More changes to Superannuation– are you ready?

A couple of years back, the Federal Government announced that it was making changes to Guaranteed Superannuation Contributions - these changes will finally come into effect on 1 July 2013. 

What does this mean for me and my business?

Compulsory superannuation contributions are made by employers of behalf of their employees. At the moment, the SG rate is 9% - this will rise to 9.25% on 1 July, followed by incremental rises each year until 2019, at which time the rate will be 12%. This is an obvious extra expense for SME’s to fork out to their employees and so far it looks as if we have to just cop it on the chin. According to the Cameron Research Group, SME’s are understandably worried about the increased cost of doing business in an environment where there is already pressure to increase wages in the face of a nationwide skills shortage.

To make matters worse, the Federal Government had initially promised a reduction in company tax on small businesses which would have negated the impact of the SG rise, but has since controversially backed out of this commitment leaving company tax at 30% instead of a staggered reduction to 28% as per the initial plan. They argue that the three years since the new super changes were proposed and the staggered rollout should give you enough time to make the necessary financial preparations in time to commence in July.

Hmmmmm... do you feel ready ? I'm sure that not everyone is!

Other changes due to come into effect on 1 July are:

• The age limit of 70 for SG contributions will no longer apply from 1 July 2013. Employers will be required to contribute to complying super funds of eligible mature age employees aged 70 years and older. The Government hopes that doing away with this age limit will encourage mature workers to stay in the workforce.
• Low income earners have an additional benefit – for those on less than $37,000 a year, the government will provide a low income superannuation contribution of up to $500 each

In another interesting move, while giving with one hand the Government has taken away with the other and halved the contributions cap for concessional (before tax) contributions to $25,000 for over-50s (previously $50,000 and had been set to increase to $55,000 before the Federal Government rethought this issue). The concessional contributions cap is now $25,000 for people of all age groups and here we were thinking that older workers were getting a break?!

Employers need to get ready now to implement these changes – so make sure you:

• Update your payroll and accounting systems to reflect the increase to the super guarantee rate.
• Continue to increase the rate you use to work out the super guarantee payments you make for your employees each year until 1 July 2019
• Ensure that you make super guarantee payments for eligible employees aged 70 years or over.

This week's blog was written by Caroline Ross, one of our capable team members.

Natasha Hawker owns Employee Matters Pty Ltd; an HR Consultancy that assists small to medium businesses with their HR functions to make them more efficient and profitable. Their offering includes HR Management, Recruitment, Training, Coaching, and Exit Management – find them at www.employeematters.com.au

The Five Most Common HR Myths

Employment Relations can be a complex area and, let's face it - it can be hard to keep up with all the legislation changes on top of everything else you need to stay on top of as a business owner.

Here are five of the myths that I hear from business owners:

I pay above the Award, so I don't have to pay overtime

As at 1/1/2010 with the introduction of Fair Work, there are now 122 industry Modern Awards. If you pay above the minimum wage, that is very nice of you, but I am sorry to say that it does not preclude you from all the other Award obligations contained within. For example many of the Awards now contain an obligation to consult when there is a major workplace change pending - this might include a restructure, change of office location or redundancy program.

Returning from parental leave - I need her full-time or I'll get her to resign

Prior to the introduction of Fair Work a woman could return to work on a part-time basis but was required to return to full-time when her 12 months maternity leave was up. This is no longer the case - the main carer can take 12 months unpaid leave with an option to request an additional 12 months. The main carer can also request Flexible Working on their return. This might take the form of part-time, reduced hours or job share to name a few options.

I don't need to pay redundancy

Previously unless you had a contractual right to a redundancy payment you were not entitled to redundancy. This also changed with the introduction of FWA. Now everyone across Australia is entitled to redundancy unless your business is classed as a small business - i.e. under 15 employees including casuals and part-time employees. However, the length of service is only calculated from 1/1/10.

I don't need policies or employment contracts, everyone knows the deal here

Employment contracts help protect your business, your clients and your intellectual property.  Employees feel more protected and secure with a contract. Policies enable you to ensure that your employees understand their legal obligations and the boundaries. It can make it easier to terminate an employee should you have cause. Policies and processes can improve productivity with consistent processes applied across the business

It's impossible to fire anyone for non performance

No, it is not, but you do need to follow a process to ensure that the termination is not ‘unfair, unjust or unreasonable. As an SME, you cannot afford to carry a non performing employee. The rest of your team will thank you for it.

Debunk these myths and you are in a much stronger position to maximise your productivity and profitability.

Let your fingers do the walking

When I'm sitting in the bus, I am always amazed at the numbers of people plugged in to iPhones, iPads and laptops - me too right now, as I am writing this blog, but it raises a concern in me for SMEs around the country - what is happening to all the information - the data being accessed, created and changed?

In this world of instant access and needing to do more with less time, our teams often work on the way to and from home, at home and even on holidays. For most businesses, this is a huge advantage as this is often discretionary work time and effectively unpaid - but what happens when employees resign or you need to terminate them either through redundancy or performance?

Have you collected the laptop, the files sent to the home email address, the USB sticks, the hard and soft copy files, the mobile messages not deleted...?

Have you changed the passwords, the security code to the building, have you collected the keys to the office? In most cases, the answer is some but not all. Do they still have a copy of the code of your latest app? All they need to do is rebuild it, because, hey, you didn't say they couldn't even if it is poor form!

Are your employees educated on the need to protect all company information when offsite, for example working on the bus or train. Are they aware of who is sitting next to them on the bus or who is listening to their mobile conversation about a client and the issues - by name, yes, there are some conversations that I could quote verbatim.

Here are five tips to protect you and your business:

• have a written exit process
• have a list of all equipment supplied to an individual and have the employee sign for it - once it's returned it can be checked off
• have a policy detailing protection of intellectual property and company-owned equipment - have a clause in your employment contracts about this
• complete an exit interview with employees who are leaving to learn about their experiences but also to reinforce their obligations post leaving the business
• all employees should know the company policies - get them to confirm this in writing 

You have worked too hard to let your critical data walk out of the business unprotected - not to mention the obligations that you have to your clients to protect their information.

Apologies for the Gremlins that played with the formatting of our current blog!

10 Things You Need to Know About FWA National Employment Standards (NES)

• So what is personal leave? Sounds like secret women's business to me.
• What is flexible working? Does that mean flexi-time?
• What is NES? Do I need to know, should I care?

The answer to all these questions is yes!

Back on 1/1/2010 when Fair Work Act legislation came into play so did the National Employment Standards or NES. These are nationwide, minimum employee conditions for all permanent employees. So what does it cover and what does it mean for your business? Well, the first aspect you need to be aware of is that any new permanent employees that you hire, whether full time or part time, need to receive a copy of the NES Information Worksheet. If you don't share this document it is considered a breach of the Act and there are potential fines. Here is a link to the document for your ease of search http://www.fairwork.gov.au/FWISdocs/Fair-Work-Information-Statement.pdf

So, practically, for a business owner what does this mean? There are 10 minimum workplace entitlements in the NES - bear in mind that these are the minimum.

1.  A maximum standard working week of 38 hours for full-time employees, plus ‘reasonable’ additional hours

There is much debate about this one but essentially my view would be more than 30mins extra per day everyday could be deemed as unreasonable by FWA Ombudsman. That said, I think this would vary on the industry and the salary earned

2.   A right to request flexible working arrangements to care for a child under school age, or a child (under 18) with a disability

The key word here is ‘request’ however; it is becoming increasingly difficult to say no, unless the decision will mean financial hardship for your business versus some inconvenience. A word of caution - employees are becoming more aware of these rights and there will be an increase in this type of request but let’s remember, in these economic times, it is the exception rather than the rule where employees take extended periods of unpaid leave

Flexible arrangements might mean reduced hours, a later start to allow for childcare drop offs, part time work, working from home or a nine day fortnight. It is also about compromise, with both parties making it work. There is also a formal process that needs to be followed to manage this request and response process

3.  Parental and adoption leave of 12 months (unpaid), with a right to request an additional 12 months

This means potentially losing an employee for a period of two years - the upside is that if this is arranged up front it may be a more attractive option for a contractor, or you might look to bring someone into the role for career development on a temporary basis

4.  Four weeks paid annual leave each year (pro rata)

No real change here but you may want to think about a forced shut-down - maybe at Christmas to maximise productivity down times. Check your Modern Award as there are timing and process issues to be considered

5.  Ten days paid personal/carer’s leave each year (pro rata), two days paid compassionate leave for each permissible occasion and two days unpaid carer’s leave for each permissible occasion

Personal Leave covers sick leave for the employee but also leave to care for immediate family members as well. Employees can also take an additional two days on each permissible occasion

6.  Community services leave for jury service or activities dealing with certain emergencies or natural disasters. This leave is unpaid except for jury service

If you have employees that are members of the SES for example you need to have a contingency plan in place for when this employee might be on extended, unpaid leave

7.  Long service leave

As per your State Legislation entitlements

8.   Public holidays and the entitlement to be paid for ordinary hours on those days

Some Awards will allow your employees to take a day in lieu for working a public holiday

9.   Notice of termination and redundancy pay

Previous to FWA 2010, you were only entitled to redundancy, if it was a contractual clause. Now everyone is entitled but their length of service only starts from 1/1/2010

10. The right for new employees to receive the Fair Work Information Statement

This is the link attached above which should be sent out with the employment contract and letter of offer. http://www.fairwork.gov.au/FWISdocs/Fair-Work-Information-Statement.pdf

Employees are becoming more aware of these rights and I suggest that it is important to be aware of your obligations and to determine if and how you can accommodate these requests, or whether you have the option to decline the request. As with all legislation, there are some processes that need to be followed - e.g. the timeline for responding to a request for flexible working and the requirement for this to be in writing. Make sure you and your team are aware of these obligations.

Kapow!!

I had a call recently for advice where a senior member of a team had punched another senior member. Has this ever happened at your work or almost happened? What would you do if it did? Nothing and hope it all goes away, right? Wrong! For a start, the incident could be deemed as assault and might involve the police. Also, as the business owner, you have a duty of care for all your employees. If you do nothing it could be seen that you condone the behaviour - or, as bad, you don't care!

You might think the punch is a sackable offence - it might be, but you need to investigate first. So how do you do this? You need to get someone who is independent and experienced in conducting this type of investigation. Consider:

·         you may choose to send both parties on paid leave while the investigation is conducted - check your Modern Award first though

·         both parties (and any witnesses) need to be interviewed to get their account of the incident; both parties are entitled to have a support person in the meeting. It may be useful to have a scribe.

·         the investigator needs to make a decision based on the 'balance of probabilities' around what actually occurred

The investigator forms a view of the likely events - then a decision needs to be made - what happens next?

 Three possibilities:

 a)     the incident did not occur - both parties are informed that there are no unresolved issues outstanding

 

b)     both parties were equally to blame but the physicality was minor - both parties given a final warning and told should this behaviour occur again it could result in the termination of their employment

c)      one party is deemed to be the aggressor and in a meeting (party is allowed a support person to attend) is advised of this outcome which may result in the termination of their employment - which could be given with or without notice. The other party involved should be advised formally of the outcome (with only necessary details). The witnesses are advised that the situation has been resolved

Sounds like a police investigation? Well, yes, it probably does - but this is best practice and should result with a fair and thorough process and outcome.

 

Are you off your trolley?

By Natasha Hawker:

Are you responsible for your employee’s mental health? No, you don’t think so? Well think again!

1 in 5 Australians will suffer some form of mental disorder at some stage of the life. Every year a further 20,000 are found to have a mental illness. This includes during their working life.

So, what does this mean for you as a business owner? Well there are two issues:

First, largely due to the stigma attached to mental illness, it is often not seen in the same category as illnesses such as the flu, measles or cancer. We often don’t know how to treat or interact with someone with a mental illness, whereas we are comfortable to send flowers and arrange support for the 'traditional' maladies. We need to admit to ourselves that it's highly likely we will employee someone with a mental illness and we need to be able to manage this, within our business.

One of the common causes of mental illness is stress and the second, and mostly unknown repercussion for business owners, is that stress falls under Workplace Health and Safety - there is an onus on Directors to protect employees. The current NSW Act places the primary duty of care for health and safety on the employer. You must create a working environment that is safe and can eliminate health risks that are stress-related.

As an employer you are required to:

·         use risk assessment techniques to understand and measure risk levels

·         respond to any identified stress hazard(s) by implementing suitable control measures

As such, there is now a strong expectation from the courts that employers are able to demonstrate how documented assessment of hazards and risk, combined with the use of sufficient, measured risk control, actually lead to effective risk reduction.

In the case of State of NSW vs. Marilyn Mannal (2005) NSW CA 367, Judge McLaughlin found the State of NSW Dept of Housing in Wagga was derelict in its duty of care and awarded $330,000. Ms Mannal claimed that when she was appointed as a Team Leader after a restructure, she was subjected to victimisation, harassment, humiliation and abuse in the workplace, which had caused psychiatric injury.

Ms Mannal had been instructed to attack the existing workplace culture and started her new role enthusiastically. The team, maybe still loyal to the previous, replaced Team Leader, became more dysfunctional; actively harassing her, were rude and did not accept her direction. Her Manager, although aware of the situation, failed to intervene on Ms Mannal’s behalf. After 19 months and many requests to Management for support, Ms Mannal sought medical assistance for a stress disorder. The Judge found that the management knew there was significant disruption and disloyalty within the team and that, therefore, the risks to mental health were foreseeable and that both formal and informal internal mechanisms in place had not been utilised.

As an employer, you are not expected to be a counsellor nor a medical practitioner but you are expected to provide a safe working environment and appropriately support any employer suffering from a mental illness. We can help you with strategies to mitigate this risk. Remember all your employees matter!

 

Natasha Hawker owns Employee Matters Pty Ltd; an HR Consultancy that assists small to medium businesses with their HR functions to make them more efficient and profitable. Their offering includes HR Management, Recruitment, Training, Coaching, and Exit Management – find them at www.employeematters.com.au