Wages & Entitlements
Rates of Pay
It is crucial for employers to identify and correctly pay minimum rates of pay and entitlements to their employees. A failure to pay employees their minimum entitlements can result in significant financial penalties and/or expensive and time-consuming underpayment of wages claims.
Identifying minimum pay rates for employees can be complex. We can assist to identify the correct instrument (i.e. award, enterprise agreement or legislation) that sets pay rates for particular employees. An employee’s experience, qualifications and responsibilities can affect the employee’s minimum pay entitlements. We can assist to determine an employee’s classification level and pay rate, and identify any associated risks.
The Building and Construction Industry On-Site Award 2010 (and other awards) contains a number of allowances and other entitlements that must be paid to employees, in addition to minimum pay rates. We can assist with identifying these entitlements, and advise on related issues including the use of “loaded” rates of pay.
Award and agreement-covered employees are entitled to additional payments for overtime work, and work performed on weekends and public holidays. We can assist with identifying any applicable “penalty” rates, and manage potential liability to your business.
The building and construction industry (and related industries) impose different pay requirements for classes of employees (for example apprentices, casual or daily hire). We can assist you to identify any requirements that affect your business, having regard to your particular circumstances.
Master Builders SA has prepared a number of pay guides, to assist members with identifying rates of pay and other obligations under the applicable modern award. The pay guides are available to members on our Master Suite platform and include:
- Building and Construction General On-site Award 2010;
- Manufacturing and Associated Industries and Occupations Award 2010; and
- Clerks – Private Sector Award 2010.
National Employment Standards
The Fair Work Act 2009 imposes a number of obligations on employers, including minimum employment entitlements contained in the National Employment Standards (NES). The NES apply to all employees, and will overrule any term in an enterprise agreement or employment contract that is less favourable than the NES.
The NES regulate maximum working hours, leave entitlements (including annual leave, personal/carer’s leave and parental leave), flexible work requests, public holidays, notice of termination, redundancy pay, and the right of employees to receive a Fair Work Information Statement upon commencement of employment. The NES make it unlawful for an employer to breach a term of an award or enterprise agreement.
The NES also underpin what can be included in awards and enterprise agreements, and contain provisions in relation to the interaction between the NES and awards and agreements.
Under the Fair Work Act 2009, employees are entitled to various kinds of paid and unpaid leave. These include paid annual leave, personal/carer’s leave, compassionate leave, and unpaid parental leave and community service leave.
The specific rules relating to each of these kinds of leave can be complex. There may also be additional requirements contained in awards or enterprise agreements. For example, there may be requirements relating to when employees can be directed to take annual leave, or when annual leave may be cashed out. A failure to comply with these obligations can have significant consequences, including financial penalties and/or employee claims.
In addition to these leave entitlements, employees are entitled to long service leave. Employers in the building and construction industry are required to comply with the long service leave scheme that applies to the industry in South Australia – known as “Portable Long Service”.
We can assist your business to understand your obligations that arise in relation to employee leave entitlements, and related issues. We can ensure that your policies and procedures are compliant with legislation, and tailor these to protect your interests.
Worplace Relations Evaluation
We provide free IR evaluations to assist members to understand and comply with complex workplace relations laws.
This includes a comprehensive review of all employment practices and identify and minimising risks.
Employees in the building and construction industry are generally entitled to RDOs, in accordance with the Building and Construction General On-Site Award 2010, or an enterprise agreement. We can assist your business to understand your obligations in respect of RDOs and related issues, and provide RDO calendars.
Unfair dismissal and adverse action (or “general protections”) claims can be time consuming and costly.
We can provide advice and assistance to minimise the risk of a claim being made.
If a claim is made, we can assist you to defend the claim by preparing a response to the claim and representing you at the conciliation conference. We can provide advice in relation to the risks associated with defending the claim at hearing, including potential outcomes and costs.
We will endeavour to resolve claims as quickly and efficiently as possible, with minimal disruption to your business.
Termination of Employment
Before ending an employee’s employment, it is important for the employer to understand its obligations and the potential liability that might arise from the termination.
For employees who are “protected” from unfair dismissal, the employer must have a “valid reason” for dismissing an employee, based on the employee’s performance, capacity, or conduct. In addition to having a valid reason, the employer must also comply with procedural requirements, including allowing the employee to respond to the reason for termination, before the termination occurs.
Where the reason for dismissal is redundancy, the employer must satisfy the requirements for a “genuine redundancy” in the Fair Work Act 2009. These include identifying the changes to operational requirements that have caused the redundancy, considering any suitable alternative positions, and complying with any consultation obligations in an award or enterprise agreement.
Bullying and Harassment
Employers have an obligation to ensure that employees are not subjected to inappropriate behaviour at work, including bullying and harassment.
Bullying occurs when a person or group of persons repeatedly behaves unreasonably towards a person, and the behaviour creates a risk to health and safety. Harassment is any behaviour of an offensive nature, and includes sexual harassment (unwelcome conduct of a sexual nature).
Bullying and harassment can result in claims by employees, and potentially investigations or prosecutions under work, health and safety laws.
We can assist your business to minimise the risk of bullying and harassment occurring, including preparing and implementing workplace policies, and undertaking employee training.
Equal Opportunity and Discrimination
There are numerous federal and State anti-discrimination and equal opportunity laws that impose various obligations on employers.
Under the Fair Work Act 2009, it is unlawful for an employer to take “adverse action” (i.e. less favourable treatment or dismissal) against a person because of a characteristic of the person. This includes a person’s race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
We can provide assistance to reduce the risk of discrimination claim, including preparing anti-discrimination policies, and providing employee training. We can advise on the risks associated with any decision that may breach anti-discrimination laws, and assist with the defence of any claims that are made.
Are they an Employee or a Contractor?
Incorrectly engaging a person as an independent contractor instead of an employee is unlawful and can have significant financial consequences.
In the building and construction industry, there is a common misconception that engaging a person “on an ABN” means that the person is a genuine independent contractor. The question of whether a person is a contractor or employee (at law) is complex, and involves a consideration of numerous elements of the relationship, and how these operate in practice. The question of whether a person has an ABN is not a relevant consideration.
An employment relationship is more likely to exist where the worker:
- performs work exclusively or almost exclusively for the business;
- is under the direct control of the business and is required to perform work under its direction and supervision;
- cannot delegate the work to others or engage a “subcontractor”;
- works set hours, as required by the business;
- is paid according to time worked (i.e. hourly) rather than according to the completion of a task;
- uses tools and equipment that have been supplied by the business;
- is not personally responsible for rectification work;
- is required to wear clothing that identifies the name of the business;
- does not bear any risk of loss, or have the ability to make a profit from the work.
A contractor relationship is more likely to exist where the worker:
- regularly performs work for other businesses (or themselves);
- performs work according to their own processes and is not under the direct control or supervision of the business;
- engages other people (and pays them directly) to assist with the work;
- does not work set hours and is free to refuse requests for additional work;
- is paid according to the completion of a task (i.e. in accordance with a pre-prepared quote), rather than hourly;
- provides their own tools and equipment, especially tools of significant value;
- is responsible for rectification work at their own cost;
- bears a risk of loss, or has the ability to profit from the work.
There can be significant consequences for incorrectly engaging a person as a contractor, including financial penalties for breaching the “sham contracting” provisions in the Fair Work Act 2009. There can also be liability arising from:
- Unpaid employee entitlements (for example annual leave, long service leave and award entitlements);
- Superannuation contributions;
- Workers compensation;
- Taxation (PAYG and payroll tax).
We can provide assistance to your business to minimise the risk arising from the engagement of independent contractors. This includes helping to identify the true nature of the relationship and preparing a written contract to minimise risks. We can also assist with the defence of claims or investigations where it is alleged that a contractor is or was an employee.
Need more information?
Contact our Workplace Relations team today to find out more information.