What's true and what's false for employers' legal obligations
How many times have you heard that you must give an employee three warnings before terminating their employment? Or that you have an obligation to offer an employee a support person in every meeting?
In this article, the first of a two-part series, we will discuss the most common workplace myths and provide clarity on the rights and obligations of employers and employees.
‘We pay above the award, so we don’t have to worry about the award: An award sets out the minimum terms and conditions of employment for certain industries or occupations, including the minimum rates of pay, hours of work, leave entitlements and consultation obligations.
It is common for employers to choose to pay an annual salary to award-covered employees that is in excess of their entitlements under the modern award. However, this does not mean that the award no longer applies to the employment relationship.
When an employer chooses to pay an employee above award entitlements, the employee must still be paid at least what they would have been paid in accordance with the award (including overtime and penalty rates). Other sections of the award, such as breaks and consultation obligations in relation to major workplace changes will continue to apply.
Where the employer and employee have agreed to a guarantee of annual earnings under the Fair Work Act 2009 (Cth) (FW Act), the award will not apply for the period of the guarantee. However even in these cases, the employee will remain covered by the award and will be eligible to make an unfair dismissal claim.
Medical certificates
‘I can only request a medical certificate if an employee takes sick leave around a weekend or a public holiday’: Under the FW Act, employers have a right to request medical evidence, such as a medical certificate, on each occasion that an employee is absent due to an illness or injury, including a single-day or part-day absence. Employers can also request evidence if an employee is exercising their right to take carer’s leave.
Despite the above, employers may have a policy that provides different or more onerous evidence requirements and employers should be mindful of their policy requirements when making requests for medical certificates.
‘An employee cannot bring an unfair dismissal claim if their employment ends during the probationary period’: Contracts of employment usually set a six-month probationary period. This period allows the employer to test whether the employee is the right person for the role and whether they have the necessary skills and experience.
The reason most contracts have a six-month probationary period is because that is typically the ‘minimum employment period’ that an employee needs to serve under the FW Act before they can bring an unfair dismissal claim (it is 12 months for small business employers). However, the contractual probationary period and the statutory minimum employment period are two separate concepts.
This can become a problem for employers who have concerns about an employee’s performance and extend the employee’s contractual probationary period beyond the six-month statutory minimum employment period. If the employer terminates the employee’s employment during the extended probationary period, then subject to the employee meeting the other eligibility requirements for making a claim, those employers might face a valid unfair dismissal claim because the employee will have served the statutory minimum employment period under the FW Act.
‘You only need to provide policies at induction’: Employers should take employees through workplace policies during inductions and keep a record of this as one of the ‘reasonable steps’ taken by the employer to address inappropriate and unlawful behaviours at work. However, for certain types of behaviour, this alone is not enough.
To avoid being held vicariously liable for the acts of their employees in the workplace, such as acts of discrimination or harassment, employers need to show they have taken all ‘reasonable steps’ to prevent the employees from engaging in the conduct from occurring.
Gadens recommends that policies are provided at induction and all employees are provided with refresher training at least every six months.
Recent changes to federal anti-discrimination laws introduced a ‘positive duty’ requiring employers to take reasonable and proportionate measures to eliminate as far as possible conduct that includes sex discrimination, sexual harassment, harassment on the ground of sex, a hostile workplace environment and victimisation in the workplace. Training on policies at induction will not be enough to satisfy the positive duty.
Deductions from pay
‘I can make deductions from an employee’s pay’: Generally, under the FW Act, employers can only make deductions from an employee’s pay when the following requirements are satisfied:
- the employee agrees in writing to the deduction and the deduction is principally for the employee’s benefit; or
- the deduction is authorised by or under law, an industrial instrument or an order of a court.
Additionally, a deduction authorised in writing and principally for the employee’s benefit must specify the amount of the deduction and may be withdrawn in writing by the employee at any time.
Despite having a provision in employment contracts stating that the employer can deduct any monies the employee owes to the employer from the employee’s pay, employers should be mindful of the rules around deductions, particularly in relation to training benefits, payments for courses, etc. We would generally recommend a separate agreement for these types of arrangements, to ensure employers are meeting the requirements of the FW Act.
Next week, we’ll cover another five workplace myths.
Erin Lynch is a partner specialising in employment and workplace relations at Gadens in Sydney.
