What are your job classifications really costing you?

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Dozens of workers in Melbourne’s South and South-Eastern suburbs have shared in more than $93,100 in back-pay after recent inquiries by the Fair Work Ombudsman revealed they had been underpaid at work.  Many of these underpayments are occurring because the employer had misclassified some workers and/or were not fully aware of the penalty rates that applied to late-night and weekend shifts.

This costly exercise for employers highlights the need for businesses to ensure they correctly classify their staff as part of identifying and applying correct pay and conditions.

The job is – what the job is!

An accurate position description is the cornerstone of any employment relationship, and yet this very important reference document is often missing from an employee’s engagement package and/or becomes dated and at times obsolete.

The reality is once we know what the job entails we can then;

a) make an informed decision about what industrial instrument applies to the role (modern award or enterprise agreement)

(b) determine the correct classification definition (as provided for in that relevant industrial instrument)

(c) determine the correct minimum rate of pay (which applies to that classification definitions)

(d) identify other penalties and allowances that might need to be applied.

It is also important to remember that the job is…what the job is. What I mean by this, is that if we do not require someone to have a trade qualification in their role, there is no obligation on our part to remunerate and reward someone for having this qualification unless there are other benefits in doing so. An example where is might apply is where a Cook is required as opposed to the trade-qualified Chef.

As much as they often cause us great angst, industrial instruments are very powerful tools for a business. As such, it is important to know what they contain and to use the provisions contained within to ensure compliance and to generate efficiencies.

Errors in application

Many other provisions within an industrial instrument are often aligned with classification definitions.

The Registered & Licensed Club Award provides for the non-application of certain provisions where managerial classifications receive salaries which are 20% and 50% in excess of the base rate. These clauses can only be applied where the position classification is determined as Level 7 to Level 13, and yet it is often found that this exemption has been applied in error to positions classified Level 1 through 6.

Another common error is the loose application of a Level 6 rate of pay without clarification that this rate is seen to be an above award payment. In reality, a Level 6 rate of pay under the Registered & Licensed Clubs Award is directly attributable to a Cook (Tradesperson), Grade 5 (Chef de Partie or Sous Chef); the Club Manager of a Club whose gross annual revenue is less than $500K; and a Diploma Qualified Child Care Worker who is engaged as a Supervisor.

Hide and seek

Many industrial instruments often also include ambiguous allowances such as those referenced from the Registered & Licensed Clubs Award below:

  • Clause 18.2 Allowances for responsibilities or skills that are not taken into account in rates of pay – is a very long title that ultimately draws reference to the payment of first aid allowances;
  • Clause 18.3  Allowance for disabilities associated with the performance of particular tasks or work in particular conditions – is another very long title providing for broken periods of work (split shifts); and
  • Clause 18.1(b)(iii) provides for the reimbursement of demonstrated costs incurred for laundering special clothing, but does not clarify what would be considered an appropriate amount which results in variations between employers.

Flexibility provisions

There are also flexibility clauses contained within an industrial instrument which can be beneficial to employers. Some of my favourites contained in the Registered & Licensed Clubs Award include:

  • Clause 7 allows and employer and an individual employee to vary the application of certain terms of the award;
  • Clause 15 provides that employees must undertake duties as directed across all areas of the business provided they have the competencies to do so;
  • Clause 26.9 allows for an employee to work make-up time with the consent of the employer; and
  • Clause 30.4 allows an employer to require and employee to take annual leave where more than eight weeks is accrued.

Documenting the employment relationship

The following is a checklist of those documents we flag for consideration and inclusion as part of formalising the employment relationships. Many of these ensure compliance under the Fair Work Act and related legislation.; Others are seen to be best practice.

  • An accurate and detailed Letter of Offer (employment contract)
  • A current and Position Description
  • Fair Work Information Statement
  • Tax File Number Declaration Form
  • Superannuation Standard Choice Form
  • Employee Details Form
  • Induction Checklist
  • Staff Manual
  • Employment Health Questionnaire (optional)
  • Parental Consent Form for School Aged Children (Queensland)

To find out more about your venue’s job classification requirements, contact us on 07 3878 9355 or email us at info@dws.net.au.

 

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