According to recent reports, new workplace reforms may change the shape of your business and possibly your job.
It is hard not to feel like you are in information overload. We know it is critical to understand how the new Legislation effects your business particularly for smaller companies (100 and under employees). For those employers the reforms can have a major impact.
Ironically, it is smaller companies that usually don't have a dedicated Human Resource area and therefore the resources to understand the impact on their business.
Associate Professor Rowena Barrett of Monash University's Family and Small Business Research Unit, says WorkChoices delivers big positives to small business, in the opportunity to plan and negotiate for the most effective workforce. She goes on to say in an era of heightened consumer expectations that has substantially moved on from 9 to 5 opening hours, it's time to catch up on HR practices - an area where small business has typically lagged.
Remaining competitive in the tightening skills shortage market is relevant for every employer. So what can we take from the new WorkChoices legislation and turn into a positive for our business?
If the intention was truly to create a simpler, fairer and more flexible workplace, how do we translate this to our business?
- AWA/Collective Agreements - cost savings / administration savings?
- Converting any savings to retention and attraction
- Differentiating
Will your business buy into the new flexibility to negotiate, not only wages but by offering appealing terms and conditions?
Employers have used AWA over recent years rather than persevere with the current award structure. It is not uncommon for employers to have a number of different awards applying to their employees. The drivers have been certainty, flexibility and cost efficiencies. These changes may include:
- Converting casual staff to part time
- Establishing flat rates of salary which include overtime, shift allowances and penalties for work on a Saturday, Sunday or Public Holiday
The changes can result in some significant overall cost savings in terms of direct wage costs and on costs.
So, if an employer does their necessary homework and concludes an AWA could yield cost savings, what do you do with those cost savings? If this is an opportunity to differentiate ourselves as employers perhaps putting those savings back into attraction and retention of staff strategies is the answer.
Even if you do not go down the path of an AWA or collective Agreement, will you use this opportunity to tighten up your employment contracts, policies and procedures? Administration savings, cost savings could be converted back to retention and attraction.
It is important for employers to think outside the square. What is necessary is a critical understanding of your employees and what motivates them. This can be different for Baby Boomers, Generation X and Generation Y.
In any strategy, consider the total salary package you will be paying to the employee. There are limited benefits made to employees that are exempt from FBT. Most benefits will attract FBT and could incur additional costs like payroll tax and workers compensation.
Working with your Solicitor and Client Relationship Manager to maximise this opportunity as you progress down this path is essential. In an environment of uncertainty employees will be looking for "what is in this for me" before they sign any new agreements.
- Impact on budgets / cash flows
- Payroll systems changes
- Recording hours and start/finishing times
- Policies and procedures/key performance indicators/employment contracts/measuring and recording.
- Take stock of employee entitlements prior to 27 March 2006
- From 27 March 2006 amend your payroll system for new entitlements and changes in entitlements
- Consider the impact of changes to entitlements to your budgets and cash flows
- Evaluate and implement any of the record keeping requirements
- Don't panic
Drill down to individual circumstances
- Governance - move toward "Action List"
- Continually evolving
- Review existing contracts
- Review your HR policies
- Communicate with your staff
We recommend meeting with an Employment Solicitor and your Client Relationship Manager to drill down to individual circumstances. Your aim should be to have the Solicitor assist you to devise an action list of what your business needs to do over say the next 6 months. It should be a document that is continually updated.
Not only is the action list about gaining certainty and direction but it is good corporate governance to show your actions to deal with the changes.
- Perception to market place
- Stigma of high turnover
- Federal Govt will pursue companies who appear to be acting in a way not consistent with the spirit of the legislation
Put simply good people are valuable and hard to find. Despite the press to the contrary, the vast majority want to do the right thing and work cooperatively with their employers.
This is an opportunity to consider how you approach your human management and remain competitive in this tightening skills shortage market.
Be prepared to defend any use of "genuine operational reasons" as a means for terminating staff.
If your business is undergoing a restructure or there is a business acquisition or sale, be aware of the new requirements regarding transmission of industrial instruments. Ensure that required notices are lodged with the Office of Employment Advocate. Given the penalties for non-compliance with the legislation of up to $33k ensure you seek advice in relation to your obligations in respect of transferring employees.
If you have any queries about these new requirements please contact Kylee Dare on telephone (02) 4935 6191 or email kdare@lawlerpartners.com.au
