In brief - With the pandemic of COVID-19 occupying much of management time at present, it would be easy to lose track of the recent key changes to workplace laws. While most employers are rightly prioritising the safety of their workers, employers also need to keep an eye on the new compliance requirements. 

Employers and HR teams should be making plans for the following changes:

Annualised salaries

On 1 March 2020, annualised salary clauses were inserted into several modern awards. This follows the decision of the Full Bench of the Fair Work Commission, which was made in response to widespread issues of 'wage theft' and employers failing to comply with awards. 

These changes include obligations to audit annual salaries, record hours of work, and back payments of any shortfall when annual salaries are audited against modern award entitlements. 

The modern awards affected by these changes are:

  • Banking, Finance and Insurance Award 2010

  • Clerks - Private Sector Award 2010

  • Contract Call Centres Award 2010

  • Hydrocarbons Industry (Upstream) Award 2010

  • Legal Services Award 2010

  • Mining Industry Award 2010

  • Oil Refining and Manufacturing Award 2010 (clerical employees only)

  • Salt Industry Award 2010

  • Telecommunications Services Award 2010

  • Water Industry Award 2010

  • Wool Storage, Sampling and Testing Award 2010

It was also held that some other Awards would have changes that required agreement between the employers and employees. These are:

  • Broadcasting and Recorded Entertainment Award 2010

  • Local Government Industry Award 2010

  • Manufacturing and Associated Industries and Occupations Award 2010

  • Oil Refining and Manufacturing Award 2010 (non-clerical employees)

  • Pharmacy Industry Award 2010

  • Rail Industry Award 2010

  • Horticulture Award

  • Pastoral Award 2010

  • Health Professionals Award 2010

  • Marine Towage Award 2010

  • Restaurant Industry Award 2010

  • Hospitality Industry (General) Award 2010

We recommend employers consider reviewing their current payroll and recording processes to ensure compliance by:

  • Reviewing any common law 'set-off' clauses in employment contracts to ensure their clauses are appropriately drafted and valid;

  • Reviewing time and record keeping processes and payroll systems;

  • Implementing annual salary review and reconciliations; 

  • Considering undertaking regular payroll checks, with the advice from HR or legal advisors, to ensure compliance. This may also be done when new employees are engaged; and

  • Considering if other forms of annualised salary options are more suitable to the employer. These include bargaining for an enterprise agreement, implementing an annual salary under a Modern Award, entering into an individual flexibility agreement with the employee or, for high income earners, entering into a guarantee of annual earnings. 

The use of annualised salaries and common law 'set-off' clauses are still a viable option for employers. However care must be taken to ensure that they are drafted to comply with recent Fair Work Commission rulings. A general statement allowing 'set-off' may not be sufficient.  

For further information on the annualised salary clauses, refer to our article: Employers get ready for modern award changes in 2020

Whistleblower laws

On 1 January 2020, new whistleblower protections laws came into effect, which offer greater protections to whistleblowers and require 'regulated entities' to publish whistleblower policies. 

'Regulated entities' include public companies and large proprietary companies. 

As at 1 January 2020, the whistleblower policy should detail:

  • The protections available to whistleblowers;

  • To whom disclosures can be made;

  • How the employer will support whistleblowers and protect them from detriment;

  • Information about how the employer will investigate disclosures that qualify for protection;

  • Information about how the employer will ensure fair treatment of employees of the company who are mentioned in disclosures that qualify for protection;

  • Information about how the policy is to be made available to officers and employees of the employer. 

Employers are encouraged to:

  • Review any existing policies to ensure compliance with the changes or implementing a comprehensive new policy; and

  • Undertake appropriate training to deal with the new legislation, particularly for managers and supervisors who will be classified as recipients of a disclosure.

For further information on the changes to whistleblower laws, please see our articles: 

  1. Employers: get ready for new whistleblower protection laws in 2019

  2. ASIC releases Regulatory Guide on the content required in whistleblower policies.   

Other Upcoming Changes

Employers may expect:

  • Criminalisation of wage theft. The Federal Attorney-General is pushing to introduce legislation to criminalise worker exploitation and underpayments. At this stage, the Attorney-General has only released a discussion paper on the issue. The Fair Work Ombudsman is also planning to establish an underpayments taskforce. Employers should review their governance processes for classifying staff and pay and overtime rates to ensure compliance.

Now might be the time to review your current payroll practices to better understand where there might be compliance issues.

If you engage independent experts to assist with this process, it will be appropriate to seek advice in regards to the 'rules' and 'definitions' that should be applied. You might even consider how you might ensure privilege over such processes. 

  • Appeal of Mondelez to the High Court. The appeal is yet to be listed for hearing in 2020, but it has potentially major ramifications and back pay claims for employers, particularly for those employers with non-standardised shift arrangements. Until the appeal is determined, employers are encouraged to review how they calculate personal/carers leave for shift workers and employees working more than 7.6 hours a day. The Fair Work Ombudsman has also updated its Fair Work Information Statement to address the Mondelez appeal.

Again, now might be the time to review your current payroll practices to better understand where there might be compliance issues. Our comments in regards to 'rules', 'definitions' and privilege apply equally to reviews of how entitlements are accrued. 

  • Modern Slavery Act reports due 31 December 2020. Employers who are covered by the Commonwealth legislation should begin to prepare for the 31 December 2020 reporting deadline.

  • Potential increase to penalties under the Privacy Act. In April 2019, a proposed penalty regime for breaches of the Privacy Act 1988 (Cth) was announced that would impose penalties for 'serious and repeated breaches' from $2.1 million to the greater of: $10 million; or three times the value of any benefit obtained through the misuse of information; or 10% of the company's annual domestic turnover. While the date of the proposed new regime has not yet been announced, we expect this to occur sometime in 2020. Employers should take time now to consider their privacy policies, audit procedures and staff training on privacy protection to ensure compliance with privacy laws and prevent the risk of being liable for substantial monetary penalties. 

  • Increase to Victorian and New South Wales workplace manslaughter penalties. Employers and directors should review their work health and safety policies and procedures to ensure they have a robust safety management system in place to reduce likelihood of incidents and manage their risk.

  • ABCC’s security of payment audits. In December 2019, the ABCC announced that it will be conducting a security of payment audit campaign for employers covered by the Code for the Tendering and Performance of Building Work 2016 (Code). The ABCC has advised code covered entities to review progress payment claims submitted to them prior to the audit commencing to ensure all payments have been timely and that no claims that are due and payable are outstanding.

What can employers do?

As we all practice social distancing and working from home, employers and HR should be taking time to consider the changes to the workplace laws and how they can ensure compliance.

This may include:

  • Considering what the above changes mean for your businesses and workforces;

  • Reviewing any existing policies to ensure compliance with the changes or implementing new policies; 

  • Consider undertaking an audit of relevant systems (e.g. payroll, WHS and privacy policies and procedures) to understand any gaps; and

  • Planning and undertake appropriate training to deal with the changes. Consider whether this training could be undertaken online for ease of employees in isolation.

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2024.