As your business expands, so does your workplace obligations. With a myriad of legislation, regulations and industrial instruments governing employee entitlements across industries and roles, payroll has never seemed more frustrating and time-consuming.
Enterprise Agreements (EA) are the ‘Holy Grail’ for expanding businesses seeking to streamline employee entitlements across the board. Imagine that – simplifying penalty rates, allowances, loadings, leave balances and ancillary entitlements into a source document that is applicable to all current and incoming staff.
What is an Enterprise Agreement?
Depending on the position title and classification of your employees, they may be subject to minimum entitlements prescribed in a relevant Modern Award. In circumstances where you have multiple employees subject to Modern Award coverage or employees in your workplace are subject to multiple Modern Awards, you should consider introducing an EA.
An EA varies the terms of the applicable Modern Award at an enterprise level to implement favourable terms and conditions that capture all employees. An EA is valid for a period of four (4) years at a time and must satisfy the requirements prescribed by the Fair Work Commission for approval.
What is Included in an Enterprise Agreement?
The Fair Work Act 2009 (Cth) (FWA) is the body of legislation which prescribes the National Employment Standards and permitted content to be captured in the EA. Generally, your EA should contain the following:
1. matters relating to the employer-employee relationship:
- wages and allowances, hours of work and shift patterns;
- leave and leave arrangements;
- staffing levels; and
- the employment of casual employees and casual conversion provisions.
2. matters relating to the employer-union relationship:
- union training leave and leave for training conducted by a union (e.g., Work Health and Safety training);
- terms providing for employees to have paid time-off to attend union meetings or participate in union activities; and
- terms providing for union involvement in dispute settlement procedures.
3. terms relating to deductions from wages:
- terms providing for deductions from wages for any purpose authorised by the employee; and
- deduction terms will not have effect if they benefit the employer and are unreasonable or if the employee is under 18 years of age without the agreement of a parent/guardian.
4. terms relating to how the EA will operate:
- setting out how and when the negotiations for a replacement EA will be conducted;
- outlining dispute resolution processes to minimise claims; and
- terms specifying who the EA will cover.
Why is it your business’s Holy Grail?
Expansion requires a significant investment in the recruitment and retainment of staff – but it does not end there. There are numerous civil and financial penalties that apply should you get it wrong, some of which may impose personal liability on the directors of the corporation.
An efficient and cost-effective solution to minimising exposure to payroll errors and non-compliance is through the introduction of an EA. Put simply, an EA will provide you the benefit of:
- certainty, in that you are providing work conditions that were vetted and approved by the Fair Work Commission;
- risk minimisation, with little scope for confusion and miscalculating entitlements;
- cost-efficiency, given that there is no need to interpret complex Modern Awards to determine an employee’s pay rate and entitlements;
- productivity, reducing the need to calculate each employee’s individual pay given that an EA may annualise their salary to capture all entitlements; and
- employee satisfaction, as your staff can negotiate the universal conditions applicable to them and therefore are less likely to commence an industrial action or strike.
How Can We Help?
Chamberlains Law Firm houses a specialist Employment and Workplace Relations team with extensive expertise in negotiating, drafting and implementing an EA compliant with the FWA. We do the all the groundwork, including liaising with the Fair Work Commission and providing a step-by-step guide on the EA administration process.
It all begins with a conversation about your personal business needs and vision for growth. We have the skills, knowledge and acumen to draft bespoke Enterprise Agreements and tailored employment contracts that will give your company one less thing to be concerned about.
***Assisted by Jasmin Mantoufeh***