Workplace Insight

Split full bench ruling upholds cashing out annual leave appeal

Workforce — Fri, 09 Dec 2011 01:10:53 +0000

A Sydney company which has incorporated annual leave entitlements into its hourly rates of pay is not breaching the National Employment Standards (NES) or misusing ‘cashing out’ provisions, a Fair Work Australia full bench has ruled.

In a split decision, Vice President Graeme Watson and Senior Deputy President Jonathan Hamberger quashed SDP Matthew O’Callaghan’s August decision to reject an enterprise agreement (EA) between Hull-Moody Finishes Pty Ltd and seven employees. Commissioner Ian Cambridge dissented.

SDP O’Callaghan had ruled the Hull-Moody EA breached the NES and ss 92-94 of the Fair Work Act. Clause 9 of the EA says workers will be paid a fixed hourly rate “which includes payment in advance for some entitlements arising under the Fair Pay and Conditions Standard”. Workers are allowed to request a deduction in their hourly rate of up to $3 per hour to be paid out when they take leave.

VP Watson and SDP Hamberger noted the hourly rate included overtime payments, annual leave pay and annual leave loading. “We therefore disagree with the SDP that the hourly rate specified in the agreement is the base rate of pay for the purposes of s 90,” they said. But they said the basis for rejecting the EA was not whether it breached s 90 but that its terms were not consistent with s 55 (which deals with the interaction between the NES and EAs).

The real difference is timing

VP Watson and SDP Hamberger noted the EA did not take away the workers’ entitlement to take leave. “Nor are they deprived of payment with respect of leave that they take or that is untaken on termination of their employment,” they said. “The real difference between the conventional operation of the NES and the arrangement under this Agreement is the timing of payments,” VP Watson and SDP Hamberger said. “In our view there is no obligation in the NES to make a payment for annual leave at a particular time, although a delay in payment may be in a different category. Even if there was an obligation to pay for leave at the time it is taken, we do not believe that payment in advance amounts to the exclusion of the entitlement to payment.”

No cashing out involved

VP Watson and SDP Hamberger said the Hull-Moody arrangement did not involve cashing out annual leave as “the payment incorporated into wages does not extinguish the entitlement to leave”.

They noted there was no clear definition of cashing out in the Act or in most dictionaries. So they defined it as “the making of a payment instead of recognising an entitlement to paid leave”. “In our view it is not permissible to speculate as to how employees will conduct their leave arrangements under the Agreement or consider whether the arrangement encourages them to adopt one approach or another.”

VP Watson and SDP Hamberger found SDP O’Callaghan erred in ruling the EA breached the NES. “We find that the payment arrangement in the Agreement does not exclude the NES because the NES is expressly adopted, each of the annual leave benefits in the NES are reflected in the Agreement and the payment arrangement does not amount to cashing out of annual leave.”

They referred the matter to SDP Hamberger for the remaining statutory tests.

More harmful than orthodox cashing out

In dissent, Cmr Cambridge said the decision had broad ramifications and could undermine the legislative safety net provision in s 93(2).

“The orthodox or conventional cashing out from an accumulated entitlement to leave has clear restrictions placed upon it as safeguards to protect the minimum benefit of four weeks paid annual leave,” he said. “Even with adoption of the description of ‘buying out’ the annual leave by hourly rate, the outcome is more harmful than conventional cashing out because an employee does not first accrue at least four weeks entitlement to paid annual leave. The buying out involves conversion of leave into payment of entitlements including the minimum four weeks which would otherwise be preserved under conventional cashing out.” Cmr Cambridge was also concerned about the absence of counter argument against the EA’s approval.

(Warren; Hull-Moody Finishes Pty Ltd; Sidotti [2011], FWAFB 6709, 29/11/11)

Source: Thomson Reuters Workforce news, 29 November 2011.

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18% of the working day wasted

HR Report — Sun, 13 Nov 2011 23:00:50 +0000

While Australian workers are motivated and work some of the longest hours in the developed world, a new survey has found they spend 18% of their day on work that wastes time and effort, according to the Ernst & Young (E&Y) Productivity Pulse survey.

E&Y calculated the 18% figure after deducting the 24% spent on personal development, networking and other organisational curricular activities. Employees spend only 58% of their day doing work of ‘real value’ to the organisation, it said.

But the low productivity could not simply be blamed on Australian workers. The survey of 2,500 employees found the biggest influence on productivity was management (54%). Organisational structure (23%), technology (15%) and innovation (8%) were ranked substantially lower on the scale.

E&Y said now was the time for business to focus on people management so as to fully utilise skills, make learning and development opportunities available and take career progression seriously.

Tech retail’s saviour?

The Pulse survey found Australian employers had not embraced the IT revolution and significant technological changes were needed in computer software and applications. About 40% of employees said they did not have access to the right technology, while 42% said they did not have the right training to apply technology effectively.

The public sector rated the worst in using technology to increase employee productivity over the last 12 months (36%). Meanwhile, retail ranked the highest in under-using technology.

“Businesses should be harnessing technology tools and strategies to more effectively collect and use consumer data to tackle online competitors head on,” the report said. “Smart retailers will look to enhance the in-store experience.”

Innovation: empower, not just employ

Innovation was widely recognised as a factor to increase productivity, although organisations in competitive markets – such as finance and insurance – were more inclined to take risks and try new things. Overall, 48% of employees said good ideas were not implemented. Ernst & Young said the onus was now on business leaders to empower their employees to generate ideas that help drive the organisation forward.

Employees got the blues over red tape

About 40% disagreed their organisation operated effectively, and 20% said it needed to reduce red tape. Sixteen per cent said processes and systems needed to be simplified.

Motivation: use it or lose it

Lack of employee motivation was not a productivity issue. The majority of respondents (71%) wanted to do their job to the best of their ability. Sixty eight per cent said they were proud to work for their employer and 69% believed their work was valued. An overwhelming majority (78%) said they had a clear vision of what was expected of them. Despite this, only 62% said their skills were strongly utilised by their employer.

Pushing the employment case for mature workers, the most motivated were those from the 65 plus age bracket at 85%. That was in contrast to 15-19 year olds at 53%. Older workers were also more motivated by the work itself rather than incentives such as salary, work life balance or employment security. Pay was generally disregarded as a ‘silver bullet’ to raise productivity, with only 13% of employees citing it as a driving factor.

Meanwhile, 32% of workers said they intended to leave their organisation within 12 months, with a further 35% looking for external opportunities.

Source: Thomson Reuters’ HR Report, 19 October 2011.

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Workers urged to dob in bullies

Workforce — Thu, 10 Nov 2011 23:00:24 +0000

The Finance Sector Union has set up a hotline for workers to dob in bullying. The FSU says so far this year it has received 516 calls for help from members in bullying matters, and represented 298 members in formal cases. FSU Acting National Secretary Chris Gambian said: “In a workplace culture that promotes short term incentives based on sales volumes, where your next pay increase or even your job security is tied to how much you can sell, and where no amount of profit is ever enough, the pressure is on. Bullying managers breed in that sort of environment, and workers are starting to push back and say enough is enough.”

Source: Thomson Reuters Workforce news, 28 October 2011.

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Internal candidate likely to fill FWA President vacancy: Prof Stewart

Workforce — Mon, 07 Nov 2011 23:00:44 +0000

While the IR world takes in the news of Fair Work Australia President Justice Geoffrey Giudice’s surprise early resignation, many are already discussing his likely replacement. Industrial Relations expert Adelaide University Professor Andrew Stewart says the FWA presidency is most likely to go to an internal candidate. Justice Giudice announced on October 27 that he will stand down as president on February 29 next year (WF17974). He had been scheduled to leave on his 65^th birthday, which is towards the end of 2012. Justice Giudice has been in the role since the inception of FWA in 2009 and held the Australian Industrial Relations Commission presidency for 12 years before that. “After more than 14 years it is time for a change in the leadership of the national industrial relations tribunal,” Justice Giudice said. “I am grateful to have had the opportunity to serve in what continues to be a most important national institution. FWA is a strong organisation and I am sure it will continue to flourish.” Stewart told Workforce Justice Giudice was regarded as a highly successful leader and in many senses he had picked a good time to step down. “The [Fair Work] legislation is well in the process of being bedded down and it doesn’t seem to be likely there will be any major changes soon,” he said. “This gives his successor an opportunity to settle in before any major changes – if any – happen.” While stressing he had no “inside knowledge”, Stewart said he would be surprised if Justice Giudice’s “ill treatment” during Senate Estimates – especially from Coalition Senators Eric Abetz and Mary-Jo Fischer – had played no part in his decision to step down early.

Stewart said Justice Giudice’s replacement had been a major topic of discussion between IR professionals since the announcement. “I would think there are highly credible internal candidates for the role,” he said. That included Senior Deputy President Jennifer Acton, Vice President Graeme Watson and VP Michael Lawler, he said. Stewart noted it had been a long time since anyone other than an external candidate had been appointed to the position. But he suggested an external candidate was unlikely to be appointed while the Fair Work laws were still being bedded down and the review of the laws was imminent. “Having someone coming from outside would not be impossible but a challenge,” he said. “I suspect the govt will look at someone internal.” Before being appointed to the AIRC, Justice Giudice practised as a labour lawyer for 20 years. He had been an IR research officer for the Hospital Employees’ Federation and group IR manager at the Myer Emporium.

Source: Thomson Reuters Workforce news, 28 October 2011. Sign up to read the full article.

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‘Expecting’ in the years ahead

HR Report — Wed, 02 Nov 2011 23:00:44 +0000

A parental leave bill expected to be tabled this year is likely to include the “long-awaited” amendment to add ‘keeping in touch’ days’ to the FW Act, University of Adelaide law professor Andrew Stewart told HR Report.

The Paid Parental Leave and Other Legislation Amendment (Consolidation) Bill 2011 would mean workers would not be forfeiting leave if they returned to work during their parental leave period.

Under the Paid Parental Leave Act, a worker can already return to work for up to 10 ‘keeping in touch’ days – or any number of days for which they did not get paid.

The amendment is one of a number of upcoming events that may affect parental leave provisions.

A review of the PPL legislation set to begin in January 2013 will be required to consider mandating super contributions as part of parental pay.

The Coalition will continue to press to take the paymaster role away from employers and The Greens have said they would seek to increase parental pay from 18 to 26 weeks.

Source: Thomson Reuters’ HR Report, 19 October 2011.

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ABCC in the dark on BCII bill

Workforce — Wed, 02 Nov 2011 00:00:08 +0000

Australian Building and Construction Commissioner Leigh Johns has not been consulted by the Federal Government on the details of proposed new laws designed to abolish the body he heads, a parliamentary committee has heard. The govt has committed to re-introduce the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2011 by the end of the year to abolish the ABCC (WF17955). At a Senate Estimates hearing in Canberra on October 19, Johns was asked whether the govt had communicated with the cmn about the bill. “No, except I was advised of the intention to introduce the legislation,” Johns said. “My role is to implement legislation introduced by the govt … it is not my role to engage on matters of policy.”

Workplace Relations Minister Chris Evans confirmed the govt had not consulted Johns on the bill and would not elaborate on its detail. He did not comment on whether the govt planned to move Johns to head the proposed building industry inspectorate which will replace the ABCC if parliament passes the bill.

Big payout if ABCC abolished?

Johns told the committee he was one year into a three-year term as ABC cmr and was not sure what his future held if the cmn was abolished. Opposition WR spokesperson Senator Eric Abetz suggested Johns was in line for a big payout. “I have no idea Senator,” Johns said, prompting a quick response from Evans: “I advise Cmr Johns not to be hopeful of a big payout.”

Source: Thomson Reuters Workforce news, 21 October 2011.

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Office space: lean not keen

HR Report — Tue, 01 Nov 2011 00:19:36 +0000

Australia has begun to see its share of ‘hot desking’ recently, with Macquarie Group and GPT Group’s workplace transformations making news. But the impact these ‘workplaces of the future’ have on productivity is largely unknown.

However, one of the few academics to have investigated the area, University of Exeter psychologist Dr Craig Knight, argues leaner workspaces may have a negative effect on worker productivity. This month, Knight is touring Australia to speak on his 2010 study that involved more than 2,000 office workers and how office design and organisation affected them.

Knight found employees who had control over their personal workspaces were happier, healthier, identified more with their employers and felt more positive about their jobs. Workers with enriching office environments, such as with plants or artworks, were on average more than 15% more productive than those in lean, depersonalised environments. When employers involved staff in developing their own work environments, productivity could increase by up to 32%. His research showed that a ‘lean’ space over which employees had no control was the least productive work environment.

“Space has a massive impact on our comfort, contentment and identity,” Knight said. “When people feel uncomfortable in their surroundings, they are less engaged.”

Source: Thomson Reuters’ HR Report, 21 September 2011.

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Justice Guidice to resign as President of Fair Work Australia

Workplace Team — Thu, 27 Oct 2011 05:49:30 +0000

Justice Geoffrey Guidice has indicated that he intends to resign from his role as President of Fair Work Australia, effective 29 February 2012.

For all the details, subscribe to Workforce, a daily news service bringing you breaking news on national industrial relations issues. Workforce will be publishing a story on Justice Guidice’s resignation on Friday 28 October.

And the McCallum Medal winner is … Andrea Ho!

Tara Crisp — Thu, 20 Oct 2011 05:19:26 +0000

Back row L to R: Yangdao Wilson Lu (finalist), Professor Ron McCallum AO, Senior Deputy President Drake, Mr Joe Catanzariti, the Honourable Justice Buchanan, Fiona Graney (finalist). Front row L to R: Nicola Bailey (finalist), Andrea Ho (winner), Oliver Pase (runner-up).

Thomson Reuters would like to congratulate Andrea Ho, who won the annual McCallum Medal presentation competition on Wednesday the 19^th of October, held at the Sydney offices of Clayton Utz.

Andrea’s prize was the coveted McCallum Medal and she will have her name engraved on the perpetual shield. She also received a $500 book voucher from Thomson Reuters and $500 cash from The College of Law. Andrea’s article relating to her presentation will be published in the Summer issue of Workplace Review.

It was a close competition with strong presentations from all of the finalists, but Andrea Ho won on the night with her humorous presentation on the practical considerations of general protections applications where dismissal has not yet occurred. Andrea took on the role of a potential general protections applicant and walked through the (somewhat difficult) process of figuring out how and where to make a claim.

Andrea was competing against four other finalists, who were all invited to present their topic on workplace relations law to Professor Ron McCallum AO, a panel of three judges comprising the Honourable Justice Buchanan of the Federal Court of Australia, Senior Deputy President Drake from Fair Work Australia and Mr Joe Catanzariti from Clayton Utz and an audience of lawyers, judges, academics, family members and others.

The runner-up was Oliver Pase, who was also the winner of the 2010 McCallum Medal. Oliver spoke about the casualisation phenomenon of the workforce both in Australia and overseas. Oliver won a $300 book voucher from Thomson Reuters and $200 cash from The College of Law.

Nicola Bailey, Fiona Graney and Yangdao Wilson Lu, the remaining three finalists, also made strong presentations on a range of interesting topics.

It was an enjoyable and successful event, organised by the Employment and Industrial Relations Law Committee of the NSW Young Lawyers group of the Law Society of NSW and sponsored by Thomson Reuters, Clayton Utz and The College of Law. Thomson Reuters are honoured to be involved in promoting legal education and research in the area of workplace relations and extend our congratulations to all five finalists.

Professor Ron McCallum AO

Mr Joe Catanzariti, Senior Deputy President Drake, the Honourable Justice Buchanan, Professor Ron McCallum AO

Professor Ron McCallum awarding first prize to Andrea Ho

Justice Buchanan awarding the runner-up prize to Oliver Pase

The finalists with Professor Ron McCallum AO. From L to R: Fiona Graney (finalist), Yangdao Wilson Lu (finalist), Professor Ron McCallum AO, Andrea Ho (winner), Oliver Pase (runner-up), Nicola Bailey (finalist).

From L to R: Senior Deputy President Drake, Professor Ron McCallum AO, Mr Joe Catanzariti, the Honourable Justice Buchanan.

Advanced Payroll Workshops

Workplace Team — Sun, 09 Oct 2011 22:00:18 +0000

Thomson Reuters is hosting three advanced payroll workshops in Brisbane, Sydney and Melbourne.

Payroll covers a vast array of areas including taxation, human resources, awards, industrial relations, state requirements and superannuation. These one-day workshops will bring you up to date on the myriad of payroll functions and then delve into those complex or problem areas involved in administering payroll.

These workshops will help you:

understand the impact that Federal and State compliance issues have on the payroll function;
understand the new PAYG requirements commencing from 1 July 2012;
know how to calculate long service leave entitlements in each State;
learn how to process complex terminations, including mandatory tax requirements; and
refresh your knowledge of reportable fringe benefits and reportable employer superannuation contributions.

The workshops are on at:

Brisbane 21 October 2011 (Hilton Brisbane)
Sydney 28 October 2011 (Sir Stamford at Circular Quay)
Melbourne 10 November 2011 (StamfordPlazaMelbourne)

For more information and to register your interest, visit our estore or contact Lidia Misev on 03 8684 2179 and lidia.misev@thomsonreuters.com.