Jun 25, 2024 | Employment Law, General Advice
On 1 July 2024, the superannuation guarantee rate is set to increase from 11% to 11.5%. In accordance with the Superannuation Act 1916 (NSW), the superannuation guarantee rate will increase and remain at 12% after 1 July 2025.
(N.B. Superannuation guarantee rate increases use the fiscal year of 1 July to 30 June rather than the calendar year of 1 January – 31 December)
What is a superannuation guarantee?
Superannuation guarantees are contributions made by an employer to an employee’s superannuation fund, a fund which supports an employee’s retirement. This fund slowly accumulates with each pay packet and is accessible when you reach your ‘preservation age’ and retire.
Below is a list of when you can access your super fund entitlement:
|
Your date of birth
|
Age you can access your super (preservation age)
|
|
Before 1 July 1960
|
55
|
|
1 July 1960 — 30 June 1961
|
56
|
|
1 July 1961 — 30 June 1962
|
57
|
|
1 July 1962 — 30 June 1963
|
58
|
|
1 July 1963 — 30 June 1964
|
59
|
|
After 1 July 1964
|
60
|
The meaning of ‘retired’ also depends on your age and working status:
- Under 60 – You must have finished working and have no intention of working again to access your super.
- 60 to 64 – You can access your super when you leave or stop working for an employer.
- 65 – Even if you are still working you can access your super.
How is superannuation guarantee calculated?
Superannuation guarantee is calculated by multiplying your ordinary time earnings (gross salary and wages) by the current superannuation guarantee rate.
If you wish to access your super prior to your ‘preservation age’, you can check your eligibility on the Australian Taxation Office website.
Which employees are eligible for super contributions?
Employees who are eligible for super contributions are:
- Employees 18 years old and over.
- Employees under 18 years old, who work more than 30 hours per week.
(N.B. For super payments prior to 1 July 2022, employees must have earned $450 or more in a month to be eligible).
What does this mean for employers?
Employers must make superannuation guarantee contributions by the quarterly due dates (28 days after the end of each quarter). It is important to note that some funds require contributions to be made monthly. The quarterly due dates are listed below:
|
Quarter
|
Period start
|
Due date
|
|
1
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1 July
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30 September
|
|
2
|
1 October
|
31 December
|
|
3
|
1 January
|
31 March
|
|
4
|
1 April
|
30 June
|
SuperStream is the electronic method that all employers must use when paying employee superannuation guarantee contributions to super funds. Employers must meet the SuperStream requirements to ensure their employee data and super payments are electronically linked.
How can employers prepare for superannuation guarantee rate increases?
It is important to check that your payroll provider has updated the guarantee rates at the correct time (1 July).
Employers should also review their employees’ contracts to check which remuneration structures they have.
- Inclusive structure: An employee with an inclusive remuneration package will include superannuation contribution payments. This means employees may have their pay reduced to accommodate for contribution increases.This reduction cannot place the employee below the minimum statutory or award entitlements and must comply with their contract terms. An employer may decide to increase an employee’s inclusive remuneration package in order to safeguard their pay.
- Non-inclusive structure: If an employee is paid superannuation guarantee contributions on top of their pay, employers will need to notify employees of rate increases and budget for the upcoming change.
Contact Us
If you require advice on superannuation contribution rate increases, it is crucial that you speak with an authorised financial advisor.
If you would like your employment contract reviewed or believe you are entitled to a higher super contribution, please contact Etheringtons Solicitors on (02) 9963 9800 or via our online contact form.
Feb 6, 2024 | Employment Law
A research paper published by the Australian Government Productivity Commission (‘AGPC’) reveals how the rise in employees working from home (‘WFH’) has resulted in a major shift in workplace relations. Though stay-at-home orders are no longer in force, the number of employees continuing to work from home is much higher than it was prior to the pandemic.
What are the costs and benefits of working from home?
Employers should consider how WFH impacts productivity, costs, workplace culture and staff retention.
Productivity
There is a potential for lower productivity when employees cannot collaborate and share knowledge effectively. Though WFH may improve time management, wellbeing and concentration, there is a risk that employees may avoid responsibilities when distanced from managerial monitoring. The effects of WFH on productivity varies across industries and is dependent on an employee’s commitment, and capability, to WFH.
Costs
Employers must also consider whether they can afford to effectively manage a remote or hybrid workforce. Though WFH forgoes the need to rent expensive office space, employers may need to invest in remote monitoring systems to prevent workers from shirking their duties. Training and equipment may also need to be provided to ensure employees can work productively from home.
Do employers have the right to monitor employees when WFH?
In Australia, employers have the right to install and monitor time tracking software on work devices during working hours. These surveillance technologies assure employee productivity and assist in managing workflow.
For employees, however, these practices raise concerns about a loss of privacy and autonomy. Though some pieces of legislation such as the Privacy Act 1988 (Cth) afford certain protections for the collection and use of personal information, there is no absolute right to privacy under the Australian Constitution.
Accordingly, employers must ensure that their workplace surveillance strategies are compliant with relevant state laws. In NSW, the Workplace Surveillance Act 2005 (NSW) requires employers to give at least 14-days-notice to employees before workplace monitoring takes effect. Sufficient notice and transparency are essential when notifying employees of workplace monitoring on personal computers and mobile devices.
How can employers effectively and ethically monitor their employees?
WFH surveillance practices must comply with relevant state laws. To avoid infringing upon the rights of employees, employers should implement the following strategies:
- Include a surveillance clause in employment contracts;
- Develop a transparent surveillance policy that provides 14-days-notice of changes to procedure; and
- Only use monitoring for essential workplace management purposes.
How Etheringtons Solicitors can help
If you are experiencing privacy related issues in the workplace or require an employment contract to be reviewed, we recommend speaking with a legal professional. For assistance on an employment matter, please contact one of our solicitors on (02) 9963 9800 or via our online contact form.
Apr 13, 2023 | Employment Law
On 28 March 2023, the Federal Court ruled in Construction, Forestry, Maritime, Mining and Energy Union v OS MCAP Pty Ltd [2023] FCAFC 51 that employers must notify employees that they “have the option to either accept or reject a request to work on a public holiday.” This judgement was made against OS MCAP Pty Ltd for being unreasonable and unlawful for requiring 85 mineworkers to work on Christmas Day and Boxing Day in 2019.
Why was this decision made?
In CFMMEU v OS MCAP Pty Ltd [2023] FCAFC 51, the Federal Court ruled that OS MCAP Pty Ltd were in breach of section 114 of the Fair Work Act 2009 (Cth).
Section 114 asserts that “if an employer requests an employee to work on a public holiday, the employee may refuse the request if:
(a) the request is not reasonable; or
(b) the refusal is reasonable.”
Although OS MCAP Pty Ltd contended that they were not breaching s114 as an employee’s refusal is contingent on a request and not a requirement, this submission was dismissed by the Court. The Court determined that OS MCAP Pty Ltd “was not permitted to require employees to work on Christmas and Boxing Day, unless, as the Union submitted, it had made a [reasonable] request.” As such, “given a requirement does not comprise a request” and OS MCAP Pty Ltd admitted they “did not make a request in the ordinary sense,” the Court ruled that the company had breached the Fair Work Act 2009 (Cth).
The Court therefore ruled that OS MCAP Pty Ltd contravened s114 because the company did not inform its employees that they were allowed to object working on Christmas Day and Boxing Day if their refusal was reasonable.
How does this decision impact rostering of employees on public holidays?
As a result of this decision, employers must be cautious when using automatic rostering software. Automatic rostering precludes employees from choosing “whether he or she will agree or refuse to work on the public holiday”.
An employer must frame their request for an employee to work on a public holiday in the form of a question to which the employee can then respond. It is only after discussion or negotiation that an employer may “require an employee to work on a public holiday if the request is reasonable and the employee’s refusal is unreasonable”.
What should I do if my employer has requested I work on a public holiday?
If your employer has requested that you work on a public holiday, it is prudent that you know what constitutes a reasonable request.
The National Employment Standards stipulate that the following conditions should be considered when determining if an employer’s request is reasonable:
- the nature of the workplace
- the role and type of work of the employee does
- employee’s personal circumstances (including caring responsibilities)
- employment status (full-time, part-time or casual)
- an expectation that they might be asked to work on the public holiday
- any overtime, penalty rates or other payment the employee might receive.
It is important to note that if you are working in the emergency services, you may be required to work on public holidays. In these instances, employers must ensure that they make a reasonable request and only roster employees if they have not provided a reasonable refusal.
For more information about your entitlements such as pay and leave when working, or not working, on a public holiday, please refer to the Fair Work Ombudsman website or seek legal advice.
Contact Us
If you believe your employer is not complying with The Fair Work Act 2009 (Cth) or the National Employment Standards, it is best to seek professional legal advice. If you would like to discuss your employment matter with a legal professional, please contact us on (02) 9963 9800 or at [email protected]
Jul 16, 2022 | Employment Law
Unfair dismissal matters can be complex and frustrating for both employers and employees alike. Since the commencement of the Fair Work Act (‘the Act’) in 2009, employers have responsibilities to correctly terminate employees. More employees are commencing unfair dismissal claims, and it is important to understand for both employers and employees to understand how these claims work.
Terminating a person’s employment is usually stressful and upsetting for everyone concerned, so it’s crucial to understand when and how termination an be done in a fair and appropriate manner.
The issues can be complex
Unfair dismissal claims may incorporate far-reaching issues including the employment type of the employee, award and enterprise agreement coverage, and time limits for claims.
In addition, the definition of ‘dismissal’ can include a situation where a person resigns but was forced to do so because of their employers conduct. This is commonly referred to as ‘constructive dismissal’.
A dismissal must be harsh, unjust or unreasonable for it to be an unfair dismissal under the Act. The primary remedy in the Act is reinstatement (where an employee is returned to their position), but in practice this is the exception rather than the rule. More often than not, compensation is ordered instead – the Fair Work Commission can order compensation of up six months of the employee’s salary.
Who is covered by the unfair dismissal provisions of the Fair Work Act?
- In a small business (with fewer than 15 employees), an employee is covered if they have worked for at least 12 months. However, even if an employee has worked at the business for 12 months, a dismissal will not be unfair where the small business has complied with the Small Business Unfair Dismissal Code.
- For larger businesses, employees are covered after six months
- Under the Act, a dismissal will not be unfair if an employer can show that it was a “genuine redundancy”.
What is a “genuine redundancy”?
There are three elements to a genuine redundancy
- The employer no longer requires the employee’s job to be done by anyone because of changes in the employer’s operational requirements; and
- The employer has complied with any consultation obligations that it might have in an enterprise agreement or award; and
- It would not have been reasonable for the employer to redeploy the employee within the employer’s business or the enterprise of an associated entity of the employer.
Small businesses – don’t be caught out
Research by Benoit Freyens, assistant economics professor at the University of Canberra, and Paul Oslington, economics professor at the Australian Catholic University, found that in the change from the Workplace Relations
Act 1996 to the Fair Work Act:
- Claimant success rates have lifted from 33% under Work Choices to 51% under the current Act.
- Claims under the Act against businesses with more than 100 employees have a 41% success rate, versus the 33% rate under the Workplace Relations Act.
- Claims lodged under the Act have jumped to 17,000 per year, from 6000 under Work Choices.
- Payouts were steady, averaging about 12 weeks’
Conclusion
Employers need to be vigilant in conforming to proper process when dismissing somebody, even when the employer believes they have sufficient reasons to justify dismissal. Employers need to follow the correct process – such as providing warnings and collecting documentary evidence. In the absence of this process it’s very easy to formulate an unfair dismissal claim on the basis of a lack of fair process.
For employers the best way to avoid claims of unfair dismissal is to make sure that your organisation and your employees really understand their obligations under the Fair Work Act when terminating someone’s employment. It also means there should be an internal review of the firm’s policies.
We represent both employers and employees so if you or your organisation needs assistance or advice on how to proceed please call on (02) 9963 9800 or via our contact form.
Jun 29, 2022 | Employment Law
It’s important for all businesses to determine whether their workers are classified as employees or independent contractors, as tax, super and other government obligations are different depending on the working arrangement present.
- Employees generally have PAYG withholding, superannuation (and occasionally fringe benefits tax) paid by the employer.
- Contractors generally look after their own tax and superannuation obligations.
If you as an employer fail to meet your obligations, you risk being liable to pay penalties.
Employee or Contractor: What factors do you need to consider?
There are a number of factors to take into account when determining whether a worker is an employee or an independent contractor. No single factor can determine this, you need to look at the whole working arrangement.
A worker isn’t automatically a contractor just because they have an ABN or specialist skills, or you only need them during busy periods.
Courts will look at the whole relationship between the parties when determining the status of a person’s employment.
The Fair Work Ombudsman has produced a table of common indicators that may contribute to determining whether a person is an employee or independent contractor:
| Indicator | Employee | Independent Contractor |
| Degree of control over how work is performed | Performs work, under the direction and control of their employer, on an ongoing basis. | Has a high level of control in how the work is done. |
| Hours of work | Generally works standard or set hours (note: a casual employee's hours may vary from week to week). | Under agreement, decides what hours to work to complete the specific task. |
| Expectation of work | Usually has an ongoing expectation of work (note: some employees may be engaged for a specific task or specific period). | Usually engaged for a specific task. |
| Risk | Bears no financial risk (this is the responsibility of their employer). | Bears the risk for making a profit or loss on each task. Usually bears responsibility and liability for poor work or injury sustained while performing the task. As such, contractors generally have their own insurance policy. |
| Superannuation | Entitled to have superannuation contributions paid into a nominated superannuation fund by their employer. | Pays their own superannuation (note: in some circumstances independent contractors may be entitled to be paid superannuation contributions). |
| Tools and equipment | Tools and equipment are generally provided by the employer, or a tool allowance is provided. | Uses their own tools and equipment (note: alternative arrangements may be made within a contract for services). |
| Tax | Has income tax deducted by their employer. | Pays their own tax and GST to the Australian Taxation Office. |
| Method of payment | Paid regularly (for example, weekly/fortnightly/monthly). | Has obtained an ABN and submits an invoice for work completed or is paid at the end of the contract or project. |
| Leave | Entitled to receive paid leave (for example, annual leave, personal/carers' leave, long service leave) or receive a loading in lieu of leave entitlements in the case of casual employees. | Does not receive paid leave. |
A simple way to help tell the difference between employees and contractors
The Australian Taxation Office on its website uses the following simple descriptions:
- Employees work in your business and are part of your business.
- Contractors run their own business and provide services to your business.
Why is the distinction important?
Employment relationships are regulated by specific labour protection laws and various awards/workplace agreements. These laws typically provide a higher degree of protection to employees than the general commercial laws that regulate contractor relationships.
This protection includes minimum conditions and standards of employment for employees, including minimum entitlements for leave, public holidays, notice of termination and redundancy pay.
Adopt good business processes
Business owners need to keep records of any decision on whether a worker is an employee or contractor and the factors relied on to make that decision.
Most of the information needed to support this decision can be found in a service contract for independent contractors or an employment contract for employees, which should accurately reflect the actual conditions of the working arrangement.
All contracts should:
- Be in writing;
- Specify whether it is a contract for services or an employment contract; Set out the period of engagement and the remuneration;
- Include dispute resolution provisions; and
- Specify if/how the relationship can be terminated.
Penalties
It is illegal for an employer to misrepresent an employment relationship or a proposed employment arrangement as an independent contracting arrangement or make a knowingly false statement to persuade or influence an employee to become an independent contractor.
Under the Fair Work Act inspectors can:
- Seek the imposition of penalties for contraventions of sham contracting arrangements
- Apply to the courts to grant an injunction or an interim injunction if an employer seeks (or threatens) to dismiss an employee for the purpose of engaging them as an independent contractor. The purpose of the injunction would be to prevent the dismissal from occurring, or otherwise remedy the effects. Courts can also make other orders to have the employee reinstated or compensated.
If you need more information or if you need assistance or advice on how to proceed please contact us on (02) 9963 9800 or via our contact form.
Jun 21, 2022 | Employment Law
Significant damage can be done to a business when an executive or senior manager resigns, taking with them valuable customers and confidential information. Restraint of trade clauses, or post-employment restraints, play a crucial role in protecting the legitimate interests of the employers when senior employees resign.
In order to protect business interests, employment contracts should contain protections which operate after the employment ends.
Restraint of trade clauses
Restraints of trade are included in employment contracts to protect an employer’s trade secrets, confidential information, customer connections and staff connections by restricting an employee’s activities after they have left employment.
A restraint clause is void unless it is reasonably necessary to protect the legitimate interests of the employer. The legitimate interests of a business will generally relate to confidential information, trade secrets and customer connections – however this will depend on the particular clause and the circumstances of each case.
A restraint clause typically prevents an employee from:
- Contacting the employer’s clients for the purposes of selling goods or services or enticing the clients away from the employer;
- Setting up a business competing with the employer’s business or working in a competitive business; and
- Poaching employees of the business.
Reasonableness
When determining whether restraint clauses are reasonable, courts will consider the following:
- The negotiation process, and in particular comments made when negotiating restraint clauses.
- The bargaining position of the parties. Was there an imbalance of power between the employer and the employee at the time of agreeing to the restraint? Did the employee have the opportunity to obtain legal advice?
- The nature of the employer’s business and characteristics of the employee. The closer the employee is to the employer’s customers, the more likely the restraint may be considered reasonable.
- The duration and geographical area of the restraint. The longer the time and wider the area, the less likely it will be reasonable.
The reasonableness of the restraint must be decided at the date of entering into the employment contract. For this reason, it is important that the parties to the contract each have an opportunity to negotiate the terms of a restraint. In addition, employees should be encouraged to seek legal advice about the length and the effect of the restraint.
The trend of waterfall or cascading Clauses
Restraints are often applied for a specified period, in relation to a particular geographic area. A common device for reducing the risk of invalidity on the ground of unreasonableness is to include ‘waterfall’ or ‘cascading’ clauses. These are alternate provisions contained in an employment agreement that may enable a court to strike out a harsher (unreasonable) restraint whilst retaining a less-restrictive and reasonable clause.
The advantage to these is that each clause is severable by a court without affecting the validity and enforceability of the restraint.
How do courts enforce restraint of trade clauses?
Employment contracts and restraint of trade clauses must be carefully drafted to ensure they can be enforced through a court. In such cases, an employer must persuade the court that the clause is reasonable and therefore valid and enforceable.
When considering enforceability, the court will consider two key issues:
- Whether the employer has a legitimate interest to protect; and
- Whether the restraint is a reasonable protection of that interest.
What are the legal remedies?
The common remedy sought by employers faced with an employee’s breach of a restraint clause is to seek an injunction. An injunction may restrain a former employee from acting in a way, or continuing to act in a way, that breaches a term of the former employment contract. For example, an injunction may prevent a former employee from working for a competitor for a certain period of time or from using or disclosing information confidential to the former employer and its business.
Some tips for business owners
When drafting restraint clauses in employment contracts, it is important to:
- Make sure the period of restraint is appropriate to the employee’s position and access to confidential information.
- Make sure the prohibited activities to be prevented are similar to the employee’s current activities.
- Ensure contracts are reviewed regularly and updated to reflect changes in the employee’s role.
Conclusion
Having an enforceable and valid restraint in employment contracts is crucial if an employer hopes to rely on it to enforce a former employee’s post-employment obligations.
This issue needs to be considered by employers when the employment contract is drafted because a court will consider the reasonableness of the restraint as at the time the contract was entered into. The courts will only find that a restraint clause is valid and enforceable where a business can demonstrate that it has a legitimate interest to protect and that the clause is reasonable.
We are able to review, draft and advise on restraint clauses and their enforceability generally. If your business needs assistance, please contact us on (02) 9963 9800 or via our contact form here.
