Keep abreast of recent developments in employment law.
Several developments in case law and changes to awards that will affect the timber industry have newly come into effect.
Case law hand grenade: accumulation of personal/carer’s leave
Full time and part time employees are entitled to a minimum of 10 days’ paid personal/carer’s leave under the National Employment Standards. This leave is available for times when employees are personally ill or injured, or need to take carer’s leave.
The legislation specifies that the leave accrues progressively throughout the year, according to the employee’s ordinary hours of work, and is cumulative.
Taken together, these provisions have generally been interpreted for the last 10 years as allowing employers to accrue an average number of ordinary hours worked in a two-week period, expressed in hours, for employees to access as they need it.
Recently a Full Bench of the Federal Court found that this approach does not provide employees with their full entitlement, and that all employees (apparently full time or part time) are entitled to 10 full days of leave each year, regardless of the number of hours an employee would have worked on those days.
As an example, look at an employee who works a compressed week, 38 ordinary hours worked over four days, 9.5 hours each day. Most employers would have accrued 76 hours’ personal/carer’s leave for this employee – the number of hours an employee would have worked in a two-week period.
The approach now endorsed by the Court means that employee must have access to 10 full days of leave at 9.5 hours per day, or the equivalent of 2.5 weeks of leave.
A further example might be an employee who works a five-day, 38-hour week, working 8 ordinary hours Monday to Thursday, and 6 ordinary hours on Friday. If this employee takes personal/carer’s leave on Monday, they would be paid 8 hours, and have one day taken off their personal/carer’s leave entitlement. If the same employee is ill on a Friday, they would be paid 6 hours, and have one day taken off their personal/carer’s leave entitlement.
The decision also appears to interpret the legislation in favour of part-time employees having access to 10 days of paid personal/carer’s leave, regardless of the number of days an employee would actually work in a normal two-week period.
The Federal Government has already sought leave to intervene and appeal the decision to the High Court. In the meantime, employers are left uncertain about their obligations – which is hardly ideal.
New annualised salary requirements in Clerks Private Sector Award
As a result of lengthy proceedings before the Fair Work Commission – three years and counting – a number of modern awards are getting annualised salary provisions, either for the first time, or a revised version of the clause that was already in the award.
While the Timber Industry Award 2010 will not gain a clause providing for annualised salaries, the Clerks Private Sector Award 2010 will have new rules for salaries.
- Any employee performing work covered by the Clerks award can be paid an agreed annualised salary if the following pre-requisites are met:
- A salary can be agreed in satisfaction of minimum weekly wages, allowances, overtime penalties, weekend and other penalties, and 17.5% annual leave loading;
- Any salary agreement must:
) Be in writing;
b.) Specify which award clauses are satisfied by the salary;
c.) Show how the salary was calculated;
d.) Provide a cap on average hours that will be covered by the salary;
- Any hours worked outside the agreed hours covered by the salary are to be paid separately in accordance with the award;
- The salary arrangement must not disadvantage the employee, and employers will be required to conduct an annual reconciliation of hours worked against salary paid – if the employee would have earned more being paid in accordance with the award, the employer must ‘top up’ the employee’s pay within 14 days;
- Records of hours worked must be kept, including any unpaid breaks, to assist with the annual reconciliation, and the employee must be asked in writing if they acknowledge the record to be correct each pay period.
New penalty rates for casual employees: General Retail Industry Award 2010
Some readers will employ people performing work covered by the General Retail Industry Award 2010. Casual penalty rates for this award have increased from the first pay period commencing on or after 1 October 2019.
The changes are:
- Casual penalty for working after 6pm Monday to Friday will increase from 30% to 35%; and
- Casual penalty for working within the spread of ordinary hours on a Saturday will increase from 40% to 45%.
- These increases in penalty rates for casual employees have come about as a result of the transitional introduction of new penalties decided by the Fair Work Commission in November 2018. No other rates have changed.
- These rates will increase again on 1 March 2020:
- Casual penalty for working after 6pm Monday to Friday will increase from 35% to 40%; and
- Casual penalty for working within the spread of ordinary hours on a Saturday will increase from 45% to 50%.
Sunday penalty rates will change from 1 July 2020:
- Full time or part time employees will be entitled to a 50% loading for ordinary hours on a Sunday, but until that time, the loading is 65%; and
- Casual employees are currently entitled to, and will remain entitled to, a 75% loading for ordinary hours on a Sunday, inclusive of the casual loading.