But do I HAVE to (make redundancy payments)?

Sing it with me, Bob Dylan: the times they are a changin’.

For one reason or another, your business is undergoing significant operational changes and you need to make some of your workforce redundant.

So, who do you make redundant, how do you do it properly and, most importantly, what do you have to pay them?

1. Who you make redundant will depend on the reasons for the redundancy, as well as the size of your business and the nature of the restructure.
2. The proper process and procedure to be followed will depend on the terms of the employment contract and/or applicable modern award or enterprise bargaining agreement. 
3. Generally, you will not have to pay an employee redundancy pay in the following situations:

1. The employee was employed on a casual or fixed-term contract;
2. The employee has only been employed for less than 12 months; or
3. The employee was an independent contractor.

There are some exceptions to this rule and then some exceptions to those exceptions.

Also, those exceptions are not the only exceptions.

Put simply, redundancy can be incredibly complicated.

Get it right and get the experts to talk you through it.

Penalties of up to $54,000 for corporations and $10,800 apply to directors for breaching their redundancy obligations under the Fair Work Act 2009 (Cth) so it pays to pay up! (Though only when you have to, of course.)

Call the Workplace Relations team at Nevett Ford on (03) 9614 7111 and we’ll make it look easy. 

 

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Overworked and Underpaid: The reality behind George Calombaris’ Greek tragedy

 

In a brilliant piece of spin worthy of an election campaign, George Calombaris openly admitted to underpaying past and present employees over $2.9 million – and has maintained his positive public image.

 

From the papers to The Project, the popular Masterchef appeared everywhere, apologised for profiting from his workers and continued to accept bookings at his numerous Greek restaurants across Melbourne.

 

You would be forgiven for thinking that it’s all that easy – underpay, apologise, back to business as usual – but be warned, this is the exception, not the rule. 

 

Businesses that are found to breach the Fair Work Act 2009 are liable to penalties of up to $54,000 for corporations, per breach. This means that if you underpay 100 employees, you are liable to 100 lots of penalties. Directors also face penalties of upon $10,800 per breach.  

 

Last year, the Fair Work Ombudsman recovered more than $2.2 million dollars in penalties alone for underpaid employees.

 

For George Calombaris’ Made Establishment empire, the repayments will be made quickly and easily, as the investors in the business have continued to pledge their financial support for the company.

 

Other businesses are not so lucky and have had to enter into voluntary administration after being ordered to back-pay their workers.

 

If you are unsure of how much to pay your employees in order to fulfil your obligations under the relevant employment contract, modern award or enterprise bargaining agreement, talk to someone who knows the answer! Contact the workplace relations team at Nevett Ford for all your employment law questions on (03) 9614 7111.

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Restaurant owners happy to pay less on Sundays

For workers in the hospitality industry, rising early for a Sunday morning shift after Saturday night’s revelry is worth it - if only for Sunday penalty rates. 

This has been the case since 1 January 2010, when the relevant modern award, the Restaurant Industry Award introduced the penalty rate regime (see clause 34.1 ).

From 1 July 2014, however, Sunday penalty rates for many hospitality workers will reduce by 25%, following a Full Bench decision of the Fair Work Commission in Restaurant and Catering Association of Victoria - Re Restaurant Industry Award 2010 [2014] FWCFB handed down on 14 May 2014.

The decision will affect employees in the restaurant industry, which includes most hospitality workers, but not those in fast food outlets or restaurants in hotels or clubs.

The decision was a result of the modern award implementation process, which requires the Commission to review awards as soon as practicable after the second anniversary of their commencement, to check if it is achieving its objective of providing a “fair and relevant minimum safety net” of employment terms and conditions (section 134 of the Fair Work Act 2009). 

In deciding whether the award is “fair and relevant”, the Commission must consider numerous factors, including the need to provide additional remuneration for employees working on weekends.

The Applicants in the matter, the Restaurantand Catering Association of Victoria, Australian BusinessIndustrial and 16 private restaurant businesses, filed an application to the Commission seeking a number of changes to the award, including cdecreased weekend and public holiday penalty rates.

The application was first heard at the Commission by Deputy President Gooley, who after four days of evidence from employers, economic experts and academics, rejected (among other requests), the proposal to reduce Sunday penalty rates. 

Deputy President Gooley’s decision was based largely on there being “insufficient or no evidence that the proposed changes would improve productivity or encourage collective bargaining” [at 30].

The Applicants appealed Deputy President Gooley’s decision to the Full Bench, which on 14 May 2014, granted permission to appeal, finding that there was a sufficient public interest to be determined in the outcome. 

The Full Bench then quashed the Deputy President’s decision regarding Sunday penalty rates on the basis that the Deputy President had determined the matter “by reference to the test of whether there had been a significant change in circumstances since the making of the Restaurant Award and, as a result, did not consider the matter in accordance with the relevant requirements of the Transitional Act” [at 154].

Finding that 6 of the 9 elements of the Award’s objective were “detrimentally affected” by Sunday penalty rates, which were failing to achieve the “fair and relevant” objective of the award, the Full Bench then decreased Sunday penalty rates from 50% to 25% [at 303].

Unsurprisingly, United Voice, representing the industry’s employees, is upset, and considering an appeal, and Restaurant and Catering Australia is ecstatic, immediately issuing a press release praising the outcome of its “historic” fight.

The effect of the decision will be felt by the industry’s workers - a force already “low-paid compared to other industries”, with a “lower skills base” and made up primarily of students and women with children.

Emma Pollett-Sutton
Lawyer

Anyone seeking advice about workplace laws should contact Nevett Ford Melbourne Lawyers on 03 9614 7111.

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