31 Aug HR LAW NEWSLETTER – AUGUST 2022

Welcome to the August 2022 HR Law Newsletter.   This month, we discuss changes to the annualised wage provisions in certain Modern Awards, upcoming 1 October 2022 wage increases, enterprise agreements, the high income threshold and personal injury claim farming.  

Changes to annualised wage provisions in the Hospitality Industry (General) Award 2020 and the Restaurant Industry Award 2020

From 1 September 2022, new annualised wage arrangement clauses will come into effect for the Hospitality Industry (General) Award 2020 (“Hospitality Award”) and the Restaurant Industry Award 2020 (“Restaurant Award”). These new annualised wage arrangements will replace the current annualised salary arrangement provisions in these Modern Awards. 

Key changes include:

• rules about what Modern Award entitlements can be included in an annualised wage arrangement;
• new rules about the maximum number of hours that attract overtime or penalty rates that an employee can work in a roster cycle and be included in their annualised wage (called the “outer limits”);
• what needs to be included in a written agreement for an annualised wage arrangement;
• extra record-keeping rules; and
• new rules about ending an annualised wage arrangement.

Annualised wage arrangements can be complex and require a thorough understanding of the Modern Award provisions and how they are applied.  If an annualised wage is something that your business is considering, give the team at HR Law a call. We can assist you in navigating your obligations under these types of payment arrangements.

1 October 2022 Modern Award wage increases

Employers are reminded of the upcoming Modern Award wage increase that will take effect from 1 October 2022 for the aviation, hospitality and tourism industry.  The increases apply to the following awards:

• Aircraft Cabin Crew Award 2020
• Airline Operations – Ground Staff Award 2020
• Air Pilots Award 2020
• Airport Employees Award 2020
• Airservices Australia Enterprise Award 2016
• Alpine Resorts Award 2020
• Hospitality Industry (General) Award 2020
• Marine Tourism and Charter Vessels Award 2020
• Registered and Licensed Clubs Award 2020
• Restaurant Industry Award 2020

You can access our previous article which discusses the 1 October increases here: https://www.hrlaw.com.au/hr-law-alert-annual-wage-review-2021-2022/

Enterprise Agreements

Enterprise agreements are industrial instruments that set out employment conditions for employees to whom they apply and are regulated by the Fair Work Act 2009 (Cth) and other relevant legislation, such as long service leave legislation.  One of the most common issues that arise with enterprise agreements is underpayments due to employers inadvertently applying incorrect payment provisions under an enterprise agreement.  

We have seen an example of this recently in the education sector. Currently, the University of Newcastle (“UON”) and the Charles Sturt University (“CSU”) are back-paying employees approximately $6,200,000.00 and $3,200,000.00 respectively as well as unpaid superannuation and interest for enterprise agreement underpayments. Both universities have also each signed separate Enforceable Undertakings (“EU”) with the Fair Work Ombudsman.

The UON did not correctly pay overtime and penalty rates, underpaid meal allowances and failed to provide minimum engagement hours owed to casuals.  These underpayments resulted because of deficiencies in UON’s payroll systems relating to interactions between overtime, allowances and penalty rates as well as the incorrect application of the relevant clauses in their enterprise agreement. In accordance with UON’s EU, UON must back-pay all known underpayments, plus a total of more than $171,000.00 in superannuation and over $1,375,000.00 interest, by 31 October 2022.

CSU’s breaches related to failures to provide minimum engagement hours for casual professional staff, and underpayment for teaching activities for casual academic staff such as failing to pay the higher qualified rate for PhD qualified academics and failing to pay for required preparation time for lectures and tutorials. CSU also lacked system controls to identify timesheet entries inconsistent with the terms of its enterprise agreement. Its EU requires CSU to rectify all underpayments, plus pay more than $628,000.00 in interest on wages and approximately $476,000.00 in relation to superannuation and related interest, by February 2023.

Employers are reminded to review their enterprise agreements and payroll records to ensure that employees are being paid in accordance with any applicable enterprise agreement.   If employees are not being paid in accordance with the enterprise agreement, employers may be subject to considerable back payments for unpaid wages and entitlements.  As you can see, these amounts can be considerable and run into the millions of dollars.

Claim Farming Now Banned

The practice of pressuring workers into making a workers’ compensation claim through what is termed “claim farming” is now banned under Queensland Law.  The term “claim farming” refers to the process by which a third party (claim farmer) approaches individuals to pressure them into making a compensation claim for personal injuries. Tactics often used by claim farmers are falsely implying they act on behalf of certain groups such as government agencies and insurers, encouraging individuals to make a claim by promising speedy and substantial compensation as well as offering to manage any medical treatments. The individual’s details are sold to claim management service providers who then handle the claim.

The Personal Injuries Proceedings Act 2002 (“PIP Act”) has been amendedto include the insertion of chapter 3 part 2 – Referrals of claims and contact to solicit or induce claims.   Clause 71B- Approach or contact for the purpose of making a claim of the PIP Act makes it clear that:

“(1) A person (the first person) must not personally approach or contact another person (the second person) and solicit or induce the second person to make a claim. Maximum penalty—300 penalty units.

(2) For subsection (1), a person personally approaches or contacts another person if the person contacts the other person— (a) whether in person or by mail, telephone, email or another form of electronic communication; and (b) whether the other person is contacted individually or as a member of a class of persons.”

If you have a workers compensation claim made against your business and you think there may be a breach of the PIP Act, give HR Law a call. We can assist you to manage the process including objecting to the claim and preparing review applications.

THIS MONTH’S CASE BRIEF

Variable time off in lieu provisions excluded from high income threshold cap

When considering an employee’s eligibility to make an unfair dismissal application, the Fair Work Commission (“Commission”) has found that variable time off in lieu (“TOIL”) provisions included as part of an employee’s salary package are excluded when calculating the high income threshold cap.

In Adam Jambanis v Warrikal Engineering Pty Ltd [2022] FWC 1907, the Commission determined that unpredictable time off in lieu should not be included when determining whether a worker is excluded from making an unfair dismissal claim because their remuneration exceeds the statutory threshold. The applicant, Mr Adam Jambanis (“Mr Jambanis”)’s salary package comprised of $155,000.00 annual remuneration, a $15,500.00 compulsory superannuation contribution, a $50.00 monthly phone allowance and overtime converted into time in lieu.

The Respondent, Warrikal Engineering Pty Ltd (“Warrikal”) raised a jurisdictional objection to the application contending that Mr Jambanis was paid above the high income threshold ($158,500.00 at the time of his dismissal) and was not protected by the unfair dismissal provisions in the Fair Work Act 2009 (Cth) (“FW Act”).

Mr Jambanis submitted that:

• his payslips confirmed that overtime paid per fortnight varied depending on Warrikal’s client operational requirements;
• pursuant to section 332(2)(a) of the FW Act, which specifies that an employee’s earnings do not include “payments the amount of which cannot be determined in advance”, the “overtime” and “site allowance” payments should be excluded from the calculation; and
• whilst there was an agreement as to how his TOIL and overtime payments would be managed, there was never an amount of TOIL or overtime guaranteed in his contract of employment. Therefore, the overtime could not be determined in advance and should not be included in the calculation.

Warrikal argued that Mr Jambanis’s pay exceeded the high-income threshold prescribed by section 382(b)(iii) of the FW Act and submitted for consideration:

• contract clauses and the intent of the clauses in relation to rosters, hours of work, and time off in leu of pay (TOIL).
• the regular, systematic, and agreed in advance, hours of overtime to be worked by the Applicant.
• valuation of overtime being able to be determined in advance and recorded by payroll.
• the signed contract which included the TOIL agreement.

With regard to the payroll records, Commissioner Schneider stated at [38] “the TOIL surplus payments received by the Applicant varied significantly each pay period” and that “this weighs in the Applicant’s favour that the payments, that occurred not infrequently, were not guaranteed, and could not be determined in advance”.

As such, Commissioner Schneider at [53] was “not satisfied that the Applicant’s TOIL surplus payments can correctly be classified as guaranteed overtime or earnings”.

Therefore, Mr Jambanis’ pay was not found to exceed the high income threshold, the jurisdictional objection was dismissed and the matter was progressed to a hearing on the merits of the unfair dismissal application.

Employers are reminded to check the contractual provisions of their high-income earning employees to ensure all salary entitlements will form part of the total remuneration package.   

The content of this article is intended to provide a general guide to the subject matter.  Specialist advice should be sought about your specific circumstances.