Why HR Administration is the Backbone of Your Business
Human Resource Administration (HR admin) is at the cornerstone for positive employee relations. It also plays a pivotal role in ensuring compliance with employment legislation.
Getting to understand all of your employees’ entitlements presents a challenge for many companies. Are they covered only by the National Employment Standards (NES)? What about a Modern Award? Should you create an Enterprise Agreement (EA)? Do your employment contracts ensure compliance across all of these?
Most employees in Australia are covered by the Fair Work System, which is a framework that governs workplace relations, ensuring fair treatment for employees and employers. Aiming to promote fairness, productivity, and balance in the workplace.
How is the Fair Work System structured?
Think of it as a growing tree, with each stage representing the one before it.
The Foundations – Roots of the tree
The first stages of the Fair Work System are the NES and the National Minimum Wage. These are represented by the roots of the tree, setting a solid foundation for all employees, ensuring that anything more must grow from these foundations. These are the legal minimum requirements that must be provided to all employees.
The NES includes entitlements such as leave, maximum weekly hours, notice of termination, and redundancy pay. However, some NES entitlements do not apply to casual employees.
The National Minimum Wage is the minimum pay rate for employees who are not covered by an award or enterprise agreement. However, this applies to relatively few employees, as most workers’ pay rates are determined by an award or enterprise agreement.
Awards -Trunk of the tree
The next stage of the tree is the Modern Awards. Awards are symbolised as the trunk of the tree, as they are built off the NES and National Minimum Wage (the foundational roots) and cannot provide less than what the NES establishes.
Awards establish minimum pay rates and entitlements for specific industries or occupations.
They automatically apply to employees performing the work outlined in the award. However, awards do not apply if the employee and employer are covered by an Enterprise Agreement (EA).
Enterprise Agreements – The branches of the tree
Enterprise Agreements determine pay and conditions for a specific workplace. EAs are negotiated between employers, employees, and their representatives and must receive approval from the Fair Work Commission. For approval, employees must be better off overall under the EA compared to any relevant award. Hence, EAs branch out of our tree trunk providing even more entitlements and benefits than the trunk (award) itself.
Employment Contracts – The leaves of the tree
Employment contracts are negotiated between an employer and an individual employee and put in writing. Employment contracts are the leaves of the tree, offering higher pay and entitlements that build upon the foundational elements in the below level of the tree. Contracts may include additional benefits, employee responsibilities, and work location. However, they cannot reduce or eliminate any pay rates or entitlements established by the underlying components, even if both parties agree. Employment Contracts can also be mutually renegotiated and altered via contract variations. As leaves fall, new ones arise, generally providing even better conditions than the previous arrangements.
Who is responsible for setting those foundations?
Fair Work Commission
The Fair Work Commission is the national workplace relations tribunal and registered organisations regulator.
They play a crucial role in the Australian workplace relations system by setting the national minimum wage and creating or amending awards. They support enterprise bargaining and approve enterprise agreements. Additionally, the Commission addresses workplace disputes and issues, including unfair dismissal, bullying, sexual harassment, discrimination, and workplace rights, as well as matters concerning regulated workers.
Fair Work Ombudsman
The Fair work ombudsman is the national workplace relations regulator.
They provide information and advice on workplace laws, offer free online tools and educational resources, and assist in resolving disputes related to pay and entitlements. They also work to recover underpayments, guide parties toward compliance, and take enforcement action when necessary.
Why knowing this is important to ensure compliance?
Legal Requirements: ensuring adherence to the Fair Work Act and other relevant laws, avoiding penalties.
Employee Rights: protecting employee entitlements, promoting fair treatment and workplace satisfaction.
Avoiding Disputes: having guidelines in the system and in the workplace reduce the likelihood of conflicts between employers and employees.
Reputation Management: upholding compliance enhances the employer’s reputation as a fair and responsible organisation.
Financial Stability: compliance can prevent costs of addressing legal issues, paying fines, and costly back pay claims.
Workplace Culture: Promotes a positive workplace culture, fostering trust and morale among employees.
Retention and Recruitment: Compliance can attract and retain talent by showcasing a commitment to fair employment practices.
How PerformHR’s services can assist you with ensuring compliance
1. Understanding Entitlements:
Ensuring you are familiarised with the National Employment Standards (NES) and National Minimum Wage to ensure all employees receive their rightful pay.
2. Award interpretation:
To determine if you fall under an award or require an enterprise agreement (EA) for specific pay rates and conditions.
3. Leverage Expert Guidance:
Use PerformHR’s services to navigate complex HR regulations and ensure compliance with pay obligations.
4. Our Employment Law Workshop:
Our “Employment Law Workshop – For All Leaders” will ensure you gain essential knowledge about legal requirements and workplace rights.
5. Create Clear Contracts:
Drafting employment contracts ensuring compliance with the Fair Work System and uphold employee entitlements.
6. Staying Informed:
PerformHR can ensure you are always informed of changes in employment laws to adapt your practices accordingly.
By implementing these tips and utilising PerformHR’s expertise, you can ensure compliance with pay obligations and effectively support the EA and bargaining process.
We Can Help!
At PerformHR, we specialise in helping businesses develop and implement robust Employment Law practices. Our dedicated team of Learning and Development specialists would love to help.
Call today on 1300 406 005 or email us at info@performhr.com.au.
“Understanding employee entitlements promotes a fair and satisfactory workplace environment.”
