New legislation allowing employees access to 10 days of Paid Family and Domestic Violence Leave (FSVL) applies for large business from today, 1 February 2023. What does this mean for employers?
Firstly, what’s changed?
- Full-time, part-time and casual employees will be able to access 10 days of paid family and domestic violence leave in a 12-month period (FDVL)
- Previously, only full-time and part-time employees could access FDVL and only up to 5 days of unpaid leave in a 12-month period
- The full 10-day leave entitlement will be available upfront and can be taken in a single block or in any other manner
- There is no length of service requirement or qualifying period
- The leave does not accumulate year-to-year
- There are now tighter rules about information that must not be included on an employee’s pay slip relating to paid FDVL in order to preserve confidentiality
What is FDV?
Violent, threatening or other abusive behaviour by an employee’s close relative, a current or former intimate partner, or a member of their household, that:
- seeks to coerce or control the employee;
- or causes them harm or fear
Who is included?
- Spouse or former spouse, de facto partner or former de facto partner
- Child, Parent, Grandparent, Grandchild or Sibling
- A child, parent, grandparent, grandchild or sibling of an employee’s current or former spouse or de facto partner,
- A person related to the employee according to Aboriginal or Torres Strait Islander kinship rules
- Intimate partners (even if not living together), or
When can it be accessed?
Full-time, part-time and casual employees may apply for FDVL if:
- they experience family and domestic violence
- they need to do something to deal with the impact of the family and domestic violence
- it is impractical to deal with the family and domestic violence outside their ordinary hours of work
What evidence is required?
An employer can ask their employee for evidence that shows the employee took the leave to deal with family and domestic violence
If the employee doesn’t provide the requested evidence, they may not get FDVL
The evidence has to convince a reasonable person that the employee took the leave to deal with the impact of family and domestic violence
Types of evidence
- documents issued by the police service
- documents issued by a court (AVO/ADVO CAN’s)
- family violence support service documents, or
- a statutory declaration
What about Confidentiality?
New regulations prohibit employees from including information concerning FDVL on employees’ pay slips (Regulations)
This includes information about the employee taking FDVL, including leave records as well as any evidence provided by the employee
Payroll systems must be set up to ensure non-disclosure in leave records and on payslips
Pay slips must not mention FDVL, including any leave taken and leave balances
What are the obligations of an employer?
- FDVL is now an NES entitlement
- FDVL has strict record-keeping requirements
- A contravention of these requirements by an employer can lead to civil penalties
- $16,500 for individual; $82,500 for corporation
- FDVL poses general protections risks in that someone may not be treated adversely due to accessing FDVL.
What should employers do now?
We recommend that all businesses take the following actions immediately:
- Update your employment contracts
- Update your Family and Domestic Violence Leave Policy
- Communicate the changes to all employees
- Update your induction processes to ensure all new employees understand the policy and how to seek support
- Ensure your payroll and finance systems are compliant with confidentiality requirements
We are here to help you with any of these changes. Reach out if we can offer you support.
As we head towards the holiday season, it’s fair to say that 2022 was yet another big year for Australia’s workplaces. We look back at seven HR issues that have helped shape the previous 12 months.
1. Labour shortages
Perhaps the most important factor that shaped Australia’s workforce over the past year has been our labour market. With the unemployment rate sitting below 3.5% and with immigration slowing thanks to COVID-19 restrictions of the past two years, many industries and employers have faced a full-blown labour crisis. In fact, a lot of employers have struggled to get new workers while others have failed to keep their existing ones without offering significant pay increases.
It’s at times like these that both recruitment and retention strategies take on a whole new importance. So, if you’re not doing what you can to optimise your workplace culture and keep employees happy and productive, now is the time to start.
2. A new government
In May, the Albanese-led Labor government took office, bringing with them a different approach to industrial relations This included a renewed emphasis on job security and gender equality.
In early September, the government also hosted a Jobs Summit in which it committed to multi-employer bargaining, as well as changes to the ‘better off overall’ test the Fair Work Commission uses when creating Awards.
To help alleviate labour shortages (see 1 above), the government also announced it planned to lift the number of skilled workers it would accept from overseas.
3. Elevation of psychological risks
Mental health has been a major issue in Australia’s workplaces for some time. However, this year, the NSW government made it mandatory for employers to assess the workplace for psychological risks (and protect their employees from them). This elevates psychological harm to the same level as physical harm under NSW law, and means employers have new obligations in the field.
So if you haven’t already assessed the psychological risks in your workplace and taken steps to rectify them, do so as soon as possible.
4. Clarity on contractors
Towards the end of last year, the High Court handed down its Workpac decision, which means that this year – finally – employees have had a higher degree of certainty over their employee obligations.
The distinction between casual and permanent employees is now more obvious, especially when combined with the former government’s legislation around transitioning from casual to permanent. That meant employers could act with a bit more confidence when it came to staffing issues this year.
5. Diversity comes of age
Diversity has been a major issue in our workplaces for some time. However, 2022 was the year that it finally became a workplace priority for many of Australia’s employers. And why wouldn’t it have? Diverse companies are shown to “lure better talent and improve their decision making, customer orientation and employee satisfaction” – all major considerations in a job market like the current one.
6. The workplace changes
While COVID-19 is still with us, 2022 was a year of less disruption than 2020 or 2021. We didn’t have the lockdowns or border closures or anything else that impacted our businesses in quite the same way as we became used to in the two preceding years.
And yet, this didn’t mean we went back to how things were pre-pandemic. Instead, we still kept many of the workplace practices that had been developed over the past two years. A lot of workplaces have adopted more flexibility, with employees using a hybrid model of working both from the office and from home. Some have even abandoned the physical office altogether – or at least now only ask employees to come in once a fortnight or once a month.
This has presented new challenges for managers and business owners, but it’s also introduced new efficiencies – especially when it comes to communication. In many cases, it’s also made output and productivity the main gauges of employee performance.
7. Outsourcing becomes even bigger
With labour shortages and flexible working now very much part of our daily lives, we’ve noticed outsourcing is also on the rise too. To some extent, we believe that’s because employers are now used to having high-quality work performed offsite. But we also think it’s part of a push to keep costs down in light of rising wages and high inflation.
Either way, outsourcing functions – including HR – was a major trend we noticed this year and one we believe is likely to continue in 2023.
If you’d like to know more about outsourcing your HR function, get in touch.
Thinking of selling your business? Your Human Resources (HR) policies, processes and practices are all likely to have an impact on the price you receive.
We explore what you need to do to get your business HR ready for sale so that you secure top dollar when it comes time to sell.
1. Have the right HR policies in place
First and foremost, any potential buyer will usually want to know how your business functions from an HR perspective. Even more importantly, that your HR policies will continue to function when the buyer takes over. They’ll also want to know that you have established HR customs and procedures that don’t conflict too much with their own.
This means always taking the time to document and write down your HR policies and procedures before your business goes to market. This means everything from employee leave and flexible working hours through to termination and redundancy.
2. Understand your HR liabilities
The other key concern most buyers will have is your HR liabilities. They’ll usually go through a due diligence process to uncover these (or at least their lawyers will). When they do, they’ll notice things like “golden parachutes” for managers, massive redundancy entitlements, large looming bonuses and, most importantly, excessive leave liabilities.
To get the best price, you’ll need to keep these to a minimum. If a member of staff has accrued more than eight weeks’ annual leave, you may be within your rights to ask them to use some of it. You should also be prudent when it comes to agreeing on severance terms with senior staff.
3. Do what you can to retain key staff
One of the most challenging things to do will be convincing your employees to stay on after the sale. Some buyers will stipulate as a condition of sale that your key employees stay. This is especially true of any businesses that rely specifically on the skill of the staff to make money (ie professional services), as well as for relationships-based businesses.
Key employee retention is also important when the sale doesn’t involve a merger or acquisition by a similar business. That’s because the buyer won’t have existing employees to take over that workload.
Losing key staff in the run-up to a sale is also likely to diminish your business’s value. Reassuring them about their value is obviously a start, but sometimes it takes offering them incentives for them to stay. You may find you need to offer loyalty bonuses in this regard.
4. Keep up employee morale
A buyer is able to see a workplace with poor employee morale or a toxic workplace culture. They will notice workers who are disengaged and productivity that is slipping. To get the best value of your sale, you need to prevent this from happening. That involves communication.
It’s only natural employees will be worried, and let’s face it, perhaps some staff have every right to be. But you also need to let employees know the positives that new owners will bring. Will there be increased opportunities? A new direction? The chance to play out on a bigger stage? Just be sure that you’re realistic about what the future brings as promising the world is likely to have the reverse effect.
Also, keep your door open and let people come to you with their fears. Staying open and honest is vital.
5. Make sure you’re compliant
Finally, one of the main HR-related exposures any business buyer can face is inheriting non-compliance with a law, regulation, award or agreement. Here, it’s your responsibility to make sure the buyer won’t uncover any major surprises in their due diligence.
The way to do that is to audit your HR policies and practices. You need to find out where your exposures lie. Then you can make them right and make an educated decision on how to best approach things.
Uncovering a major breach of law can make a buyer nervous and leave them wondering what other exposures they may be facing.
Are your HR policies ready for sale?
Selling a business can be a long and drawn-out process. Any serious buyer is going to take time going through every detail to make certain they know what they’re buying. By identifying and correcting any HR-related issues, you’ll be in a much stronger negotiating position and more likely to get the best price.
If you’d like to get your business and HR policies ready for sale, speak to the Catalina Consultants team.
Companies that fall foul of the new whistleblower laws risk seriously heavy fines. So what should your business and your HR department be doing to comply? Employers who fall on the wrong side of these new whistleblower policies, risk the prospect of being fined up to 10 per cent of their annual turnover. This new whistleblower protection regime came into effect on 1 July 2019.
Which whistleblower protections have changed?
The key changes introduced on 1 July, that affect your HR policies are set out below.
- Protected disclosures now include any breaches of tax laws, ASIC laws and APRA laws, as well as criminal law breaches. Disclosures on systemic issues are also protected, even if they involve legal activities. However, disclosures about personal employment or workplace grievances such as interpersonal conflicts, transfer, promotion and disciplinary decisions aren’t protected.
- More people fall into the category of ‘eligible whistleblowers’, such as anyone who has ever been in a relationship with a company. This includes former employees, contractors, employees of contractors, associates and relatives.
- More people can be ‘eligible recipients’ of disclosures, including senior managers, directors and auditors. In certain circumstances, even journalists and politicians can be eligible recipients.
- Stronger whistleblower protections including anonymity increased immunities against prosecution and protection against victimisation. Whistleblowers are no longer required to act in good faith to be protected, although they need to have reasonable grounds to suspect misconduct.
The federal government introduced the changes by amending the Corporations Act 2001 (Cth) and the Taxation Administration Act 1953 (Cth). Together, these Acts regulate almost all companies, including foreign corporations, trading or financial corporations formed within the limits of the Commonwealth, ADIs, NOHCs, super funds, and insurers.
What penalties apply if your business breaches the new whistleblower laws?
Courts can make orders against a company if they fail in their duty of care to protect a whistleblowing employee. The maximum civil penalties for breaching the confidentiality of an eligible whistleblower’s identity or causing or threatening harm include:
- for individuals, up to $1.05 million (5,000 penalty units); and
- for companies, up to $10.5 million (50,000 penalty units) or 10% of the annual turnover (up to $525 million or 5 million penalty units).
Three actions your company needs to do to comply with the new whistleblower laws
To make sure your company stays on the right side of these laws, we believe there are three things your business should be doing.
Implementing a whistleblower policy
From 1 January 2020, some companies will be required to have a whistleblower policy that complies with the new section 1317AI of the Corporations Act 2001 (Cth) or face a $12,600 fine. This can be drawn up by your Human Resources department.
- public companies
- large proprietary companies (characterised by having any two of the following: $50+ million in consolidated revenue; $25+ million or more in consolidated gross assets; or 100+ employees), and
- registrable superannuation entities.
To comply with section 1317AI, the policy must contain:
- the protections available to whistleblowers
- how and to whom an individual can make a disclosure
- how the company will support and protect whistleblowers
- what investigations into a disclosure will proceed
- how the company will ensure the fair treatment of employees who are mentioned in whistleblower disclosures, and
- how the policy will be made available.
What if you don’t fall under these rules?
Although only certain companies are required to have a whistleblower policy, we strongly recommend all companies create or update their whistleblower policy. We also recommend that your policy includes a scope to conduct investigations internally and externally, and addresses client legal privilege. Your policies should also set out a cohesive process to work through situations where a person subject to disclosure is also authorised to receive it. Finally, as part of these new policies and procedures, we suggest you have a process for determining whether eligible whistleblower consent to be identified during an investigation.
And for listed companies?
ASX-listed companies should also take account of the ASX Corporate Governance Principles and Recommendations, which further recommends that policies:
- link to the company’s values and HR compliance
- identify the types of concerns that may be reported
- provide for the training of employees about the policy and their rights and obligations under it
- provide for the training of managers and others who can receive whistleblower reports about how to respond to them, and
- state they will be periodically reviewed to check that they’re operating effectively and whether any changes are required.
Assessing your current whistleblower procedures
The new regime requires employers and HR departments to analyse and strategise any existing whistleblower procedures they have in place and to rework or replace them where necessary. Further, to protect whistleblowers from harm, ensure any whistleblowers’ information is stored securely in confidentiality and that what you’re doing complies with privacy laws.
Training all your staff in whistleblowing protections
Given these significant changes, we recommend employers provide two types of tailored HR training. The first training program should be for ‘eligible recipients’. This is eligible to members part of the sector such as senior managers, officers, and anyone else authorised to receive disclosures from whistleblowers, including compliance officers. This training should cover the process set out in the company’s whistleblower policy to respond to disclosures. Pay special attention to the importance of protecting the whistleblower’s right to anonymity during the investigation, unless they consent to being identified. Remember you auditors, actuaries, tax agents and BAS agents are also ‘eligible recipients’. Although it isn’t expected fo you to train these people, we recommend you inform them of their new obligations.
The second training program should be for all staff, including all Human Resource employees. This should set out how the whistleblower regime works and how your whistleblower policy provides a process for disclosing and investigating certain matters. It should also be used to provide details of the protections that will be provided to eligible whistleblowers.
What do you need to do right now?
Employers should respond to the new whistleblower regime now to make sure they comply with new laws and that they’re not exposed to the potential of exceptionally high fines. After all, a fine of 10% of annual turnover is high enough to cripple most companies. Don’t have HR issues, have HR solutions. If you’d like to know more about your own company’s circumstances, introducing these policies into your organisation or what practical steps you can take, get in touch.
In the early stages of a business, most owners and managers focus on growth – almost to the exclusion of everything else. But by spending a little time on your human resources (HR) upfront, and then re-examining where you’re at along the way, you can save a lot of headaches and create a more dynamic, successful and profitable business.
There are many examples of startups where neglect for human resources, led to serious issues down the track. Some of the more high profile ones include Uber’s alleged sexist workplace culture to Twitter’s alleged lack of diversity. And these were startups that had already made it big. More common are the ones whose issues get in the way well ahead of that, hampering the business so that it never reaches its potential
It makes sense to make your HR a priority from day one: the first employees you hire are likely to be the most important ones you’ll ever employ. The culture you build together will be the one that permeates through the whole business and, if it’s the wrong one it can take seriously expensive surgery to fix it.
But it also makes sense to keep reviewing and making sure your people and your policies continue to serve your business the right way all the way through your journey.
With that in mind, here’s what I think you should be doing and when implementing your HR procedures:
1. When you’re starting out
When you’re starting out you’re usually looking for work, so it can be hard to envision the day you’ll be so busy with it that you won’t have time to scratch yourself. But, if you do things right, that’s exactly what will happen. And, if you haven’t put the fundamentals in place now, retrofitting them over an existing business will be trickier. That’s why, when you’re opening the doors, I think it pays to look at:
- The technology and systems you’re using. Set up your payroll properly and invest in software that can grow with your business. You should also consider which human resources management tools you’ll use. The best let you manage everything from leave and training to performance. If you can avoid working with word and excel from the outset, do so. Going paperless now will save you from having to transfer everything to a new system down the track.
- Your policies and procedures. I know you probably want to keep things reasonably flexible and personal when you’re brand new but the day will come when that won’t work. So put the policies and procedures in place that you’d have if you had 50 people working for you, not five. Go beyond the statutory minimums and try to make sure they reflect the culture you’d like to have. For instance, if you’re big on flexible work put down the way you see it working from day one.
- Defined roles and responsibilities. Map out what everyone in it does and let them know what you expect of them. Then spend time drawing up an organisational chart that reflects this. Better still, put together two of them – the one you’d like to have in the future as well as the one you have today. That way, when you do have to hire, you should already have a firm idea of what you’re looking for and be better able to slot people in.
- Recruitment. Employing the wrong people will be the most serious drag on your business. Employing the right ones will be the most important step in your journey to success. So look at recruitment right from the start. Define the kind of employees you want and the core values you want them to have. But don’t leave it theoretical – go out and start looking for them. I’m serious. Even if you can’t hire anyone right now, why not post to uni job boards and similar so that people know who you are, what you do and what you’ll eventually be looking for. Speak to them informally and tell them where you’re at. That way, when you do need to hire, you’ll have a bank of eager graduates waiting to come and work for you.
2. A year or two into your HR journey
Hopefully, now things are chugging along. And hopefully, also, those HR steps you took when you first started out have helped keep you on track. But you’ll probably be facing some practical issues that you never reckoned on: the employee who keeps calling in sick, the person whose skills aren’t what you thought they were or the star performer who ups and leaves.
Here’s what I think you should be doing about now:
- Review and update what you’re doing. Now is the time to look at everything you did on day one to make sure it’s still working for you. Are your policies and procedures still working? Does your org chart still reflect where you want to be or has the business pivoted? Some of what you look at may make you cringe. Other stuff may make you pat yourself on the back for how right you got it.
- Focus on culture. You’re in a phase of business now where culture really starts to matter. So take the time to assess what yours looks like. Are people happy in their roles, energised by their work and making a real contribution? If not, why not? Is there something you can do to improve things? Is it time for a team bonding day or retreat? Do you need to look at what you’re paying people?
- Refine your disciplinary procedures. It’s about now that you’ll probably have to start doing what you hoped never to do: start performance managing people and potentially even sacking them. This is one of the toughest things a business owner has to do.
- Encourage talent. You’re probably starting to get a feel for which employees will drive your business to the next level and which simply won’t. So this is the time to encourage the people who are making a real contribution to your business. Let them know how much they’re needed. Be prepared to invest in a bit of training for them to help them advance their careers and your business. And start helping them step up where you can.
- Call on outside help. You’re probably also starting to recognise that doing everything HR-related yourself is a big ask. So be prepared to call on outside help when you need.
3. Three-to-five years down the track
By now you’ve grown to the point where it’s simply impossible to be across all the detail for every employee. It’s also when people and culture issues really come home to bite. Here’s what you should be thinking of about now:
- Leadership capability. You’re probably going to need to involve others in the strategy of the business now, as well as in its day-to-day operations. You might even be considering getting in CEO or managing director to take over the running of the show. The biggest decision you’ll likely have to make is whether to hire internally or externally and there are real advantages and disadvantages to each. Generally, a good place to start is to look at what skills you have in-house and what’s missing. Are the things you need teachable? Could any of your existing employees get there with a bit of help or are you better off looking elsewhere? This is when a good lateral hiring policy starts to become vital too.
- Training plans. Tied in with this, I think a more mature business should also take a more formal approach to training. Make sure every person in the business has a training plan which will help them progress to where they and you want them to be.
- Performance appraisals. You should also now have a formal system for assessing performance. Whether that’s a traditional performance appraisal twice a year or a more regular and consistent system is up to you. But it should now be transparent and easy to follow so that staff know where they stand and what needs improving.
- Salary and remuneration. When you first started out this was probably transparent enough – people could see how the business was performing and how their personal remuneration tied into that. Now, it needs some thinking through. If you don’t have a proper profit share or bonus arrangement, especially for key staff, this is when to do it.
4. Once you’re big
It may be tempting to take a breather and sit back but I can tell you that now’s the time you’ll notice everything that didn’t go to plan. How nice it would have been to have had a crystal ball back at start.
This is often the point where businesses change direction, where experiments didn’t happen or when the ground shifts beneath their feet. So it’s also when you often have to start thinking about redundancies and letting people go, not just hiring them.
It’s also when you should probably invest in tech solutions that will help you make things more efficient – not just throwing people at every problem.
Finally, it’s when your core values start to shine through. These should now be the rudder that guides you through growth so go back and look at them. Make sure you still stand for what you said you were going to stand for. Ensure that your people and their metrics for success match these too.
Ultimately, that’s what business success should look like: doing the work you want to do for people you want to do it for without ever compromising what you stand for.
See how we might be able to advise you when it comes to your HR
No matter which stage of business you’re at, we’d love to see how we might be able to assist with your HR capabilities. Get in touch with us today.