Insights & News

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23 January 2020
Modern Award Annualised Salaries – Are you ready for 1 March 2020?
January 23, 2020

By Lucy Shanahan, partner

From 1 March 2020, changed annualised salary provisions in 22 modern awards will apply.  The new provisions impose greater obligations on employers who rely on award based annualised salaries to satisfy award entitlements including record keeping, auditing and employee consent. It is important that you take steps now to ensure you are compliant with the provisions that will apply from 1 March 2020.

Who do the new provisions apply to?

The new provisions will apply to any employer covered by the modern awards listed below. The new provisions only apply to full time employees, and only apply to employers who rely on an annualised salary arrangement under the terms of an award to satisfy award conditions.  The model clauses are not intended to invalidate or regulate terms of common law contracts which ‘buy out’ or otherwise compensate for award entitlements.

The Full Bench of the Fair Work Commission has introduced four different model clauses which apply to different modern awards. Model Clauses 1 and 3 apply most broadly as set out below.

Model Clause 1 Model Clause 3
Banking, Finance and Insurance Award 2010 Broadcasting and Recorded Entertainment Award 2010
Clerks – Private Sector Award 2010 Health Professionals Award 2010 (supervisory and managerial staff)
Contract Call Centres Award 2010 Horticulture Award 2010
Hydrocarbons Industry (Upstream) Award 2010 Local Government Industry Award 2010
Legal Services Award 2010 Manufacturing and Associated Industries and Occupations Award 2010
Mining Industry Award 2010 Oil Refining and Manufacturing Award 2010 (non-clerical employees)
Oil Refining and Manufacturing Award 2010 (clerical employees only) Pastoral Award 2010
Salt Industry Award 2010 Pharmacy Industry Award 2010
Telecommunications Services Award 2010 Rail Industry Award 2010
Water Industry Award 2010
Wool Storage, Sampling and Testing Award 2010

Model Clause 2 applies to the Hospitality Industry (General) Award 2010 in respect of employees classified as managerial staff and Model Clause 4 will apply to the Restaurant Industry Award 2010, Marine Towage Award 2010 and Hospitality Industry (General) Award 2010 in respect of non-managerial staff.  In this Insight we focus on Model Clauses 1 and 3.

What are the new provisions?

Model Clauses 1 and 3 require an employer to keep specific records and to undertake an audit either every 12 months or on termination of an employee’s employment.

The audit requires employers to calculate the amount of remuneration that would have been paid to the employee under the modern award and compare that amount to the annualised salary paid.  Any deficiency must be addressed within 14 days.

Under Model Clause 1, an employee must be advised of the information set out below in writing. A record of the information must also be kept.

For those employers who are covered by Model Clause 3, the information set out below must be contained in a written agreement between the employer and the employee. A copy of the written agreement must be retained as a time and wages record.

Record Keeping Obligations Further Details
Annualised salary paid Annual salary paid to satisfy award entitlements
Provisions of the award satisfied by the annual salary
  • minimum weekly wages
  • allowances
  • overtime penalty rates
  • weekend and other penalty rates
  • annual loading
Starting and finishing time of work and any unpaid breaks taken The record of starting and finishing times and unpaid breaks taken must be signed by the employee or acknowledged as correct in writing by the employee each pay period or roster cycle.  This can be done electronically
Method used to calculate the annualised salary including:
  • specification of each separate component of the annualised salary
  • any overtime or penalty assumptions used in the calculation
  • the outer limit of ordinary hours which would attract the payment of a penalty rate under the relevant award
  • the outer limit number of overtime hours which the employee may be required to work in a pay period or roster cycle without being entitled to an amount in excess of the annualised wage

Any hours worked in excess of the outer limits are not covered by the annualised salary and are paid for in accordance with the award.

In addition, under Model Clause 3, an annualised salary arrangement can be terminated by:

  • a mutual written agreement between the parties at any time, or
  • either party providing written notice to the other 12 months before the agreement ceases to operate.

What do you need to do?

1 March 2020 is fast approaching. You need to identify whether you are required to comply with the terms of any of the Model Clauses, and then take steps to ensure that you are compliant.  This will involve preparing relevant communication to employees and may involve making changes to your record keeping and payroll procedures.

Remember that you need to work out first whether or not you need to make any changes. Don’t panic! We can assist you to ascertain if the changes apply to you and help you to prepare for these changes.

Lucy Shanahan
Partner
+61 2 9169 8405
lucy.shanahan@kingstonreid.com

28 November 2019
Two levels of industrial manslaughter liability to be introduced in WA, following new laws in Victoria
November 28, 2019

By Duncan Fletcher, partner and Oliver Marshall, lawyer

Western Australian Work Health and Safety Bill 2019

In a snapshot

  • The long awaited Work Health and Safety Bill 2019 (WA) was tabled in the Western Australian Parliament on 27 November 2019 and is based on the harmonised model Work Health and Safety Act.
  • The WA Bill introduces two separate industrial manslaughter offences and has an expanded application to potentially all risks to health (broadly defined).
  • Insurance policies with indemnities will need to be reviewed or risk being void.

A little more detail

On 27 November 2019, the Work Health and Safety Bill 2019 (WA) (WA Bill) was tabled in the Western Australian Parliament. The WA Bill applies generally to all workplaces in Western Australia and makes provision for specific industries in separate sets of proposed regulations. Currently, there are three sets of proposed regulations, one covering general workplaces in WA, one set will cover the mining industry and another set will cover the petroleum and geothermal energy industries. The regulations however remain subject to the outcomes of the public consultation period which closed on 26 November 2019.

The most notable feature of the WA Bill is the introduction into WA of the criminal offence of industrial manslaughter, under which corporations and individuals, including directors or other corporate officers may be convicted. The WA Bill introduces two separate industrial manslaughter offences. The first being Industrial manslaughter – crime offence, carrying the maximum penalties of imprisonment for 20 years for an individual and a fine of $10 million for a body corporate. This offence includes the element that the accused person engaged in conduct knowing it was likely to cause the relevant death and the person engages in that conduct in disregard of the likelihood of death.

The second offence is the Industrial manslaughter – simple offence and is punishable by the maximum penalties of imprisonment of up to 10 years for an individual and a fine of $5 million for a body corporate. The simple offence contains only 3 elements, centring on the causation of death by the PCBU.

However in in order for an officer of the Person Conducting a Business or Undertaking (PCBU) to be convicted of either industrial manslaughter offences under the WA Bill, it must also be proven that the PCBU’s conduct was attributable to any neglect on behalf of the officer, or that it was engaged in with the officer’s consent or connivance.

The WA Bill also expands the scope of application by defining “health” in its broadest sense to cover both physical and psychological health. This means that the WA Bill potentially covers psychological risks to health such as stress, fatigue and bullying.

Another notable feature of the WA Bill is that it deems certain parts of insurance policies of no effect if they indemnify a person for liability under the WA Bill. This means that only those parts of insurance policies addressing liability for penalties under the WA Bill will be deemed void, rather than being “illegal” as announced by the WA Industrial Relations Minister Bill Johnston in this press release and reported in some commentary.

The text of the WA Bill is available on the WA Parliament Website together with a comprehensive explanatory memorandum.

Victorian and Northern Territory Offences

The Victorian parliament today passed the Workplace Safety Legislation (Workplace Manslaughter and Other Matters) Act 2019 (Victorian Amendment Act).

The primary objective of the Victorian Amendment Act is to introduce the offence of industrial manslaughter in Victoria, which was an election commitment by the Andrews Labor Government. The Victorian Act does so whilst also providing the highest monetary penalty under a work health and safety law in Australia at $16.5 million.

The Victorian Amendment Act creates a single offence of Workplace Manslaughter applicable to both PCBUs and officers of PCBUs. The offence is structured so that negligent conduct is the central element, supported by safety duty and causation elements. That is, an accused person will be guilty if they engage in negligent conduct, that breaches an applicable safety duty owed to a person and the conduct causes the death of that person.

However, unlike the WA Bill, the Victorian Amendment Act does not require an additional element of neglect, consent or connivance to be proven for an officer to be convicted of the offence. Rather, the Victorian Amendment Act simply recreates the elements of the offence applicable to PCBUs and applies them to “a person who is an officer of an applicable entity”, being corporations, unincorporated associations and partnerships.

Meanwhile, the Northern Territory parliament also introduced an industrial manslaughter offence in the Work Health and Safety (National Uniform Legislation) Amendment Act 2019 (NT Act). The NT Act passed into law on 27 November 2019 and will commence on a date fixed by Gazette notice.

The offence under the NT Act is structured similarly to the Victorian Amendment Act, however it includes an additional requirement to prove recklessness or negligence about the relevant conduct causing the death. Pursuant to the NT Act, the industrial manslaughter offence is punishable by imprisonment for life for an individual or $10.2 million for corporations.

Victoria and the Northern Territory now join Queensland and the Australian Capital Territory as the Australian jurisdictions with industrial manslaughter offences in force.

Duncan Fletcher
Partner
+61 8 6381 7050
duncan.fletcher@kingstonreid.com
Oliver Marshall
Lawyer
+61 8 6381 7056
oliver.marshall@kingstonreid.com
18 November 2019
Kingston Reid – Australia’s Largest New Specialist Workplace Firm – Open for Business
November 18, 2019

Today we are delighted to announce the launch of Australia’s new specialist workplace law firm – Kingston Reid.

We are simultaneously opening offices in Sydney, Melbourne and Perth with a founding team of nine partners and a large team of lawyers ready to service all the workplace needs of our valued clients.

Kingston Reid has hired top legal talent from across Australia to create the nation’s leading specialist workplace law firm. Most of the foundation team have worked together for years at their former firm, K&L Gates. The team is well-known as one of the pre-eminent legal teams for employment, industrial relations and workplace health and safety work in Australia, servicing top corporate clients and all levels of government on all their employment needs.

In launching the new firm, Kingston Reid’s Managing Partner, Alice DeBoos, said, “Our name is new but our experience and our collective footprint in the Australian market is anything but.

“Our new firm is founded by myself and eight other deeply experienced partners who have all been at the forefront of some of Australia’s most significant employment, workplace health and safety, and industrial relations matters.”

Ms De Boos went on to explain that Kingston Reid – the name of the firm chosen by the founding partners – is inspired by the legacy of Charles Kingston and George Reid, who established legislative framework for Australia’s workplaces in 1904.

The firm’s mission is to provide uncomplicated, insightful and visionary employment, workplace relations and safety law advice, delivered with an uncompromising focus on delighting clients.

“Our brand is unashamedly bold, timeless, colourful and unique. It symbolises unconventional ideas, innovation, and our energy, which, combined, will enable us to create a superb culture and an exceptional experience for our clients and our people,” said Ms De Boos.

Kingston Reid works with clients to address their most pressing workplace law matters and navigate the issues that matter the most. The firm represents employers in all workplace-related jurisdictions across all industries, including government, construction, ports and logistics, manufacturing, utilities, retail, banking and finance, professional services, IT and health.

“Our expertise is in working with Australian employers to design and implement cutting-edge workplace strategies which help facilitate their operational needs, navigate important safety matters, and tackle challenging compliance issues – not to mention run and defend all litigation,” Ms DeBoos continued.

Kingston Reid has a national focus, international reach and a global outlook. With more than 40 staff across the offices in Australia, the firm services Australian and multi-national corporate clients across the country.

The firm intends to grow in the future both in respect of its business offering as well as its size. Ms DeBoos added: “We think a lot of top talent will see the benefits of working in a nimble specialist domestic firm that is able to diversify as well as handle the most complex legal work in the market.

“Our move to establish Kingston Reid is not about doing different work or servicing different clients than we previously have; it’s about creating a specialist environment focussed solely on the issues facing employers in the workplace.

“We’ve come from one of the best law firms in the country and now want to apply that experience to creating a platform that only focusses on the world of workplaces, with an uncompromising commitment to client service.