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?

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:

Who is included?

When can it be accessed?

Full-time, part-time and casual employees may apply for FDVL if:

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

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?

What should employers do now?

We recommend that all businesses take the following actions immediately:

We are here to help you with any of these changes. Reach out if we can offer you support.

Employers often use restraints of trade to try to stop employees from taking their confidential information to a competitor and gaining an unfair advantage over them. But just how enforceable are they? 

A recent New South Wales Court of Appeal (NSWCA) found that whether a restraint of trade is enforceable depends on whether you’re trying to protect a legitimate interest, as well as factors such as their duration and an employee’s seniority.

The background to the case

The case started with a familiar scenario – a senior sales manager left his employer to work for a competitor. However, his employment contract contained three clauses: a confidentiality clause, an ‘exclusive employment clause’ (this said he must devote his time and attention to the employer during business hours and promote its best interests), and a restraint of trade.

The restraint of trade clause was one of the typical ‘cascading’ ones that employers sometimes use that allow for ‘12 months’, ‘9 months’, ‘6 months’, etc, in the hope that a court will enforce the most reasonable duration.

When the employee left and worked for a competitor, the employer alleged he broke all three of these clauses in his contract. 

He then failed to comply with the notice of termination clause of the contract, which provided for three months that he would not work in direct competition. Instead, he started working for the competitor within four weeks of leaving. He also helped the competitor poach a more junior employee who was subject to a similar restraint of trade clause. 

The proceedings

The former employer brought proceedings in the Supreme Court of NSW (the NSWSC)  alleging the employee – and the employee he poached – had breached their employment contracts. It received interlocutory orders (that is, temporary orders), which prevented the employees from working for the competitor until the court decided the case.

The court eventually handed down a decision in the employer’s favour. It found:

The employee appealed the NSWSC’s decision in the NSW Court of Appeal. 

The appeal: Are restraints of trade enforceable? 

The Court of Appeal noted that restraints were only enforceable insofar as they protected an employer’s reasonable interests for a reasonable amount of time.

In this case, the employer had a legitimate interest in protecting its confidential information from a competitor, including its marketing plans and potential weaknesses in its product. As the employee was senior and privy to this information, it was, therefore, reasonable to restrain him from a competitor for nine months.

However, it also noted that the employee he helped poach was more junior and did not have any awareness of the company’s confidential information. It wasn’t reasonable to restrain him from working for a competitor because he could not damage its legitimate interest. 

The Court of Appeal also found that the employee breached his notice of termination provision. He had also breached his contractual and fiduciary duties to his former employer when he helped poach the employee.

The Court of Appeal also found that because the competitor had encouraged the employee to breach his fiduciary duty, it, too, was liable.

What the case means for you as an employer

There are times you can rely on restraints of trade to protect your confidential information, but they need to be proportionate, and they can’t be used as a ‘catch all’ to try to limit who employees can work for. You’re also far more likely to find they’re enforceable against senior employees.  

It’s always a good idea to have restraints drafted properly by your legal adviser. It’s also often a good idea to use ‘cascading’ clauses – based both on duration and geography – so that a court will enforce appropriate terms rather than ‘striking out’ an unreasonable restraint. 

Also. if you’re hiring an employee from a competitor and they have a restraint, proceed with caution. If possible, have your legal adviser check their restraint over before you sign them up.

Want more?

If you’d like to know more about restraints of trade, get in touch.

Alternatively, you can read the full decision here. 

 

Labour shortages and rising wages mean employers need to do more with less. So, if you’re one of the many business owners who find they have too many HR tasks and not enough staff to complete them, here are six HR tasks we think you can automate, outsource or eliminate.

1. Managing leave

Many employers still rely on an employee to stay on top of everyone’s leave entitlements. But these days, managing leave entitlements – including sick leave, annual leave, carer’s leave and long service leave – can all be automated. 

When it comes to sick leave, some of today’s HR software can automatically follow up with employees, make sure they’ve submitted a doctor’s certificate (which they can do via their phone) and then notify team leaders and managers of their absence.

Best of all, modern HR software can let you identify trends in people’s sick leave – which can be great for identifying mental health issues and minimising potential psychological harm to employees.

Using an automated system to track annual leave can also give you complete visibility over when people will be absent. It can also reveal when you’re likely to be short-staffed, based on your workflow – and even potentially recommend critical times employees should be encouraged to take leave. 

Not only is there no need to have someone doing this all manually anymore, but by automating, you could eliminate risk while also giving yourself a strategic advantage.

2. Timesheets and payroll 

If you have someone processing timesheets and payroll manually, now’s the time to rethink your approach. 

There’s excellent software out there that will do this for you much more efficiently and cost-effectively. It will automatically ensure you’re complying with relevant tax, superannuation and employment laws, submit what you need to the ATO, and generally make your life as easy as possible.

Or, if you want a more comprehensive offering involving a human touch, you could outsource it. 

3. Hiring new employees

Hiring new employees is a function we often fundamentally associate with HR, but it could be one best performed by someone else. After all, it’s something that’s vital to your business and its ongoing success, but it also requires specific skills and processes. And depending on the size of your business, it can chew up a lot of your resources.

These high-impact, low-volume tasks are often the very best ones to outsource. There are specialists, such as recruitment companies or a virtual HR provider like ours, who can tap into their network, offer impartiality, and help you select the best candidate. We can even work with you to develop a strategic plan for attracting and retaining talent for the long term, so that you know what you need ahead of time.

4. Performance reviews

Performance reviews have traditionally been another fundamental part of the HR process – and a part that can take an extraordinary amount of time. They’re also one aspect of the relationship between management and employee that can be sensitive, fraught with risk, and carry long-term implications for workplace productivity and culture. 

That’s why this is another part of the HR process that often makes sense to eliminate from your in-house function and outsource, saving time and money. 

5. Compliance

Making sure your organisation complies with employment and HR laws can be complex. It can also be something that can consume your HR professionals, keeping them away from the areas in which they excel. 

The good news is that these days, HR software will make sure you’re complying with some of the rules and regulations you need to. And, for a high-level, or strategic view, you can always outsource.

6. Writing policies and procedures

Again, writing policies and procedures is laborious, and it’s also easy to get things wrong – potentially opening your organisation up to legal exposure. And yet, writing complex, sometimes specialist policies and procedures often falls to generalist HR professionals. A better approach is often to outsource this work to people who specialise in the area so that you know you’re following best practice and setting yourself up for success.

Looking for ways to eliminate more HR functions?

HR covers a range of functions from the strategic through to the detailed, and it’s often virtually impossible to hire people with all the skills you need. By outsourcing some of the tasks and automating others, you can make sure you’re always running the most efficient and cost-effective HR function possible. 

Want more?

If you’d like to know more about how these changes specifically impact your workplace, get in touch. 

A growing number of employers are introducing ‘life leave’ for employees. Should your organisation be doing the same?

We explore what is how, how it works and the potential benefits (and disadvantages) of introducing it into your workplace.

What is life leave?

Life leave is a broad type of leave that lets employees have time off simply to do non-work related things. This could be anything from being at home so that work can be done on your property, having a day off for your birthday or even just taking a mental health day. 

Different types of life leave

There’s no single template available which means different employers implement it differently. 

For instance, EY Australia introduced unpaid life leave for its employees in 2019, giving them between six and 12 weeks to ‘explore interests’ outside of work, such as travel or study. In contrast, in 2020, CBA introduced three days’ paid life leave for its employees. 

CBA’s policy had its critics because, at the same time, some employees’ sick leave entitlements were reduced from 15 days to 12 days. CBA also only allowed employees to take the life leave entitlement if they’d used up their entire annual leave entitlement of previous 12 months and had less than a total 20 days’ accrued annual leave. 

Still, an internal survey released by CBA showed an overwhelming majority of employees – as many as 80% – welcomed the move. 

Why wouldn’t you just increase annual leave?

Annual leave is different from life leave because it is a statutory entitlement for all employees regulated by the National Employment Standards (NES). 

That means the NES provide for the situations under which an employee is entitled to annual leave and outline the minimum employers must provide. Importantly, they also specify that it ‘accumulates’ – something which isn’t necessarily the case for life leave. Also, under many Awards and Agreements, employees are entitled to a leave loading when they take annual leave. 

By introducing this new type of leave, employers have greater flexibility and can stipulate whether it accumulates, whether it’s paid or unpaid and whether leave loading applies. 

The pros and cons

The advantages of introducing life leave into your workplace include the following.

There could, however, be some downsides to introducing life leave too.

What alternatives are there?

If it all seems a bridge too far for your workplace but you want some of its benefits, you could always introduce more paid – or unpaid – annual leave. Alternatively, a lot of workplaces we work with have perks such as a day off for a birthday, a day off for family commitments, an extra long weekend or two a year or flexible public holidays. Some even offer unlimited leave.

Should your workplace introduce life leave?

Whether or not you should introduce life leave at your workplace depends on a number of factors, not least of which is the type of work you do. After all, while life leave lends itself to service-based jobs – such as accounting or financial services – it would be a much trickier proposition in industries that require someone to be present – such as manufacturing or retail.

That said, the flexibility that comes with life leave – both from an employer and employee perspective – makes it an increasingly attractive proposition.

If you’d like to know more about introducing it into your workplace, get in touch.

Many employers see probation periods as something of an insurance policy when it comes to recruiting staff. If things don’t work out in the first six months, they potentially give you the option of ending the employment relationship without incurring significant costs or facing lengthy legal action. 

But with labour shortages, wage rises and mass resignations a feature of the employment landscape in 2022, do employers need to be a little more circumspect when it comes to terminating a probationary employee’s employment? We explore everything you need to know about probation periods in 2022.

The case against terminating employment

Let’s begin by looking at when terminating isn’t the best path. 

Hiring and firing employees is an expensive business. In 2019, I wrote about how to terminate employment when someone is on probation. Back then I noted that one US study found that the cost of losing a staff member and re-hiring generally equates to around a third of their income. In other words, if you need to fire and re-hire someone on $60,000 a year, expect it to set your business back $20,000. 

That study was made in a very different labour market than the current one too. Today, the costs are likely to be much higher, given just how difficult it is to find good employees.

That means terminating someone’s employment – even when they’re on probation – isn’t something you’d do lightly. 

But, still, there are times you really should dismiss an employee, especially where the cost of their continuing underperformance will be much bigger in the long run. 

How do probationary periods work? 

Even when you’ve done all the right things in the recruitment process, you’ll sometimes make mistakes. After all, you can’t be 100% certain about anyone’s work – or how they fit into your organisation – until you actually see it for yourself. Probationary periods are designed to get around this, letting you use an employee’s early time with you – usually between three and six months – to assess whether they’re right. 

If they’re not, well, you have the opportunity to end the employment relationship without the same legal obligations you’d have towards a more long-standing employee. 

That said, an employee still has some entitlements during probation. For instance, they’re still entitled to the 10 National Employment Standards and some of the protections contained in the Fair Work Act 2009. 

This means you’ll have to provide them with a week’s notice of termination (or at least payment in lieu of this notice period). They’ll also be entitled to be paid for any annual leave they’ve accrued. 

What they usually won’t be entitled to do, is to bring an unfair dismissal claim in the Fair Work Commission.  However, under the Fair Work Act 2009, employees can’t bring an unfair dismissal for the first six months of their employment anyway – or 12 months where the employer has less than 15 employees.

The key: An effective probation period

The key to getting probation right – especially in today’s environment – is to run an effective probation period. This means not just giving your employee the opportunity to prove themselves but also helping equip them with the skills they need to be a good employee. 

Here’s how I think you should do that in 2022.

Read more here about getting the first six months of employment right.

Can you extend a probationary period?

With labour in short supply, you might be tempted to extend an employee’s probationary period, effectively giving them a second chance. But are you allowed to do this?

The answer is that it depends on what the contract of employment says. Some employment contracts will provide that the employer can extend probation in certain situations. If the employee is covered by an Award or Agreement, you also need to be mindful of this too.

At the same time, always remember that the employment laws, most notably the Fair Work Act 2009, still apply. That means, that if you extend an employee’s contract beyond the statutory probation period, they will have the right to bring an unfair dismissal claim, as well as to all the other entitlements of other employees. 

With that in mind, there may be little point in attempting to extend a probationary period because the employee will have all the same rights as other permanent staff members.  

How to terminate an employee when they’re on probation

While you can terminate a probationary employee’s employment without having to go through some of the requirements of a permanent employee, you can’t just dismiss a probationary employee for any reason you like. 

Even if they can’t access unfair dismissal remedies, probationary employees can access unlawful termination remedies from the moment they start working for you. That means you can’t terminate their employment for a prohibited reason, such as temporary absence from work, union membership, making a complaint or on the basis of race, gender or pregnancy.   

If you are terminating employment for a legitimate reason, you don’t have to wait until the end of the probationary period before dismissing them. When you’ve done your best and you really have reached the point of no return, my view is to act now and begin the process of hiring someone to replace them.

Want more? 

Terminating a worker’s employment can be fraught, even when they’re on probation. And never has there been more at stake than right now. Get in touch if you’re unsure about one of your new employees and need a guiding hand.

When you engage an HR consultant, you expect them to take your human resources headaches and challenges off your hands. In the process, an ideal HR expert will help take your business to the next level. But what are the qualities they need to do this?

We’ve identified six key characteristics we think an outsourced HR consultancy should always have.

HR quality 1: Commerciality

Probably the most important characteristic of any HR consultant is commerciality. In business, time and money are everything. Your HR consultant needs to be able to assess risks, limit costs and make accurate calls quickly and decisively. They need to be able to understand your bottom line so they use their judgement to make effective commercial decisions. That never means acting unethically or breaching the law. Even putting the morality of this aside, the commercial risk of doing so is far too great. But it does mean being able to weigh up the pros and cons of different HR strategies and then having the judgement to choose the one that delivers the best long-term financial outcome.

HR quality 2: Leverage

An effective HR consultancy isn’t just one person. Nor is it simply a group of senior human resources practitioners who charge high rates and only want to be involved in the strategic decisions your business make. I think a good HR consultancy should consist of a team of HR professionals who operate across all levels of the business. They should have the capacity to perform every one of the HR functions you don’t have in-house – from the strategic to the administrative and from the day-to-day to the once-off projects. I say this because every business has different human resource needs. In fact, even the same business’ HR needs will change from time-to-time. Any HR consultancy you engage should be able to account for this and should have the in-house skills, expertise and experience to deliver what’s in your best interests, no matter what they are or how they evolve.

HR quality 3: The human touch

Believe it or not, the clue is the name: human resources is about humans, not just numbers. Every HR decision you make will directly impact on people in your workplace. In that sense, it’s unlike any other of your commercial functions. I think that means your HR consultants should be human too. They should understand the workplace culture, and know how to treat people tactfully, sensitively and with empathy. They should have the experience and astuteness to know what makes people tick and what they need to do to motivate them or change their behaviour. And they should be able to bring people into their confidence without ever being unprofessional.These are qualities you simply can’t – and won’t – get from off-the-shelf and highly automated HR solutions and one of the reasons why it’s always worth paying for a professional HR consultancy.

HR quality 4: Flexibility

The one constant about business is that there are no constants: your strategy and ambitions get modified, customers or clients come and go, staff turn over, new markets open up, new roles are created and the opportunities and risks vary and evolve. An effective HR consultant knows this and can change and grow with your business.I think the best way they can achieve this is by choosing an HR consultant that’s neither too small to cope with change nor too large to be nimble. Putting it another way, they should be small enough to know your business intimately but large enough to have all the skills and knowledge they need to serve you as you change.

HR quality 5: Curiosity

Speaking of which, I think a good HR consultant should be staffed by a team of forward-looking, curious and engaged people who are genuinely interested in and motivated by what they do and are prepared to keep learning. The field of HR changes all the time and your advisers need to be the ones who keep up with it.
But I think their curiosity should extend beyond just their individual area of expertise. They should also be curious about both business and the world around us more generally. That way they’ll be able to frame any advice they give in a broader context rather than solely within the confines of human resources.

HR quality 6: Collaboration

The final vital skill your HR consultant should have is the ability to collaborate. They should act as a true business partner – someone who gets where you’re coming from and helps you achieve it. This means understanding your vision for the business and working out what they can do to make sure it happens. It also means listening to your concerns and challenges and responding to help you overcome them. But as a true partner, your HR consultant should also be thinking about what they can do to proactively help your business, whether that’s in introducing new efficiencies, helping you stay on top of risks or being one step ahead of the changing regulatory landscape. In short, it means seeing themselves as an integral part of your team and understanding that your future and their future are intertwined.

Are you ready to find your HR consultant?

If your HR partner has these six qualities, they can help drive your business forward so that your staff are productive, your risks are managed, your costs are kept down and your goals are met. Catalina Consulting is a professional HR Consulting firm, offering a wide range of services including custom HR solutions. If you would like to know how we can help you take your business to the next level, get in touch today.