Record keeping woes: Are you doing the right thing?

Keeping records is a given in HR management.  According to Frances Thomas, senior associate at Holding Redlich, many employers are confused as to what records to keep, who can access them, and how to handle requests to access them.

According to requirements detailed in both the Fair Work Act and the Fair Work Regulations 2009, records must be legible, they must not be altered to except to correct errors, must not be misleading or inaccurate and must be readily accessible to a Fair Work inspector, whilst remaining otherwise confidential to the employee (health and union officials may have access in certain circumstances).

Employees must have access to a legible copy of their record at their place of work within two business days after making a request. Alternatively, a copy can be posted to the employee within a fortnight.

Thomas stressed that the responsibility of regularly maintaining – and if need be, correcting – records falls on the employer, regardless of whether the payroll function has been outsourced.

Suspected failures to adhere to record-keeping standards are investigated by Fair Work inspectors, who may issue infringement notices up to a year after a contravention. Fines for non-compliance with these notices can reach $510 for an individual and $2,500 for a corporation. “Depending on the circumstances, the actual penalty may be much higher if a large number of employees are involved,” Thomas said.

In the case of repeat contraventions or more serious cases, court action may be initiated by the Fair Work Ombudsman, seeking a civil penalty against corporations and individuals who have been involved. In this case, the maximum civil penalties per contravention rise to $5,100 (30 penalty units) for individuals and $25,500 (150 penalty units) for corporations.

The right to access employment records of members is limited to union officials in that they must be investigating a suspected contravention. A specific notice is often needed, but provisions are made in circumstances where a notice may be dispensed with. The official’s disclosure of the information from these documents is limited to investigating and/or seeking a remedy to a contravention.

Holding Redlich provided a number of steps organisations can put into place to ensure adherence to their obligations:

• Review what records are being created and the process of maintaining them.

• Regularly conduct in-depth audits to determine the level of record accuracy.

• Design, implement and train staff on correction processes.

• Carefully consider the level of access allowed to employee and contractors’ records internally, such as which HR personnel should have access to particular files.
   
• Ensure processes for dealing with requests for access from employees, unions, the FWC Inspectors and third parties are implemented correctly.
   
• Identify the records that employees and union officials have a right to access.
   
• Identify records that pertain to contractors and records that are outside of the employment relationship and develop protocols for complying with the National Privacy Principles in relation to these.
   
• Seek advice in transfer-of-business scenarios about the employment records being provided to a buyer or potential buyer and about contract provisions to be included in the sale of business agreement dealing with the provision and content of employee records as well as timing of when that information will be provided.
   
• When outsourcing functions such as payroll, ensure that there is an adequate agreement in place which addresses a potential breach of obligations by the other party and also allows for regular record due diligence.
   
• Be mindful of how information in records may be perceived by employees, particularly in respect of attributes protected under Anti-discrimination Laws, including mandatory reporting requirements.
   
• For businesses that contract with State Government departments or agencies, further scrutiny should be applied and specific advice obtained in relation to privacy obligations.
   
• In all communications with contractors, employees and prospective employees, clearly and directly explain what information you collect, how this information is used and what access employees have to it.
   
• Develop a policy which communicates these issues to employees and contractors and provides an avenue for them to seek access to records and also to challenge a determination by the business to refuse access.