Grab a cuppa and strap in! I’ve trawled Linkedin and screenshot a number of education posts around common employment, and contract of employment issues that I commonly see when meeting with prospective clients.
*this post applies to National System employers, WA based sole traders, partnerships and unincorporated organisations fall under the WA Industrial Relations System. References to an “Employee Agreement” relates to a registered collective agreement.
If it’s in a contract, it’s lawful – In short, No
Just because a clause is contained within a contract, and an employee has signed it, it doesn’t mean you can lawfully undertake that action.
The Fair Work Act underpins the industrial relations system in Australia, it is the legal framework that sets the minimum standards and conditions for the employer – employee relationship. From the Act we get the National Standards of Employment (NES) which are the 11 minimum terms & conditions for all employees, and then the Award is a full set of standards and conditions broken down by occupation.
An employment contract can’t provide for less, or deviate from in a detrimental way, than any of these industrial instruments.
I commonly see unlawful clauses contained within employment contracts related to ordinary hours of work and the entitlement of leave and superannuation, overpayments and payroll deductions, withholding of pay and use of individual flexibility agreements.
I’ve overpaid my employee, I’m entitled to take money back next pay – only if you’ve received a signed deduction authority from the employee
Again, a common clause I see written into employment contracts. Fair Work is pretty explicit about how and when payroll deductions can occur, if you are attempting to recoup funds without a signed authority you are quite simply playing with fire.
Medicals, uniforms, training courses, damage to equipment; it all costs money. I make sure I’m reimbursed for this from the employees pay – Again, Fair Work has explicit guidelines around how and when this can occur, having it written into a contract does not give you free rein
“and it’s unreasonable in the circumstances” and no, having a new employee sign a blank payroll deduction authority to be used to deduct monies from their final pay without obtaining consent for the amount first is not reasonable. Best practice will always come back to consulting with employees.
My departing employee hasn’t returned their work keys so I’m withholding their pay – most Awards dictate that an employee must receive their final pay within 7 days of their employment ending
Employment contracts can extend this period, for example if you are on a monthly pay cycle you can include a clause to state the final pay will be received in accordance with the pay cycle. Withholding a final pay (or any pay for that matter) is unlawful.
Industrial relations is complex, and our system is by no means easy to navigate. As a business owner / leader it is your responsibility to ensure that your business practices are lawful, but more importantly, that you fully understand what your contracts and policies contain and the implications of enforcing such business tools.
The buck stops with you, and you need to ask yourself:
- Do I understand the advice I’ve been given
- Do I understand and accept the risk of non-compliance
- What are the wider implications to this business practice
- Does it align to the values of the business (are you walking the walk)
This is part 1 of this series, stay tuned for part 2 where I dissect ordinary hours of work, flat rates of pay and leave accruals.
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