand and comply with Modern Awards, the National Employment Standards (NES), the unfair dismissal laws, the record-keeping requirements and much, much more.

However, there are certain mistakes the team here at Workforce Guardian encounter over and over again. So this month, we thought we’d tackle each of them head-on so that you can help your clients fix them before it’s all too late!

Mistake #1: Thinking Salaries Make a Difference

Many employers still think that paying an employee a fixed salary (as opposed to an hourly wage) means they no longer need to provide their Award-covered employees with overtime rates, penalty rates, allowances or annual leave loading. Unfortunately, this is a very common mistake.

If an employee is covered by a Modern Award, and if that Award provides the above-mentioned entitlements, they must be provided to employees each time they’re triggered regardless of whether or not the employee is paid a wage or a salary.

The only time these Award-based monetary entitlements do not need to be provided is when:

  1. the employee has been issued with a contract (or some other written agreement) which makes it clear that the above-Award salary is inclusive of Award-based monetary entitlements, and
  2. the employee’s salary is at least equal to or more than the amount the employee would have received had they been paid in accordance with the Modern Award.

If these requirements have not been met, the employee’s above-Award salary will often be treated by the authorities as the employee’s base rate, and penalty rates, overtime rates, allowances and other amounts will then become payable on top of the salary.

Mistake #2: Not Complying with Modern Awards

An ICB member recently contacted us with what appeared to be a straightforward question: a client runs a retail business and has a part-time employee who works different days every week. When the Anzac Day public holiday arrived, the client’s employee wanted to be paid for it even though the shop was closed, while the employer was adamant that payment wasn’t required because the employee ‘may not have worked that day anyway.

As the employer had correctly noted, the answer to whether or not payment was required depended on whether the employee would usually have worked on the particular day of the week in question. Given this, we requested a copy of the written agreement regarding working hours which the General Retail Industry Award 2010 states must be made when an employee is engaged on a part-time basis. Unsurprisingly, we were then advised no such agreement had been made. This had two consequences:

  1. the employer was in clear breach of their legal obligations under the Award, and was accordingly at risk of a potential penalty, and
  2. it was impossible for us to confirm whether payment was required for the day in question

As the Award itself assumed a written agreement had been made regarding part-time hours of work - and because the employer had failed to comply with that particular requirement - it became impossible for the employer to confidently determine whether payment for the public holiday was required. Put another way: non-compliance with one clause of an Award almost always leads to breaches of other clauses.

The easiest way to prevent such dilemmas is to simply read - and fully comply with - each of the specific obligations imposed by any applicable Modern Awards.

Mistake #3: Believing HR Myths

Very few employers still believe in the Tooth Fairy or Santa, but plenty still believe

  • an employee must be given three written warnings before being fired,
  • you can dismiss employees without notice during a ‘probationary period’
  • casuals don’t accrue long service leave
  • small businesses are exempt from the unfair dismissal laws, and
  • written agreements override the statutory obligations imposed by the NES and Modern Awards

Believing common HR myths can result in HR disaster – claims can be costly, time-consuming, and very embarrassing. Obtaining advice from properly-qualified experts is, accordingly, essential. Our nation’s employment laws have changed dramatically over the past 20 years, so it’s worth making sure your clients aren’t applying old employment laws to today’s current employees.


Updated: 16th May, 2016