Increase to minimum wages
On 2 June 2015, the Fair Work Commission’s Panel for annual wage reviews released its Annual Wage Review decision for FY16. The decision increased minimum award wages across the board by 2.5%, effective 1 July 2015. As a result of this decision, the weekly minimum wage increased from $640.90 to $656.90 (an increase of $16) and the hourly minimum wage increased from $16.87 to $17.29 (an increase of 42 cents).
The Panel referred to a reduction in inflation and aggregate wages growth as significant contributing factors for the decision to fix the increase at 2.5%, which is 0.5% less than last year’s increase.
Increased penalties for breach of the Fair Work Act
The Coalition Government has introduced a Federal Bill – the Crimes Legislation Amendment (Penalty Unit) Bill 2015 – which proposes to increase the value of penalty units for Commonwealth offences. An increase to the value of Federal penalty units will impact the penalties that may be ordered by a Court for breaches of the civil remedy provisions in the Fair Work Act 2009 (Cth) (FW Act). Federal penalty units are currently set at $170 and the Bill proposes an increase to $180. The Bill also proposes that, as of 1 July 2018, the Federal penalty unit will be automatically adjusted every three years, in line with the Consumer Price Index.
The Bill has now passed through both Houses of Parliament and is awaiting royal assent. If it receives royal assent, as of 31 July 2015 the maximum penalties that can be imposed under the FW Act will increase from $10,200 to $10,800 for an individual and from $51,000 to $54,000 for a corporation, per breach.
Employment related tax measures proposed by the Federal Budget 2015-2016
The Coalition Government’s 2015-2016 budget set out a number of measures that will impact on Australian employers. The measures set out below do not yet have legislative force and will need to pass through Parliament prior to becoming law:
- tightening the application of the Zone Tax Offset, which provides a tax offset to individuals living in particular remote locations to recognise the cost and consequences of living in those areas, to exclude ‘fly-in fly-out’ and ‘drive-in drive-out’ workers. These measures are proposed to take effect from 1 July 2015;
- regarding individuals on working-holiday visas as non-residents for tax purposes, regardless of their length of stay in Australia, with the effect that these individuals will be taxed at a flat rate of 32.5 cents in the dollar for income derived in Australia. This measure is proposed to take effect from 1 July 2016;
- replacing the current methods of calculating work-related car expenses for tax purposes so that all expenses are calculated at the single rate of 66 cents per kilometre, regardless of the car’s engine size. This measure will not affect leasing and salary sacrificing arrangements and is proposed to take effect from 1 July 2015; and
- extending the existing fringe benefits tax exemption for providing work-related electronic devices to employees. The amendment should allow small businesses to provide employees with multiple devices despite those devices having similar functions (eg a laptop and a tablet). This measure is proposed to take effect from 1 April 2016.
The developing anti-bullying jurisdiction
The Fair Work Commission's anti-bullying jurisdiction has now been live for 18 months. There were 701 anti-bullying applications in 2014 and although this is a significant number, it was certainly much less than the FWC anticipated. Importantly, only a handful of orders were made, with most applications either dismissed or resolved before orders were required.
Most actions were against managers and supervisors, with the defence of "reasonable management action" being put forward regularly by employers. A decision in February this year provided some guidance around what might be regarded as reasonable management action carried out in a reasonable manner. A company implemented a performance improvement plan (PIP) for an in-house solicitor. The solicitor claimed that this (and related actions) were bullying. However, in a context where under-performance and examples of how to rectify the problems had been brought to the employee's attention throughout a 2 year period before the PIP was implemented and regular feedback and support had been provided, implementation of the PIP was found to be reasonable management action. The PIP set clear expectations for areas for improvement and explained how this improvement could be achieved, with the result that the manner in which the process was implemented was found to be reasonable.
The FWC said that performance management could amount to bullying if it was used as a "means to achieve and justify a predetermined outcome of termination". Further, if the performance management lacked any "evident and intelligible justification", it would be considered unreasonable. The FWC emphasised that the PIP tool and accompanying procedures should be referred to in the relevant employer policies.
The FWC only has power to make anti-bullying orders where a worker has been bullied "at work". We now have a clearer picture of what this phrase means - and it is not just being inside a physical workplace. It includes conduct when the worker is performing work, regardless of where or when they perform that work. The bully does not need to be "at work" when engaging in the unreasonable behaviour. The FWC's powers will also be enlivened when a worker is engaged in some other activity which is permitted or authorised by the employer, such as being on a meal break. Managers cannot avoid the possibility of a bullying claim by calling a worker to discuss performance while the worker is at home.
Bullying through social media remains a grey area. Clearly, social media can be used to bully. However, whether the FWC has power to make an order may depend on where and when the offending comments were posted and accessed and whether the posts had a connection to the workplace. The FWC has so far been reluctant to set clear boundaries on this subject and has emphasised that it will consider this issue on a case-by-case basis.
What is clear is that the new anti-bullying laws have not opened any litigation floodgates or triggered any substantial changes in the way in which employers need to approach bullying in the workplace.
Annual leave and workers' compensation - double dipping?
Are workers entitled to accrue annual leave while they are receiving workers' compensation payments? Unfortunately, this simple question has generated much debate and uncertainty in most States and Territories.
In June 2015, the Federal Court confirmed that workers in NSW are entitled to accrue annual leave while they are receiving workers' compensation payments.
But what about the other States? The answer is that in all jurisdictions except Tasmania it would be prudent for employers to allow employees to accrue and take annual leave while in receipt of workers' compensation benefits on the understanding that this will not impact workers' compensation entitlements. The Tasmanian legislation disentitles a worker to weekly workers' compensation payments while the worker is on annual or long service leave.
However, the Fair Work Amendment Bill 2014 (now before Parliament) proposes amendments to theFair Work Act 2009 which would prevent employees (nationwide) from taking or accruing annual leave while they are receiving workers' compensation benefits. The Bill, if passed, would reverse the impact of the NSW decision and make the situation clear and consistent across the country - so watch this space